materi 3 dan 4

Technology Enabled vs. Clean SLateReengineering

“ENTERPRISE RESOURCE PLANNING SYSTEMS”, D. E. O’LEARY, 2000 ©

ERP and Reengineering“SAP implementation equals forced reengineering”

“it’s rare when you don’t have to do some kind of reengineering”

ERP is the “electronic embodiment of reengineering”


Reengineering Tools and Technologies in 1994 (CSC Index 1994)

Tool USA Europe

None 41% 36%

Process Value Analysis 36 27

Benchmarking 34 36

Competitive Analysis 25 28

Activity-Based Costing 20 17

Other 16 17


Currently, ERP is the dominant tool!

Technology Enabled (Constrained) Reengineering“Enabled” vs. “Constrained” …

◦ Which term? Why?

A particular technology (or portfolio of technologies) is chosen as a tool to facilitate reengineering.

◦ Thus, reengineering choices are a function of the technologies chosen.

◦ The technology drives the reengineering.


Clean Slate Reengineering

Process design starts with a clean slate

Also referred to as “starting from scratch”

Theoretically, no limits


Somewhere Between the TwoIn actuality, there are few projects that are “purely” clean slate or technology enabled

More of a spectrum


TechnologyEnabled

CleanSlate

Advantages of Technology EnabledERP provides a tool to facilitate change

ERP helps structure complex reengineering efforts

Tools help explain and rationalize efforts

ERP bounds the design, limiting overload

Design is feasible

There is Evidence that the design will work

Designs likely are cost effective

Designs likely can be implemented in a timely manner

There is software available


Advantages of Clean SlateNot constrained by a particular tool

Not constrained to a limited set of processes

Evolution is not limited by a particular technology

Can develop a design that others cannot access

There is evidence that firms think they should reengineer and then implement

May be the only option


Which Firm Should Use Which Approach?

Depends on

Firms Size

Available Resources

Time Pressure

Strategic Gain

Uniqueness of solution


Large FirmsHave the resources to do clean slate

Are often industry leaders and thus, generally have time

Are likely to use processes as a competitive advantage

Are more likely to need a unique solution


Firms with Deep PocketsClean slate requires substantial resources

In some cases, clean slate will lead to many starts and stops before the “final” design is found


Firms with TimeClean slate takes longer so only firms that have the time can really do clean slate approaches.


Firms for which Processes are a Strategic Advantage

The more unique a firm in terms of its industry, processes, customers or other factors, the more likely that they see their specific processes as a competitive advantage, and thus use some clean slate approach.


Firms that Seek a Unique Solution

Technology enabled approaches are easily copied and diffused

Clean slate approaches are not as rapidly or as easily copied.


Chapter 8

Choosing an ERP System

“ENTERPRISE RESOURCE PLANNING SYSTEMS”, D. E. O’LEARY,

2000 ©

Two Basic Approaches

There are two basic approaches that are used as bases of choosing ERP software

◦ Requirements Analysis (“As Is”)

◦ Best Practices Analysis (“To Be”)


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“As Is” AnalysisAs is refers to the current system and its current capabilities

The system “as it is” right now


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Requirements Analysis (“As Is”)“As Is” the ways things are.

Organization determines what their processes and artifacts currently are and use that “as is” model to establish requirements that software is judged against.

Typically, the software that best meets the requirements is the one chosen by the firm


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Requirements Analysis -Evaluating FeaturesTypically, requirements are features that the software “must have”◦ In addition, sometimes “would like to have” also is

gathered.

◦ Likely to use a numeric scale of say 1-5 for each feature, based on how important the feature is

For missing features, typically changes to the software are seen as a gradation of change, e.g., “enhancement” or “customization”


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How many requirements?Timberjack’s requirement analysis took six months and generated > 1,000 requirements

Another firm took eight months and generated 1,500 requirements

If it takes a long time, then requirements can (will?) change


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How long will it take?Can be a substantial effort and take a while!

Typically 1 - 3 months


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Who Should Be Doing Analysis?Trade-off between current employees who know how work is done, and managers, who see work from a different perspective. ...

Which processes should be captured:◦ Past

◦ Current, or

◦ New?


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Help for Doing Requirements Analysis

Consultants specialize in requirements analysis, e.g., Big 5

There are existing packages that facilitate requirements analysis, e.g., “The Requirements Analyst”


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Advantages of Requirements AnalysisClassic System Choice Process, so it is generally understood

Establishes a bench mark that can be used to judge fit of software

Provides a document that can be used for communication and to generate buy-in


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Disadvantages of Requirements Analysis“As Is” analysis can be very

◦ time consuming, slowing the implementation

◦ costly (e.g., one firm spent $100,000)

May (will) be impossible to specify all software requirements

If there are too many requirements then vendors may not fully respond to the RFP


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Disadvantages of Requirements AnalysisLose chance to reengineer by focusing on the ‘‘As Is” model

◦ Cements existing processes without evaluation as to their quality

Requirements are not stable, so it is likely that requirements can only chase reality

◦ Requirements are only a snap shot


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FormatTypically a list, along with a relative ranking of the importance (1,2,3,4,5)

Scripted◦ Loosely Scripted -- “show me what you have”

◦ Tightly Scripted -- “can you handle this data?”


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“To Be” AnalysisProcess of determining which best practices should be used by a particular organization, i.e., how should the organization process information, and choose the software on that basis

Focuses, not on where the organization is, but where it wants to be.

Search often includes Big 5 best practices, and ERP best practice capabilities


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Gap AnalysisMatch “AS IS” and “TO BE” to determine if any gaps.

How do we evaluate gaps?◦ Count them?

◦ Rate importance?

◦ ...


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Both Requirements Analysis and Gap Analysis Ignore Important Issues

Cost

Installation time

Flexibility

User interface

Upgradability

Implementation Personnel

Reliability …


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Cost Factors - Mini Case:Which Do You Choose?

Upgrade Oracle SAP

Implementation $3-5 M $4-8 M $6-10 M

Software Development $2-4 M $1-3 M minimal

No. of Users (Seats) 15-20 10-15 8-10


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Both approaches ...basically assume that majority wins. How do you choose, the software that has the most requested features or the most valuable features or ..?

can focus on artifacts (e.g., invoice) rather than processes


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Emerging ApproachIncreasingly, consultants are promulgating the approach where no “as is” model is developed, no gap model is developed …

Go straight to the “to be” model, since that is what really counts

Typically, with this approach the consultant knows both your organization and the software


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Emerging ApproachInstead, just choose one of the better ERP packages and choose the best practices available within that package.

◦ Systems are so good that any of the systems will have processes that are “good enough”


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How do firms choose?A Case Study

Company: Chesapeake Display and Packaging (CDP)

They used a five step approach, including a vote as to which everyone preferred.◦ Form Blue Ribbon Committee◦ Contact Vendors to Arrange Demos◦ Ask Vendor for Proof of Rapid Implementation◦ Vote◦ Make Choice


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1. Form Blue Ribbon TeamA Blue Ribbon Team (BRT) was chosen for their knowledge of the business and business processes

There were some big picture people

The committee was limited to no more than ten people


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2. Contact Vendors to Arrange Demo’sA limited number of first tier vendors were chosen, contacted and asked to prepare a demo for the BRT

Vendors were given unlimited access to the BRT for three weeks.

Demos lasted 1-2 days

Vendors choose the hardware and software that they preferred


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3. Ask the Vendor for Proof of Rapid Implementation AbilityVendors were asked ...

◦ Show your software can handle our business

◦ Show you can implement in the time required

◦ Show expertise in understanding the industry


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4. VoteAfter the demos, there were three candidates, Baan, J.D. Edwards and SSA.

In order to choose, the BRT was asked to rank 1 to 3 based on “Best functional fit” and “Best implementation personnel”


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5. Software RecommendationJ.D. Edwards was seen as offering

◦ Superior financial capabilities

◦ One integrated solution

◦ Human resources and payroll

◦ Advanced object oriented tool set

◦ A planning module that allowed for scheduling on a cost basis


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So, What do you ...Like about the way they selected their system?

Not like about the way that they selected their system?


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