Enterprise Systems for Management 2nd Edition by Luvai Motiwalla Instructor manual
- Refer to the Hershey case. What difficult lessons did Hershey learn from this entire process? Did Hershey ultimately achieve its original goals by implementing this new ERP system?
Hershey did meet its business and IT goals with the upgrade to SAP/R3. They learned the following:
- Top management must be on board from start to finish during and ERP implementation. They appointed George Davis as CIO and had other top executives participating.
- All data requirements need to be clearly defined before implementation begins. Hershey’s internal data users communicated their data requirements to the implementation team which was directed by a steering committee which included top management like the CEO and CIO.
- Slow and steady wins the race. Instead of choosing the hard cut in option as they had in the past, they rolled out the final upgrade.
- Know your business. Basic business definitions and processes were not left to external consultants but defined by involved internal resources.
- Don't try to do everything all at once. Spend appropriate time and resources testing the new system. Keep things simple by limiting the number of software applications in the new system.
- Provide examples of ERP components in an organization that you know of or where you are working. Provide examples of the hardware, software, people, processes and databases.
Good to read about ERP systems at your work. Another good example of ERP is the ISIS system that you are using for course registration, etc.
Basically, ERP integrates all data and processes of an organization into a unified system. A typical ERP system will use multiple components of computer software and hardware to achieve the integration. Ideally, an ERP system delivers a single database that contains all data for the software modules, which would include:
Manufacturing – Engineering, Bills of Material, Scheduling, Capacity, Workflow Management, Quality Control, Cost Management, Manufacturing Processes, Manufacturing Projects, Manufacturing Flow.
Supply Chain Management – Inventory, Order Entry, Purchasing, Product Configurator, Supply Chain Planning, Supplier Scheduling, Inspection of goods, Claim Processing, Commission Calculation
Financials – General Ledger, Cash Management, Accounts Payable, Accounts Receivable, and Fixed Assets.
Projects – Costing, Billing, Time and Expense, Activity Management
Human Resources – Human Resources, Payroll, Training, Time & Attendance, Benefits
Customer Relationship Management – Sales and Marketing, Commissions, Service, Customer Contact and Call Center support
Data Warehouse and various Self-Service interfaces for Customers, Suppliers, and Employees.
- If you had a choice between customizing an ERP application to meet the organization processes and modifying organization processes to meet the ERP functionality which would you choose? Explain.
I agree with some of the comments made on this DB, namely, if you have to choose between process change vs. customization, then go for process change. In the long-run more benefits are accrued with this option. However, a lot depends on the organization's goal and objectives and people. Basically, customizing the package (commercial off-the-shelf software) has lots of headaches especially when the technology upgrade becomes necessary.
Another benefit of minimizing customization is the opportunity to rethink and improve business processes. Very few firms actively seek out improvements in business processes and instead they rely on technology changes. Many of the vanilla installations have built best practices for business processes.
However it does depend on the gap between the systems best practices and the company’s current practices. With a wide selection of ERP vendors available, a company could benefit from thorough research to determine which package best fits the company's needs and is suitable for the specific industry.
Once the vendor is selected, it’s best to stick with as 'vanilla' of a solution as possible. It will keep costs down and allow easier support and upgrades. But it will require changes in employee habits. The resistance that will come from employees forced to change how they work is absolutely unavoidable, so with a vanilla implementation, managers must be prepared to deal with the resistance and have the confidence to coach employees through the changes.