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Role-based ERP systems are critical for the siloed, highly inefficient architectures of legacy ERP systems to be made more relevant, contribute greater financial performance, and lead to higher levels of overall customer satisfaction.
c. Purpose of the study
The purpose the study is evaluate how enterprises who adopt role-based ERP system implementations are able to attain higher levels of financial and operations-based performance vs. those that rely on silo-based, more functionally defined ERP structures. Role-based ERP systems have been proven to lead to greater order accuracy, velocity and customer satisfaction as a result. The ability to gain greater visibility throughout supply chains, better manage pricing, discounts, implement and maintain contract management systems, and also deliver consistently high customer service have all been attributed to role-based ERP systems. Conversely siloed ERP systems that are managed strictly to functional areas have been shown to severely limit the ability of enterprises to be more responsive to market demands. Originally designed to maximize and over time in fact optimize the performance of functional departments of an organization, these ERP systems today restrict the ability of organizations to be more market-driven.
The transition of ERP systems from just being systems of record to being catalysts of competitive advantage have led to role-based designs becoming prevalent. Higher satisfaction levels of users, greater efficiency in supply chain management and visibility, more effective and focused channel management strategies and programs, and many other benefits are derived when the data in an ERP system can be more effectively used. This is the central problem that this dissertation looks to address.
d. Research questions
The following are the key research questions of this study. These are later used as part of the hypothesis for this study and in the definition of methodology.
1. Do roles-based ERP systems deliver greater levels of operational performance due to the latency of data being minimized and the accuracy maximized? In other words are role-based ERP systems more effective at delivering the right information or analysis at the right time to make decisions more effectively and therefore reduce chances for errors?
2. Are role-based ERP systems more effective at contributing to enterprise-wide strategies including more effective channel management, supply chain management, service lifecycle management initiatives compared to their functional equivalents?
3. Are role-based ERP systems really more agile at providing more insights into the performance of individual functional and cross-functional teams and initiatives, including the capturing of more collaboratively focused Key Performance Indicators (KPIs) and metrics?
4. Do role-based ERP systems lead to greater levels of ERP adoption than their more siloed and functionally-defined counterparts?
5. Is the scalability of role-based ERP systems more effective for those strategies where channel management is an integral area of a company's overall business strategy?
6. Can role-based ERP systems contribute to greater levels of performance of quoting, product configuration and mass customization strategies for manufacturers?
7. Are the costs associated with redesigning a previous-generation ERP system to enable it to be more role-based earned back in operational efficiencies, higher levels of order accuracy cost savings, and increased Turn on Investment (ROI) over time?
8. How do integration technologies, specifically XML, influence the design and performance of role-based ERP systems over time? XML is the integration technology that ERP systems increasingly rely on for connecting diverse databases.
These are the most critical questions to be evaluated in the context of this dissertation. The focus on how to quantify the performance of role-based ERP systems as they relate to both individual contributor productivity and their impact on the broader financial performance of an organization need greater assessment. Implicit in this dissertations' analysis is an evaluation of how the adoption rates of each of these generations of ERP systems impacts the ability of the enterprises that have standardized on them to respond to highly uncertain market conditions.
e. Importance of the study
The highly turbulent nature of global economic conditions and the inherent risk they represent is today a very powerful catalyst driving the adoption of analytics, business intelligence, more real-time financial reporting and analysis, and in general a much higher level of reliance on KPIs. Risk reduction through more effective analysis of market uncertainties, better analysis of supply chain and sourcing dynamics, and the definition of contingency strategies all require process-based platforms capable of scaling to respond to strategic threats and opportunities enterprises have. The growing adoption of Service Oriented Architectures (SOA) is primarily being driven by these needs enterprises have for highly process-centric systems that can align quickly to the unique information requirements that individualized roles in an organization have. The SOA platforms early adopters are incorporating into their companies augment and strengthen their ERP systems to deliver greater accuracy of data, more real-time analysis and over time become critically important for the definition of customer-based strategies. The greatest adoption rate of SOA platforms is in fact specifically for redefining, augmenting, strengthening and making more focused the customer-facing strategies companies have. In one sense the SOA frameworks that early adopters are relying on are the transitory technology to being truly role-based on their ERP system implementations. Industry analysts and observers point to the fact that SOA frameworks may be short-term in duration given the rapidly changing ERP and enterprise systems landscape. Initial studies of this specific area of adoption indicate however that SOA frameworks are becoming so engrained in the customer-based and customer-centric strategies of enterprises using them that it is doubtful they will be replaced, only expanded. The area of greatest expansion will be in the development of Web Services (Alonso, Kuno, Casati, Machiraju, 2004)
that can integrate into SOA frameworks and replicate the functions of traditional, silo-based ERP systems.
With SOA frameworks emerging as the catalysts of more customer-driven strategies and also being seen as reasonable substitutes to role-based ERP systems, this dynamic of Web Services adoption on SOA platforms needs to be taken into account in this analysis. For those enterprises not choosing to rip and replace their ERP systems or significantly modify them to support role-based data, business intelligence (BI) and EPM functions the use of SOA frameworks with selective integration of Web Services is an interim platform approach enterprises are taking to spare the cost and time of entirely becoming role-based (Alonso, Kuno, Casati, Machiraju, 2004) in ERP strategies.
The important of the study therefore is multifaceted. The validating or refuting of role-based ERP systems delivering higher levels of financial and operational performance relative to more rigid, inflexible silo-based platforms needs to be assessed. This is critically important to the definition of ERP role-based systems and their ability to provide real-time, accurate, and relevant enough data to drive better decisions. Making these dynamics more difficult to clearly predict is the growing adoption of SOA frameworks and the flexibility these provide for selective adoption of Web Services. Web Services are often adopted as additions or extensions of ERP systems that have failed to scale to meet the needs of organizations over time (Amoako-Gyampah, 2004). In effect SOA frameworks then are becoming the interim substitutes that forestall the painful and very costly decision to rip and replace one ERP system for another. SOA frameworks fill this void of siloed, more inflexible ERP systems and also provide enterprises with the option of evaluating Web Services to support their more customer-centric strategies (Amoako-Gyampah, Salam, 2004).
Balancing between the traditional, highly siloed and inflexible legacy ERP systems and the early adopters of SOA frameworks are those ERP systems that have been modified to provide for role-based use. Included in these role-based uses are business intelligence (BI), data management, and EPM. While BPM and BPR strategies are more quickly accomplished using SOA frameworks given their process-centric structure, the value of role-based ERP systems is in their ability to more precisely align with the engrained processes of how companies manage mission critical strategies. Of the three options of staying with a functionally-defined legacy ERP system, choosing to adopt an SOA framework with selective use of Web Services, or define and create a role-based ERP system based on legacy and new components, the last has the greatest potential for the highest ROI and probability of success. It is the intent of this dissertation to explain why this is. Studies indicate that overcoming resistance to change in any ERP implementation begins when those using the system have a voice in how it is being defined. A secondary benefit of defining a role-based ERP system is that there is greater potential for those most impacted by it to have a say in its creation, design and eventual launch and use enterprise-wide. The importance then of this study is in defining and intermediating between these three critical alternatives that enterprises must contend with to ensure their ERP systems stay more responsive and relevant to their ongoing business strategies.
Finally the connection of role-based ERP systems' performance to…[continue]
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