ERP Systems Challenges of Enterprise

ERP Systems

Challenges of Enterprise Software Implementations

Organizations are being constrained by the lack of role-based data, information and intelligence that Enterprise Resource Planning (ERP) systems are capable of delivering today. A widening gulf is occurring between traditional means of providing data and intelligence and the rapidly evolving needs of organizations who have invested millions of dollars in ERP systems. To align the data, information and intelligence from ERP systems to the needs of organizations, role-based taxonomies and data publishing and propagation strategies need to be put into place. The low levels of customer satisfaction with ERP systems support this point as do the rapid adoption of hosted and Software-as-a-Service (SaaS) analytics applications that can be expensed in a given financial period, thereby sidestepping the control of Chief Information Officers (CIOs). There is widespread frustration in organizations at the lack of responsiveness of ERP systems, primarily because the data, information and reports they generate are only marginally useful. Over time the usefulness of ERP systems as the series of synchronization systems has been reduced by the latency of data and information provided. As the pace of many industries have accelerated due to improvements in supply chains, lean manufacturing, logistics and services, ERP systems are forced to also increase their performance. Making ERP data more relevant begins with a reorientation towards role-based data, information, strategy, and process intelligence. This dissertation's objective is to access the effectiveness of role-based data, information and intelligence in ERP systems.

Background of the Problem

ERP systems traditionally have been designed to automate core accounting and finance functions throughout organizations, with Accounts Payable and Accounts Receivable being at the center, integrated to manufacturing and supply chain systems. Over the last two decades, ERP systems have been extended throughout enterprises, encompassing Customer Relationship Management (CRM), pricing, Supply Chain Management (SCM), Service Lifecycle Management SLM) and many other ancillary areas of the organization. As the proliferation of these modules has made many ERP systems extend beyond their primary role in organizations, the ability of these systems to manage the increasingly complex and often conflicting data, information and intelligence needs of users has not scaled The lack of data, information and intelligence scalability is hindering the process of many organizations to their longer-range strategic objectives and also slowing down their ability to react to immediate market opportunities and threats.

Purpose of the Study

The purpose of this study is to quantify the contribution of role-based ERP systems to mid-tier companies in attaining their customer acquisition, lean manufacturing, cost reductions and customer service objectives. By concentrating on these four specific areas, the influence of an ERP systems' contribution on the value chain of a company can be assessed.

The first hypothesis of this study is that role-based data, information and intelligence increases the potential for an organization to react more quickly to market conditions and also nurtures trust as members of teams within companies have greater accuracy of information. The greater the accuracy of the information and its relevancy to specific roles, the greater the potential for collaboration and information sharing over time which leads to higher levels of trust being attained (Lee, Lee, Olson, Chung, 2010). Studies of the Toyota Production System (TPS) one of the most complex supply chain and ERP systems globally in use today, illustrates a critical fact about role-based data, information and intelligence. Studies of the TPS and its impact on supplier collaboration and performance indicate that over time, knowledge, not necessarily pricing or product competitive advantage, becomes the primary competitive advantage (Dyer, Nobeoka, 2000). Role-based information systems within the TPS are used to nurture cross-supplier collaboration and increase the level of trust throughout the supplier and manufacturing networks (Dyer, Nobeoka, 2000). Role-based ERP systems therefore have the potential to create significantly higher levels of collaboration and trust throughout a manufacturing network over time.

Research Questions

The following are the key research questions that form the foundation of this dissertation. First, the contributions of role-based data, information and intelligence in mid-tier manufacturing and service companies will be quantified by looking at customer acquisition, lean manufacturing, cost reductions and customer service processes. Each of these process areas will be benchmarked in organizations that have traditional ERP systems installed that do not provide for role-based distribution of data and information. A second population of mid-tier companies will be queried as to their process performance of these four areas based on their use of role-based ERP systems. The variation in performance across these four process areas based on a comparison of non-role-based vs. role-based will serve as the basis of the hypothesis testing and further phases of subsequent research.

Second, the effects of role-based data, information and intelligence on an organizations' propensity to generate greater levels of collaboration through trust will be measured through attitudinal surveys of directors and vice presidents in the sampled companies. These surveys will seek to determine if the use of role-based data made the collaboration process more or less effective, and contributed or detracted from the levels of trust organizations are able to attain as a result.

Third, the use of role-based data as a means to more effectively manage external suppliers and channel partners will be assessed by comparing financial metrics of companies who have role-based ERP systems relative to those that do not. The propensity of role-based data to create learning ecosystems as has been shown by the TPS will also be assessed (Dyer, Nobeoka, 2000).

Fourth, the use of role-based data to increase the agility of an organization will be assessed through the use of market share analysis and frequency of new product introductions relative to industry norms. These two metrics of performance will illustrate how agile role-based vs. non-role-based ERP systems are on the ability of an organization to translate innovation into launched products over time. Comparing market share growth and product introduction performance relative to industry norms will also illustrate how well integrated complex cross-functional processes are in an organization. Product introductions require intensive internal coordination and the frequency and success of their implementation when compared between role-based and non-role-based systems will be a significant predictor of overall ERP systems effectiveness. Importance of Study

Traditional ERP systems have not differentiated the data, intelligence and information to the specific needs of users, often significantly reducing the value of these systems over time. The advent of role-based data, intelligence and information shows potential to increase the overall performance of organizations first at the value chain and secondly at the trust-based level. It is the intention of this dissertation to ascertain the value of role-based ERP systems on the performance of midtier companies globally.

Scope of Study

Encompassing midtier manufacturing companies who have legacy ERP systems in one sample and early adopters of role-based ERP systems in a second audience, variance analysis will be completed to determine if there is a significant increase in value chain performance and trust as a result of role-based ERP systems. The scope of the study will also be in the U.S. To mitigate scheduling conflicts and increase response rate.