ERP Revelations: The dynamics of contextual forces

Transcription

1 ERP Revelations: The dynamics of contextual forces Joe Nandhakumar School of Management, University of Bath, UK Matti Rossi, Jari Talvinen Helsinki School of Economics, Finland Structure of the talk Aims and goals Research method Intro to case company ERP implementation process planned vs. realized system Theoretical and practical Implications 1

2 Aims ERP implementation & use context to understand the relationship between the ERP implementation process and the underlying influences within the context to conceptualize the triggers and consequences of the contextual forces Research approach in-depth case study approach study was carried out in a large multinational company (EURMOBIL - a pseudonym) that went through a major re-organization the study mainly focused on order-fulfillment project as part of a global change program data collection involved intensive participation in the project from its initiation in late 1997 to mid-1999 (15 months period) follow-up interviews were carried out until

3 EURMOBIL a large, long-established multinational company in the telecommunication sector 50,000 employees in over 100 countries it has four major product segments: mobile operations (e.g. mobile base stations) fixed line telecom operations enterprise communication solutions consumer products (mobile phones) traditionally fixed line operations were profitable but currently mobile operations became the most profitable part The company has two main operations business-to-business and consumer solutions it implemented a standardized enterprise wide information system (ie SAP) to streamline supply chain Technology as a tool for global standardization EURMOBIL wanted to position itself as the most advanced telecom equipment maker It had been lagging against competition, yet wanted to position itself as a 21st century company Globally integrated and standardized logistics and optimized sourcing seen as enabler ERP would then provide the data on the operations on real time However, this needed massive process development, standarization and implementation efforts 3

4 Overall organization of the change program CorporateERP Program Management researcher B-to-b program Manager B-to-b program Council B-to-b program office Project management Sales & Marketing Sourcing & Supply Projects & Implement. Customer Services Project managers -Y200ERP -LogisticsERP -CorporateERP Systems & Process Integration Change Management & Communication Simplify and streamline the supply chain From this to this Suppliers SU Order Orders KAM Order Final delivery First-tier suppliers Make to order Supply unit Direct order Direct delivery KAM Order copy Customer Site/- delivery point Deliveries Variations of process per product One common process Variations of process per product Many internal hand-overs Multiple stocks of material Costly fire-fighting Many different processes Reduced complexity Simplified handling Clear split of responsibility One common process 4

5 Planned project timeline Functionality HR Maintenance Logistics Logistics Base processes Base processes Base processes Time Y2000ERP Aug 98 LogisticsERP 4Q98 CorporateERP 2 Q99 Changed course six months into the project the company went through turmoil, revenue collapsed CEO was fired the new CEO joined from the mobile operations the CIO was demoted from the management team changed centralized to de-centralized logistics the whole project blueprint was changed at least once during its course 5

6 Main components of the realized ERP Phase 0 Phase 1 Phase 2 Phase 3 CorporateERP LogisticsERP LogisticshubERP LogisticsdirectERP Y2000ERP BaseERP US Local ERP HR ERP HR ERP LogisticshubERP LogisticsdirectERP Y2000ERP BaseERP national organizations reluctant to give up legacy systems systems in many national organizations were not year 2000 compliant US Local ERP providing a model of logistic centre based implementation to show progress and maintain the momentum intentionality technology culture power the concept of global systems clashed with the culture of national companies bargaining power between the poor and rich divisions new CEO from mobile network undermined the LogisticsERP as this benefited fixed line biz Y2000ERP became a global template for the ERP 6

7 Underlying forces at the managerial level - intentionality e.g clear intentions to replace legacy systems + to transform all the fulfillment processes into standardized global process. at the organizational level - social structure Power: e.g. the new CEO from mobile used his power position to undermine the LogisticsERP Culture: e.g cultural freedom to run their local operations conflicting with the concept of global systems and processes at systems level - affordance (nature of the systems/ perception of what action is possible with the system) e.g year 2000 compliant, common accounts/standard product catalogue for ERP module to function forces were interrelated and contingent upon other contextual conditions e.g. power relationship of the new CEO and the favourable market for the mobile Emergence and consequences of the drift and control of ERP implementation Managers action Intentionality Enable/ constrain Produced/reproduced Social Structure Affordance Resistance/ accommodation 7

8 Theoretical Implications conceptualizing the relationship between ERP implementation process & the underlying contextual influences takes account of managers intentions, the nature of technology and the power/cultural context triggers of technology drift associated with ERP system and the consequences of these drifts taking account the affordance of the technology and thereby opening the technology for social analysis Implications for practice approach to managing ERP project should take into account: the need for customization & improvisation to accommodate revised goals the need to take advantage of emerging capabilities and opportunities by understanding the contextual forces and the triggers and consequences of ERP drift, the nature of changes required to the systems can be anticipated and evaluated when the situation is novel and confusing (e.g. EUROMOBIL ERP) => trial-and-error, venturing, learning by doing, intuitive action and improvising are preferred when the issue is clear and there are well-established organizational processes to be implemented into the system = > rational planning would be preferred 8

9 Contact information Joe Nandhakumar School of Management University of Bath, Bath BA2 7AY, UK th.ac.uk Phone: Fax: mnsjn Matti Rossi, Jari Talvinen Helsinki School of Economics P.O. Box 1210 FIN Helsinki Finland Phone: Fax: