What is an Enterprise Wide Application?

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What is an Enterprise Wide Application?

• Introduction and principles

Based on Chapter 1 in Adam, Frederic and Sammon,
David (2004) The Enterprise Resource Planning
Decade Lessons Learned And Issues For The
Future, Idea Publishing Group, Hershey, PS.
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Enterprise Wide Applications

• As the name indicates
• Keywords
• .

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Enterprise Wide Applications

• As the name indicates
• Keywords
• Integrated
• Centralised
• Best practice
• Cross functional
• mega packages
• Costly (inc. hidden costs)
• Highly complex
• High impact on business

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Definition

• No simple definition
• American Production and Inventory Control Society
  (APICS)
• an accounting-oriented information system for
  identifying and planning the enterprise-wide
  resources needed to take, make, ship, and account
  for customer orders
• Transaction-oriented / operational

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Family of applications

• Enterprise Resource Planning systems
• Supply Chain Management
• Customer Relationship Management
• Other more specialised applications such as
  planning, warehouse management
• Merging into ERPII / XRP encompassing all
  aspects of the business

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A Complete Family Tree
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XRP - Overview of modular design
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ERP Family history (brief)

• As old as Fred under a variety of names
• ERP name early 90s
• Definitely here to stay
• ERP creates a level of dependence that far
  surpasses the dependence associated with prior
  technological regimes
• ERP related expertise is in need in most firms

Markus, M. L., Tanis, C. (2000). The
Enterprise Systems Experience From Adoption to
Success. Claremont, CA Claremont Graduate
University.
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Software characteristics

• Modular
• Centralised single instance model
• Reliant on large database (eg oracle)
• Web based interface
• Robust but inflexible
• Configurable rather than customisable
• Very dependent on data entry

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Key modules
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Goals of ERP implementations

• Standardisation / centralisation
• Control eg integration of financial data
• End fragmentation of legacy systems
• More visibility on key processes
• Optimisation / productivity gains
• Competitive advantage?
• Platform for other projects infrastructure /
  backbone
• Mechanism for integration of latest technologies
  (eg RFID)

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Other strong points

• No more uncoordinated applications eg quality
  control
• No more re-keying
• Solution to reporting problems across the board
• Sorting out HR
• Harmonising nomenclatures eg product codes,
  inventory files

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Problems with ERP

• Impact on business processes (eg flexibility)
• Understanding the fit problem
• Doubtful benefits realisation (50 failure rate?)
• Measurability
• True origin of benefits
• Impact on firm in wider sense
• People
• Clients / suppliers / partners
• Cost / disruption factor
• Time
• Learning curve
• Coping with evolution (version control)

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The Tower of Babel
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• Gorry and Scott Morton (1971)
• The integrated management information systems
  ideas so popular in the literature are a poor
  design concept. More particularly, the integrated
  or company wide database is a misleading notion
  and even if it could be achieved, it would be
  exorbitantly expensive

Gorry A. and Scott Morton. M. (1971) A Framework
for Management Information Systems, Sloan
Management Review, Fall, 55-70.
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• Dearden (1972)
• The notion that a company can and ought to have
  an expert (or a group of experts) create for it a
  single, completely integrated super-system - an
  MIS - to help it govern every aspect of its
  activity is absurd

Dearden, A (1972) MIS is a mirage, Harvard
Business Review, January / February
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ERP Stats

• Market dominated by 4/5 vendors though listings
  show 50
• SAP (around 30), JD Edwards/peoplesoft, Baan,
  Oracle, MAPICS
• SAP alone 19,000 customers in 120 countries,
  adding up to 12 million users in 65,000 sites.
• This number of firms cannot all be wrong!