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THE PLACE AND KEY SUCCESS FACTORS

OF ENTERPRISE RESOURCE PLANNING (ERP)

IN THE NEW PARADIGMS OF BUSINESS MANAGEMENT

Enterprise Resource Planning solutions appeared on the market from the early 1980s. Generally they

comprised modules for Finance !ogistics and "anufacturing allo#ing for the management of purchases

sales stocks production etc. $hese solutions #ere referred to as Enterprise Resource Planning since they

permitted the stage ela%oration and integrated administration of the company ma&or resources 'finance fi(edin)entory materials human resource* and the associated processes.

+efore ERP the purchased or in,house de)eloped soft#are more or less interfaced #ere the only solution

offered to companies to manage their acti)ities #hile respecting separation %et#een departments tasks inputand data%ases. For e(ample in a French affiliate of a -.. %ased company one could find a "anagement

/ccounting section and a General /ccounting section. $he first #ould ensure an input of accounting

documents according to an /merican hart of /ccounts #hile the second #ould ensure an input #ith thesame documents on the %asis of a French hart of /ccounts 'in order to allo# a French fiscal declaration*.

n his %ook 2ean,!ouis !e3ueu( gi)es an ERP definition #hich distinguishes ERP from other types of

soft#are %y suggesting that it must possess simultaneously at least the three follo#ing characteristics 4

1the effecti)e management of )arious company acti)ities56the e(istence of a common data%ase5

7the capa%ility to react 3uickly to operating rules.

Fi)e ma&or editors share the ERP market #ith /P %y far the leader 4 /P R/!E /pplications

PEP!EF$ 2 E:/R and +//; .uring the 1990s they #ere a%le to get the attention of industryleaders leading to a cumulated turno)er for these fi)e editors of 1< %illion dollars. =o#e)er in 1999 and 6000

a certain market saturation #as noticea%le resulting in operational losses among certain of the editors a drop

in share )alue and press articles predicting the end of ERP.

$o understand this phenomenon #e analy>e the reasons #hich led deciders at each point in time to choose an

ERP solution.

1. Why purh!"# !$ ERP "%&u'%$

/s indicated %elo# the moti)ation for the purchase of an ERP solution has e)ol)ed #ith time.


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Figure 1: The motivations for the purchase of an ERP solutionover time.

Th# p#r%* 1++, - 1++

uring the period 1990 to 199? company management e)en for companies sho#ing strong gro#th and

profita%ility #ere focused on cost reduction #ith as a fa)orite target salary and #elfare charges #hichtranslated into reduction in the num%er of &o%s. @ReengineeringA #as all the rage. $o reduce costs the solution

#as to rationali>e the processes #ith a centrali>ed management of !ogistics and Production. Gradually the

multinational companies put the in)estment priority on European factories and distri%ution centers rather than

on country %y country units. n time the notion of Glo%ali>ation %ecame the norm. $hese tendencies #erereinforced %y the notion of @outsourcingA and progressi)ely the idea #as to displace production to those

countries #here competence e(isted %ut #here salary and #elfare charges #ere a fraction of those ofde)eloped countries.

n this conte(t the offer of the ERP soft#are editors #hich promised a strategic .$. solution @one,stop,shopA

#as perfectly timed. n the marketing and sales pitch it #as understood on the one hand that a reduction in.$. personnel #ould ensue especially those in)ol)ed in in,house de)elopment5 and on the other hand a single

data input #ould mean a reduction in administrati)e tasks and therefore &o%s related to these tasks. $his #ould

in turn ensure the pay%ack on the soft#are in)estment and its implementation. t is of note that these costsaccumulated and to an e(tent remained hidden and unseen o)er a num%er of years. /lso #orth noting is that

management no# are satisfied #ith their ERP solution e)en though no Return n n)estment #as calculatedand e)en though the total cost had ne)er %een estimated B/nother ERP sales argument #as the fact that it forced the application of standards and of uniformity in

management practices. $hanks to ERP a multinationals head3uarters could ha)e complete )isi%ility for

e(ample of stocks irrespecti)e of #here assets #ere to %e found physically. "anagement rules #ere applied

uni)ersally the chart of accounts and product codes #ere the same4 only local particularities for legal fiscaland %usiness practice reasons #ere permitted to #hat #as other#ise a glo%al corporate model.

ne can understand #hy ERP %ecame so successful for multinational managements and the .$. managementstandard for the 1990s. n the future it is likely that historians #ill attri%ute importance to ERP in the

e)olution of management practices e)en if today the ne(t stage of nternet technology applied commercially


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means there is a tendency not to look in the rear,)ie# mirror.

Th# p#r%* 1++ -1++/

$hose companies #ho implemented ERP in the years 1990 to 199? noticed aspects that #ere missing in terms

of a really integrated solution to their %usiness management needs. For e(ample "arketing and ales #ere not

catered for sufficiently %y ERP.

n this period 199? , 1998 ERP impro)ed these functionalities missing from earlier )ersions. upplementary

modules #ere offered as an add,on for e(ample for use %y the sales force in the field or to accommodate E

#hich allo#ed companies to communicate #ith their #holesalers their larger customers their suppliers. /scustomi>ation to ERP #as hea)y and costly the solutions proposed #ere often products of ERP editor

strategic partners.

Editors organi>ed regularly conferences to e(plain their strategy announce ne# )ersions of their product

listen to user e(periences and organi>e simultaneously in separate rooms meeting points #here partners could

offer add,on solutions. n time these conferences %ecame su%&ect to media attention and lu(urious #ith golftournaments %an3uets and amusements. =undreds if not thousands of persons attended and Editors competed

to choose the most prestigious of conference )enues.

-ser companies reali>ed progressi)ely that their ERP choice imposed a life long marriage #ith theirupplierCEditor and that a di)orce #as not an option from an economic )ie#point. Editors profited from this

situation %y imposing practices4 )ersion changes of their soft#are each 16 to 18 months #ith se)eral updates

%et#een )ersions %ecame a norm. ften the user companies assisted %y the Editor formed groups %y region or%y )ertical sector of acti)ity. $hese -ser Groups #ere created to lo%%y for Editor future de)elopment.

$he purchase moti)ations of prospect customers and the re3uirements of their e(isting customer %ase hadrapidly changed and ERP pro)iders had to adapt. :hat no# #as important #as an integrated solution for

financeClogisticsCproduction. /nd in addition modules adapted to )ertical sector industrial and commercial

needs responding also to "arketing and ales etc.

Th# p#r%* 1+++ - 0,,,

$he year 1999 #as characteri>ed %y Dear 6000 pro&ects allo#ing company automated systems to pass to the

year 6000. /lso to %e a%le to accommodate the Euro Editors had to offer the appropriate )ersion of their

soft#are. +ut a pause #as needed to implement these ne# )ersions and effort and in)estment #asconcentrated on this priority. For the first time ERP editors found their sales line platforming out and their

profit line sho#ing a do#n#ard cur)e.

$hose companies #ho did not ha)e an ERP solution hurried to implement those #ho had a solution hurried to%e on the right )ersion. For all the 3uestion #as the same 4 does your solution get through Dear 6000 an it

accommodate the Euro 'and not only as &ust another currency %ut in respect of all the directi)es in

application*

0. Th# %$"#u#$#" %2 ERP %$ %3p!$#"4 %$ 'h# 5%r6 %2 $*7*u!&" !$* %$ 'h# 3!$!8#3#$'

pr!'#".

0.1 Th# 3p#$'!'%$ 3#'h%*.


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t #as especially the implementation method used %y the Editors #hich impacted on the organi>ation and the

&o%s and management practices 'parado(ically more than the ERP product itself*nce the ERP choice made the classic method #as to create a pro&ect team #ith the follo#ing tasks 4

Figure 2: ERP implementation steps

$he pro&ect team #as formed of soft#are .$. specialists and key users for each module. ften mem%ers of

this team #ere those persons key for daily operations and transactions. $he first challenge #as to free them up

from their daily routine %y the use of temporary or short term contract staff for e(ample.

$he team had to first %e trained intensi)ely in the ERP soft#are in group sessions animated %y the Editorconsultant.

$hen the consultant conducted inter)ie#s so as to ha)e a %etter understanding of the profession and #orking

practices of the company. $his dialogue also allo#ed user department managements and the pro&ect team to

%etter understand ERP.

$he phase onference Room Pilot #as the occasion to test each transaction type using the ERP solution and

real data in a test en)ironment. $he o%&ecti)e of this critical phase #as to identify all pro%lems and classifythem for solution at a later date.

$he .$. specialists then for their part started the #ork of data con)ersion interface #ith other applicationsand appropriateCnecessary custom de)elopment . n parallel it #as often necessary to upgrade the central

computer %ecause one of the characteristics of an ERP #as to re3uire more computer po#er.

imultaneously key users prepared the set,upCparametering each in the area for #hich they #ere e(pert4

finance logistics or production. $o parameter the system meant using detailed management rules foreseeing

each possi%le situation. For e(ample to determine #ho and for #hat function the right to system use %e gi)en

for #hich type of re3uest modification addition to data :ho #as to define and control the master files forarticles for clients etc :hich account applied to #hich cost center associated #ith #hich %usiness unit and

#ith #hich legal entity


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$he key users )alidated the choices made %y .$. in terms of con)ersion interface and modification and#orked in tandem on the solution of issues that had %een raised in the onference Room Pilot.

/s the target !i)e date approached the end users #ere trained for their respecti)e tasks. $he technical anduser documentation #as edited and measures taken to ensure regular update. $he documentation needed to %e

the reflect of legislation and guidelines in force. n addition companies often #ished to o%tain certification

9000 or pass inspections for their sector of acti)ity 'for e(ample F/ Food and rug /dministration*

For this reason attention needed to %e paid to documentation accuracy and pertinence.

$he !i)e date #as a critical moment #hich #as achie)ed #ith more or less success according to the degree of

preparation %eforehand. $his #as especially e)ident if the migration choice #as a cutoff from the old systemsto the ne#. $he alternati)e of a period of t#o systems in parallel for se)eral #eeks or months #as often

considered too hea)y to handle. +etter prepared companies used risk analysis techni3ues and put in place

contingency and continuity plans %efore !i)e.

ERP has al#ays an important impact on the organi>ation and on management practices due in particular to the

fact that it imposes the same treatment method #hate)er the organi>ations acti)ity as #ell as a standardi>edand rigorous implementation procedure.

0.0 Th# #22#' %2 !$ 3p#$'!'%$.

$he changes in time are not necessarily dramatic e)en if for certain companies and for certain indi)iduals the

ERP implementation process #as painful or %adly percei)ed. n the other hand o%ser)ed o)er a longer

period say fi)e years the changes %et#een %efore and after ERP are radical.

1.-nified around a company pro&ect.

First of all the ERP implementation often percei)ed as an .$. pro&ect %ecomes rapidly a company #ide

pro&ect of large proportion. $he efforts and resources mo%ili>ed are significant the decisions to %e taken need

consensus among different department managements the organi>ation #orking methods ha)e to %e at theoutset re)ie#ed and rationali>ed and the implications of ERP ha)e a ripple effect throughout all the

companys acti)ities.

For many companies staff and employees at different le)els rallied around the pro&ect team of .$. specialistsand key users. +y com%ining their kno#ledge of the old and ne# .$. system and their e(perience of the

%usiness and organi>ation they #ere a%le to truly &udge their profession company and its processes. $his

synergy encouraged %y the teering ommittee led to the definition of %est practices and a reduction insuperfluous tasks dou%le input and a redesign of data%ases #hich may not ha)e %een up to date #ith

redundant data managed %y different departments etc.

Figure 3: The consequences of an ERP project


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$he ERP implementation often presented an opportunity to take the time to reflect on company operations.

ometimes the #ay of #orking #as for historical reasons #hich no,one present could &ustify. n this #ay the

simple fact of e(plaining certain company procedures to outside persons such as the ERP consultant often putthe spotlight on a num%er of dysfunctions.

6.+reaking do#n of %arriers.

+arriers is perhaps too strong a term %ut it is true that di)isions departments and ser)ices #ere %rought

together since an integrated soft#are implied that finance 'accounting and management reporting* logistics

'order processing #arehouse e(peditions after sales ser)ice* or production needed to use a common data%aseand system.

For this reason directors .$. specialists and key users had to concert to discuss management rules and thecontents and control of data%ases. $his continued #orking together and consultation %ecame a fundamental

element of success and ERP pro&ect ad)ancement.

7.Persons #ho lost a point of reference.

For certain and irrespecti)e of their le)el in the hierarchy the changes pro)oked %y ERP had a desta%ili>ing

effect. For e(ample4,For a user comforta%le #ith a certain method for reregistering transactions it may appear to %e desta%ili>ing

to con)ert to a ne# system.

,For an .$. specialist used to de)eloping solutions as and #hen users re3uired may find difficult to re)ise thispractice.

,For a director in the ha%it of controlling information and e(amining figures prior to reporting to head office

it may %e hard to adapt to recei)ing information not necessarily in the same format and information #hichcould %e consulted %y hisCher superiors in real time.


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For this reason of insta%ility and the resulting latent resistance many pro&ects sa# their %udget costs and

delays e(plode. $he notion of oaching hange "anagement no# %ecame a part of implementationmethodology. ne had come far from a simple .$. pro&ect .


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Processing an employee could see on screen if a product #as a)aila%le or not the credit situation of the

customer the normal addresses for shipping and in)oicing etc. n other #ords the employee could replydirectly on the telephone to )arious 3uestions.

n the other hand a user or .$. specialist could no longer master all information. +efore ERP and #ith in,house de)elopments it #as relati)ely easy to isolate a program chain to inter)ene and correct. ERP ho#e)er

#as too comple( and its source code rarely a)aila%le.

$he ERP editor and its consultants %ecame omnipresent among their customers. t %ecame commonplace tosee consultants and programmers to the e(tent it #as confusing as to #ho #as )isitor and #ho #as employee B

H.hanges in the relation %et#een customers suppliers partners and intermediaries.

uring the 1990s decade one could see de)eloping changes in relations %et#een company partners. First of

all #ere the E solution tended to create stronger links.

+ut it #as the use of nternet technology in a commercial sense and the ad)ent of Electronic ommerce #hich

%rought in a ne# dimension to %usiness dealings and the relations %et#een the company and its en)ironmentn fact ERP is an fundamental element of + to + '+usiness to +usiness*.

/n argument #ould %e to say that to %enefit fully from + to + the t#o follo#ing conditions need to coe(ist4 a*

a rethinking of %usiness processes and %* the reali>ing of an ERP solution using a methodical and disciplinedimplementation method. For e(ample once a sale is registered there needs to %e the follo# through to ensure

the physical logistics and to pro)ide an e(emplary customer ser)ice at each step. t is the people in)ol)ed the

processes and a pro)en ERP solution #hich #ill ensure the response le)el demanded.

9. Th# p&!# %2 ERP $ 'h# $#5 3!$!8#3#$' pr!'#".

ERP contri%ution to the #ay companies are managed.

:hat are the real contri%utions of ERP to the company n #hat #ay is ERP the foundation on #hich anElectronic ommerce solution can %e %uilt

Reduction in effort for the collect and input of data 4 immediate input at the moment of the

transaction.

Possi%ility to interrogate in real time and at distance integrated information from different

functions.

iscipline and uniformity applied to processes and #orking methods.

+reaking do#n of function and geographic %arriers.

Real time aid to decision,making5 for e(ample %etter )isi%ility of stocks leading to higher

ser)ice le)el to the customer.

ntegration of acti)ities from the taking of the order through to the planning of production5

from #arehouse picking and dispatch through to in)oicing5 the transactions %eing automatically

recorded in an accounting format.

/ successful ERP implementation led to a simplification of management processes.

t is the reason for #hich e)en the larger multinationals ha)e %een a%le to profit from ne# technologies #iththe same speed of adaptation as the start,ups. E)en the ERP editors #ere surprised.

$he real role of Electronic ommerce is to act on applications such as upply hain "anagement '"*

ERP and ustomer Relationship "anagement 'R"* , a stretching of the company on the one hand to its


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supplier on the other to its customer as #ell as other partners such as employees tate etc. 'ee figure ation and %usiness

process impact of such a pro&ect. $he dialogue #ith the Editor tended to an underestimation sometimes a

flagrant underestimation.

;o#adays and #ith the %enefit of hindsight there is a consensus among authors as to key success factors at

this Pro&ect !ife ycle first stage.

The need for a Project Sponsor

atish amath refers to this as to asking the 3uestion @:ho is the Pro&ect hampion A

f the pro&ect the ERP implementation is associated #ith a person , a person #ith management clout a person

responsi%le for a %usiness unit concerned a person #ho hierarchically and %y personal charisma is forcefulkno#n respected liked throughout the company this helps to assure pro&ect success. $his person is seen to %e

associated and permanently associated #ith the pro&ect irrespecti)e of percei)ed success or failure at any

moment in time.

ome companies did not ha)e a champion and the pro&ect %ecame an .$. pro&ect among others or an

imposition from =ead ffice etc.

/ first success factor is therefore the identification of a strong internal o#ner. tephen P. !aughlin classifies

this as one of si( key success factors.

A strong management commitment

$he ponsor and later the Pro&ect $eam to %e effecti)e needs a strong and maintained managementcommitment.

$op "anagement and their continued in)ol)ement support commitment mo%ili>ation is )ital. n other #ords

if the "anaging irector does not ha)e the successful ERP implementation as say one of hisCher si( personalma&or o%&ecti)es 'of the year in 3uestion* there is already a handicap.

Identification of a Project Coordinator

;either the Pro&ect ponsor nor the General "anagement can %e e(pected to motor the pro&ect through e)en

if their implication is key. $hey #ill pro)ide )ision and impetus.

$o manage the day,to,day to manage the detail of the %udgeted costs and delays the identification and

interdependence of tasks the allocation of persons to task the reporting the animation of meetings etc.

necessitates a Pro&ect oordinator. ften this #as the .$. "anager and often he or she had to com%ine thisrole #ith .$. epartment "anagement. $his makes sense as .$. is highly in)ol)ed and later #ill %e

instrumental in data con)ersion interfaces and modifications.

/ compromise if the .$. "anager is Pro&ect oordinator #ould %e to make the Pro&ect oordination functiona priority and pro)ide assistance so that %oth epartment super)ision and Pro&ect oordination can %e


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maintained. $he Pro&ect ponsor %eing a +usiness -nit leader should lessen the risk of the pro&ect %eing .$.

dri)en.

A strong business case for the Project.

/nother utset uccess Factor especially in hindsight is the need for a strong %usiness case for the

implementation.

f the reason for adopting an ERP solution is purely to align an affiliate #ith a =ead ffice choice or #ith ahidden or open agenda to reduce the num%er of personnel to centrali>e control and reporting so that a local

management is %rought to line or if simply the %usiness needs are secondary , these Jmoti)ations can add to

resistance either from the start or at a later date. $his resistance can %e manifest or latent5 in %oth cases theconse3uences in terms of cost delay implementation 3uality could %e ma&or.

$his may seem self,e)ident %ut these errors #ere committed time and again. / takeo)er may%e a hostiletakeo)er and #ith personnel and middle management concerned for their future #as not al#ays helped %y say

a decision to go from one Editor to another simply to suit the ne# o#ner.

/n ERP choice to replace disparate systems to impose a corporate product coding to impose a corporate set

of accounts #hile lauda%le encountered considera%le resistance if local %usiness practices fiscal and legalneeds #ere ignored. ncidentally the resistance might not ha)e %een only internal , ta( authorities auditors

suppliers and customers may also ha)e %een )ocal in their o%&ections.

:hat #e are no# seeing is that if the moti)ation came genuinely from a strong %usiness need clearly

identified and common to all then the Pro&ect could %e Jsold.

$his aspect of resistance is important and highlighted %y )arious authors.

=er% rasner demonstrates that in o%stacles prior to going !i)e 6 K relate to people 1K to %usinessprocess issues and 16K to .$. technical issues. /lthough difficult to 3uantify it can %e assumed that a part of

the 6K relates to resistance.

$he %usiness case could %e an o)erriding factor such as Dear 6000 if e(isting systems could not accommodateor the handling of the Euro. /ndCor the need to a%sor% gro#ing %usiness or of streamlining order processing

in)entory management and e(peditions. 2oanne :. Ross stresses this need to de)elop a clear %usiness case that

clarifies performance o%&ecti)es.

/ mistake often made #as not only to see the ERP implementation as J&ust another $ pro&ect %ut as a

finality in itself. f no %usiness case #as associated and as management and personnel disco)ered that the

pro&ect #as painful costly time,consuming , the momentum #ould stallI

/nother reason #hy this success factor #as underestimated #as the option taken %y many companies to tailor

the actual #ays of #orking to the ERP solution rather than to use the implementation as an opportunity to

reengineer and align on %est practices.

Clear vision

Patrick Lerger of MP maintains that a good definition of o%&ecti)es at the outset is fundamental. $he effect of

ERP #as to put the house into order. +ut to achie)e #hat

:hile company deciders in the early 1990s did not necessarily foresee the e(tension of their ERP pro&ect toinclude uppliers or ustomers in the sense of respecti)ely upply hain "anagement '"* or ustomer

Relationship "anagement 'R"* or the commercial usefulness of nternet in complement or as an alternati)e

to E a success factor is the clear )ision to get the momentum going.


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Patrick Lerger goes further in suggesting that the )ocation of ERP is to %ring rationality logic and order to a

company. !eo /potheker says that ERP #as designed to accelerate the company processes 'stockmanagement client satisfaction etc.*. 2ames onnolly notes that the appeal of ERP may come less from its

cash %enefits and more from its a%ility to untangle snarled %usiness practices and systems. +ruce ald#ell and

$om tein go further (ERP forces 'iscipline an' organi)ation aroun' processes" ma*ing the alignment of + Tan' ,usiness goals more li*el- in the post ERP era. /uthors tend to concur on this contri%ution of ERP

2oanne :. Ross says the challenge is that ERP installs discipline into an undisciplined organi>ation.

$he success factor of clear )ision is the con&ugation of this logic clear mind discipline etc. #ith a clear ideaof #hat is #anted as an end result. $hese o%&ecti)es #ill translate later into needs re3uirements into measures

checks and %alances control and a means of calculating a return on in)estment 'financialCnon,financial*.

$his means company deciders asking the 3uestion @:hat are #e doing this pro&ect for and ho# does it fit into

the larger picture of our %usiness and )ision A

Re engineering, Rethinking Change and Change !anagement "enchmarking and "est Practices.

/gain out the outset and %efore leading into the ;eeds Re3uirement definition a success factor is thelateral thinking a%ility of top management.

$hose #ho em%raced change instead of a)oiding it #ho #ere #illing to critically study ho# things#ere %eing done and remo)e duplication redundancy illogicality. ometimes a #ay of doing things had

e)ol)ed historically and might ha)e made sense at one time %ut no longer did today.$o %e a success factor this openness needed to a)oid the notions of Reengineering as purely an e(cuse

for cost cutting &o% reducing.

=er% rasner points out that an ERP first step is to re,engineer do#nsi>e rightsi>e or other#ise streamline%usiness processes in pursuit of a competiti)e edge or greater efficiency. ameer +. esai identifies an attitude

#hich stresses on %usiness transformation instead of process automation as a success factor. =e cites another

as culti)ating an approach #hich %rings a%out the proper integration of people process and technologythrough effecti)e management of change.

/nd management of change includes education training and communication. t means understanding andcommunicating the implications of ERP on corporate culture and decision,making.

n summary these outset success factors demonstrate the important role of $op "anagement. $heir

responsi%ilities at this stage include41identify a Pro&ect ponsor

6ensure a strong management commitment

7identify a Pro&ect oordinator


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specialists to test each transaction type through the ERP solution against a prepared script.

=o#e)er many authors #arn against the ;eeds Re3uirement %ecoming too rigid. Parado(ically a failure

factor in ERP implementations can come a%out if the ERP solution is e(pected to fit the %usiness re3uirements

rather than )ice )ersa. $his can %e difficult for the "anagement and taff to accept. $he tendency is to #ant torein)ent the ERP solution to match e(actly ho# things are done or ho# things ideally should %e done.

/lso there is perhaps a fear to align on a mediocre solution along #ith competitors all putting in ERP

solutions of one kind and another and a desire to remaining indi)idual4 Jthe #ay things are done round here.+ut this thinking means perhaps not taking into account %est practices %uilt into the solution %y the ERP

Editors resulting from research across a #ide num%er of industries and indi)idual companies. /lso mo)ing

a#ay from standard means not %enefiting from the ad)antage of an integrated system #ith one input oftransaction data. $he impulsion to customi>e the ERP solution e(tensi)ely leads to remo)ing the ad)antages

that had %een sought for in the first place. /s 2oanne :. Ross illustrates ( -ou are more li*el- to reap ,enefits

if -ou mol' -our ,usiness processes to fit the s-stem rather than the other /a- roun' N O. he adds that ERPis like concrete 4 (eas- to mol' /hile ,eing poure'" nearl- impossi,le to reshape after it is set . Frank ca)o

goes further saying that a characteristic of fastCsuccessful implementations is to change the %usiness to fit the

system and >ero modifications. ertain companies had >ero modifications as a corporate rule. tephen P.!aughlin suggests that a company must change its e(isting processes to conform to Editor assumptions a%out

management philosophy and %usiness practices.

n a study %enchmarking /P implementations %y the -ni)ersity of t. Gallen #it>erland the conclusionsare that %est performing companies use /P as a core system use /P functionality #here applica%le and

add functionality or use functionality outside the /P system #here necessary. f #e link this to the

aforementioned Gartner Group comment then the customi>ation should %e less than 1? K ideally.

Patrick Lerger of MP points out that the ERP product needs to adapt to the enterprise %ut the enterprise has

to adapt also to the ERP product. $he ERP soft#are is fle(i%le through the parametering or set,up choices itallo#s and %y complementary modules or products 'sometimes through strategic alliances #ith other Editors*

for enhancements to the soft#are in standard addressing a particular need or %usiness re3uirement. $he

complementary products often concerned tools for the ales Force /fter ales er)ice "arketing orReporting associated #ith %ut remo)ed from core functionality such as /ccounting rder Processing

n)entory "anagement etc.

$he -ni)ersity of t Gallen study e(plains that the highly integrated nature and comple(ity of ERP systems

re3uires common #orking practices and standardi>ation of processes. $his %ecomes e)en more important inthe conte(t of multi site implementations across %orders. $here needs to %e common choices as to for e(ample

hart of /ccounts or Glo%al Product odes and as much ERP solutions standard as possi%le.

$he e(ceptions #ould %e due to local %usiness practice fiscal or legal constraints. /lso the aspects of ;eedsRe3uirement for the particular company #hich are not catered for %y the ERP solution in standard and need to

%e customi>ed , an e(ample might %e %atch tracea%ility enhancements for a Pharmaceutical company.

/nother success factor is to %e prepared to continually re,look at the ;eeds Re3uirement through the rest of

the Pro&ect !ife ycle stages and %eyond !i)e. (0ou have to treat it li*e an organic s-stem says Erinalla#ay. Frank ca)o recommends significant post,implementation #ork. $he -ni)ersity of t Gallen study

points to %est performing companies continuously #ork on integrating /P use and %usiness processes.

C%$&u"%$

n summary ERP is the foundation of present and future success of Electronic ommerce +usiness to

+usiness. t is pro%a%le that the term ERP 'ne)er )ery e(plicit* #ill disappear that the editors too #ill

disappear if they cannot rein)ent themsel)es . +ut 'h# 'r!$"2%r3!'%$ '%5!r* $#5 ;u"$#"" p!r!*83" 5&&

;# !h#7#* ;y 'h# %3;$!'%$ %2 ! r#'h$6$8 %2 pr%#""#"4 ! p#r2%r3$8 ERP "%&u'%$4 !$* 'h#

I$'#r$#' '#h$%&%8#". $hese elements taken separately do not e(plain the transformation #e are #itnessing

today. t is the synergy of a com%ined effort process ERP and technology #hich leads to this transformation.t is in fact the first time that the company has the re3uisites to really situate the customer as so)ereign.


14/14

/s far as critical success factors the ;eeds Re3uirement had to %e formal detailed and lead naturally

to an ERP solution choice. t also set a frame#ork for scripts tests in later implementation phases.+ut there needed to %e a certain humility and fle(i%ility so that the %enefits of the ERP solution %e

optimi>ed. $he ustomer had to say #ant this this and this %ut also listen carefully #hen the Editor said

can deli)er this this and that. -nless there #as an o)erriding %usiness legal or fiscal reason the economicpath #as one of compromise. / Jfailure factor could %e either not sufficiently e(pressing o%&ecti)es needs

constraints clearly5 or ha)ing done so sticking to them so rigidly that the ERP solution #as customi>ed or

interfaced to death.

$he success factors to this point in time i.e. at the outset of the pro&ect implementation often dictated#hether the pro&ect #ould ultimately %e in line #ith %udget costs delays and e(pectations. $o use the concrete

metaphor already cited the errors made at this stage #ould %e difficult to correct 'remold* later on.

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