The Relation between BPR and ERP Systems: A Failed Project

David Paper, Kenneth B.Tingey, Wai Mok

Chapter XI

Executive Summary

Vicro Communications (pseudonym) Reenginering its basic business processes With the aid of data-centric enterprise Relying completely on the software Software might increase:

Information sharing Process efficiency Standardization of IT Data mining /warehousing capabilities

Executive Summary Management made no attempt to: Rethink existing processes before

implementation of the software Obtain feedback from employees familiar with

existing business or legacy systems For Vicro, reengineering effort failed even

after investing hundreds of millions of dollars Software is currently being phased out

Background International provider of products and services

that help companies communicate through print and digital technologies

Leading supplier of document formatted info.,print outsourcing and and data based marketing

Vicro designs, manufactures and delivers business communication products, services and solutions to customers

Background

Operates over 100 warehousing facilities Nearly 14000 employees serving 47

countries 2.45 bil in 1999 and 2.26 bil in 2000

revenue Provides consulting, proj. management,

reenginering and distribution of high volume, customized communications to its clients

Latest print and digital technologies Market leader in managing critical business

communications

Setting the Stage A conservative organization It doesn’t embrace “bleeding edge” tech. Wants to deploy proven tech. that will help

satisfy and exceed customer requests and expectations

Experimented with business process reengineering(BPR)

Literature BPR as a savior of underperforming

organizations BPR as next revolution in performance via

process improvement and process change Flawed BPR strategy:

Inappropriate use of consultants Workforce tied to old technologies Failure to invest in training Legacy system out of control

Case description Virco Communications under-performing BPR efforts would be facilitated by data-

centric enterprise software Vicro chose 30 years software Legacy systems were never considered Stakeholders wanted to complement BPR with

IT Vicro made no attempt to align business

propcess changes with business objectives

Data Analysis

Formal and Informal Interviews

Common Patterns /Themes General Theme : Breakthrough technology in the BPR process

Data AnalysisInterview Use of Computers Use of HPT (High Profile Technology)

Manufacturing systems Project ManagerRon Dickerson

Technology Usage

PCs and Mainframes Data Collection Storage Reporting Communication Data-Centric problem solving

Process Improvement

Relationship between BPR and Technology No Design for new processes Not Redesigning existing processes No match between enterprise software and

best practices

HPT AdoptionHPT was not flexible enoughMismatching the existing processesLegacy systems are still in placeHPT doubled the activityHPT was not user friendly20 modules in HPTHPT was not customizable

CEO Mandate HPT forced everyone to use a standardNo real experience with BPR Invest Much NO RESULTNo look at the state of the existing processes

Change of Leadership

Enterprise IntegrationHPT did nothing to facilitate enterprise integration.

Invest on HPT instead of Rethinking the business

Resistance to change HPT was forced No punishment No one have the power to tell what to do Pontificating that HPT will be the standard HPT was so inflexible

Account payable (AP)

Current Challenges Top management had no plan! Top management delegated BPR Top management trusted the software vendor Not involving people and resistance to change Forcing “Best Practices”

Current Situation JUST AP

MOST EXPENSIVE280$ million

Complete Failure!

Contribution to BPR literature Super Themes

Immersion Technology usage, HPT adoption

Fluidity Responsiveness, Effectiveness, Knowledge sharing &

capture Top management support

Summary See if processes and systems are fluid

Obtain feedback Communicate to management Main reason for failure Business processes are not streamlined Forced HPT

Developing an Information System Solution

Define and Understand the Problem

Develop Alternative Solutions

Choose the Best Solution

Implement the Solution

Systems Analysis

Strategies for Acquiring IT Applications

Options for Obtaining Information Systems

Build your own Outsourcing

The Systems Development Lifecycle

Systems Investigation

Systems Analysis

Systems Design

Systems Implementation

Systems Maintenance

Discussion If you were the first CEO, what would you do

to prevent failure? In your opinion what was the main reason for

project failure?