文献出处：
Han, S. W. \—Enterprise Resource Planning: A cost-based business case and implementation assessment.\ce Industries 14.3 (2014): 239-256.
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ERP—Enterprise Resource Planning: A cost-based business
case and implementation assessment
S. W. Han
Hi-Tech Consulting Center, LG CNS Co., Ltd., 8F, Prime Tower #10–1, Hoehyun-dong, 2-ga, Jung-gu, Seoul, 100–630, Korea
Abstract
This article provides the key factors that are critical to the successful implementation of enterprise resource planning (ERP). It reports the results of a study carried out to assess a number of different ERP implementations in different organizations. A case study method of investigation was used, and the experiences of five manufacturing companies were documented. Also, this study explores and proposes an ERP system selection process and a cost-based business case approach. The critical factors in the adoption of ERP are identified as learning from the experiences of others, appointing a process innovator, establishing committees and project teams, training and providing technical support for the users, and implementing appropriate changes to the organizational structure and managerial responsibilities. For more effective ERP implementations, we advise building a supportive culture and environment with a strong emphasis on human and organizational aspects. 1. INTRODUCTION
Throughout the 1990s, most large industrial companies installed enterprise resource planning (ERP) systems; that is, massive computer applications allowing a business to manage all of its operations (finance, requirements planning, human resources, and order fulfillment) on the basis of a single, integrated set of corporate data. ERP promised huge improvements in efficiency; for
example, shorter intervals between order and payments, lower back-office staff requirements, reduced inventory, and improved customer service. Encouraged by these possibilities, businesses around the world invested some $300 billion in ERP during the decade (Dorien & Malcolm, 2000).
What most attracted many a chief information officer was the opportunity to replace a tangle of complex, disparate, and obsolescent applications with a single Y2K-compliant system from a reputable and stable vendor; one Korean major oil company, for example, managed to switch off 70 old systems when ERP went live. By entering customer and sales data in an ERP system, a manufacturer can generate the next cycle’s demand forecast, which in turn generates orders for raw materials, production schedules, timetables for shifts, and financial projections while keeping close track of inventory.
As the adoption of ERP has increased by manufacturing firms, so has the research by academics and researchers into all aspects of using these information technologies, covering planning, implementation, integration, management, and exploitation (Lee & Lee, 2000; Parr & Shanks, 2000; Sumner, 2000). Some examples of these studies include: a study of ERP in 20 British companies by Currie (1996), a study of 95 information systems by Jaikumar (1997) in North America, and a study of ERP and other information systems in the United Kingdom by Bessant and Haywood (1999).
Previous field studies examining ERP implementations have found that expectations of ERP will not be brought to fruition unless a holistic approach is taken in planning, acquiring, implementing, and exploiting. One of the critical issues to be considered in the decision making process is that the link between the information system and business strategy must relate to the competitive priorities and the positioning of the organization. The choice of information system, for which many options exist, must be driven by, and closely aligned with, the broader framework of competitive positioning decisions. The basic question “How do we compete?‖ must be answered before information system investment decisions are made. Therefore, this article has three distinctive parts. The first describes ERP system selection process in implementation, the second addresses a cost-based approach to the business case, and the last provides the key factors that are critical to the successful implementation of ERP. In the last part, the experiences of five Korean organizations that are dopted ERP in recent years are analyzed. A case study approach was
used to explore he reasons for adopting the ERP, planning and implementation issues, benefits achieved, and the limitations and difficulties associated with the ERP. 2. ERP SYSTEM SELECTION PROCESS
ERP systems offer pervasive business functionality. Because of this pervasiveness, implementations have ranged from great successes to complete failures. Therefore, advice is frequently sought in selecting systems. However, we have concluded that there is no system that is best for all companies, but rather there is a process you can go through to find the right system for your company. The process starts with assembling a competent project team, addressing business needs, exploring alternatives, developing criteria, and making informed judgments that lead to a successful system.
3. A COST-BASED BUSINESS CASE APPROACH
Many companies find ERP systems help them make better-informed decisions. Others discover too late that their purchase has been based more on faith than good judgment, and run up tens or even hundreds of millions of dollars in extra costs and schedule delays (Sethi & King, 1994). How, then, can senior managers ensure that their companies build a sound business case for deploying ERP systems? And what can they do to guarantee that the promised benefits are not eclipsed by the costs of integration, process redesign, and training? One answer is to take a cost-based approach to the business case.
Hard returns, such as reduced headcount resulting from streamlined operations, are simple to predict and control but are only part of the picture. Soft returns, such as revenue or employee productivity gains, are neither easy to predict nor under a company’s direct control (Gorry & Morton, 1971). The problem is a common one in evaluating IT investments (Dempsey, Dvorak, Holen, Mark, & Meehan, 1998).
In the case of ERP systems, the length of the payback period and the size of the investment needed—in terms of both cash and human resources—make it unwise to assess a project on anything but a hard-returns basis. This is not to suggest that an ERP system cannot help a company boost revenue, or that employees cannot learn to become more productive with the aid of a superior management information system. But the difficulty and expense of deploying ERP mean that most companies should appraise such an investment purely in terms of its potential to cut costs.
4. THE KEY FACTORS FOR SUCCESSFUL ERP IMPLEMENTATION 4.1. Overview of Case Study
The five organizations involved in this study were chosen after preliminary discussion with the company contact concerning the aims and objectives of the research project. Potential companies for participation in the study were initially identified through various sources; that is, suggestions by faculty and staff members, existing ongoing personal contacts with local companies managers, new contacts made with company representatives participating in conferences and seminars, and publicity of the company’s newly acquired information system in the media.
4.2. Field Interviews
Based on the author’s previous research in ERP (Park & Han, 2002; Sohal et al., 2000) and the literature, an interview questionnaire was developed and used in field interviews. The interview guide (questionnaire) focuses the inquiry procedures and ensures reasonably consistent inquiry procedures at all sites (Gosse, 1993). Several visits were made to each company. During the initial meeting with senior management (typically the managing director, general manager, or plan manager), the aims and objectives of the research project were described and discussed in some detail. Discussion with senior management focused on issues such as the overall strategy of the organization, the basis of competitive advantage, competition, the company’s performance in relation to the dimensions of competitiveness, reasons for implementing the particular information system, their role in planning and implementation of the information system, and the benefit of the information system to the organization. 4.3. Result and Summary
The taped interviews were transcribed and written up in the form of case studies. This process took a considerable amount of time as each case study went through a number of drafts, sometimes going back to the companies for further details or replaying the taped interviews. The case studies were then sent to the company contact for verification and permission for general use in publications.
The written case studies were then used to understand the following: Competitive priorities and company goals;
Reasons for adopting the new information system;
Planning and implementation procedures/ issues; Benefits achieved from the ERP investment;
The difficulties and limitations associated with adopting the ERP.
The results of this analysis are presented below under each of the above headings. 5. LIMITATIONS OF THE STUDY
This study is the first attempt to discuss and describe experiences of ERP implementation in Korea. The findings and results are practical rather than theoretical because the participants of the survey are actually ERP users. In spite of this strength, the study has weaknesses. Some limitations originated from the approach of our research. First, we had to rely on the retrospective experiences of the respondents. It may be argued that respondent views might be biased. Second, our samples are limited to Korea. Therefore, general conclusions must be made with caution. Additionally, the implementation of ERP in Korea has the barriers inherent in the process of technology transfer because ERP in Korea comes primarily from developed countries. The literature on the implementation of ERP has been written in the context of developed countries, primarily the United States and Europe. The findings of this study, together with other studies from developed countries, show that human and organizational factors play a central role in the ERP implementation. However, ERP is no longer restricted within countries, because of globalization. Therefore, the findings of this study can be more than an indicator of other countries as well.
6. CONCLUSIONS
This study explores and proposes an ERP system selection process and a cost-based business case approach. Before selecting an ERP system, a business must first look at itself and understand its substance, asking two very fundamental questions: ―What are we?‖ and ―What do we want to be?‖ The typical steps of ERP selection involve planning, analysis, vendor screening, in-depth evaluation, and decision finalization. In contrast to other software selections, a comprehensive ERP selection is made more complex by the scope of application functionality, change impact, size, and integration requirements. Most organizations struggle to commit a core team of full-time resources to the project. Our experience indicates that part-time resource commitments will fail to provide the continuity and level of effort necessary to meet the reasonable project deadlines. The project team must articulate a vision and set of objectives to build support and executive buy-in