Week 10

Q.2 Using Sumner (2005), read the article on pages 149 – 150. Answer the following: a. What aspects of BI have been employed in this case example? b. What would you expect to be the challenges facing the development of a BI approach for such a large organisation? c. Would Dow Corning be a suitable candidate for a shared services approach using an ASP? Justify and argue your answer

a) In the case example aspects of BI have been employed by Dow Corning Corp when they integrated their global business processes by implementing a basic ERP backbone, SAP R/3 AG. This improved business intelligence by replacing a multiplicity of legacy systems running on mainframes, allowing capabilities of managerial information to be extended.

b) Challenges being faced by this large organization in regards to BI would be attaining a strong implementation plan and team in addition to adequate software support. The case study states that an important lesson learned was the value of going into the software-evaluation phase with all the details decided about the specific business reports that would need to be created. Also not utilizing the software-evaluation process, they would not have been able to draw on the wisdom on the entire development team, which helped them to visualize future potential for BI in the post-ERP implementation phase.

c) As Dow Corning Corp are a global organization with more than 60% of their business originating outside the U.S., the use of shared services approach using an ASP could prove to be beneficial. Netsourcing which is one of the strategies of using shared services, provides infrastructure, services, applications and support over the web. However, there are certain risks involved. Risk may arise from contracts, risks may occur during migration to the ERP system, and risks may occur during post-contract operations. Some main concerns from potential customers include, service and business stability, security and reliability (Sumner 2005).

On the other hand shared services using ASP offer cost efficiency, accelerated application development and access to the latest technology and support. Given that Dow Corning is an international company and has various sites around the world, with the appropriate precautions taken, Dow Corning Corp could benefit greatly from the convenience that shared services using ASP provides.

References

Sumner, M 2005, Enterprise Resource Planning, Pearson Prentice Hall, Upper Saddle River, New Jersey.

Week 9

Question 3

What external factors (non-implementation project related) could affect how and when an ERP goes live? Explain and Justify.

Go-live is a very nervous time for many companies. All the hard work and planning finally becomes a reality. However, there are many internal and external factors that can delay an ERP go-live. External factors such as clients, suppliers and governments will not stop so that the company can change systems calmly. Consequently, if a government decides on new tax rates or new legislations which were not taken into account in the planning stages, will delay the go-live until these changes are implemented into the ERP system. These types of changes may only take a day or two. Available skilled consultants is also a major external factor, as if there is no expert ERP system support for go-live, it will delay go-live until a professional is available, this could be days or even weeks. However, most ERP software suppliers provide this support, but confirming these details does not hurt.

Another external factor which is inevitable is politics. What users read in the paper or hear in the media about the success or failure of the ERP software provider may mold their attitude towards the implementation and go-live. This can have a heavy impact on users, and it can take time for users to come around and see the benefits of their new system. As, if users are not grasping the concepts and procedures, users may have to be re-trained, which again could take days or even weeks. Most of these factors are hard to control, however it is best to plan for as much as possible to ensure a smooth and successful go-live.

References

Lozinsky, S. 1988, Enterprise-wide software solutions: integration strategies and practices, Addison-Wesley, Reading Massachusetts.

Week 8

Question 1

What manufacturing data is used by the managerial accounting module within ERP?

ERP integrates production planning, material management, and cost and management accounting which is very useful to managerial accounting. In cost and management accounting, activity-based costing is used to increase the accuracy of the product-cost information and to develop activity-based budgets.

The system links production planning’s bill of materials with material movement information that is available in the material management portion of the system. It permits the establishment of standards for material handling. The manufacturing data used by the managerial accounting module are direct material part numbers, production orders, number of units that will fit on a pallet, which in turn calculates standard direct cost and material handling costs.

 

 

Question 3

How does this data integration support managerial decision making?

Linking planning, materials handling and accounting gives additional support to managerial decision making, especially budgeting. Activity-based budgeting attempts to anticipate the demands on a process, such as materials handling, given the estimated production of various products in standard batch sizes. The system is able to estimate the quantity of the various direct materials and the number of pallet moves required to support the total budgeted production. This support results in process improvements, streamlined processes and increased efficiency in relation to managerial decision making.

References

Sumner, M 2005, Enterprise Resource Planning, Pearson Prentice Hall, Upper Saddle River, New Jersey.

Week 7

Question 3

Imagine that in the ERP implementation you are involved with, uses are reluctant to get involved with phase 2. What issues, problems and risks, both short and long term, does this present?

Phase 2 is where ideas and theories are transformed into practice and results, this is where the planning of how the package is going to work for the company take place. This phase is usually where the most obstacles arise. One obstacle in particular that is generally prominent in most implementations of new ERP systems, is relucant users. User acceptance and resistance may always be an issue, however this is more prevalent when the company is installing an ERP system for the first time.

This may seem like a small issue to those outside the business world, but in spite of their benefits many ERP systems fail because of users resistance. Reluctant users can bring all sorts of issues to an organisation’s ERP implementation;

• Negative attitude, can bring an implementation down, this attitude that users have will rub off on customers, fellow collegues, not good for morale at all.
• Users may believe that they are given unrealistic expectations to complete their normal duties aswell as assist in user testing and implementation. If users are overloaded with work they are not inclined to be very keen to participate in the implementation.
• Unaccepting users are also are not likely to pay attention in training sessions as for one reason or another they are against the new ERP implementaion. If these users are not aware of proper procedures, they are not preforming transactions correctly and accurately, this could cause all sorts of problems for management and analysis teams. As if financials prove to be incorrectly costed or allocated this could have short and long term damaging effects on the business.

The most major long term effect from relucant users was if the ERP was to fail because of this unaccepting attitude, this would cost the company thousands of dollars, resources and most likely customers. This is a big price to pay for not having workers accepting new business procedures.

It is inevitable that things won’t change without some uneasiness, this is why many company’s spend the time and money, training and testing their new systems with their employees, to encourage them to believe that the system will be working for them, to help streamline their processes and re-engineering outdated procedures, so overall the company will remain competitive and proporous organisation.

References

Lozinsky, S. 1988, Enterprise-wide software solutions: integration strategies and practices, Addison-Wesley, Reading Massachusetts.