OUTLINE • Motivation for Enterprise Resource Planning (ERP) • ERP Obstacles and Success Factors -- Focus on “Tightly-Coupled” Organization • Views of an Organization • “Loosely-Coupled” Organizations & Benefits ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS • Definition • Purpose • Experience MOTIVATIONS FOR ENTERPRISE RESOURCE PLANNING SYSTEM • Replace legacy systems with integrated system • Provide single face to customer Process Improvement Common Platform Infrastructure Data Visibility Capability Cost Reduction Strategic Decision Making Customer Responsiveness Performance OBSTACLES AND SUCCESS FACTORS 1. Need Metrics - If vague, can not determine if benefiting 2. Need On-going Resource Requirements - but hard to keep top management attention 3. Need Management Report Requirements - ERPs best at transaction processing, not DSS 4. Address Resistance - Loss of control, broader process view, culture/politics CONCLUSIONS • Discipline into Undisciplined Organizations • Major Cultural Change to Organization • Standardize Organization’s Processes & Data ==> Key to Flexibility & Success WHAT IS AN ORGANIZATION? COHEN, MARCH & OLSEN: “AN ORGANIZATION IS A COLLECTION OF CHOICES LOOKING FOR PROBLEMS” EMERY: “A SET OF RELATED TASKS DIRECTED TOWARDS A COMMON GOAL” WEICK: “AN ORGANIZATION AS A NOUN IS A MYTH...IT IS EVENTS THAT ARE LINKED TOGETHER” MADNICK: “AN ORGANIZATION IS A COLLECTION OF INDIVIDUALS THAT SHARE COMMON BELIEFS, GOALS, CUSTOMS AND/OR AUTHORITY. CONVENTIONAL VIEW OF ORGANIZATION • DISCIPLINED – PLANS – COST-BENEFIT ANALYSIS – DIVISION OF LABOR JOB DESCRIPTIONS – EVALUATION AND REWARD SYSTEM • PRACTICE? • UNPRODUCTIVE TO VIEW BEHAVIOR AS “ABSURD” OR “IRRATIONAL” • BENEFITS OF LOOSE COUPLING? EXAMPLE SITUATION: AUTOMATING TECHNICAL ORDER (TO) PROCESSING IN THE US AIR FORCE ORG. 1 (USAF) ORG. 2 (PRINTERS) ORG. 3 (WEAPON SYSTEMS) VALUE OF “LOOSE COUPLING” 1. ALLOWS PORTIONS OF ORGANIZATION TO PERSIST + ELECTED OFFICIAL/ELECTORATE - MAY PERSIST TOO LONG + DIMINSHES IMPACT OF VOLATILITY 2. SENSING MECHANISM + MORE INDEPENDENT SOURCES - TOO VULNERABLE 3. LOCALIZED ADAPTION + SWIFT, ECONOMICAL ADAPTION - OPPOSITE OF STANDARDIZATION 4. ALLOW LOCAL MUTATIONS AND NOVEL SOLUTIONS TO EXIST + CAN ADAPT TO RANGE OF CHANGES - COULD SLOW SPREAD OF GOOD MUTATIONS 5. BREAKDOWN SEALED OFF + LOCALIZATION OF TROUBLE - MAY BE HARD TO DIRECT AND REPAIR 6. SELF-DETERMINATION INCREASES SENSE OF EFFICACY + LINKS INTENTIONS AND ACTIONS - STANDARDIZATION & MORE NEGOTIATION 7. REDUCED COORDINATION COST + LESS TIME AND MONEY ON COORDINATION - MAY BE INEFFICIENT IN USE OF RESOURCES CONCLUSIONS • NEED TO UNDERSTAND INTER-DEPENDENCY AMONG STRATEGIC CONCERNS, ORGANIZATIONAL CULTURE, AND TECHNOLOGY FOR CONNECTIVITY STRATEGIC CONCERNS PROCESS? INFORMATION TECHNOLOGY • • ORGANIZATIONAL CULTURE CAN START FROM ANY COMPONENT IN MANY CASES – STRATEGIC CONCERNS REQUIRE INTEGRATION – ORGANIZATIONAL CULTURE FAVORS AUTONOMY – TECHNOLOGY CAN PROVIDE INTEGRATION AS WELL AS AUTONOMY