Technology Enabled vs.

Clean SLate
Reengineering
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

ERP and Reengineering

SAP implementation equals forced reengineering
its rare when you dont have to do some kind of reengineering
ERP is the electronic embodiment of reengineering
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Reengineering Tools and Technologies in

1994 (CSC Index 1994)
Tool USA Europe
None 41% 36%
Process Value Analysis 36 27
Benchmarking 34 36
Competitive Analysis 25 28
Activity-Based Costing 20 17
Other 16 17
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Currently, ERP is the dominant tool!

Technology Enabled (Constrained)
Reengineering
Enabled vs. Constrained
Which term? Why?
A particular technology (or portfolio of technologies) is chosen as a tool
to facilitate reengineering.
Thus, reengineering choices are a function of the technologies chosen.
The technology drives the reengineering.
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Clean Slate Reengineering

Process design starts with a clean slate
Also referred to as starting from scratch
Theoretically, no limits
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Somewhere Between the Two

In actuality, there are few projects that are purely clean slate or
technology enabled
More of a spectrum
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Technology
Enabled
Clean
Slate
Advantages of Technology
Enabled
ERP provides a tool to facilitate change
ERP helps structure complex reengineering efforts
Tools help explain and rationalize efforts
ERP bounds the design, limiting overload
Design is feasible
There is Evidence that the design will work
Designs likely are cost effective
Designs likely can be implemented in a timely manner
There is software available
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Advantages of Clean Slate

Not constrained by a particular tool
Not constrained to a limited set of processes
Evolution is not limited by a particular technology
Can develop a design that others cannot access
There is evidence that firms think they should
reengineer and then implement
May be the only option
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Which Firm Should Use Which

Approach?
Depends on
Firms Size
Available Resources
Time Pressure
Strategic Gain
Uniqueness of solution
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Large Firms
Have the resources to do clean slate
Are often industry leaders and thus, generally have time
Are likely to use processes as a competitive advantage
Are more likely to need a unique solution
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Firms with Deep Pockets

Clean slate requires substantial resources
In some cases, clean slate will lead to many starts and stops before the
final design is found
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Firms with Time

Clean slate takes longer so only firms that have the time can really do
clean slate approaches.
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Firms for which Processes are a Strategic

Advantage
The more unique a firm in terms of its industry, processes, customers or
other factors, the more likely that they see their specific processes as a
competitive advantage, and thus use some clean slate approach.
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Firms that Seek a Unique

Solution
Technology enabled approaches are easily copied and diffused
Clean slate approaches are not as rapidly or as easily copied.
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY, 2000

Chapter 8
Choosing an ERP
System
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY,
2000
Two Basic Approaches
There are two basic approaches that are used as bases of choosing ERP
software
Requirements Analysis (As Is)
Best Practices Analysis (To Be)
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2000
As Is Analysis
As is refers to the current system and its current capabilities
The system as it is right now
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY,
2000
Requirements Analysis (As
Is)
As Is the ways things are.
Organization determines what their processes and artifacts currently
are and use that as is model to establish requirements that
software is judged against.
Typically, the software that best meets the requirements is the one
chosen by the firm
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2000
Requirements Analysis -
Evaluating Features
Typically, requirements are features that the
software must have
In addition, sometimes would like to have also is
gathered.
Likely to use a numeric scale of say 1-5 for each feature,
based on how important the feature is
For missing features, typically changes to the
software are seen as a gradation of change, e.g.,
enhancement or customization
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How many requirements?
Timberjacks requirement analysis took six months and generated >
1,000 requirements
Another firm took eight months and generated 1,500 requirements
If it takes a long time, then requirements can (will?) change
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How long will it take?
Can be a substantial effort and take a while!
Typically 1 - 3 months
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2000
Who Should Be Doing
Analysis?
Trade-off between current employees who know how work is done,
and managers, who see work from a different perspective. ...
Which processes should be captured:
Past
Current, or
New?
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Help for Doing Requirements
Analysis
Consultants specialize in requirements analysis, e.g., Big 5
There are existing packages that facilitate requirements analysis, e.g.,
The Requirements Analyst
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Advantages of Requirements
Analysis
Classic System Choice Process, so it is generally understood
Establishes a bench mark that can be used to judge fit of software
Provides a document that can be used for communication and to
generate buy-in
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Disadvantages of
Requirements Analysis
As Is analysis can be very
time consuming, slowing the implementation
costly (e.g., one firm spent $100,000)
May (will) be impossible to specify all software requirements
If there are too many requirements then vendors may not fully
respond to the RFP
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Disadvantages of
Requirements Analysis
Lose chance to reengineer by focusing on the As Is model
Cements existing processes without evaluation as to their quality
Requirements are not stable, so it is likely that requirements can only
chase reality
Requirements are only a snap shot
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Format
Typically a list, along with a relative ranking of the importance
(1,2,3,4,5)
Scripted
Loosely Scripted -- show me what you have
Tightly Scripted -- can you handle this data?
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To Be Analysis
Process of determining which best practices should
be used by a particular organization, i.e., how
should the organization process information, and
choose the software on that basis
Focuses, not on where the organization is, but
where it wants to be.
Search often includes Big 5 best practices, and ERP
best practice capabilities
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Gap Analysis
Match AS IS and TO BE to determine if any gaps.
How do we evaluate gaps?
Count them?
Rate importance?
...
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Both Requirements Analysis and Gap Analysis Ignore
Important Issues
Cost
Installation time
Flexibility
User interface
Upgradability
Implementation Personnel
Reliability
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2000
Cost Factors - Mini Case:
Which Do You Choose?
Upgrade Oracle SAP
Implementation $3-5 M $4-8 M $6-10 M
Software Development $2-4 M $1-3 M minimal
No. of Users (Seats) 15-20 10-15 8-10
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Both approaches ...
basically assume that majority wins. How do you choose, the
software that has the most requested features or the most valuable
features or ..?
can focus on artifacts (e.g., invoice) rather than processes
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2000
Emerging Approach
Increasingly, consultants are promulgating the approach where no as
is model is developed, no gap model is developed
Go straight to the to be model, since that is what really counts
Typically, with this approach the consultant knows both your
organization and the software
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY,
2000
Emerging Approach
Instead, just choose one of the better ERP packages and choose the
best practices available within that package.
Systems are so good that any of the systems will have processes that are
good enough
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2000
How do firms choose?
A Case Study
Company: Chesapeake Display and Packaging
(CDP)
They used a five step approach, including a vote
as to which everyone preferred.
Form Blue Ribbon Committee
Contact Vendors to Arrange Demos
Ask Vendor for Proof of Rapid Implementation
Vote
Make Choice
ENTERPRISE RESOURCE PLANNING SYSTEMS, D. E. OLEARY,
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1. Form Blue Ribbon Team
A Blue Ribbon Team (BRT) was chosen for their knowledge of the
business and business processes
There were some big picture people
The committee was limited to no more than ten people
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2. Contact Vendors to Arrange
Demos
A limited number of first tier vendors were chosen, contacted and
asked to prepare a demo for the BRT
Vendors were given unlimited access to the BRT for three weeks.
Demos lasted 1-2 days
Vendors choose the hardware and software that they preferred
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3. Ask the Vendor for Proof of
Rapid Implementation Ability
Vendors were asked ...
Show your software can handle our business
Show you can implement in the time required
Show expertise in understanding the industry
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4. Vote
After the demos, there were three candidates, Baan, J.D. Edwards and
SSA.
In order to choose, the BRT was asked to rank 1 to 3 based on Best
functional fit and Best implementation personnel
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5. Software Recommendation
J.D. Edwards was seen as offering
Superior financial capabilities
One integrated solution
Human resources and payroll
Advanced object oriented tool set
A planning module that allowed for scheduling on a cost basis
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2000
So, What do you ...
Like about the way they selected their system?
Not like about the way that they selected their system?
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2000