This part of this thesis also aims to describe the empirical findings from different enterprise firms and consultant firms. Having this part also mean that, it is essential for me to carry out my own findings to clarify my curiosity toward implementation strategy dilemma. Therefore, empirical data for this thesis aim to be collected through both questionnaires and structured interview.
Enterprise Perspective about Implementation Strategies
This part of this thesis describes the findings and responses from different enterprise firms that have implemented or that are in the process of implementing ERP system. This part is aim to clarify and have overview of enterprise perspective towards ERP implementation strategies.
The above chart respresent the response rate for recommending each of the available strategy. The aim for this chart is to categorise enterprise perspective and opinion toward each of these strategies, so as to generalise their overall perception.
Kongsberg Automotive is a global provider of engineering, design and manufacture for seat comfort, driver and motion control systems, fluid assemblies and industrial driver interface products. Their product line includes systems for seat comfort, clutch actuation, cable actuation, gear shifters, transmission control systems, stabilizing rods, couplings, electronic engine controls, speciality hoses, tubes and fittings‖ (Kongsbergautomotive.com/ourbusiness, 2007). This company was founded in the year 1947 and it is categorised as larger size firm with the size of the customer, total asset and revenue, size of the product, geographical regions and number of employees according to the interview with Per Högberg. The company implemented SAP ERP system between 1998/1999, where business strategy was the motivation for this implementation.
As the Ex-CIO, IT manager and project manager in a global company, call ―Kongsberg Automotive‖, Högberg in an interview with him totally agree that, choosing a particular implementation strategy contribute and have major impact on the success or failure of ERP system project. In an interview with him, Big bang strategy was used during the implementation of SAP ERP system in their company. He emphasized that, this strategy was used simply because it was the available strategy during their ERP system project and there are no factors to be considered. However, he disclosed that the project was first fail with the entire scope of the project and due to the complexity of their firm. Implementing SAP ERP system in their firm, the basic modules of the system were implemented, such as; financial, human resources, sale and marketing, production and materials management and others.
In further discussion, he emphasized that, the size of the organization is very important to be considered when it comes to the choice of a particular implementation strategy. He explain that, organisation can be large in size and less complex, on the other hand, organization can be small in size and can be more complex. However, from his experience and knowledge, he will recommend Phased strategy as the best alternative to implement ERP system because, this strategy provide a clear scope of how entire project will be handle, also lies on the high risk of the implementation success. He also emphasized that, choosing Big bang strategy, people think it is so easy by just once and for all implementation, but, it is more complex than how people think. He also emphasized that, organization are now trying to avoid Big bang as much as they can.
Fagerhult Belysning AB
Fagerhult develop, manufacture and market professional lighting systems for the public environments as well as offering a range of decorative lighting. Their activities are conducted with constant focus on design, function, flexibility and energy-saving solutions‖ (fagerhultgroup.com/about-fagerhult, 2007) The company was founded in the year 1945 and it is categorised as a medium size firm with the total revenue and number of employees according to the interview with Kenneth Hellman. The company are in the process of implementing Microsoft dynamics AX ERP system, where technical functionality and business strategy was the motivation for the ERP system project.
Responding to each question in an interview, Hellman also agree with the fact that choosing a particular implementation strategy contribute and have impact on the success or failure of the ERP system project. In an interview with him, their company are still in the process of implementing Microsoft dynamics AX ERP system, where sale and marketing module are aim to be implemented. So far, implementation has already been carryout in two different countries, including Sweden and Poland, still remaining eight countries left in which this company has location. Hellman emphasised his opinion and perception towards functionality and service provided from the ERP system and scope that the entire project will be successful. However, the project might not be as successful in terms of budget and time schedule of the entire project because of some gap between budget and the implementation period.
Hellman emphasised that, Phased was the original strategy, and Pilot is used as a support strategy for the implementation processes. These strategies were chosen because, they wanted to have total control of the entire implementation, also, chosen these strategies, they learn and gain more knowledge by implementing phase by phase. Asking Hellman of the functional and organisation parameters that influence their choice of these strategies, he emphasised that, nature of integration, number of interfaces with other applications and the entire scope of the business are the functional parameters they considered. Regarding organisation parameters, he emphasised on many by giving priorities to each of them as follow; (1) Size of the organisation, complexity of the organisation and degree of the internationalisation, (2) Total number of users and resources available (3) level of commitment from the senior management and need to re-design/standardise business processes are the organisation parameters they also considered before deciding on their chosen strategy. However, regardless of influencing factors, Hellman recommended Phased and Pilot strategy as the best alternative to implement ERP system, say no to Big bang, that it should not be used at all. Figure 4.1 above shows his rating among other strategies.
Holmgrens Bil AB
Holmgrens bil AB is a car dealer located in most of the Småland area of Sweden, including Gislaved, Vetlanda, Vimmerby, Varnamo and Jonkoping. The company is selling varieties of cars including Peugeot, Saab, Lexus, Hyundai, Opel, Chevrolet and Toyota. Holmgrens bil AB was founded in the year 1960, and it is categorised as a larger size company with the total revenue and number of employees. The company have implemented varieties of ERP system, first time in the year 1996 and the second time in the year 2003. Where business strategy and technical functionality with their car manufacturing company was the motivation for their ERP system adoption.
In an interview with Nors, he emphasised that, three different ERP systems were implemented in their company, include; Jeeves, Dracar and Kobra. The reason for these varieties of ERP system was due to their car suppliers. For instance, their car suppliers required them to used similar system as theirs, to support day to day transaction and the flow of data sharing between car manufacturers and holmgrens as a dealer. However, Big bang, Phased and some Piloting were used in this company for their implementation of ERP system. During the implementation of Dracar in the year 1996, Big bang approach was used, this is because, it was the only option then. During Kobra implementation, Phased and some Piloting were adopted. Considering the factors that influence their decision on the chosen strategies, Nors emphasised that, nature of the requirement, nature of the integration and level of customisation are the functional parameters, while complexity of the organisation, total number of users and resources available are the organisation parameters.
In overall, ERP system implementations in this company were seen as successful based on the company requirements. However, Nors recommended Big bang as the best alternative, if organisation can manage the drawbacks for using this approach, especially, the training issue after going live. His rating to other available strategies is shown in the above figure 4.1.
Relative Experience from Different Companies
Hugoson, strategic business consultant that have worked with many and different firm such as; manufacturing, logistics, military, healthcare and many more companies in both medium and large size of the organisation also confirmed from his experience and knowledge about ERP system implementation that, decision on an implementation strategy is really an issue in an organisation. He shared his own view with me in respect to enterprise perspective when it come to chosen a particular strategy. Hugson embarks on the topic of this thesis and disclosed that, perception on a particular implementation strategy goes beyond just enterprise and consultant but, also ERP system vendors. He explain that, enterprise perception is to implement ERP system that will meet their organisation need and be successful, also, consultant perception is to implement the system using strategy of their choice while vendor perception is to sell ERP system without consider how the implementation processes will be achieved. Back to the consultant perception toward implementation strategies, Hugoson said and I cote! ―I think many consultant firm considered Big bang as a good affair because of one time implementation so as to make their money once and for all, not considering enterprise point view towards progress and success‖. He said, that is why organisation should have total control of implementation process and decide on which of the strategies is needed to be considered. From the interview, he used the word step by step to mean Phased approach as the best alternative to which organisation can rely on in order to achieve success factors from the implementation of ERP system project. However, in rating other strategies among others, Hugoson (Email response, 20-05-2009) described that, these strategies are somewhat related to one anoter, however, Big bang strategy should be avoided as much as possible in an organisation, emphasised that, this is really bad alternative to choose for a big common system as an example and it should be rated zero.
In his further explanation, he described Parallel approach as an alternative as soon as Big bang is not chosen. However, it should also be used even if Big bang is chosen. He described Phased approach as the best options if big common system is chosen in an organisation, emphasised that, timing issue should be closely related to changes in the business processes.
Regarding Pilot approach, he emphasised that, this strategy could be an alternative for Big bang and perhaps a support for Phased strategy. In his final discussion, Hugoson (Email response, 20-05-2009) emphasised in his own opinion that, ―the most suitable strategy is to create a structure of interacting systems with high degree of independence which is aligned with (reflects) of the business structure, then each of the business area should implement their system directly coordinated with the development of their business process. Using this approach, it is possible to use ERP systems, either through delineation of independent (but interacting) subsystems from the same vendor, or through use of subsystems from different vendors (the best of breed alternative)‖. Considering this structure approach, it is best described as step by step (Phased approach) according to his explanation.
Consultant Perspective about Implementation Strategies
This part also aims at describing consultant perspective toward ERP system implementation strategies. Having this part also mean to clarify and have overview of consultant opinion and experience in choosing a particular strategy.
The above chart also represent the rating response from consultant perception toward each of the available strategies. This chart also aim at presenting consultant opinion toward each strategy, so as to generalise and draw conclusion over their own perception too.
Collaborative Business AB
Collaborative business AB is an IT consultant firm located in mullsjö, Sweden. The company is owned by Per Högberg after his twenty-two years experience in enterprise firm and ERP system implementation. The company implement small portion of ERP system for various customer particular in Sweden, where Phased and Pilot are the focus strategies that the company use for their customers. The company was founded in the year 2007 and it is categorised as a small size company with the number of employees according to the interview with Per Högberg.
As it is shown in the table above, Per Högberg is the chief information officer (CIO) of C-business AB. He disclosed his total experience and knowledge with me in reference to the choice of choosing a particular implementation strategy. As it is discussed earlier, the company implement ERP system basically SAP, for various customer in Sweden by using Phased and Pilot implementation strategies. So far, he confirmed that his company has been successful in implementing ERP system for their customers. When considering the functional and organisation parameter to be considered for choosing a specific strategy, Högberg emphasised that, nature of the customer requirement and size of the organisation are very important things to be considered. However, he recommends Phased and Pilot strategies as the best alternative to implement ERP system, while his rating to other strategies is shown in the figure 4.2 above.
Sogeti Sverige AB
Sogeti sverige AB is another IT consultancy firm that also responded to the questionnaires when collecting data. The company was founded in the year 2003 in Sweden and presently have branches in different countries including, Belgium, France, Spain, UK and united state. The company is categorised as large size company with the number of employees, total revenue and size of the geographical regions. The company also implement Microsoft dynamics AX ERP system for various customers, where Big bang and Phased are the implementation strategies used for their customers.
Hagström was the consultant that responded to the questionnaires from Sogeti Sverige AB. From his answer to the questionnaire, their company implement Microsoft dynamics AX ERP system for various customers, where Phased and Big bang are the focus implementation approaches used. So far from his response, their company has been successful in implementing ERP system for their customers. In his responses to what factors influence their choice of a particular strategy for a specific customer, he answered that, nature of the customers in an organisation are the functional parameters while size and complexity of the organisation and degree of the internationalisation are the organisation parameters.
In responded to which strategies that could be highly recommended, he answered ―It‘s all depends on the customer‖. To clarify this answer, I sent an email to him to explain his view toward this response and to rate their focus strategies among other, he replied describing where different strategy is applicable to different customers. However, he emphasised that, ―Large multisite and global firms with many different ERP’s in use need Phased approach more than a smaller single-site firm with only one ERP need‖. Therefore, it is very hard to derive conclusion from his response. He also emphasised that, he cannot rate all these strategies in general because ―it still depend on the customer‖.
SYSteam Datakonsult i Småland AB
Systeam consultant firm is located in Sweden and was founded in the year 1984. The company is seen as both business and IT consultant, categorised as large size firm with total revenue and number of employees according to the questionnaire response from Stefan Ramsö the CEO of the company. The company also implement Jeeves ERP system for various customers, where Phased is the focus strategy that they used.
In his response to the questionnaire, Ramsö emphasised that, the company has been successful in implementing ERP system for their customers. Considering the factors that influence the decision of choosing a particular strategy, he indicated that, nature of integration and number of interface with other applications are the functional parameters while need to re-design/standardised business processes is the organisation parameter that influence their decision. His response also indicated that choosing a particular strategy is an issue in an organisation and they sometimes experience controversy in choosing a particular strategy with their customers. In recommending a particular strategy, he also responded that, ―it depends on customer needs‖ however, he rated all the available strategies as it is shown in the figure 4.2.
Summary For Empirical Findings
Empirical findings for this thesis shows that, both enterprise and consultant firms have different opinion toward ERP system implementation strategies. However, it can also be seen that, each firm also have different opinion toward each of the implementation strategy.
In a response to the factors that influence each firms decision toward the choice of a specific implementation strategy, table below indicate each respondent influencing factors;
The findings suggest that, all the above influencing factors are due essential for an organisation to be considered when making choice for a particular implementation strategy. My findings also suggest that, the most suitable strategy is to create a structure of interacting systems with high degree of independence which is aligned with (reflects) of the business structure, then each of the business area should implement their system directly coordinated with the development of their business process. Another suggestion is that, each firm should first of all think of having total control of their implementation processes, so as to avoid imposing implementation strategy and to make the best choice of the strategy that fit business requirements.
Phased implementation strategy is considered as the best or a very recommendable strategy, to which organisation can adopt for their ERP systems implementation from both enterprise and consultant perspective. The chart above indicates each respondent opinion towards each of the available strategy.
Table of Contents
1.1 Problems Discussion
1.2 Research Questions
1.6 Interested Parties
1.8 Thesis Disposition
2.1 Research Approaches
2.2 Knowledge Analysis
2.3 Data Collection
3 Theoretical Framework
3.1 ERP System Life Cycle
3.2 ERP System Implementation strategies
3.3 Influencing Factors of Implementation Strategy Decision .
3.4 Johnson and Scholes Strategic Model
3.5 Critical Success Factors (CSF) Framework
3.6 Perception Toward Theoretical Framework Structure
4 Empirical Findings
4.1 Enterprise Perspective about Implementation Strategies
4.2 Consultant Perspective about Implementation Strategies
4.3 Summary For Empirical Findings
5.1 Influencing factors to the Choice of Implementation Strategies
5.2 Choosing the Best Implementation Strategies
5.3 The Best Implementation Strategy (ies)
7.2 Further Studies
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Strategic Dilemma With ERP System Implementation Enterprise vs Consultant Perspective