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Implementing Enterprise Resource Planning
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International
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Volume 9 Issue 2
EDITORS
Western Europe
Professor Barry J. Davies
Professor of Marketing, University of Gloucestershire, UK
bdavies@glos.ac.uk.
The Rest of the World
Professor Claudio Vignali
Arnold Ziff Chair in Retailing, Leeds Metropolitan University, UK
c.vignali@leedsmet.ac.uk
Central Europe
Professor Tihomir Vranesevic
The Graduate School of Economics, The University of Zagreb
tvranesevic@efzg.hr
EDITORIAL BOARD
Dr. David J. Bennett
Head of Department, Operations & Information Management Division, Aston Business School, Birmingham, UK
d.j.bennett@aston.ac.uk
Dr. Leo Dana
University of Canterbury, New Zealand
leo.dana@cantebury.ac.nz
Professor Alberto Mattiacci
Professor of Retailing and Marketing,The University of Sienna, Italy
mattiaccialbunisi.it
Professor Mark Dupuis
Professor of Marketing, Ecole Superiore de Commerce de Paris, France.
Dr. Labros Vasiliadis
Business Academy, Chalkida, Greece
labvas@yahoo.gr
Dr. Henk J. Gianotten
Director, Centre for Retailing Research, Economish Institut voor het Midden en Kleinbedrijf, Netherlands.
Dr. Hans-Rüdiger Kaufmann
University of Applied Science, Liechtenstein
hans-ruediger.kaufmann@hochschule.li
Professor Dr. Jürgen Polke
Associate Dean, University of Applied Science, Vorarlberg, Austria
jurgen.polke@fhv.at
Professor Carlo A. Pratesi
Professor of Retailing Marketing, University of Urbino, Italy
capbox@tin.it
Professor Jurica Pavicic
Professor of Marketing, University of Zagreb, Croatia
jpavicic@efzg.hr
Professor Antonella Reitano
Professor di Economica & Gestione, Universita di Calabria, Italy
a.reitano@unical.it
Professor Brenda Sternquist
Professor, International Retail Management, Michigan State University, USA
steinqui@msu.edu
Dr. Tomasz Wisniewski
The University of Szczecin Poland
t.wisniewski@univ.szczecin.pl
Dr. Demetris Vrontis
Dean, School of Business Administration, Intercollege, Cyprus
vrontis.d@intercollege.ac.cy
PRODUCTION EDITOR
Gianpaolo Vignali
g.vignali@leedsmet.ac.uk
www.ijmc.org.uk
Centre for International Research in Consumers
Location and their Environments (CIRCLE)
ISSN 1741-6264
International Journal of Management Cases is published by:
Pallas Press, Pallas Villa, University of Gloucestershire
Business School, The Park, Cheltenham
Gloucestershire, GL50 2RH
Copyright
University of Gloucestershire 2006
In te r n a ti o n a l
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Contents
MINIMIZING RISKS TO DUBAI’S BUSINESS EXPENDITURE CYCLES: CONTROL OBJECTIVES
AND PROCEDURAL ISSUES
4
MAJEED ALI HUSSAIN AND AFAF A J SAEED
MONETARY AGGREGATES AS INDICATOR OF ECONOMIC ACTIVITY IN UAE: 1985-2004
HIKMAT A ALRAWI AND IVANA ADAMSON
14
SAUDI CEMENT COMPANY:“SURVIVAL IS THE NAME OF THE GAME IN A VERY COMPETITIVE
INDUSTRY”
31
SALEM M AL-GHAMDI AND M. SADIQ SOHAIL
IMPLEMENTING ENTERPRISE RESOURCE PLANNING SYSTEMS THROUGH KNOWLEDGE
TRANSFER PARTNERSHIPS: TWO CASE STUDIES.
41
MARTIN WYNN AND GABRIELA MALDONADO
CONSUMER PERCEPTIONS OF INTERNATIONAL RETAIL BRANDING IN TAIWAN
CHING-WEI HO, JOHN TEMPERLEY AND CLAUDIO VIGNALI
52
THE USE OF ONLINE RESERVATIONS
MARINELA SOFOCLEOUS AND GIANPAOLO VIGNALI
66
TRENDS, ENTRY BARRIERS AND COMPETITIVE ENVIRONMENT OF THE GERMAN RETAIL
SCENE FOR DISTRIBUTING DELICATESSEN
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HANNES WECHNER AND HANS RÜDIGER KAUFMANN
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IMPLEMENTING ENTERPRISE RESOURCE
PLANNING SYSTEMS THROUGH
KNOWLEDGE TRANSFER PARTNERSHIPS:
TWO CASE STUDIES
MARTIN WYNN
UNIVERSITY OF GLOUCESTERSHIRE BUSINESS SCHOOL
GABRIELA MALDONADO
UNIVERSITY OF GLOUCESTERSHIRE BUSINESS SCHOOL
budgets. The article examines the key dimensions
of project delivery and then highlights some of
the critical management issues that underpinned
project success.
Abstract
Information systems strategy is becoming an
increasingly important component of overall
business strategy in both large corporations
and small to medium sized enterprises (SMEs).
The need for readily available and consistent
management information, drawn from integrated
systems based on sound and upgradeable
technologies, has led many senior company
managers to review the business case for root
and branch systems replacement. Enterprise
Resource Planning (ERP) software packages
offer companies the opportunity to achieve these
benefits, and also act as a catalyst for wide ranging
process improvement across an organisation, as
new software systems and associated procedures
are introduced.
Key words
Information
systems,
enterprise
resource
planning, ERP, IS strategy, critical success factors,
knowledge transfer partnerships
Introduction
Jeffrey and Morrison (2000) recently concluded
that ‘you don’t have to go far to bump into lots of
evidence that shows how ERP software has not
delivered on the promises of vendors’. It is thus
of interest to review two recently completed ERP
projects and to distil what lessons can be learned
from these case studies. Both these projects
have been implemented through the Knowledge
Transfer Partnership (KTP) scheme, which
provides Department of Trade and Industry (DTI)
funding to allow project managers employed by the
University to work in industry to deliver projects of
strategic value and benefit to the company partner.
The two companies both had circa 200 staff at the
start of the projects which each ran for two years in
the period 2003 - 2005 (Brecon Pharmaceuticals
Ltd - BPL) and 2004-2006 (Dowty Propellers
Repair and Overhaul - DPRO). A significant
difference, however, is that DPRO are part of a
larger group – Smiths Aerospace, and this had
significant impact on the course and nature of the
ERP implementation.
The track record to date, however, has been
mixed, with many ERP projects exceeding original
cost and time estimates, with delayed or diluted
benefits delivery. This is not altogether surprising
when one considers the complexity of such
projects – they introduce new software and new
ways of working that require training in both the
technology and related procedures, and this affects
nearly all computer users across the company in
different ways. As a result, considerable interest
has focussed on the critical issues that need to be
addressed to ensure success in ERP projects.
This article examines two ERP projects that
have taken place in recent years at Brecon
Pharmaceuticals and at Dowty Propellers. Both
projects can be viewed as successful, having
completed within specified timescales and project
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What is ERP?
The knowledge transfer partnership
(KTP) scheme
ERP packages came to market in the early 1990s
as the spread of the Unix operating system as
a de facto standard for mini computers and the
increasing dominance of the Intel chipset led to a
massive surge in the packaged software market.
Building on the earlier Materials Requirements
Planning (MRP) packages, Enterprise Resource
Planning systems went much further, providing
modules for sales order processing, ledgers,
payroll ad personnel as well as MRP. Through
the 1990s the functionality of these packages
from major vendors – notably SAP and Oracle
- continued to expand, partly through acquisition
of competitors’ packages which were, over time
incorporated into the mainstream ERP offering.
As Koch (1999) has noted, ‘ERP attempts to
integrate all departments and functions across a
company onto a single computer system that can
serve all those departments’ particular needs’.
The KTP scheme has been described as ‘the
best kept secret in higher education’, and yet
it is now delivering major business benefits for
companies working with local universities across
the UK. The scheme brings government funding
to support a project set up between a company
and the university. The project is usually aimed
at improving the bottom-line profitability of the
company through a strategic initiative linked to
delivery of the company’s business plan. The
scheme can be viewed as a four-way partnership
between university, the company, the graduate
(or ‘Associate’ as they are termed), and the DTI,
who provide up to 60% of project costs (Figure
1).
A good-quality graduate, often with several
years industrial experience, is recruited by the
university but works in the company on a specific
project which is central to the future growth of
the company. An academic from the university
is assigned for 20 days per annum to support
and supervise the project, and bring in specialist
knowledge and expertise as appropriate to
ensure project delivery. Training and equipment
are provided, and companies pay 40% to 60%
of the project cost, depending on company size.
The total value of the scheme to the company is
£80k over the two years.
The increased take-up of ERP software,
particularly by large companies operating
globally, coincided with the spread of business
process re-engineering (BPR) as a management
concept employed by many companies to
improve efficiencies and reduce overheads.
The two became closely linked as BPR projects
were frequently combined with the introduction
of integrated ERP solutions. As Turban et al
(2002) have remarked, ‘ERP forces discipline
and organisation around business processes,
making the alignment of IT and business goals
more likely’.
The University of Gloucestershire Business
School is a major centre of expertise in
management and information technology in the
south west of England and is home to over 90
staff and 2,800 students, 600 of which are on
postgraduate programmes. Based at the Park
campus in Cheltenham, the Business School
has spearheaded the development of knowledge
transfer activities with local businesses over the
past four years. Central to this success has been
the approval of 35 KTP projects during this period.
The following account examines two of these as
case studies, which focus on the implementation
of company wide information systems and which
highlight the value of the scheme in speeding
the delivery of business benefits and improving
corporate profitability.
In the 21st century, ERP projects are no longer
the domain of large companies alone, nor are
ERP products limited to the few major global
software players. Many of the smaller software
suppliers now offer a fuller range of functionality,
and integrated software systems are now on the
business agenda of many SMEs. This is true of
both the case studies that follow, as both BPL
and DPRO invested in new ERP software as part
of an integrated strategy to improve efficiencies
and underpin significant business growth.
Figure 1. The four-way partnership that underpins
KTP projects
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Figure 1. The four-way partnership that underpins KTP projects
ending 2001 to £22m in 2007, increasing pre-tax
profits from £0.5m to £4.4million over this period.
With substantial investment in new packaging
facilities and successful contracts now agreed with
international drug companies (e.g. Eli Lilly), BPL is
well placed to pursue its growth ambitions.
Case study one: Brecon Pharmaceuticals
Ltd
Background
Brecon Pharmaceuticals Ltd (BPL) provides
‘outsourced’ services to the pharmaceuticals and
healthcare industries, principally the packaging of
manufactured drugs and of new drugs undergoing
clinical trials. BPL’s reputation is founded upon
a high quality, flexible service. BPL has adopted
the vision statement ‘growth through excellence’
where ‘excellence’ is defined as ‘the customers’
confidence in the company’s ability to deliver
according to their requirements’. The market for
outsourcing in the UK pharmaceuticals industry
is currently £50m per annum and is expanding by
at least 5% per annum. BPL has a 10% share its main competitors are the other UK outsourced
packaging providers, including PCI/Unipack (£20m
turnover) and Penn Pharmaceuticals Ltd (£14m
turnover). BPL is in the middle of an aggressive
business plan to grow turnover from £4m in year
The need for integrated, scaleable
information systems
The ability to respond rapidly to customer
requirements is a key factor in obtaining business.
BPL therefore holds some spare capacity, in terms
of machinery and facilities, which can be “switched
on” at short notice. Typically, the firm order book
is only two to three months long; but it takes
approximately six months to recruit staff to the
required standard or, where necessary, to order
and install new equipment. In order to maintain its
competitive advantage, BPL had to optimise the
management of its resources, making efficient use
of existing facilities and timing the introduction of
new equipment and qualified staff to best effect.
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in month 12 – a full six months ahead of the
original KTP plan. This was achieved despite the
rigorous demands of validation of a modular ERP
package.
As the company grew, it became clear that its
information systems needed to be robust and
scaleable to support the planned increases in
business volumes. In line with this growth, the
number of employees increased from approx 180
in 2003 to over 300 in 2006, bringing associated
challenges in managing employee data, and the
administrative burden of an increasing range of
employee benefits. BPL had to replace the mix
of manual and non-integrated computerised
systems, which were inadequate for an expanding
business and could have seriously undermined
the planned expansion. A new core system, an
ERP package, was purchased as part of the KTP
project in 2003. The package - EFACS from Exel
Computer Systems plc - was selected because
it allowed significant ‘tailoring’ (via its ‘Adapt’
programming language) of the basic package to
meet company-specific process requirements.
These requirements were identified in the early
stages of the KTP project.
During the installation of the core ERP system, the
company’s view of the importance of the secondary
IT projects to the business changed significantly.
As business priorities changed, the intranet and
human resources/payroll projects were put on
hold and efforts were refocused on other key
initiatives. Secondary focus was diverted to the
upgrading of the existing document management
system, and to validation and support problems
with existing label production software. These
two projects (and the ERP project) are governed
by GPMP standards and, as such, are subject to
frequent audits by clients. It was thus important
that these were given priority. Intranet and human
resources/payroll systems are still on the agenda,
and it is anticipated that both will be completed by
the end of 2007.
The ERP implementation, together with the
introduction of human resource management
and intranet systems, formed the basis of this
programme. BPL did not have the in-house
skills necessary to introduce change on such a
significant scale.
Implementation problems
There were a number of difficulties that required
particular focus to allow the project to progress.
These included:
Package selection and implementation
Sign-off of EFACS validation
The particular requirements of the pharmaceuticals
industry in relation to Good Pharmaceuticals
Manufacturing
Practice
(GPMP),
stock
traceability, and process validation, require a
sound understanding of the business and the
roles that each department plays in delivering the
service to clients. This understanding was key in
ensuring an appropriate package was selected
and tailored to BPL’s business processes. The
Associate took charge of the organisation of
training sessions, workshops, and process
analysis that formed the basis of the software
configuration process. He provided the fulltime, on-site focus that the project required, and
integrated the team effectively and diplomatically
within a very short time frame. This culminated
in the selection of the EFACS ERP as the core
system for BPL’s future information systems
requirements. Progress throughout the project
ran ahead of schedule, ‘go live’ being achieved
The EFACS implementation was delayed with
issues surrounding software validation of the
system. Due to lack of experience of implementing
software within the company, new procedures had
to be developed, tested and approved before the
application could be signed off as fit for use. The
issue of validation was further complicated by the
need to comply with pharmaceutical regulations
dictated by the EU Guidance on Manufacture.
Network problems
When the application was finally migrated from
a test environment to the ‘live’ environment, it
was found that several of the client applications
could not gain access to the server. This was
because the client PCs had been set to operate
on a closed network, and these settings had been
hard coded in the registry files of particular client
PCs. This issue further delayed the validation of
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to maximise outputs and efficiency. This level of
activity could not have been sustained without
the new IT capability. Staff awareness of the
capabilities of IT has been raised significantly, and
staff IT literacy has increased as a result. IT-based
solutions are increasingly sought when problem
solving.
the application, as the cause of the problem was
not one that had been experienced in the past by
Exel consultants.
Software bugs in the EFACS ERP
A number of bugs were found in the ERP system,
which required either code changes or updates to
be received from the supplier. Having pursued the
occurrence of these bugs, the supplier responded
that constant changes were being made to enhance
the application as new versions of the application
were released. Despite efforts to release a bug
free application, some bugs were missed.
The company’s capacity to handle an increasing
variety of client orders has increased significantly.
Their ability to plan forward is also much improved,
allowing important investment decisions to be made
with the best possible supporting information. It is
important, as a service provider, that the company
does not make delivery promises that cannot be
achieved, because this undermines the client’s
confidence in Brecon. Thus planning abilities are
extremely important and none of the company’s
competitors has the level of sophistication for
capacity planning brought in with the new ERP
system. Specific quantifiable benefits included
headcount savings in production, QA, warehousing
and finance delivering £80,000 saving per annum
(4 staff). The increase in cubicle utilisation brought
about by improved scheduling and production
planning was quantified as a hard benefit of £640K
per annum.
Change of priorities for second-tier projects
A major difficulty occurred as the priority of second
tier projects changed. It was no longer possible to
achieve the KTP Associate’s remit for implementing
3 major software implementations. Instead, the
Associate was able to deliver another smaller
business critical project relating to document
management and taking on more responsibility
relating to the management of IT activities. For
the Associate, this provided a new learning curve
relating to staff management outside a project
team and greater understanding of the company
IT infrastructure. The second tier projects continue
to be a part of Brecon’s objectives and are now to
be progressed forward.
Case study two: Dowty Propellers Repair
and Overhaul
Background
Systems benefits
Dowty Propellers is a part of Smiths Aerospace.
This was a division of Smiths Group when the
project was undertaken, but is currently in the
process of being sold to General Electric. Smiths
Group is a global engineering business, listed on
the London Stock Exchange, that focuses on high
performance applications, building and sustaining
market-leading businesses in growth sectors.
Smiths Aerospace is a leading global provider
of innovative solutions to builders and operators
of civil and military aircraft, from transport to
fighters, from unmanned aerial vehicles (UAVs) to
helicopters and regional jets. Smiths Aerospace
currently employs about 11,000 people in around
40 countries. During the 2005 financial year, it
reported circa $2 billion revenues in Europe and
North America.
There were nevertheless some very significant
project benefits. In the course of installing the
EFACS ERP system, the company learned a great
deal about the benefits that IT can bring to all parts
of the business, and about the amount of resource
needed to achieve a successful installation. BPL
also reviewed existing processes and, in many
cases, was able to modify or refine them in order
to maximise the benefits from major systems
change.
The ERP and document management systems
have improved the company’s ability to manage
the increasing variety of client orders. BPL now
routinely processes over 60 works orders every
month. Each works order needs a significant
amount of supporting documentation, and
materials, machines and staff need to be available
at the right time, in the right configuration, in order
Dowty Propellers is part of the mechanical systems
business of Smiths Aerospace, with over 60 years
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experience in the production of aircraft propeller
assemblies. The company is recognised as the
industry leader in the manufacturing of composite
blades using resin transfer moulding (RTM)
technology. The company currently employs
over 200 people split into the two main value
streams of the business - the manufacture of
original equipment (OE) and the aftermarket
business. 70% of the business is related to OE
and the remaining 30% is aftermarket. The ERP
system (Syteline) had already been installed in
Dowty OE, but the remaining functions of the
aftermarket business, namely the repair and
overhaul business, was functioning under a
different ERP system (Fourthshift) and hence the
need to integrate it to the rest of the business, via
standardisation on one ERP. Combined with this,
was a broader initiative at Group level to migrate
the company over a period of years to the SAP
ERP product.
major businesses across the Smiths Aerospace
division to the new ‘shared services’ by the end of
2008, and hence implement the SAP Financials
module and integrate it with their existing
business systems. This would be the first step in
the staged migration to the entire SAP suite (See
Figures 2 and 3).
Dowty Propellers 5 year plan shows a doubling
of turnover from 2003 to 2008. Integrating the
business systems and streamlining the business
processes are essential to support this business
plan. Dowty Propellers repair and overhaul
(DPRO) is a separate facility where the repair and
warranty work and the overhaul of the propeller
systems are undertaken. DPRO is part of the
aftermarket stream of the main Dowty Propellers
business.
Syteline was implemented in the Dowty Propellers
OE company in 1998, and was reasonably
successful in supporting core business processes,
albeit with significant package modification, and
with a Progress database engine. As DPRO
previously resided in a different part of the
organisation, it had implemented the Fourthshift
ERP. Dowty Propellers had identified the need
to re-engineer its business processes into two
value streams, aftermarket and OE. A common IT
platform was identified as a fundamental building
block of the reengineering process.
This will undoubtedly be a difficult and lengthy
process involving a number of interim solutions
and short-term interface developments. As a
result of company acquisition over many years,
Smiths IT portfolio included no less than 16
different ERP packages. A significant first step
in rationalisation was to select just 4 of these
16 ERP packages that could co-exist alongside
SAP, and would integrate, for the mid-term, with
SAP Financials. These four packages are shown
in Figure 3 and include, significantly, the Syteline
ERP package.
Smiths Group ERP strategy
Dowty Propellers was the second business unit
chosen by the Group to roll out SAP Financials.
The business had to undergo extensive
business process change to allow for a smooth
implementation of Syteline and decommissioning
of Fourthshift so that the SAP roll out would
encompass both business units – Dowty OE and
DPRO – running on a common system – Syteline.
The problem was compounded by the fact that the
version of Fourthshift being run was very near to
being ‘out of maintenance’ and this added more
urgency to completion of the project. The OE and
aftermarket business process re-engineering and
integration, alongside the implementation of a
new ERP system at the DPRO business, were at
the centre of the KTP project.
A key objective of Smiths Aerospace overall
business strategy is to strengthen their position
as a ‘Tier 1’ global supplier of integrated aircraft
systems. Both Smiths Group as a whole and
Dowty Propellers have recognised the need to
underpin their business strategy with improved
systems and business processes. As a result,
Smiths Aerospace is undergoing a major restructuring with departmental functions such as
human resources, finance and IT being centralised
as ‘shared services’. SAP been chosen as the
ERP solution that will ultimately support all of the
Group’s main functions and processes, although
initially this will be implemented to run the finance
function only. The current plan is to migrate all
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Figure 2. Current systems architecture at Smiths Aerospace
The Implementation of Syteline ERP in
DPRO
systems as the business entered the new phase
of growth. The improved functionality of Syteline
reduced the reliance on end-user databases.
Business analysis was carried out at an early
stage of the KTP project to identify the current
status of the IT architecture at DPRO; this was
key to determine and plan how best to link the
two businesses together within the given short
timescales. The business analysis revealed a
system that had grown organically to support the
needs of the business as it experienced a period of
rapid growth. As Fourthshift was unable to fulfil all
business information requirements, enterprising
computer users had developed a suite of databases
and spreadsheets to help them run the business.
Whilst this scenario supported the business at
the time, management recognised the need to
rationalise and simplify the company’s information
The proliferation of these databases had increased
the support demands on the IT department, and
the department had also lost much of its Fourthshift
expertise. The migration to Syteline therefore made
support easier to deliver, and within the core skill
set of Smiths Aerospace. It also facilitated change
control and standardisation of the IT architecture.
A common ERP platform also delivers the ability
to implement standard business procedures
and controls at both geographical locations.
By adopting Syteline, the DPRO business area
was brought within scope of the Group strategic
information systems solution.
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Figure 3. Future systems architecture at Smiths Aerospace
The project reviewed, improved and standardised
core processes across the two businesses so
that both companies could be supported by one
configuration of Syteline. Gap analysis was carried
out to identify the business requirements and map
these to the functionality offered by the new ERP
system. Wherever possible, system changes were
kept to the minimum as Syteline had already been
mapped to SAP in the OE business. A new IT
architecture was devised and peripheral databases
were reduced to the bare minimum, leaving just
four additional Access databases connected to the
main ERP system. The communications between
the two sites in Gloucester were also addressed,
as the DPRO site was linked to the ERP server
hosted at the OE site. Systems piloting, user
acceptance testing and training were progressed
in accordance with the project plan.
were reported after go-live, only teething issues
that are directly related to system configuration
and user access rights. This was recognised as
a potential issue on the plan as there was not
enough time to cater for all the necessary system
administration work before the go-live date.
Business management agreed to compromise in
some areas in order to have the DPRO business
integrated into the OE business by the agreed
date, and so a post-implementation phase was
agreed to address minor issues.
The system was delivered as per plan and in time
to allow work to continue integrating Syteline at
the OE site with SAP. The new system went live
at DPRO in March 2006, and has been operating
successfully since then. No major problems
The impact of short timescales
Risk factors
There were a number of difficulties that required
particular focus to allow the project to progress.
These included:
This project was on the critical path for the rollout
of SAP Financials, and hence was constrained
by the go-live date of the latter project. This did
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from their IT investment, by allowing the DPRO
business to be included in the SAP roll out.
not allow enough time to complete a thorough
reengineering of business processes, and in
addition the scope of the system implementation
had to be restricted to the minimum to achieve
the project end date.
In summary the main business benefits drawn
from this systems and business integration
were:
Due to the tight time frame, there was very little
contingency built into the programme and so
any issue could have put the overall project at
risk. The project go-live date was delayed on
two occasions due to external factors, but the
resultant small slippage had no significant impact
on the SAP project.
• Processes realigned to deliver business
strategy - re-engineering to the aftermarket
and OE value streams
• Enhancing customer service by enabling one
point of contact within Dowty Propellers
• Reducing the complexity of the existing IT
infrastructure and architecture by integrating
the two business functions around one ERP
system
Competition for key resources
One major issue that put the project in jeopardy
was the competition for resources due to the large
number of projects currently going on at Smiths, in
which input from the same people was required.
The Finance Department centralisation, together
with the IT Department centralisation, system
changes to support a significant new customer
of Smiths Aerospace, and the support of dayto-day business operations, all required certain
key resources, which were all also involved on
the DPRO systems project. Prioritisation proved
to be a great challenge as the business had to
constantly revise the allocation of resources and
take decisions that allowed all projects to move
forward at an acceptable pace.
• Streamlining operations and optimising the
use of corporate resources
• Consolidating and standardising data across
the businesses, facilitating improved access
and reporting
• Supporting Group’s strategy requirements
by preparing the businesses for an SAP
implementation, and also ensuring the flow
down of benefits from the SAP project to the
Dowty Propellers’ business
• Improved IT efficiencies by reducing the
number of databases and systems requiring
support
Systems benefits
Systems integration across the two businesses
helped the organisation to align IT with their
business strategy. At the same time, the move
to Syteline allowed compliance with the Group
decision of implementing SAP as the main
financials package, without this representing
a challenge to the individual businesses, and
hence sacrificing profitability, transparency and
internal control.
Concluding remarks: CSFs for ERP
project implementation
The KTP project initiatives outlined above
illustrate some critical success factors (CSFs)
for the development and implementation of ERP
systems. First and foremost, business leadership
and commitment are essential. This is probably
the single-most important factor in ensuring
project success. At both Brecon Pharmaceuticals
and Dowty Propellers, the Finance Director took
personal leadership of the ERP projects, and
chaired the project steering groups (called local
management committees in the KTP scheme).
This allowed the project to have a direct route
into the managing director that was particularly
significant in resolving prioritisation and
resourcing issues, and coordinating activities in
different business areas.
An integrated systems strategy - instead of
discrete, project-based activities managed
as separate functions in departmental silos enabled the company to achieve agility and drive
revenue and competitive advantage across the
Division, enhancing productivity and ultimately
optimising business performance. Integrating
the two businesses on a unified systems
platform, allowed the organisation to reduce its
IT complexity and obtain more business value
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Process re-engineering, although important,
should not become a distraction to what is the main
task of getting a new system in and implemented.
Koch (1999) has humorously remarked that ‘the
inherent difficulties of implementing something
as complex as an ERP is like teaching an
elephant to do the hootchy-kootchy’. His point is
clear - it is difficult enough to get a large piece
of software, including new cross-company
systems functionality, implemented, without an
over lengthy re-engineering phase. Business
process re-engineering can help ERP projects
deliver dramatic benefits in terms of efficiency
gains and customer service, but there is a danger
that the BPR stage sucks in a disproportionate
level of resources, delays implementation and
stalls the project. At BPL, this was not allowed
to happen, and much of the reengineering phase
took place after the main software modules
were implemented; and at DPRO, the need to
go live with Syteline to meet the SAP Financials
implementation timescales again meant that
process reengineering was curtailed, although its
impact was still significant.
As regards the KTP scheme, its great value is
that it provides a dedicated supervised resource
to instigate, promote and manage key initiatives
to drive a business forward. This is particularly
valuable with cross-company systems and
process change projects such as ERP
implementation. The university supervisors and
the DTI consultants provide additional guidance
and back up and attend regular steering group
meetings. This is particularly valuable with such
projects that are multi-faceted and involve not
only change in technology, but also change in
working practices and sometimes in core business
processes. Turban et al (2002) have noted that
‘with the advance of enterprise-wide computing
comes a new challenge: how to control all major
business processes with a single software
architecture in real-time’. The KTP scheme has
helped both Brecon Pharmaceuticals and Dowty
Propellers make considerable progress towards
this goal.
Building in contingencies is important in three
main areas. The extent of data rationalisation
issues is always difficult to estimate until all old
systems are uncovered and investigated, and the
extent of data duplication and misrepresentation
is established. It is wise to get most of these
issues sorted out before going live, so that the new
system starts with a clean bill of health from the
data perspective. This was particularly significant
at DPRO where an array of end-use databases
and spreadsheets held multiple versions of key
data items, notably product, job and customer
data. The extent of new systems and skills
training is another key activity which is difficult to
estimate up-front, as is the need for third party
resources (possibly from the software vendors),
for installing and configuring the system (avoid
specific customisation!) and building interfaces
to any point solutions that may remain. Although,
as Davydov (2001) notes, ‘the challenge is
to integrate the whole set of enterprise wide
applications into a single integrated information
network’, ERP systems rarely provide 100% of
the functionality required, and some interfacing
to old systems or new point solutions is normally
required. In these case studies, links were
installed or built to a label production system at
BPL and to both the SAP Financials module and
end-user Access databases at DPRO.
Davenport, T., (2000). Mission critical – realizing
the promise of Enterprise Systems. Harvard
Business School Press.
References
Davydov, M., (2001). Corporate portals and ebusiness integration. McGraw-Hill.
Jeffrey, W. and Morrison J., (2000). ERP – one
letter at a time. CIO Magazine, Sept 1st
Koch, C., (1999). The ABCs of ERP. CIO
Magazine, Dec 22nd.
Turban, E., King, D., Lee, J., Warkentin, M. and
Chung, H. M. (2002). Electronic commerce 2002
– a managerial perspective. Prentice Hall
Acknowledgements
Due acknowledgement and thanks are given
to Peter Roberts, Finance Director at Brecon
Pharmaceuticals (and KTP company supervisor),
and to the KTP Associate who led the project
there; and to David Abbott, Finance Director at
Dowty Propellers Repair and Overhaul (and KTP
company supervisor) and Helen Russell, Finance
Director at Dowty Propellers OE. It should be
noted that the views expressed in this article are
not necessarily the views of Dowty Propellers or
Brecon Pharmaceuticals.
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Biographical notes
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M a n a g e me n t
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Gabriela Maldonado, BSc, MSc was also in
the Department of Computing at the University
of Gloucestershire, and worked as the KTP
Associate at Dowty Propellers. Gabriela is now
Systems Programme Manager at Man ERF,
Swindon.
Martin Wynn, BA, MA, PhD, PGCFHE, is Principal
Lecturer in the Department of Computing at the
University of Gloucestershire Business School
and was academic supervisor for both the case
studies discussed in this article. He was formerly
IT Director at drinks manufacturer HP Bulmer,
now part of Scottish and Newcastle plc.
Both are qualified PRINCE2TM Practitioners.
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