Transcript What is an Enterprise Wide Application?

Business and IS Performance
(IS 6010)
MBS BIS 2010 / 2011
11th November 2010
Fergal Carton ([email protected])
Accounting Finance and Information Systems
Last week
•
Apple iTunes process new elements (talk with ATMac and HMV)
–
Distribution points: Hinchley in the UK and TNT depots in Dublin, Cork
–
Courier to customer directly for all Apple deliveries: packing and labelling?
–
HMV sales data collected nightly, interface to Apple?
–
Replenishment of HMV stores done centrally based on sales reported
•
Notes on process mapping and assumptions
•
Accuracy and precision
–
–
•
Accuracy is tellling the truth, precision is telling the same story over and over again
Granularity is the level of detail required
Virtualisation / integration and usefulness of information
–
Finance need visibility of the road ahead, the dashboard and road behind
–
Looking at screens instead of talking to people (getting the balance right)
–
View of reality distorted by act of collecting data (eg. Zip codes for Ireland)
–
Virtualisation introduces constraints on reporting
•
Living with demand uncertainty, stretch performance targets
•
Integration can result in greater dependence on manual data manipulation
This week
• Decoupling point
• Control objectives of integration are undermined
• Integration framework
• Mason and Swanson framework for measurement and IS
• Research on impact of ERP on management decision making
Linking the physical to the
virtual
• Use of systems to gain visibility of processes
• Good data integrity is accurate and precise
• What are the obstacles to data integrity?
–
–
–
–
People purposefully (or not) getting data wrong)
Poor motivation
Poor training
Calibration of the tool
• Accuracy of data is driven by good design
– Understanding of physical process
– Understanding of limitations of information system
• Gift card example highlights some obstacles
Decoupling point
• Decisions were made “intellectually”, “in the
brain”, “on the fly”, “off-line” or “by the seat of the
pants”.
• Such managerial observations represented the
“decoupling point” where the physical and the
virtual diverged.
• Information that was structured in a system was
no longer adequate to support decision making.
Decoupling point
• Inability of planners to deal with demand uncertainty, so
responsibility for make or break performance decisions
was pushed downwards to operations managers
• Instead of the planning role protecting operations from
fluctuations in demand, managers had to take personal
risks in operational decision making (Planning, Buying,
Making and Delivering)
• In so doing, managers were obliged to take control of the
means of decision making, including the implementation
and use of appropriate decision support tools.
• Hence the predominance of the “soft” vocabularly
Control objectives of integration undermined
Control
Centralisation
Co-ordination
More analysis potential
Integration
Granularity
Accuracy / consistency
Inflexibility
Deteriorating data integrity
Technical skills required for reporting
Latency
Manual
Integration framework
Virtual
Measure
Plan
Plan
Plan
Resource
visibility
Physical
Execute
Schedule
Supply
Demand
Performance control
Mason and Swanson, 1979 II
• Managers require information about
resources and their relative
effectiveness for achieving the
organisation’s purpose
• Resources = people, materias, plant
and equipment, money and information
• Managerial accounting systems
– Resources and costs
– Relationship between costs and
performance
Mason and Swanson, 1979 IV
• Managers queries and alternatives
which govern the precision of the
measure
• Precision of measure only to
“discriminate between critical
magnitudes”
• Use recruitment process to differentiate
between primary and secondary data
Mason and Swanson, 1979 V
• What problems shall I look into
(attention)?
• What course of action is better
(solution)?
• How well am i doing (scorecard)?
• IS view of information accuracy (data
intgegrity) obscures role of information
as influential
Overlapping research domains
Standardisation
8
9
6
Centralisation
1
13
2 3
17 18
11
25 34
26 33
27 5
29
7
30
36
12 15
14 16
19
4
20
10
22
35
21
23
28 31 32 37
Integration
24
Decision
Making
Overlapping research domains
Centralisation
Flexibility
Information
characteristics
Information overload
Retrospective
justification
Fragmentation of
managerial attention
Two in depth case studies
RQ1: organisational goals
•
•
•
•
•
Performance goals are soft (flexible)
ERP requires hard data for execution
Uncertainty from demand fluctuations
Dis-connect plannning from operations
Creates buffer zone for decision makers
• Both cases disconnected MRP logic
RQ2: decision making
•
•
•
•
•
Much time wasted on reconciliation
Fragmentation of demand signals
Coping with uncertainty impacts data
Link between reports and reality blurred
Overloading managers with data
• Demand uncertainty is a business issue
RQ3: impact of ERP on DM
•
•
•
•
•
ERP not a reliable lens due to gaps
Use of offline tools distorts picture further
Vendor driven discourse on integration
Managers are not data integrity experts
ERP success is a socio-technical question
• ERP integration is a poor model for DM
ERP fit and data integrity
Actions
Re-implementation
Symptoms
t5
Data integrity high,
new gaps emerge
t4
Data integrity low, growing
perception of ERP inflexibility
t3
Data integrity high
(onwards and upwards phase)
t2
Data integrity low
(stabilisation phase)
t1
Gaps minimised,
data integrity high
t0
Gaps exist between current
processes and ERP best practice
Increasing use of BI,
DW and off-line tools
Business model
changes in reaction to
external environment
Workarounds or changes
to business processes
Gaps discovered between
operations and ERP
ERP go-live
ERP configuration, process re-design
Analysis for ERP project
Low
High
Fit of ERP to reality
Conclusions
•
•
•
•
•
Demand uncertainty undermines ERP
Assumed data dependencies invalid
Integrated model cannot partially work
Integration drives offline data manipulation
Technical infrastructure complexifies
• Understand nature of information first
Virtual perceptions of the real world
Further thoughts
•
•
•
•
•
ERP model portrays complexity of reality
Virtualisation creates abberations
Managers won´t relinquish DM to ERP
Decoupling to retain human control
Artefact of management or technology?
• Need to study aims of integration wrt DM
Reading
•
•
•
•
•
•
Mason, 1969
Child, 1973
Mason and Swanson, 1979
Galbraith, 1983
Zuboff, 1984
Elmes et al., 2005