Transcript Template Powerpoint Presentatie HUB

Critical Success Factors
of ERP Implementations
in Belgian SME’s:
A Multiple Case Study
Claude Doom and Koen Milis
HOGESCHOOL-UNIVERSITEIT BRUSSEL
ERP success
• Critical Success Factors (CSF)
• Most research: large implementations
• Focus on smaller ERP implementations in SMEs
• Focus on Belgian market
– Many SMEs
– Case study of 4 successful implementations
• Preliminary results
Critical Success Factors for ERP
• CSF: improves chances of successful project
implementation
• Five groups:
1.
2.
3.
4.
5.
Vision, scope, and goals
Culture, communication, and support
Infrastructure
Approach
Project management
Vision, Scope, and Goals
Enterprise vision, ERP project scope,
Implementation goals
• Vision, Strategy and Business plan
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Clear and motivating business vision
Clear project mission (related to business)
Clear definition of strategic goals
Clear business plan, describing benefits
Model of target business
• Scope
– Clear definition of ERP project scope
– Limitation of scope to essential business functions
Culture, Communication, and Support
• Senior management support
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Project approval
Identifying project as top priority
Senior management participation
Defending and supporting project
Mediation in conflicts
Understanding of technology and issues
Proper resource assignment
Communication of shared vision
Communication of role of new system to staff
Identify and approve new organizational structures, roles
and responsibilities
– Approve codes of conduct
Culture, Communication, and Support
• User involvement
• Effective change management
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Strong corporate identity
Open to change
Encouraging open communication
Determination to accept new technologies
Determination to overcome implementation problems
Project champion
• Internal communication
– Announcement of project scope, objectives before onset
– Formal presentations / user participation (requirements,
results)
• Supplier management
Infrastructure
• Standardized IT infrastructure
• Suitable business and IT legacy systems
Approach
Overall approach to project
• Formalized project approach and methodology
– “Skeleton approach”: limited start  expansion
– “Single module”: module per module
– “Big Bang”: complete system
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Focus on user requirements
Use of external consultants
User training
Data accuracy (at conversion, at input)
Alignment with business processes
Project Management
• Proper project planning, phasing and follow-up
– Project goals description
(realistic quality, time and cost goals)
– Project scope
• Identification business processes
• Choice of modules
• Identification of changes
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Project phasing and critical path analysis
Milestones and deadlines
Resources plan
Project follow-up organization
Contingency measures
Project Management
• Properly organized project management
• Appropriate project teams
– A single physical location
– Incentives for delivery within time and budget
– Incentives and risk-sharing agreements with partners
Critical Success Factors in Belgian SMEs
Do these CSFs apply to Belgian SMEs?
• 76 SMEs with known successful ERP
implementations
– #employees: 10  250
– Revenue < 50 mio euro
– Balance total < 43 mio euro
• Limited survey
• 4 Representative cases
– Different sectors
– Structured interview of key players (IT, Management)
Company
Activity
Employees
Revenue in 2006
(mio euro)
113
34.1
F-Co
Latex-foam
M-Co
Process engineering
57
14.5
O-Co
Vegetable oils
87
84.0
W-Co
Tires and Wheels
51
40.5
F-Co
• Leading European manufacturer of latex foam
• Sites in Belgium, Czech republic
• Sales offices in 10 more countries
• SAP implementation
– Purchasing, order entry, materials management, production
planning, financial accounting, distribution and logistics,
asset management, data warehouse
– Single site
– Project divided into subprojects
– 10% modified
– “Big Bang” roll-out
F-Co: Project
Component
Fraction of cost
Hardware
10%
Software
60%
Consulting
5%
Implementation team
5%
Training
20%
• Duration: 6 months planned, 7-12 months effective
• Cost: 1 – 1.5 mio euro as planned
• Useful lifetime: 10 years
F-Co: CSFs
• Users heavily involved
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Information and participation
Requirements identification
Training
No formal acceptance
• Pivotal role of senior management
– Project approval
– Financial responsibility
– Top priority
• Change management
– Organization open to change
– Commitment to new technology
– Determination to overcome operational problems
F-Co: CSFs
• Change management
– Project champion
• Middle management
• Defending project
Project participants
Fraction of staff
Users
50%
Business analysts
15%
Technical experts
10%
External consultants
25%
• Project approach and management
– Mixed team with external consultants
– Project manager selection criteria: competences and
experience
– Team members
• Top performing staff
• Mostly part-time involvement
– Critical decisions: company management (close collaboration)
– Incentive for delivery within time and budget
M-Co
• Branch of world-wide provider of products and
technologies for separation, heat transfer, fluid
handling
• Intentia ERP suite
– Purchasing, order entry, materials management, financial
accounting, distribution and logistics, financial management
– Interface to data warehouse and reporting tools
– Division into subprojects
– 20% modifications
M-Co: Project
Component
Fraction of cost
Hardware
30%
Software
35%
Consulting
10%
Implementation team
10%
Training
15%
• Duration: 7-12 months, slightly longer than planned
• Cost: 1 – 1.5 mio euro as planned
• Useful lifetime: 10 years
M-Co: CSFs
• User involvement (outside project team!)
– Informed
– Not actively involved
– Only management participated actively
• Requirements, advice and feedback
– Positive acceptance of final result
– Extensive training
• Crucial role of Management participation
– Approval
– Responsibility
– Identification as top priority
M-Co: CSFs
• Change management
– Corporate culture: flexibility,
shared values, common goals
– Open communication
– Project champion
• Middle management
• Effective contribution unclear
Project
participants
Fraction of
staff
Users
40%
Business analysts
20%
Technical experts
20%
External
consultants
20%
• Project approach and management
– Project manager selection criteria: capabilities, flexibility,
reputation
– Team members
• Mostly part-time
– Consultation with management for critical decisions
– No incentives
O-Co
• European division of global player in development
and production of vegetable oils
• SAP implementation
– Purchasing, order entry, materials management, production
planning, financial accounting, distribution and logistics,
financial management, data warehouse, advanced planning
– 30% modifications
O-Co: Project
Component
Fraction of cost
Hardware
10%
Software
10%
Consulting
50%
Implementation team
20%
Training
10%
?
• Duration: 7-12 months as planned
• Cost: 1 – 1.5 mio euro as planned
• Useful lifetime: 5 years
O-Co: CSFs
• Particular attention to user involvement
– Timely information
– Requirements, remarks, feedback
– Actively seek user approval
• Active involvement top management
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Approval
Identification as top priority
Conflict resolution
Active participation
Not final responsibility
(final responsibility carried by member of operational management)
O-Co: CSFs
• Change management
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Corporate culture of open communication
Openness to change
Commitment to new technology
Strong will to overcome operational problems
Change agents and Project champion (middle management)
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Emphasizing advantages
Defense against critics
Conflict resolution
Contacts with users
Detecting problems with system
O-Co: CSFs
• Project management
– Project team
• Best staff members
• 50% end users
Project participants
Fraction of staff
Users
50%
Business analysts
10%
Technical experts
0%
External consultants
40%
– Project manager selection criteria: capabilities, experience,
reputation, flexibility
– All critical decisions taken by corporate management
– No incentives
W-Co
• Provider of industrial and agricultural tires and
complete wheels
• Belgium: 3 sites
• Intentia ERP
– Purchasing, order entry, materials management, production
planning, financial accounting, distribution and logistics,
financial management
– Interface with data warehouse
– 5% modifications
– Loose planning
– Split into subprojects
W-Co: Project
Component
Hardware
Fraction of cost
5%
Software
15%
Consulting
50%
Implementation team
10%
Training
20%
• Duration: 7-12 months as planned
• Cost: 1 – 1.5 mio euro as planned
W-Co: CSFs
• Major user participation
– Information whole community
• Representation by a few users
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Soliciting user input
Requirements, feedback
No formal approval
Training: “job helpers”
• Top management instrumental
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Approval
Alignment with corporate strategy
Identification as top priority
Conflict mediation
Necessary changes in corporate culture
Assumed final responsibility
W-Co: CSFs
• Change management
– Project champion
• Project management
– Project team
Project participants
Fraction of staff
Users
10%
Business analysts
50%
Technical experts
20%
External consultants
20%
• Best staff members
• Mostly part-time
– Project manager selection criteria: reputation, flexibility
– Urgent decisions taken by project team
• Proper communication with top management
Critical Success Factors in Belgian SMEs
• Vision, Scope, and Goals
strategic goals, and business plan
4–– Vision,
4?– Scope
Efficient management reporting
• Culture, Communication, and Support
4
4
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4
4
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• Explicit scope limitation
Senior management support
important
User involvement
Effective change management
Internal communication
Supplier management
• Suitable corporate culture,
open to change
Critical Success Factors in Belgian SMEs
• Infrastructure
standardized IT infrastructure
8–– ASuitable
business and legacy systems
?
• Approach
formalized project approach and methodology
4–– AFocus
user requirements
4– Use ofonexternal
4– User training consultants
4– Data accuracy
?
– Alignment with business processes
Critical Success Factors in Belgian SMEs
• Project Management
project planning
4–– Proper
project management
4– Proper
teams
4 Good project
• Variable
project management
• No critical path
• No contingency
• Project champion
• Contribution not always clear
• Project manager criteria: capabilities,
experience
• Mix of internal and external specialists
Conclusions
• Important Critical Success Factors of ERP
implementations in Belgian SMEs:
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A clear vision on the strategic goals of the implementation
Senior management support
Active user involvement
A suitable corporate culture, open to change
Internal communication on the project (before, during)
Proper supplier management
Formalized project approach and methodology
Focus on user requirements
Use of external consultants
User training: technical, business, practice oriented
Proper project planning, phasing and follow-up
A mixed project team: users, internal technical and business
experts, external consultants
Thank you