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Production Management II (Prof. Schuh)

Business Engineering & System Selection

WZL©

Production Management II- lecture 12 -

Business Engineering & Software Selection

Responsible:Dipl.-Wi.-Ing. L. [email protected] (Steinbachstr. 53B, room 518)Tel.: 0241-80-28195

Objectives of lecture Business Engineering:

• Definition and introduction to the elements of Business Engineering

• Function and use of Business Collaboration Infrastructure

• Chances and risks during the implementation of IT-systems

• Proceedings of Business Engineering

• Methods and phases of Change Management

Objectives of lecture Software Selection (FIR):

• 3-Phase-Concept for the selection and implementation of ERP-systems

Demonstration (Trovarit AG):

• Tools for an efficient selection of ERP-systems

Exercise:

• Methods of Business Engineering

• Approach to software selection

L12 page I

lecture 12



Table of contents of lecture 12:

1. IT-systems transform today’s companies

1.1 Business Engineering L12 page 1

1.2 IT-systems in the field of production management L12 page 2

2. Difficulties during integration of IT-systems

2.1 Integrating IT-systems into a company’s process network L12 page 3

2.2 Business Collaboration Infrastructure L12 page 5

3. Business Engineering

3.1 Basics and procedure L12 page 10

3.2 Methods and tools – for instance: PROMET L12 page 16

4. Change Management

4.1 Methods L12 page 17

4.2 Stages of a change project L12 page 18

4.3 Controlling of realization L12 page 19

5. Methodology for Selecting and Implementing ERP systems

5.1 The market for ERP systems L12 page 20

5.2 ERP Implementation Project: Approach and selection criteria L12 page 27

5.3 Web-based ERP Selection Process,

comparison with traditional methods L12 page 48

6. Tools for an efficient selection of ERP systems

6.1 Software Selection with the IT-Matchmaker L12 page 56

7. Exercise

7.1 Question on Business Engineering E12 page 1

7.2 Question on system selection E12 page 10

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Summary lecture 12:

Today’s economy is undergoing a transformation from the industrial to the information age. This transformation allows one to move the focus of transformation from its original area to the entire network of value selection.

Isolated IT-applications as a result of the tayloristic approach of functional fragmentation of the entire production process can be found prevalently. But, a continuous flow of information both within and far beyond the company is an existential premise for the company‘s future success. Hence, the introduction of IT-systems is being complicated by a huge number of interfaces, which in parts can be very complex. Communication is being alleviated through standards on the levels of business, process and application as well as adequate software-solutions.

“Business Engineering“ characterizes as the design for companies of the information-age. Since transformation applies to complex man-machine-systems, a limitation to the technical aspect of change is not sufficient. Introducing an IT-system is more likely an organizational than a technical problem.

Making the transformation fast and safe as well as minimizing expenses is the approach in Business Engineering. Hereby transformation becomes directable: It strips transformation down to projects, a project down to a professional outline and to the direction of change. In turn the professional outline is stripped down to the levels strategy, process and system. Small, handableproject-activities with clearly defined results in form of documents are generated.

During the selection and implementation of standard ERP systems three phases can be distinguished:

• Reorganisation: Project Initiation, Process and Structure Analysis, Process and Structure Optimization

• System Selection: Pre-selection, Final Selection, Final Contract Negotiation

• Realization: Realization Preparations, System Implementation, Setting System into Service.

The selection of an ERP System is expediently supported by the internet platform “IT-Matchmaker”.

Professional Change Management and consequent controlling of implementation are elementary premises for a successful implementation IT-systems.

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Bibliographies lecture 12:

Martin, R. Wie Software wirklich Nutzen bringtLempp, P. Harvard Business Manager, Juni 2003, p. 71ffMauterer, H.

Müller-Stewens, G. Strategisches ManagementLechner, C. Schäffer-Poeschel Verlag Stuttgart, 2. Auflage, 2003

Österle, H. Business EngineeringWinter, R. Springer Verlag Berlin, 2000

Österle, H. Business Engineering – Prozeß- und SystementwicklungSpringer Verlag Berlin, 1995

VDI-Gem.ausschuß CIM CIM-ManagementRechnerintegrierte Konstruktion und Produktion Band 1VDI-Verlag Düsseldorf, 1990

VDI-Gem.ausschuß CIM Kommunikation und DatenbanktechnikRechnerintegrierte Konstruktion und Produktion Band 6VDI-Verlag Düsseldorf, 1991

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IT-Innovations force companies of the industrial age to change

Bild 1

Business Engineering

IT-innovationsinformation technique

construction technique

applications electronic services

preparation, structuring and

use of information

business-knowledge

methods of Change Management

business architecture of the information age

companies of the industrial

age

understand

transformation

understand support

restructured companies

new companies

make possible

represents overall concept

Annotations:

Today’s economy is undergoing a transformation from the industrial to the information age. Especially innovations from the sector ‘information- and communication-technology’ („IT-innovations“) allow new business-solutions, new services, products, processes, companies and branches. New forms of leadership and coordination replace conventional forms of organization.

The transformation with its technical and socio-economic aspects is by far too eminent and complex to be intuitively and uncoordinatedly created by a single isolated person on basis of minor basic rules.

In order to open up business potentials of IT-innovations, teams, which are based on a division of labor, must look into technologies, strategies, processes and applications minutiously and professionally. Such proceedings and the existence and usage of appropriate procedure models, methods and tools characterize disciplines in the field of engineering.

“Business Engineering” characterizes as the design of companies of the information-age. As the transformation concerns complex man-machine-systems, it is essential not just to focus on the technical and professional aspects of change. Knowledge of business and IT are being brought together and connected to all aspects of the transformation, leading from means of representation to procedure models and cultural as well as political aspects.

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IT-Systems in the field of production management

marketing development workpreparation

productionplanning

productionassembly sales service

maintenancedisassembly

recycling

CAD

CAM

CRM

SCMCAP

CAE

PLM meta-data basis

CAO

CAD: Computer Aided DesignCAE: Computer Aided EngineeringCAM: Computer Aided Manufacturing

CAO: Computer Aided OfficeCAQ: Computer Aided QualityCAM: Computer Aided Manufacturing

CAQ

CRM: Custom Relationship ManagementERP: Enterprise Ressource PlanningPLM: Product Lifecycle Management

SCM: Supply Chain Management

ERP

Bild 2

Annotations:

Nowadays one will not find companies operating without computer support. Since the 50s computer-based information processing has become a determined part in producing companies.

Today complete process chains of producing companies are being supported by information technologies. There are appropriate IT-systems for nearly each task: Beginning design and development supported by several CAD-systems and simulation tools, to the administration department and services, which e. g. may offer long-range services for products or telemetric services. Masses of data are stored and maintained in complex data- and transaction-systems.

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Integrating IT-Systems into a company‘s process network

Bild 3

Pictures: SAP AG, Hasso Plattner, Technologie integrierter Informationssysteme, 2001

1.Integration into processes within the company

2.Integration into processesexceeding the borders ofthe company

CollaborativeMarketplace

Annotations:

In the past the organization of data processing ensued the organization of the production. Thereby it accorded to the tayloristic approach of functional separation of the entire producing processes.

One result is an infrastructure of optimized functional subareas, which can still be found today in sub-optimum processes of the entire company. Isolated applications only allow a certain effort in maintaining competitive ability. A continuous flow of information is an existential premise for a company‘s success.

Therefore IT-systems need to be integrated into the company’s processes. In advance these processes are to be optimized, as systematization comes before automization to ensure the company’s success. A large number of new systems, such as SCM-systems, optimize workflows far beyond the borders of departments or processes.

Due to today‘s tight networking among companies, the next step is to integrate IT-systems into processes exceeding the borders of the company. Very often this interconnection cannot just be found among two companies. A variety of internet platforms allow an automatic process-flow on a basis of so-called „Collaborative Marketplaces“

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IT-Systems require a maximum in data exchange

Bild 4

RAO = Raw material, auxiliary material, operating material, subassemblies

purchasing

merchandise planning

-

sales planning

-

production

product concept

-

ex stock

processing of orders

-

cost accounting

-

Human Ressources

auditing

financial accounting

-

billing

bill order

intakeorder intake

stock value

working hours

plan orderproduction order

work plansbill of materials

calculation

accountinggoods issue

costs

delivery date

customer-specificqualities

requ

est f

or d

eliv

ery

plan

bre

ak

capa

citie

s

orde

r

orde

r

avai

labl

e qu

antit

y

with

draw

al R

AO

approved job

cash

sal

es

-

outstanding money

liabi

litie

s

finan

cial

- stat

emen

t

production planning

-

Annotations:

A large exchange of data can be found between the separate elements of a process. This needs to be beard in mind while integrating the information technology into processes.

Each source of information needs to be kept in mind, data-structures are to be created accordingly and interfaces need to be defined and implemented. Data, wich is generated within single processes, must be accessible to other areas and systems.

The realization of interfaces during implementation of IT-systems is highly complex and laborious – whether adjustments of standard systems or individual solutions are concerned. In many cases a main part of the software investment is needed here.

Defining standards of communication drastically eases this challenge. Especially among inter-companies-exchange it initializes a cost-effective linking of processes.

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The customer does not want products, but instead a direct support of its processes

Sou

rce:

Hub

ert Ö

ster

le, 2

002

ERP = Enterprise Ressource Planning, KMS = Knowledge Management System, SW = Software

Bild 5

CustomerCustomerprocess

Company

InformationEvaluation

Design

Buy

ProduceOperate

Maintain

Pay

Content

Design

Sell

Produce

Support

Bill

Customerportal

Content &community

Productlife cycle

Commerce

Supplychain

Maintenance & repair

Finance

Content &community

Productlife cycle

Commerce

Supplychain

Maintenance & repair

Finance

EnterpriseDevelopment

Marketing &Sales

Product Innov-ation & Design

MaterialsManagement

Manufacturing /Production

Distribution

HumanResources Finance

IS / ITAssetMgmt

HumanResources Finance

IS / ITAssetMgmt

ERPERP

KMS KMS

Portal-SW Portal-SWERPERP

KMS KMS

Portal-SW Portal-SW

Business Collaboration Infrastructure

Annotations:

The most important aspect concerning transformation is that availability of a technichal and organizational networking infrastructure allows expanding the focus of transformation from the original area to the entire value-added network. Thereby huge potentials of optimization are made accessible and hence Business Engineering is a networked business architecture, which is optimized along the entire value-added chain.

Sustainable business success is achievable almost only through differentiation. It can be gained by tighter contacts to one’s clients compared to competitors, which is a wider range of services. Clients prefer self-contained solution, which can be integrated without problems. Per contra single products have to be combined and integrated by the clients themselves.

A proper example might be a retailer that does not only deliver memory chips for Nokia, but as well supports Nokia’s developers in choosing the appropriate product, operates a part-storage at Nokia, etc..

In order to keep costs for distributors low in spite of an increased level of services, core-competences of sub-distributors are involved and exchange of information is standardized if possible. Mostly distributors do not offer their services exclusively to a single integrator but produce so-called “Shared Services”. Scale effects are a basic factor of success for such service providers. Standardization on the side of IT is made possible by a “Business CollaborationInfrastructure.“

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WebServices assume tasks in company networks

companysupplier Customer

Business Collaboration Infrastructure

BusinessSupport

Information

Bild 6

Business Bus

translatione.g. AltaVista,QuickTrans

Human Ressourcese.g. ADP,Ceridian

maintenancee.g. Dell,

Cisco

travele.g. Rosenbluth,

Start.de

BusinessNetworking

Integration

Basis

Credit Profilese.g. Equifax,

Experian

Finance Informtione.g. Bloomberg,

American Express

online databasese.g. Dialog,OneSource

Investmente.g. Moody‘s,

Reuters

eMaile.g. Hotmail,

WEB.DE

paymente.g. TransPoint,

PayNet

communitye.g. VerticalNet,

Harbinger

tracking and tracinge.g. UPS,

FedEx

product cataloguese.g. GE, MarketSite,

Requisite

White & Yellow Pagese.g. Four11,

Wajens Internet G.

Joint-Venture indexe.g. Dun&Bradstr.,Thomas Register

Message Brokere.g. Harbinger,

Sterlingcommerce

Internet ServiceProvider (ISP)e.g. IBM, NetZero

Private Key Issuere.g. VeriSign,

Swisskey

Network Operationse.g. Exodus,

UUNET

Hostinge.g. Oracle,

SignNet

Annotations:

The Business Collaboration Infrastructure consists of „Business Bus“ and „eServices“. The variety of standards in business-, process- and application-levels as well as adequate software packages are building up a widely accepted infrastructure for business networks, in a meaning equal to the effects of street-density and road traffic regulations on today‘s traffic. These standards and the software associated to them are called “Business Bus”.

It is complemented by various basic services (eServices), which are independent from certain branches or customer-processes. Some of these basic services do have a mandatory structure and need to be realized by especially trustworthy and reliable institutions (“public services”).

- Basic services: deliver a technical infrastructure to be accessed by all other services

- Integration services: support coordination of processes between different companies,e. g. news-transport, identification of market participants, etc.

- Business Networking Services: needed for cooperation with other companies

- Information services: e. g. news or scientific reports

- Business Support Services: processes, which can be outsourced orbought by a company

Common characteristics of all services are that they mostly function on an electronical basis, thy can be used alone or bundled with other services, their components are highly standardized and their accounting mostly is autonomous.

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Example: Balancing bills supported by using the Business-Bus

Bild 7

Business Bus

distribution

sales

planning

offsetting

supplier customer

auditing

-online billing

payment and liquidation

eService

Bill Presentment & Payment-Processes

distribution

negotiation

information

payment(2)

(3)

(4)

(5)

(1)

Annotations:

The payment of a service is electronically monitored by a neutral instance. The advantage is maximum security both for customer and supplier: paying in advance a customer can be sure to get his money back, if he is not satisfied with the product delivered. The supplier has the guarantee to be paid as long as his delivery is correct.

For example, this service is offered by eBay.

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IT-architectures: today‘s systems have a flexible structure

Bild 8

presentation & - logic logic of usage data

presentation & - logic logic of usage

Core System

Client / Server - SystemClient Server

data

Tripartite system architecture

presentatationWebclient

presentation logicWebserver

presentation presentation logicClient

applicationsserver (ORB)

logic of usage

CORBA JAVA .NET

data

data

Server

Server

Software

IT-technologies:

Annotations:

Basically IT-systems consist of four core-components:

- Presentation: Graphic output of the software-surface, e. g. windows, buttons, etc.

- Presentation logic: Data preparation for the presentation, e. g. calculation of diagrams

- Logic of usage: Functionality, e. g. interpretation of total turnover

- Data: Storing information, e. g. figures, texts, etc.

Most of today‘s IT-systems used in producing companies are client server based. Innovative software solutions have a tripartite structure and enable a dynamic exchange of software components.

The tripartite system architecture practically is the technical basis for the Business Collaboration Infrastructure. At the same time, it is the most flexible solution for networks, as old core components can be separated to several servers. Future dominating IT-technologies to realize this architecture are Corba, Java and Microsoft‘s upcoming .NET initiative.

Application Service Provider (ASP) use this architecture as well. These service providers have application logic and data servers in their computer-pools, while the customer is remotely accessing data from the distance and uses and pays functions simply by needs.

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Chances and risks during implementation of IT-systems

Bild 9

+ Chances - Risks

Accelerated processesIncreased flexibilityIncreased qualityImproved productsGeneral access to knowledgeStandardized, where applicable automated data transferCost saving

IT-implementation is more an organizational than a technical challenge!

Remodeling of processesIncreased need of trainingIncreased burden on employees Unpredictable interfacesLoss of customized solutions along with implementation of standard softwareEnsured “capacity to act” of the company during implementationDependency on external partnersOversized startup costs

What is being implemented and when? Standard software or individual development?Are goals and potentials as a matter of fact achieved?

Annotations:

The transformation from the industrial to the information age is a gigantic challenge for industry and society. Thousands of projects a year bring up new or improved business solutions. But not every project is succesful. According to an analysis carried out by Cambridge Technology Partners, 95% of more than 600 IT-projects did not work to their satisfaction.

IT-systems promise to open up a wide range of new potential within companies. But very often chances face risks, which are hardly planable in advance. Implementation does not only mean implementation of a software system: Processes and structures need to be optimized and oppositions and fears need to be reduced.

Mostly things cannot be done at once. Graduated schemes have to be developed in analogy to priorities and possibilities. A decision between customizing a standard software or implementing an individual solution is to be made: Guaranteed quality and functionality of standard software are facing the expenses to customize the product and limited possibilities.

Thus introducing an IT-system is more an organizational than a technical problem since processes need to be customized and systems chosen – based on the fact that priorities are set by the company‘s main strategy. A professional Change Management becomes necessary as a result of the reconfiguration of processes along with direct and intensive involvement of employees.

Furthermore controlling has a decisive role in every project to guarantee a prompt achievement of the company‘s objectives.

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Business Engineering Map

Bild 10

information- and communication systems

management

behavior

power

informationtechnology

transformation of the company

businessstrategy

businessprocesses

Annotations:

What leads a project to success? Project Management, Know-how, Technology, Change Management? Restriction of the project‘s complexity, splitting it into manageable parts and a systematic proceeding, which connects the single results, eminently raise a project‘s chances of success.

Main views of change processes are the professional dimension and the politic-cultural dimension. The professional dimension focuses on methods and models of the technological observation, which include developments of strategy, process and system. So-called “human factors“, such as motivation and management, behavior, communication or proportions of power are objectives of the politic-cultural dimension.

Business Engineering splits transformation into projects (within the project portfolio), a project into the professional concept and the management of change. The professional concept then is split into the levels ‘strategy’, ‘process’ and ‘system’. Doing so, Business Engineering creates small, hand able results in form of documents. Finally a procedure model connects these activities to an appropriate order within the project‘s plan.

Business Engineering aims at making the transformation fast and safe and minimizes the effort needed. It makes the transformation guidable.

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Integration as a premise to realize Business Networking strategies

Process level

Information-systems level

Strategic level

customersupplier

customersupplier

Business CollaborationInfrastructure

customersupplier


Strategy-specific elements:• customer segments• customer covered processes• positioning within the value chain

Process-specific elements:• customer process• cooperation processes• internal processes• portal efforts

IS-specific elements:• portal applications• BCI-applications• EAI-applications• standards• internal applications


BCI = Business Collaboration Infrastructure, EAI = Enterprise Application Infrastructure

Bild 11

Annotations:

The Business Engineering Model shown is meant to be a framework. Its aim is to help the Business Engineer understand single projects and project activities in the entire context.

Most of the time the process of Business Engineering is initiated by IT-innovations, sometimes as well by changes of the general framework, branches, markets, customer behavior and the change of values. As a consequence the process is based on methods and models of the IT- and technology-managements in their early stages.

At the level of strategy the business architectures, models and strategies are thereforemonitored. This part of Business Engineering is based on methods and models of strategic management (see lectures PM I L11 and L12).

Having formulated appropriate strategies and specification of the business model, appropriate business processes and finally appropriate information- and communication-systems for systematically supportable parts of the process are developed in a next step (see lectures PM I L9 and L10 for the modeling of companies and processes).

The complexity of transformation requires an engineering-, method- and model-based procedure. Networked business architectures and the possibility to direct business models either to production processes or to customer processes mark this complexity. Innovations only become effective when being implemented within strategy-, process- or system-levels. Doing so, the information und communication techniques bring along restrictions, which need to be beard in mind at all levels.

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Principles of Business Engineering

Bild 12

Meta-Model of Business Engineering

Strategie

System

StrategischesGeschäftsfeldMarkt Marktleistung

beeinflusst

produziert /konsumiert

bietet an

Aufgabe Prozessbesteht

aus

Leistung

Funktion Applikationführt aus

Datensammlunggreift zu auf

IT-Komponente

läuft auf

strategy

process

system

business unitmarket market serviceaffects

can be

produces / requires

uses

offers

task processconsists of

service

function

supports

applicationcarries out

data poolaccesses

IT-components

uses

resultwhat?

activitywhereby?

roleswho?

techniquehow?

stakeholderfor whom?

Meta-model

prob

lem

-au

tono

mou

spr

oble

m-s

peci

fic

concretion

Annotations:

Basic principles of the Method Engineering help making projects more stringent. The figure above shows the meta-model of Business Engineering. It contains essential objects and their connections.

Business Engineering acts on the assumption of the problem-independent meta-model, which then is specifically being adapted to the problem. Methods consist of five elements: meta-model, results, techniques, activities and roles.

The question of Stakeholder Value come to the foreground at the same time, which is a criterion for a business solution. On the strategy-level business logic defines factors for success, which are to be consulted on all levels for measurement of the project- and business-successes. An important part of this is the consideration of cost effectiveness, for example in form of Return on Investment (ROI).

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Methods consist of five elements

elements ofmethods

1. proceduremodel

analysis of cooperation potentials

design and selection of

realization alternatives

planning and implementation of

pilot projects

continuation

1

2

3

4

3. results

5. Meta-model

Bild 13

ZEIT

In der Zeit Zeitrahmenüberschritten

Zeitrahmenunterschritten

KOSTENInnerhalbKostenrahmen

Über Kostenrahmen

UnterKostenrahmen

ProjektA

B C

ProjektD E

Rollen auf Ebene Mitarbeiter Projektinitiator (R) Pilotpartner

Moderator (M) Externer Berater

Entscheider (E) Führungsebene Führungsebene

. . . . . . . . . . . . . . .

2. techniques

4. roles

Annotations:

Five elements of methods:

Meta-model: The meta-model is the data-model of Business Engineering. It describes single objects of configuration (e. g. process, task, customer, application) and relations among them.

Results: Business Engineering is result-oriented. Pure realization of activities does not implement success automatically. Every project-activity must lead to pre-defined results (mainly documents).

Techniques: Techniques guide the Business Engineer through formulation of results. They focus on crucial tasks.

Activities: A project consists of a sequence of activities (proceedings model), which are defined in the project plan resp. the activity plan. The techniques patronize the fulfillment of the activities.

Roles: Contributors of a project find themselves in certain roles, which are connected to corresponding tasks, competences and responsibilities. They can be the organizer programmer, project manager, user or project sponsor.

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Architecture and methodology of fact-finding

Bild 14

...

meta-model company-specific modelreference-model

products distribution

marketscustomer segments

processes

incidents

input

...predecessor/ successor

output

...data

functions

modularityfunctionality SSW 2SSW 4

SSW 1 SSW 2SSW 4

SSW 1ISW

ISW

architecturelevel

business/strategy

process

implementation

software

caption: SSW = standard software, ISW = individual software

Annotations:

Starting points are meta-models, which are defined for each type of element and for every level (business model, processes, applications, software).

Subsequently company-specific models are generated. On their basis conclusions for a good practice can be made. Furthermore reference models for every level can be deduced by means of creativity techniques and an analysis of weak spots.

In a next step a procedure model is based on reference models and Good Practices. This model gives advice for a consistent design of business models, processes and applications and assures a holistic approach.

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Example for structured information

Bild 15

Change Managementtechnical concept

system

business unit

task index

reference variable

business logic

application

perfomanceindex task chain

IT-scenario

application scenarios

GraphicalUser

Interface

application structure

customer processvision

customer process roster

market service

sales channels

customer process

value added network

customer segmen-

tation

stake-holder-

map

ROI-analysis

projectportfolio

project assignment

project schedule

strategyprocess

road map

process

Annotations:

The multinational company UNTEL AG predominantly sells hi-fi systems, DVD players, games, compact discs and similar products. Digitalization and the internet fundamentally change the rules within this branch. Therefore, UNTEL starts different projects to explore and build-up these new forms of business.

UNTEL establishes a subsidiary company, which exclusively focuses on the musical entertainment via the internet (for example cdnow.com, etc.). Within a project, new documents, similar to those above, for the planning and realization of the new business are generated.

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Methods and tools – for instance: PROMET

Bild 16

http://prometatweb.img.com/

PROMET-module

Quelle: IMG, Schweiz

Annotations:Several special tools for the management of Business Engineering are available:

Modeling of business processes: Outline of the operational and organizational structure. The method presented mainly focuses on the graphic visualization; The tools are limited to other methods and seldom contain procedure models. Examples: ARIS Toolset (IDS-Scheer) and Bonapart (proubis).

Project management: Planning and controlling of both financial and human resources of a project as well as reporting. Methods for certain problems are not available with these tools. Common products of this category are Project by Microsoft or SuperProject/Net by Computer Associates.

Method supported: Sporadically special tools for certain tasks are available. SAP offers AcceleratedSAP (ASAP) for an introduction of its ERP-software R/3, which offers a procedure model, techniques (tutorials, questionnaires, checklists) and templates in addition to the project management. Meanwhile special ASAP-versions for upgrade-projects, global roll-outs or introduction of special products are available.

Teamwork within a project: Partial support through special modules of document management-groupware-systems. Thereby activities, project results, references and employees can be administered and displayed for varying roles (project manager or collaborator). Examples are iTeam by Documentum or Opentext’s Livelink.

Along with leading companies the Institute of Information Management at the University of St. Gallen has been developing a number of methods for the last ten years. The IMG AG adapted and enhanced these methods and added additional ones: PROMET® is a set of modular-structured and problem- resp. solution-specific methods, which can be combined through defined interfaces.

The backbone of every transformation-project is formed by so-called core-modules. They cover the basic techniques for a continuous transformation from the strategy-level via the process configuration to the implementation of neworganizational solutions.

Supplement-modules provide thematically differing tasks, such as the development of business strategies, inter-business networking or the introduction of internet and intranet, with specific solutions.

The modules of a roadmap are combined and endorsed by procedure-models. A generic procedure-model describes the activities of a typical business engineering project.

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Change Management

Bild 17

project schedule

ROI-analysis stakeholder mapinvestment revenue investment expense

directly monetarily

indirectly monetarily

nonmonetarily

- less stock- sale of investments- …

- added standardization- …

- increased flexibility- …

planning of new system

IT purchasing

facilities purchasing

starting expenses

training

level of concernment through the project

alliancedepedencyconflict

opinion leader

expert

stakeholder

critical stakeholder

Annotations:

Business Engineering does not only concentrate on the professional solution of a project, but also on the management of change with the same interest. Among other things it deals with the cost effectiveness of a solution (ROI analysis), with the project management and with the groups of interest (Stakeholder Map).

The analysis of cost effectiveness faces the entire expenses, which include not only IT-costs but as well personnel expenses for the change process, trainings, etc, to potential revenues. Mostly not all potential in cutting down can be accredited to the new system. Part of the revenues is not monetarily quantifiable very often.

Within each change project, the participants can be divided into patrons, opponents, supporters and unsteady persons. The stakeholder map is an important tool in visualizing and analyzing the participants and their relationships to each other.

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Stages of a change project

Bild 18

cultural changeat a minority

denial

obligation/ support

creativity

return

taking the challenge

pressure to change

moral

time

crisis / disorientation

1 32 54

prelude: getting into the process

Roll-Out: empowering the system-

process of steadiness: obtaining the monumentum

consolidation: finding back to a steady state

1 32 54

activity niveau

de-stabilization

time

stabilization3-5 years

sentitization: preparing the change

-

effort

time

Annotations:

At the changeover from one epoch to the other fundamental alteration occurs. Withal the intensities of the activities and the moral within a company act differently.

Five stages, which cause different activities, can be distinguished in the design of change. The entire cycle describes a perennial process:

Sensitization: An early cultural change among a minority, which considers its own form of management as not contemporary, initiates the process. At first stakeholders are identified and a gross concept is developed.

Prelude: The change process is being discussed and the adequacy is justified. A climate of priority is created and the organization of change is established.

Roll-Out: First euphoria has faded, rejection comes up and requires an active debate. It is aimed at bundling energies to realize the change. The determination to the intention needs to be demonstrated and the employees concerned need to adapt the change and become an active part of it („issue ownership“).

Process of steadiness: At first, laborious success must not be wasted, but needs to be saved sustain ably and its cultural consolidation needs to be pushed. As moral is on a low it needs to be forced to change by the highest effort. Due to a multitude of parallel projects the change has to be sustained by several key personalities. It is shown, whether the change has been successful or not.

Consolidation: The process needs to be entirely concluded, experiences need to be evaluated and the organization of the project needs to be dissolved. Everyday life arises from the special program.

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WZL©

Controlling of realization

audit BalancedScorecard

financialcontrolling

concept realization result

managementwork

feedback

tproject

Bild 19

Annotations:

Often the consistence of implementation is crucial for success or failure of an IT-introduction. In many cases only a small part of all possible potentials is achieved with the start of the new IT-solution. It is not until a continuous optimization of the new processes and the new systems that an IT-solution unfolds its complete range of possibilities.

Blind activism harms the project. Therefore the management needs to concentrate on goals with the highest benefit and must fully activate its employees. In order to realize this, goals need to be set consequently and lastingly realized in a sustainable way.

This can be achieved by appropriate methods within the different stages of a project:

Methods of resolution for the given tasks are rated in an audit by the management. A solution is selected and the appropriate realization is initiated.

A Balanced Scorecard helps tracking the course of realization (cp. PM I lecture 1). It even helps tracking down the strategy and goals to single areas and employees. In terms of selected key figures and corresponding methods each employee is pointed up his role in and contributions to the process of realization with individual aims.

By means of the controlling of finance values (cp. PM I, lecture 1) the prosperousness of the IT-project for the company can be judged retroactively.

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Produktionsmanagement

Production Management II - Lecture 12 (Part 2) -

Methodology for Selecting and Implementing Enterprise Information Systems (Focus: ERP Systems)

Dipl.-Wi.-Ing. Philipp SchieggBereich ProduktionsmanagementForschungsinstitut für Rationalisierung (FIR)an der RWTH AachenEmail: [email protected]

Forschungsinstitut für Rationalisierung (FIR)an der RWTH AachenPontdriesch 14-16D-52062 AachenTel.: +49 (0) 241-47705-432Fax: +49 (0) 241-47705-199

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Overview

Introduction

The Market for ERP Systems

ERP Implementation Project: Approach and Selection Criteria

Web-based ERP Selection Process,Comparison with Traditional Methods

Summary and Conclusion

2

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Typical Challenges When Starting an ERP Implementation Project

Low Market Transparency

Where to get reliable informationon available systems?Are there alternatives to SAP?What are benefits of American ERP Systems?

Unrealistic Expectations

„The system has to be as powerful and convenient as the current one ...“Production scheduling has to be in real-time

Project ManagementDifficult

No support and commitment fromtop managementGoals and priorities are not clearand transparentPersonal interest conflict withproject interests

No Previous Experiencein ImplementingERP Systems

Which software functionalities areimportant, now and in future?Which approach: Fully integrated oradaptable, scalable core system?

3

Annotations:

Due to missing capacities and qualification of employees, small and medium enterprises have substantial problems when it comes to selecting and implementing an ERP System.

The various challenges are depicted in the slide.

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Characteristics of an ERP Selection and Implementation Project

High initial investment as well as high costs in subsequent

project phases!! Total benefit of an ERP implementation project is

difficult to quantify

Planning horizon is rather long-term!! Changes in products, processes,

and organisations occur more and more frequent

Companies have limited experience with ERP projects!! Requirements and expectations

are very high because the wholecompany is involved

ERP systems are complex products, expert advice is

often needed!! The multitude and heterogeneity of information sources

can cause confusion

Annotations :

An ERP project causes high capital outlays, which must be justified. The quantification of benefits can only be a rough estimate.

A normal lifecycle of an ERP system is usually 10-15 years. Accordingly, the software selection has to ensure, which future functionalities the system has to cover.

Ever shorter product life cycles, steadily changing processes and structures in the enterprise, have to be considered during the selction phase.

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Overview

Introduction





2

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Market Overview ERP-Systems –Market Concentration

0%

20%

40%

60%

80%

100%

1 7 13 19 25 31 37 43 49 55 61 67 73 79 85 91 97 103# Systems

Cumulated Market share

Source: Studies conducted quarterly by FIR, Q3 1999, 105 relevant ERP-Systems

28 Systems share80% of the market 50 Systems share

92% of the market

4 Systems share39% of the market

Annotations :

The market situation (ERP systems) is not transparent:

140 ERP-Systeme are actively sold in Germany.

The market is very fragmented, a few number of software providers dominate the market.

The performance and complexity with regard to functionalities varies significantly.

Some system cover both specific industries and functions.

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Differentiation Strategies Over the Last Years

Product Modernisation • Complete (Re-) Development

• Partial Migration to New Technologies, e.g. Java

Decrease in Software Development Activities

• Partnerships with complementary and/or competingcompanies in order to enlarge product portfolio and customerbase

• Shift from a software developing company to a servicecompany, e.g. focus on implementation and consultingservices

Specialisation • Industry focus, e.g. textile, automotive or metal industry

• Specialised software modules, e.g. enterprise integration, middleware etc.

7

Annotations:

The differentiation strategies of individual system providers were: reduction of owndevelopment activities, specialization and product modernization. The productmodernization was characterised by the development of new systems or by the extension of systems around new functionalities and technologies.

The reduction of own development activities was achieved by co-operation withproviders of complementary or competitive systems.

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Overview

Introduction





2

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Comparison of different selection and implementationapproaches and relevant criteria

Project without externalConsulting but internal team

Project with external consulting and internal team

Hiring experienced person for duration of the project

„Shake-Hands“

Approach

Project only with CIO (ChiefInformation Officer) no internal team

CriterionMinimisation of Risk

Consideration of major IT and business requirements

Consideration of company‘s„organizational behaviour“

Bottom-up approach, employeesatisfaction

Reduced cost of decision-making

Minimisation of project duration

fulfilled

partiallyfulfilled

( )( )

( )( )

( )( )( )

( ) ( )

14

Annotations:

The different approaches for the selection of an ERP system can be categorized alongdifferent criteria. In the context of a project without external consulting, the currentorganisational experience is essentially considered. Future requirements remainfrequently unconsidered.

The selection by the CIO without participation of a specialized team frequently leads to a high investment risk, since the acceptance among the coworkers represents a substantial aspect of a successful ERP implementation. Therefore, existingrequirements are not sufficiently considered during software selection.

Something similar applies to employee acceptance with appropriate experience and to the selection of any PPS /ERP system by "Shake Hands".

Projects with experienced consultants and with participation of a specialized teamensure a wide acceptance of the system as well as an appropriate minimization of risk. Due to the consulting costs, however, total costs increase.

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3-Phase-Concept

1.2 Process and Structure Analysis1.1 Project Initiation

1.3 Process and Structure Optimisation

2.2 Final Selection2.1 Pre-selection

2.3 Final Contract Negotiation

1. Reorganisation

2. System Selection

Project Phases Work Blocks

3.2 System Implementation3.1 Realisation Preparations

3.3 Setting System into Service

3. Realisation 3PhasenPhasenKONZEPTKONZEPT

Annotations:

The selection and implementation of an ERP systems represent a major problem for most enterprises.

An established and well proven concept is the "3-Phases Concept” for the selection and implementation of standard ERP Systems", developed at the Research Institute for Operations Management at RWTH Aachen.

It has been applied in over 250 selection projects. The project structure covers the three phases reorganization, system selection and realization. Each phase of the concept is divided into three work blocks.

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Steps and Activities during Business Process Reengineering

Project Initiation1.11.1 • Formulation of Objectives and Tasks• Definition of Project Scope•Project Team Set up • Project Management, Project Plan

Process and Structure Analysis1.21.2

ja

ja

ja1

5 6

2

3 4

• Analyze Order Processes• Analyze Information Flows and Organisational Structures• Analyze Planning and Control Procedures• Analyze Products and Information Flow Volumes and Quality• Determine and Prioritize Weak Points

Process and Structure Optimisation1.31.3 • Elaborate and Agree on a cross-department orderprocess concept

• Optimize order process• Determine first requirements regarding software support• Determine and Prioritize Improvement Activities

19

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Annotations:

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Example for Business-Process-Modelling

Erstellung derArbeitsplan-

konzepte

AV- Arbeitsplankonzept

mit Auftragsdatenund Fertigungszeiten

22

20

EDV-Erfassung derArbeitsplan-

konzepte

FS- Laufkarte

(Arbeitsplänemit Materialdatenund Terminen)

- Lohnscheine- Rückmeldescheine

- Strukturplan (aus TP)

Zusammenführung der Zeichnungen

und Arbeitspapiere

FS

- Zeichnungen- Laufkarte (immer an der

Zeichnung/Werkstück)(Arbeitsplänemit Materialdatenund Terminen)

- Terminkarte (Kopie der Laufkarte; Verbleibin der Meisterei)

- Lohnscheine- Rückmeldescheine

- Hängeordner fürdie Fertigung(Terminkarte, Lohn-scheine, Rückmelde-scheine, Laufkartemit Zeichnung)

Fehlende zeitliche Abhängigkeitzwischen den Arbeitsplänen

AV

Kalkulationsdateneingehalten?

21

- Kalkulationsdaten

Ggf. Korrektur derStücklisten und

Zeichnung

AV, KS- Geänderte Stückliste

an EDV- Geänderte Zeichnung

- Stücklisten- Zeichnung

ja

nein

Laufkarte in Neuenkirchengleich Entnahmekarte

WT: ReferenzierungBaugruppenliste zu

Kurz-LV fehlt teilweise

2 - 6Wo.

DLZ Output EDVBemerkung InputThrouput-

time

Nescad

Dakoda

InformationFlow

IT-Support

Week-Points

Department

Task

Additional-information

Manuelle Erstellungder Arbeitsplankonzepte

- Erstellung der komplettenFertigungsunterlagen fürden Vorrichtungsbau(Rheine)

Fehlende Kopplung mit dem Strukturplan

Fehlende Prüfung aufvollständige Vorgaben

Guter Zugriffauf archivierteArbeitspläne

Arbeitstechnische Opti-mierung der Stücklisteund Zeichnung zu spät

Annotations:

The analyses of processes and information flows is the starting point in the reorganisation phase. The use of modelling software is recommended (e.g. Visio, Bonapart, ARIS or Powerpoint).

Cross-departmental processes should also be taken into account. In the example, firstthe involved organisational units as well as the process steps are documented.

In parallel, weak points and lead times are analysed. Subsequently,improvementmeasures can be determined.

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1st Work Block of System Selection

Work Block Working StepWork Block Working Step

Analysis of ERP-Market

Determination and Weighting ofERP-System Requirements

ERP-System Evaluation

Determination of Top Group

2.1 Pre-selection

Annotations:

The selection procedure is based on the principle of cost-benefit analysis

First the user must decide, how important a certain software functionality is for the company. The weighting of requirements goes next.

Furthermore, considerations regarding hardware and other requirements have to be considered

The evaluation of the fulfilment of individual requirments leads to a ranking of ERP systems.

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Analysis and Evaluation of the ERP-Market

Control

Periodical testing of the collected dataon site by FIR-engineersPeriodical testing of the collected dataon site by FIR-engineers

Quarterly conducted marketresearch to collect generaldata from 230 ERP-System suppliers

Quarterly conducted marketresearch to collect generaldata from 230 ERP-System suppliers Evaluation of the grade of

functionality of ERP-SystemsEvaluation of the grade offunctionality of ERP-Systems

Validation Completeness

Data Collection Data Usage

Actuality Indepen-dency

TROVARIT AG:

Technology-Provider

TROVARIT AG:TROVARIT AG:

Technology-Provider

ITIT--MatchmakerMatchmaker

Annotations:

The market for ERP systems is observed and analyzed for over 20 years by FIR. Since May 2000, market survey is published by the IT Matchmaker (www.it matchmaker.com) the Trovarit AG, a spin off of the FIR.

The IT Matchmaker is an internet platform which supports an online, web-based selection of enterprise software solutions (e.g. ERP systems).

Up to 1.500 respectively 2,200 characteristics are seized in a standard catalog for each system. The processes of data acquisition, control/data examination as well as data use are arranged in such a manner that the topicality, the validity and the completeness of the collected data are ensured.

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Scope of ERP Systems – Overview of Functionalities

Organisational Structure Bill of Materiall Resource Mgt. Order ProcessingProduction Planning Purchasing Inventory Mgt. Controlling

Fulfi

llmen

t

0

200

400

600

800

1000

1200

1400

1600

100% 1 4 13 25 28 37 34 49 31 43 61 67 73 79Systems (anonymous)

Source: www.it-matchmaker.com, 11/2002

23

Annotations:

Depicted is a standard evaluation done with the IT-Matchmaker (ranking).

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Efficient Software Selection Through a Ranking Procedure

Produkt- und Produktstrukturverwaltung+Allgemeine Fragen0Materialstammverwaltung0Stücklistenverwaltung+Identifizierung/ Klassifizierung++

Arbeitsplanung+Arbeitsplanverwaltung++Ressourcenverwaltung+

Auftragskoordination++Angebotsbearbeitung+Auftragsklärung+Auftragsgrobterminierung++Auftragsführung++Preisfindung0Versand+Retouren-Servicemanagement++

Kapitel

Unter-kapitel

Kapitel

Unter-kapitel

KapitelUnter-kapitel

VeryImportant Important Not so

important

270 442 0

Kritische Merkmale

Critical

34

Weighting of chapters of the criteria catalogue

++ + 0 - - -

3,0 1,5 -1 0,5

82,2

83,1

84,0

84,3

84,6

85,8

86,1

90,6

92,6

95,0

0 10 20 30 40 50 60 70 80 90 100

m

S

S

5

S

A

S

1

2

3

Narrowing down the selection to 3 preferred systems!

24

Annotations:

The characteristics that are collected in the standard catalog can be assigned individualchapters and sub chpaters depending on the topic.

The weighting of the importance of individual characteristics, sub chapter or chaptersleads to a ranking of systems subscibed to the IT Matchmaker.

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Future Trends -System Functionalities in ERP-Systems

FutureTrendsE-Business-

Functionalities

Web-Shop, Content managementSpare part ordering and associated services via Inter-Front-end...

Mapping of ComplexOrganisation Structures

Item Data Management in Multi-Site Production CompaniesMaterials Management in Multi-Site Production CompaniesSales Planning in Decentralised Sales Organisations...

Advanced Planning & Scheduling (APS)-Functionality

Constraint-based Delivery Date Calculation (Available to Promise)Simultaneous Production Planning in Real-Time...

Workflow undEvent Control

Workflow Support for indirect Departments (e.g. Engineering)Integration of E-Mail in the Workflow...

Annotations:

The increasing requirements on the part of the enterprises regarding the optimization of the enterprise-internal and external business processes led to new trends with ERP systems.

The illustration of complex organisational structures supports the job execution over several production sites, up to complex distribution structures. APS (Advanced Planning) functionalities improve current, MRP–based ERP systems.

A Workflow possible and an event support makes the inclusion and co-ordination of all coworkers concerned by a business transaction within shortest time.

E-Business-functionalities make an efficient completion possible of business processes including the Internets as communication medium.

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Decision Support: Current Types of Standard-ERP-Systems

Incr

ease

of

inst

alla

tions

Product life cycle

techno-logicalinnovation

functional features

B

C

A

Features : systems with a balanced ratio of technical innovation andextensive functionality

Type of choice : balanced ratio ofsecurity, risk and potential

Features : extensive functionality on cost of technological innovation

Type of choice : high security at lowpotential

B

C

Features : high grade of innovative systemswith limited functionality

Type of choice : high risk and highpotential

A

= System ntime

B CA

relevant area of selection

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Annotations:

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IT consultancies and Sales partners – Additional Dimension to ERP Selection and Implementation

ERP Systems(approx. 100 Standard-ERP-Systems on the

German market)

IT consultancy(approx 5000 different IT consultanciesand Sales partners for ERP systems)

Industry

Examples: ERP Software Providers and number of IT consultancies

SAP: approx. 100 (only Germany)ABAS: 27 (Europe)

NAVISION: 97 (only Germany)

27

Annotiations:

In the context of a selective procedure not only the software providers have to be considered, but additionally a multiplicity of associated system implementation partners or IT consultancies. The IT consultancies differ e.g. by a different industry experience, by different pre-setting of the ERP system (pre-customized).

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Focus

„System“

Summary – Selection Criteria in ERP-Projects

Focus

„System Vendor“

Performance-based Selection Criteria

Strategic Selection Criteria

Implementation Concept

Quality and Availability of Professional Consultants

Quality und Responsiveness of Support

...

Market Position and Stability of System Vendor

Management Board of the System Vendor

R&D PotentialStrategy of the System Vendor (e.g. Industry focus)...

Match of “System Philosophy” and Corporate PhilosophyModernity of System TechnologySystem Flexibility Previous System Implementations with other Clients...Aachen Model of PPC

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Annotations:

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2nd Work Block of System Selection

Work Block Working Step

2.2 Final Selection Creation of Test Guide

Evaluation of System Tests

Visit of Reference Customers

System Decision

Carry-out of System Tests with ERP-System-Suppliers

Annotations:

In the context of the final selection phase, the preferred systems must be analyzed, based on the specific requirements that were determined in the previous phase -reorganization.

The approach is based on the examination of so called business process scenarios.

The „screenplay“/“script“for the systematical test is a document that lists all requirements and allows to grade or rank the ERP system.

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2-Day Workshops with Software Providers (System Demonstration)

Create Checklist- Requirements, Questions- Sample Data

„Script“ for the Test

Grade Significance Characteristic

The system offers a better solutionto the requirement as expected.

The requirement posed is fully fulfilled. Functionality is suitable

The fulfilment of the requirements is acceptable. However weaknesses exist

The requirement posed is fulfilled insufficient. Crucial points of the requirement can benot sufficiently covered by the system.

The requirement posed is not fulfilled. The system does not offer any support

1

2

3

4

5

The system fulfills demanded functionality in the standard

The system will offer functionality at the time of the introduction in the standard.

Functionality can be covered after slight adjustment

Functionality can be provided, however major programmingrequired

A system adjustment to the requirements is not possible

A

B

C

D

E

Graded by User Company

Graded by Software Vendor

30

Grade

Annotations:At the beginning of the test, an agenda is established containing some

introductory information.

The agenda for the system test is organized around two parts:

1) Total „screenplay“/“script“

This includes the core processes e.g. from purchasing, production to sales. For each core process the company or team evaluates:

• Which information must be available in the system?

• How many graphical user interfaces have to be called in order to obtain the necessary information?

• which information must be entered into the system, e.g. selection lists, plausibility checks, assistance during the input etc.,

2) Individual „screenplay“/“script“

This part includes specific and detailed requirements and questions that have to be answered in the system test.

A final section contains question about previous experiences of the software provider in implementation projects or necessary adjustments of the software.

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Evaluation of the Final Selection

insufficient

System test

ABCD

StandardAt Implementation Standard1/2 MD Programmingx MD Programming

Functional Spectrum (What?)Su

pplie

r

1234

outstandinggoodsatisfactorysufficient

Performance (How?)

Proj

ectte

am

1

2

3

2

3

Consultancy

Programming

1

2

3

XX

X

XA B C D Approvement of fulfilment

of Requirements 500,- 1000,- 1500,-

500,- 1000,- 1500,-Critical Requirements

Preparation EvaluationProcess optimisationBAPSY-Preselection

++ - Criteria

TestdataCompany data

Test guideOverall test guideSpecific test guide

Functional Spectrumbefore after Programming

1 2 3

One-time/on-going costs

1 2 3 1 2 3

Daily Rate 1

System System

costs costs

System

Fulfilment

IndividualRequirements

TOP-Systems1

2 3

5

Annotations:

The system test offers the project members the possibility of grading the ERP system according to their requirements. These requirements are demonstrated during the system test by the software provider.

The evaluation follows a uniform evaluation guideline (see also previous slide).

The total ranks of the systems are determined by taking into consideration different criteria, i.e. functionality, cost, ease of use etc.

The results of the system test are consolidated in a requirement specificationdocument, which forms the basis for contract negotiations with the software provider.

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3rd Work Block of System Selection

2.3 Final ContractNegotiation

Derivation of Obligation Booklet

Development of Software Contract

Development of Hardware Contract

Creation of Service Contract


Annotations:

The requirement specification document defines the actions needed of the software provider and form the basis for contract negotiation and makes it the legally binding document for all adjustments and additional programming, e.g. interfaces, to the ERP system.

If hardware is not available in the enterprise, there might be fees for leasing or hosting. In this case, as soon as the definition took place on a hardware set up, a hardware contract must be agreed on.

With conclusion of a contract also those achievements are to be documented, which must be provided by the enterprise, e.g. meeting rooms but also qualified personnel.

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1st Work Block of Realisation


3.1 RealisationPreparation

Training of SystemAdministrators

Prototyping

Creation of a Realisation Plan

Specification and PriorisationOf Individual Requirements

Annotations:

The first work block of the implementation phase makes sure that the project teambecomes acquainted with the ERP system, on the basis of typical business processes.

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3.2 SystemImplementation

Training of Project Team

Detailed Conception

Test of Program Modificationsand Interfaces

Adaption and Configurationof Software


2nd Work Block of Realisation

Annotations:

Important organization objects in the context of a fine tuning are the business processes, the organizational structure, the work organization, the planning processesand production control concepts. A detailed conception helps avoid errors and securea successful implementation of the system.

In the phase of the adaption and configuration, the fine concept must be applied intothe practice. In order to cover the requirements, the software providers make use of tools that support the adaption of the system.

Adjustments, which can be only made by the system designer, is referred to as individual programming.

A set of different tests is run before ramping up the system to normal use by all users in the company.

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Adjustment of / Fine-Tuning ERP Systems

Standard SoftwareStandard Software Means of AdjustmentMeans of Adjustment AreaArea

Parametrization • System Parameters

Modularisation • Functional Building Blocks, e.g. Sales, Purchasing, Production

List and Report Generator • Lists, Reports

Maskengenerator • Adjustment of Graphical User Interfaces (GUI)

Rule Based Heuristics • Product Configuration• Material Requirements Planning

Code Generator • Programmerstellung

35

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Annotations :

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3rd Work Block of Realisation


3.3 Putting intoService

Completion of Hardware Installation

Training and Instruction of End Users

Data Preparation and Transfer

Simulation and Final Check by End Users

Actualisation of Transfer Data and Puttinginto Services

Annotations:

In this phase, the ramp up from a hardward point of view is covered. Furthermore, training and briefing of the final users is carried out, therefore ensuring useracceptance. The training courses should take place if possible after a first datamigration and possible short time before the last-finite productive start of the system.

Data transfer from the old to the new system is a big issue. The following kinds of the data transfer can be differentiated: The interpretive, the automated 1:1 and the manualdata transfer. With the interpretive data transfer the meaning of the values of datafields is interpreted and illustrated in the new system. With the automated 1:1 assumption maximally an alignment of different data field designations is made. The data clearing can be made before or after the data transfer. With the manual datatransfer the data are revised if necessary during manual input.

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Overview

Introduction





2

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Information Sources for the Pre-Selection of ERP-Systems

Market surveys and market guides

Web pages of software vendors

Journal articles

„Yellow Pages“ on the Internet

Other CompaniesAv

aila

bilit

y (T

ime

& Pl

ace)

Tim

elin

ess

of In

form

atio

n

Qual

ity

Com

plet

enes

s

Neut

ralit

y

Low

Tran

sact

ion

Cost

s

Ease

of I

nfor

mat

ion

Retri

eval

Supp

ort o

f Sel

ectio

n Pr

oces

s

External Consulting Services

Trade fairs

( )

( )( )

( ) ( )

( )( )

( )

( )

( )

( )( ) ( )

( )

( )

( )( )

fulfilled

Partially fulfilled

( )

YjC

( )

( ) ( )

Web-based Platformssupporting the selection

Web-based Platformssupporting a bidding process

( )

Annotations:

The picture gives an overview over the degrees of assistance, which different sourcesof information for selecting an ERP system.

Internet-based selection and advertisement platforms, like the IT Matchmaker, offer a degree at assistance, which no other communication medium reaches.

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Web-Based Software Selection

Forms of Web-Based Software Selection

Requesting companyplaces request on platformWorkflow for SelectionProcessCheck of Authenticity of Software VendorsControlled Access through User Management System

Private platforms, high quality of selection

Simple electronic addresslistingselection and establishment of contact isjob of the potential customerinformation limited

Elektronic Catalogs of Systems and Vendors

Open and Public Platformsfor RFP (Request for

Proposals)

Requesting companyplaces request on platformAny software providermay publish its requestRFP‘s and content are notcross-checked for eligibility

42

Annotations:

Three concepts of a Internet-supported selection can be differentiated:

Electronic Catalogs of systems and vendors, open and public platforms for RFPs, as well as private platforms with high quality selection.

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LegendIndustry company

System Provider

Platform OperatorInternetPlatform

Information Acquistion Phase

CommunicationPhase

Catalogueof Criteria

Create ProfileCheck Profile

Publishcomplete RFP

Pre-SelectSystems/ Providers Analyze RFP

Private Platform – Selection Process (Part 1)

Create RFP

Evaluate Ranking DetermineRanking

- Additional Requirements- Anonymous

Communication

43

Annotations:

In the context of the information phase a requirement profile (RFP) should be providedon which the entire selection process bases.

The outcome of this phase is a set of three preferred systems or system providers, to which the final RFP is sent. The IT Matchmaker supports this process of RFP. Communication with the vendors runs in this communication phase in an anonymousway.

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Final Selection - Offline- Consulting- Workshops

Internet Platform

Contact ProvidersFor additional

Information

Check ReceivedProposals

Republish Proposal

Check and AnswerAdditional Requests

Text field for Comments

Standard Layout and Formats for Proposals

Create and Publish Proposal

AssessProposals

Standard Layout for Cost Estimation

Private Platform – Selection Process (Part 2)

Group of PreferredProviders

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44

Annotations:

The whole process of receiving, analysing, checking and answering the RFP issupported by the internet platform, in order to simplify the evaluation for the companiesinvolved.

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Summary

The market situation for ERP systems is characterized by a large heterogeneity. There are approx. 100 standard ERP systems in GermanyDifferences in software functionality are significantNot only the right system, but the also the adequate implementation partner is a criteria in the selection process

In Germany, around 5.000 of these implementation partners exist! Internet platforms can support the software selection processParticularly private platforms offer the possibility also to streamline the selectionprocess by providing a standard workflow and standardised communicationbetween potential customers and software providers

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Annotations :

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Contact Details

Forschungsinstitut für RationalisierungRationalisierung

an der RWTH Aachenwww .fir.rwth -aachen .de

Dipl. -Ing.Thorsten LückeBereichsleiter


Pontdriesch 14/16, D -52062 AachenPhone ++49/ 2 41/4 77 05 – 4 02, Fax ++ 49/2 41/4 77 05 - 1 99

Cellular + 49/1 73/ 5 96 78 60e-mail : [email protected] -aachen .de

Forschungsinstitut für RationalisierungRationalisierung

an der RWTH Aachenwww .fir.rwth -aachen .de

Dipl. -Wi.-Ing.Philipp Schiegg


Pontdriesch 14/16, D -52062 AachenPhone ++ 49/ 2 41/4 77 05 – 4 32, Fax ++ 49/ 2 41/4 77 05 - 1 99

e-mail : [email protected].

Thank you for your attention

49

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Trovarit AG – The IT-Matchmaker© 2004 page 60

content powered by association co-oporations

media partner (selection)

Trovarit AG – The IT-Matchmaker

tools for selection of ERP/PPS-systems

Dipl.-Ing. Peter TreutleinTrovarit AG, Aachen

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Trovarit AG – The IT-Matchmaker© 2004

Agenda

Trovarit AG

The challenge of ERP system selection

Provider-neutral selection of ERP systems

Summary

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Foundation: Sept. 9th, 2000 as a spin-off by Forschungsinstitut fürRationalisierung at RWTH Aachen University (FIR e.V.)

Incorporators: Dr.-Ing. Dipl.-Wirt.-Ing. Karsten SontowDipl.-Ing. Peter Treutlein

Start of business: Sept. 1st, 2001Employees: 16 (07/2004)Products: Information and tools for a professional software-selectionBackground: 15 years of experience of FIR in market research, compilation of

market overviews as well as selection and implementation of software-solutions (> 250 projects)

Content: FIR e.V., RWTH Aachen / schwetz consulting / Universität Münster / i2s GmbH (CH) / Fraunhofer IPA

Associations: VDMA e.V./ BVE e.V./ VDI e.V./ DDV e.V./ BDU e.V./REFA e.V. / MFS (CH)

Trovarit AG – key data of the company

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Annotations:




Trovarit AG‘s philosophy

Security and efficiency during software-selection!

... through 100% of neutrality against providers!participation is open to all providerssame chances for each providerno recommendation of selection at all provider-neutral software-analysts and co-operation partner

... through high data qualitycontinuous checking of system-profilesResearch based on detailed, individualspecification sheetshigher level of detailingcontinuous market observation

... through a widespread tool-rangepractice-oriented templates for specification sheetsmarket overview at the push of a buttonanonymous and enclosed competitive biddingsanalysis- and decision support

... through consistent project managementdefined milestonesprecise resultssystematic prioritizationexplicit focusing

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Annotations:




B2B

B2C

B2A

dmin

productionsales

serviceThe IT-Matchmaker – field of application

marketingCustomer Relationship

Management

technical servicesmaintenance management

service management

purchasing, storage, distribution, logistics

merchandise management

Supply Chain Management

administration documents management

financing

handling / productionEnterprise Ressource

Planning

production planning and -scheduling

detailed production planning and –scheduling

(MES)

product developmentProduct Lifecycle Mgt.

CAxN. N.

web-based

IT-Matchmakersoftware-selection

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Annotations:

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Agenda

Trovarit AG



Summary

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Annotations:




Today‘s reality concerning software-selection

Reasons for ineffective software projects

unclear or incomplete claims

unrealistic expectations

unclear objectives

changing demands

unrealistic project plan

wrong project structure

unrealistic scheduling

missing resource-qualifications

lack of resources

missing involvement of participants

26 %successful

28 %aborted

46 %non-successful

source: Standish Group 08/2000

budget 214 %time 222 %functionality 54 %

“quota of success”

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Annotations:




The challenge “software-selection”

“The market is complex”large variety of systems and providers

many terms and “IT-trends”

different price-models and services

“Something‘s important”huge investments and day-to-day costs

undefined use

great influence on internal workflows

“Making a decision is hard”goals, focal area and proceeding are unclear

objectives to the software and the supplier are hard to formulate

many participants with differing expectations

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Annotations:




One decision and many decision makers

The Department“We need to know our current status”

“Our approved code of practice must endure”

“Our daily work shall be supported at an optimum”

Management“No costs may apply as possible”

“Costs must decrease, adherence to delivery dates and quality must increase”

“The main thing is, that it does work – as soon as possible”

The IT-department“If possible, not another software-solution and an additional new provider”

“Great solution = great IT-budget = great meaning”

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Annotations:




Decision-basis for software-selection

Software-providerExperience, competence, service, location

Economical stability, market share and perspective

Software-solutionFunctionality (complexity and type of the support given)

Technology (supported platforms, records, interfaces etc.)

demands

field of services

&

Cost effectivenessInvestments (hardware, software, implementation etc.)

Return (increase in sales, cost reduction)

&

IT-s

trat

egy

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Annotations:




Systems‘ focal points of technology(resp. databases)

source: www.it-matchmaker.com, 11/2002

0%

10%

20%

30%

40%

50%

60%sh

are

of th

e sy

stem

s

Ada

bas

Btr

ieve

C-Is

am

DB

/2

DB

/400

Info

rmix

Ingr

es

Inte

rBas

e

MS

SQL-

Serv

er

MS

Acce

ss

Ora

cle

Prog

ress

Syba

se

supported databases

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Annotations:




Functional spectrum of ERP systems

Which system suits your tasks best on behalf of functional range and investment volume?

organizational structures Bill of materials maintenance work schedule maintenance processing of ordersproduction planning purchasing storage cost accounting

rate

of f

ulfil

lmen

t [nu

mbe

r of f

eatu

res]

0

200

400

600

800

1000

1200

1400

1600

100% 1 4 13 25 28 37 34 49 31 43 61 67 73 79system (anonymous)


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Annotations:




Focal points of expertise among providers

0% 10% 20% 30% 40% 50% 60%

percentage of branches covered

chemicals

plastics

packings

paper and lumber

furniture

metal production

metal processsing

standard machine construction

specialized machine construction

plant construction

apparatus engineering

automotive

aerospace

misc. vehicle construction

technical durables

High Tech and electronics

food and luxury articles


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Annotations:




1.500 € 2.000 € 2.500 € 3.000 € 3.500 € 4.000 € 4.500 €

bis 25

bis 50

bis 100

bis 250

bis 500

Anz

ahl C

oncu

rren

t Use

r

... licence costs per workstation (e.g. ERP-systems)

basis:42 project enquiries335 cost estimations


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Annotations:

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... maintenance rate p.a. (% of the licence costs)


8% 10% 12% 14% 16% 18% 20% 22% 24%

basis:42 project enquiries

331 cost estimations

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Annotations:

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Agenda

Trovarit AG



Summary

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Software-selection – placement into an IT-project

Organizational analysis (where necessary re-organization)Organizational analysis (where necessary re-organization)Viewing the actual organizationDetermination of weak spotsDefinition of the target conceptAdapting the target concept to the organization

Viewing the actual organizationDetermination of weak spotsDefinition of the target conceptAdapting the target concept to the organization

Software-selectionSoftware-selection

Defining the requirements Pre-selectionFinal selection

Defining the requirements Pre-selectionFinal selection

ImplementationImplementation

Preparing stepsAdaptation and configuration of the softwareTrainingsImplementation within the pilot areaInitial operation

Preparing stepsAdaptation and configuration of the softwareTrainingsImplementation within the pilot areaInitial operation

proj

ectm

anag

emen

tpr

ojec

tman

agem

ent

Project initialization

Establishing project teams

Definition ofmile stones

Project scheduling

Project controlling

Project initialization

Establishing project teams

Definition ofmile stones

Project scheduling

Project controlling

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Annotations:




enquiry to10 - 15 providers

price/performance ratio

bidding to 3-5 providers

project-“characteristics“,crucial demands

price indication

specification sheet

cost estimate

project profile, requirements

market analysis,“hit lists“

detailed competence profiles

service profiles

IT-M

atch

mak

ersystem presentationvaluation of the

system

market-research

pre-selection

final selection

data gathering

company provider

IT-M.select – tool for software-selection

online offlinecaption:

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Annotations:




Agenda

Trovarit AG



Summary

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Conclusion

... which should only be made on a solid basis!“Knowledge, one needs“ – specification and requirement sheets“Knowledge of who offers what” – market research and system tests“Knowledge of the costs” – open competitive bidding and comparison of the bids

Software-selection is an investment decision, ...Large project effortLong-ranging consequencesSignificant investment-risk

Approved tools and a qualified support help to avoid expenses and risks!Market-overviewsInternet platformsSpecialist counseling and research institutes

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Annotations:




Contact:

Trovarit AGPontdriesch 10/1252062 Aachen

Tel.: +49 (241) 40 009 – 0Fax: +49 (241) 40 009 – 111

www.trovarit.comwww.it-matchmaker.com

Trovarit AG – The IT-MatchmakerSecurity and efficiency during software-selection

We appreciate your attention

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