Wash, Rinse, and Repeat

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1 Wash, Rinse, and Repeat The Infinite Rework Cycle in the ERP Environment Meg Fryling Assistant Professor Siena College

2 Enterprise Resource Planning (ERP) Suite of applications, database, and set of inherent processes for consolidating business operations into a single, consistent, computing platform. Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

business operations into a single, consistent, computing

3 ERP Lifecycle Planning Fit-gap (Customize vs. BPR) Functional and technical parties must be involved and work hand-in-hand Execution (Implementation) Customizing software and/or changing processes Post-Implementation (Maintenance/Enhancements) The system will NOT be 100% when you go-live Maintenance, bundles, upgrades and extension of capabilities UPGRADE

(Implementation) Customizing software and/or changing processes Post-Implementation

4 The Problem The time and resources to implement and maintain ERP systems far exceed original expectations Implementation and maintenance contains many hidden costs Organizations fail to recognize Total Cost of Ownership (TCO) Make implementation decisions that likely have long-term impacts on the TCO

many hidden costs Organizations fail to recognize Total Cost of Ownership

5 The Problem Unable to fully extended the ERP capabilities let alone create new capabilities The inability to move forward in the ERP lifecycle prevents realization of the full potential benefit of ERP (West and Daigle 2004) Resources not available for other projects

ERP lifecycle prevents realization of the full potential benefit

6 Lifecycle of ERP Benefits We are here Source: ECAR Research Bulletin Total Cost of Ownership: A Strategic Tool for ERP Planning and Implementation

7 Research Objectives Explore dynamics of ERP software projects, with a focus on the rework cycle in a postimplementation ERP environment Identify rework cycle characteristics unique to ERP Find ways in which we can reduce the high resource demands of ERP maintenance

environment Identify rework cycle characteristics unique to ERP

8 Methodology Case Institution: Research University Timeframe: March 2007-May 2009 Post-implementation Includes major upgrade in 2008 Quantitative Data Total customizations New work 3 types of rework Build model based on traditional rework cycle Incorporate unique ERP characteristics Calibrate to case institution

Total customizations New work 3 types of rework Build model based on

9 Dynamic Behavior to Consider Customizations must be reapplied if that part of the software product is redelivered TCO of a customization will increase indefinitely Only way to stop growth is to eliminate customization Once a customization exists there is a customer expectation that it will remain Once you customize one component it is difficult to justify not customizing another (political slippery slope)

customization Once a customization exists there is a customer expectation that it will remain Once

10 Dynamic Behavior to Consider Customizations can break other delivered components of the software (domino customization effect) Vendors do not support customizations When preparing for an upgrade, tasks completed in the old environment must be completed twice Resources tied up on upgrade work are unavailable for new projects (task backlog)

When preparing for an upgrade, tasks completed in the old environment must be

11 Average Work Received per Month by Type

12 Number of Adaptive and Perfective Tasks Received Per Month by Type

13 Number of Corrective Tasks Discovered per Month

14 Defective Upgrade Rework Waiting to be Moved to Production

15 Correctly Completed Upgrade Work Breaking from Bundles

16 The Model ERP-Rework1

17 Bug rework discovery Base run

18 Bug rework discovery Base run vs. perfect quality and no customizations

19 Bug rework discovery Base run vs. perfect quality and no customizations (extended time)

20 Discussion Rework cycle in the ERP environment is infinite There are multiple types of rework Inflows and outflows from stocks in the ERP rework cycle are impacted by bundle/upgrade releases ERP maintenance includes multiple overlapping projects in the form of bundles and upgrades Discovery of rework is delayed based on when bundles/upgrades are actually moved into production

releases ERP maintenance includes multiple overlapping projects in the form of bundles and

21 Discussion Even after the implementation of an ERP system, there are high resource demands for system maintenance Resources are never freed up for other projects Exogenous vendor generated bugs are a major problem

22 Future Research Schedule pressure and its impact on task quality and workforce fatigue Less likely to impacting hiring or deadline adjustments than original implementation Apply to additional cases Develop DSS Cooper and Lee Model for the Flour Corporation Provide tool for maintenance price and support contract negotiations

23 Comments? Questions? Suggestions? Meg Fryling

I. Abstract. Problem Dynamics

I. Abstract. Problem Dynamics ERP Implementation Dynamics Meg Fryling, Ph.D. Student Information Science and Policy University at Albany State University of New York 1400 Washington Ave Albany, NY 12222 USA Phone: +1 (518) 437-4528