The Secret Success of a Global ERP Champion

The role of a global ERP champion is to guide a business through process transformation and ERP system implementation. A “change curve” model that depicts the “Valley of Despair” illustrates what a champion can expect and do to initiate new business processes, to address resistance to change, and to promote the advantages of a globally integrated system. The model, which anticipates a drop in business performance during the transition period, encourages change leaders to minimize time spent in the valley, to minimize the depth of the valley, and to maximize the slope of the value realization path out of the valley. A new perspective, drawn from experience, redefines a successful global ERP implementation in terms of a seamless transition to a new, integrated, efficient global system.

Enterprise Resource Planning Under Open Source Software

Open source software is becoming more prevalent in businesses today, and while still a relatively immature offering, open source enterprise resource planning (OS-ERP) systems are becoming more common. However, whether or not an OS-ERP package is the right software for a given organization is a little researched question. Building on the current real options thinking about platform acquisitions, this chapter proposes the five most critical factors to consider when evaluating an OS-ERP package. To adequately do this, a great deal of detail about the current offerings in OS-ERP software is presented, followed by a review of the real options theory and thinking behind using these factors to evaluate OS-ERP options. The international implications of OS-ERP are presented in the “Future Trends” section.

Enterprise Resource Planning Systems in a Global Environment

Companies around the world are placing increasing emphasis on strategy development and implementation. Some argue that this increased emphasis is in response to market forces of increased competition and globalization, and the need to be flexible and adaptive to the business environment. Strategy development and implementation is a multifaceted task reliant on a number of interdependent factors. One of these is the role of information technology which in recent times has become an integral part of most companies’ strategies. This chapter discusses the role of strategy development and the importance of the alignment of business and IT strategies in a global environment. It discusses the role of enterprise resource planning systems on strategy development and how these systems underpin many strategic objectives companies strive for in a global environment.

Sarbanes-Oxley Compliance, Internal Control, and ERP Systems

The effort to comply with the Sarbanes-Oxley Act (SOX) has focused management attention in companies all over the world on the importance of assessing, developing, and maintaining an effective and efficient internal control system. Enterprise resource planning (ERP) systems are a crucial factor in developing such a system. Despite the attention this has attracted in practice, little academic research has focused on this area. This chapter addresses the question: How are ERP systems implicated in Sarbanes-Oxley compliance? It aims to show how SOX requirements regarding assessment and improvement of internal controls are related to the functionalities of an ERP system both in local and global implementations. It examines a solution (mySAP ERP) offered by one specific vendor (SAP) and what functionalities are relevant to global SOX compliance. Based on this, the chapter discusses likely developments regarding compliance functionalities in future releases of ERP systems.

The Implementation of ERP Packages as a Mediation Process

This research has investigated the implementation of ERP as mediation process that is, as an interactive process developed between the organization’s members and external consultants. The adoption of a mediation lens helps identify how global and local skills have been combined in ERP projects, and how these different arrangements have affected the project results. Underlying our analysis were two main questions: (1) How do patterns of mediation emerge, and what kinds of elements influence their emergence? and (2) What kind of association can be established between patterns of mediation and project results? Our conclusions point towards certain drivers. The local firm’s position regarding the head office and the meaning attached to each project have directly influenced the way external consultants are perceived by the local firm’s members, and these perceptions influence team members’ and consultants’ roles. Team members’ and consultants’ roles, in turn, contribute to reinforcement or transformation of established mediation patterns.

ERP Systems Effectiveness in Implementing Internal Controls in Global Organizations

This chapter examines the effectiveness of ERP systems in implementing internal controls in global organizations, particularly controls required by the Sarbanes-Oxley Act (U.S. Congress, 2002), or SOX. It aims to understand the extent to which ERP systems are able to meet these requirements and challenges organizations face in enhancing their ERP systems for this purpose. The chapter reports the results of interviews with ERP systems managers and directors in four organizations with significant global operations. It reveals a substantial degree of completion of SOX requirements by these organizations, often facilitated by consultants, and often accomplished as part of broader systems, processes, and strategic management improvement initiatives. It also highlights some significant technical and cultural implementation challenges, such as systems inflexibility and diversity, systems security weaknesses, and resistance to change, as well as some benefits upon completion, such as improved process efficiency and systems security, and potential intangible long-term benefits.

Implementing ERP Systems in Multinational Projects

In this chapter we present the factors for the success of ERP implementation projects. In the first section, we present the outcome of three surveys on the process and success factors for ERP projects. The first survey was undertaken in 2003 in Germany, the second in 2004 in the United States, and the third in 2006 in Turkey. The results are discussed in light of Hofstede’s model of cultural factors. In the second section we evaluate common ERP lifecycle models. In spite of the great variety of potential advantages, it is also necessary to illuminate the real effects of standard ERP software in practice. Recent studies have revealed that 81% of German companies interviewed using SAP do not fully exploit the software’s ability to optimize business processes, though 61% stated that SAP offers very good process optimization opportunities (Ploenzke, 2000). Therefore we evaluated popular lifecycle models with respect to their suitability to implement standard software in a process-driven way (Kuehl & Knoell, 2002). In the third section we present a semi-process-oriented approach lifecycle model for the implementation and release changeover of ERP systems. This lifecycle model was developed from the authors’ experience in practice, and its practical relevance was evaluated in real-world projects. This approach is also assessed in light of the criteria presented in the second section.

Success Factors for the Global Implementation of ERP/HRMS Software

This research observes a global implementation of enterprise resource planning (ERP)/human resources management system (HRMS) software at an international company. The software was implemented in 16 countries. Variables such as cultural differences, communication-distance, management support, trust, and resistance to change were evaluated in the literature review. These variables have an impact on implementation success during global HRMS implementation. Further analyses on specific success factors faced with global implementations were evaluated using semi-structured interviews. The authors prepared a questionnaire to further explore the data. Respondents rated questions related to management support the highest overall. An interesting find was that the semi-structured interview results indicated that the software chosen was not a perfect fit for the global community. The mean for questions related to global HRMS success was higher for respondents located in the United States than those located in other locations.

From Ledgers to ERP

The chapter narrates the history of the accounting needs of individuals and organizations and explains their successive technological solutions, up to today’s ERPs. The ledger, double-entry accounting, cost accounting, departmental accounting, material requisitions systems for production, human resources systems, and finally the enterprise-wide resource planning or management systems are analyzed in terms of how IT has?and has not?been able to “computerize” and integrate them. The main functionalities of ERPs are explained: the enterprise resource functionality and the planning functionality, as well as to what extent organizations need these functionalities and should pay its high prices. The expectations that have not yet been sufficiently satisfied by current systems, such as the ERP for SMEs, the transfer of “best practices,” the interconnection of supply chains via ERP, and the ERP for global organizations, are discussed.

ERP Trends, Opportunities, and Challenges

This chapter highlights the key trends in the ERP market, with a focus on the challenges related to the implementation of these systems in the Middle Eastern Gulf region. The key trends discussed here include consolidation of the ERP market, diversification of the ERP product, new modes for ERP application delivery, ERP and new technologies, changing ERP pricing structures, ERP support operations, growing demands for ERP vertical solutions, demanding ERP customers, inter-organizational ERP solutions, and regional adaptations for ERP products. The chapter further provides insight into emerging and future trends in the region. Awareness of these issues plus knowledge of the local environment gives us a richer understanding of key ERP issues and how they apply within the unique limitations and opportunities of this region.