Enterprise Resource Planning Implementation Differences Within the Same Methodology - Case Study From West Europe and

Turkey
Turan Erman Erkan At l m University, Ankara, Turkey
ermanerk@atilim.edu
Abstract: Enterprise Resource Planning (ERP) systems are vital for competitive edge in todays business world. ERP is an integrated information system that serves all departments within an enterprise. Therefore, business processes should be optimised before ERP implementation in order to catch a perfect implementation. Before year 2000 all the giant firms realised their ERP projects and after that best practises took place. After those trial and error based experiences, ERP vendors need to form an ERP implementation methodology. Big ERP vendors developed implementation methodologies, they were almost the same; starting from project preparation to selection, implementation to maintenance and control. Those project methodologies improved the success rate of ERP implementations. This research is both empirical and qualitative. In fact it consists of two monographic researches. They are both about ERP implementations in the same sector. One of the firms is a national one and other one is a multinational one. Both implementations done by the same consultant team with the same methodology, so the evaluation of the project is more objective than any other questionnaire based ones, which are filled by different implementation teams. The findings of the comparison are surprisingly different from each other within the implementations, although they both used the same methodology. Basic steps of the ERP implementation such as: project preparation, business blueprint, realization, final preparation and go live & support differs from each other both in national and multinational firms. The major difference is seen in the first steps which are project preparation and business blueprint. Multinational firm seems to have more chance than the national one in achieving organisational efficiency through successful ERP implementation. The research outcome is useful for professionals running implementation projects and those making decisions on ERP implementation. The results can also be used by practitioners managing ERP projects in order to avoid from implementation methodology illusion. Keywords: enterprise resource planning, ERP project management, ERP implementation, cultural differences

1. Introduction
The business environment is dramatically changing. Companies today face the challenge of increasing competition, expanding markets, and rising customer expectations. This increases the pressure on companies to lower total costs in the entire supply chain, shorten throughput times, drastically reduce inventories, expand product choice, provide more reliable delivery dates and better customer service, improve quality, and efficiently coordinate global demand, supply, and production (Umble, 2003). Therefore, the changes in the business perspectives, goals objectives and strategies are pressuring on organizations and on their structure to be upgraded in spite of their cultures and values. Knowledge sharing is not a competitive advantage anymore the challenge is in knowledge management. As the business world evolved it was no longer adequate for companies to merely offer their goods for sale, in order to stay viable they had to keep their competitive advantage (Tersine 2003). in the 60s industry concentrated on how to produce more (quantity), in the 70s how to produce it cheaper (cost) in the 80s how to produce it better (quality) in the 90s how to produce it quicker (lead time) in the 21st century how to offer more (service

ERP systems have been considered an important development in the corporate use of information technology in the 1990s, enhancing organizational cross-functional efficiency and effectiveness through the seamless integration of all the information flowing through a company (Davenport, 1998). ERP is the business backbone. It is a cross-functional enterprise system that integrates and automates many of the internal business processes of a company, particularly those within the manufacturing, logistics, distribution, accounting, finance, and human resource functions of the business. Thus, ERP serves as the vital backbone information system of the enterprise, helping a company achieve the efficiency, agility, and responsiveness required to succeed in a dynamic business environment (Davenport, 1998) and (Olson, 2004). ERP software typically consists of integrated modules that give a

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Turan Erman Erkan company a real-time cross-functional view of its core business processes, such as production, order processing, and sales, and its resources, such as cash, raw materials, production capacity, and people. However, properly implementing ERP systems is a difficult and costly process that has caused serious business losses for some companies, which underestimated the planning, development, and training that were necessary to reengineer their business processes to accommodate their new ERP systems. ERP literature suggest that an ERP system alone cannot improve the company performance unless an organization restructures its operational processes, and this is generally accomplished through business process reengineering (Bingi, Sharma, and Godla 2003, Olson 2004 and Davenport 1998).

1.1 Enterprise resource planning project management

In order to study ERP implementation projects, some researchers are using a critical success factors (CSFs) approach (Esteves and Pastor 2001, Nah et al 1999). However, little has been done in relation to the management and the operationalization of these CSFs. Project evaluation is critical to the understanding, control and monitoring of the CSFs of an ERP implementation project. ERP project success is influenced by a large number of factors, and most of the times it is difficult to measure them objectively. Adequate Business Process Redesign (BPR) is one of the most cited CSFs in ERP implementation projects (e.g. Bancroft et al. 1998, Bingi et al. 1999, Holland et al. 1999, Nah et al. 2001). Comprehensive BPR is related with the alignment between business processes and the ERP business model and associated best practices (Esteves and Pastor 2000). As Valiris and Glykas (1999) mention, in the literature there has been some confusion regarding the use of terms like reengineering, process improvement and redesign. They suggest that reengineering is synonymous to radical change and process improvement to incremental change and that both, reengineering and process improvement are included in the definition of redesign. This CSF stream focuses on the details associated with implementing ERP systems and their relative success and cost. Specifically, according to Motwani et al (2005); the articles in this stream include topics such as the implementation procedures (Abdinnour et al 2003, Al-Mudimigh et al 2001, Mandal and Gunasekaran 2003 and Umble 2003), critical success factors (Al-Mashari et al 2003, Nah et al 2001, Clemmons and Simon 2001, Davison 2002 and Hong and Kim 2002), pitfalls and complexities in ERP implementation (Ip et al 2002, McAlary 1999 and Ribbers and Schoo 2002), and successful strategies for effective ERP implementation (Aladwani 2001, Cliffe 1999, Markus et al 2000a and 2000b, Scheer and Habermann 2000, Willis and Brown 2002 and Mabert, Soni and Venkataramanan 2003). Based on the preceding review of the literature done by Motwani (2005) and also on the research by Akkermans and van Helden (2002), Grabski, Leech and Lu (2001), and Somers and Nelson (2001), Grabski, Stewart, and Leech (2007) developed a list of ERP implementation controls, Business process reengineering Consultants' involvement Top management support Active steering committee Knowledgeable project team Close working relationship between the project team and consultants Detailed requirements specification Detailed implementation plan Frequent communication with the users Managing people User involvement Training Involvement of internal audit System testing prior to implementation Close monitoring after implementation Change management and transition management

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Turan Erman Erkan Develop users' project ownership In-depth, up front project planning Project management skills Project sponsor from top management Clearly identified objectives Specified measures of success Ways to manage risk Detailed tracking of actionable items by internal audit Monthly internal audit reports on project risk items to steering committee.

Therefore, both ERP vendors and clients start caring about those controls and improve their implementation methodologies.

1.2 SAP ASAP methodology

The ASAP solution was developed to ensure the successful, on-time delivery of a project. SAP delivers the Accelerated SAP (ASAP) methodology for project management and system implementation. Developed by SAP to optimize the success of implementing the SAP Business Suite, ASAP streamlines the implementation by providing templates, methods, tools, and accelerators that have been built on the success of thousands of previous SAP implementations (SAP, 2001) The ASAP Roadmap provides the methodology for implementing and continuously optimizing your SAP System. It divides the implementation process into five phases and offers detailed Project Plans to assist you (in Microsoft Project format). The documentation stored at each level of the Roadmap tree structure contains recommendations on implementing your SAP System and links to helpful tools and accelerators (Niefert 2009, Portougal and Sundaram 2006) The implementation of your SAP System covers the following phases: Project Preparation In this phase you plan your project and lay the foundations for successful implementation. It is at this stage that you make the strategic decisions crucial to your project: Define your project goals and objectives Clarify the scope of your implementation Define your project schedule, budget plan, and implementation sequence Establish the project organization and relevant committees and assign resources

Business Blueprint In this phase you create a blueprint using the Question & Answer database (Q&Adb), which documents your enterprises requirements and establishes how your business processes and organizational structure are to be represented in the SAP System. You also refine the original project goals and objectives and revise the overall project schedule in this phase. Realization In this phase, you configure the requirements contained in the Business Blueprint. Baseline configuration (major scope) is followed by final configuration (remaining scope), which can consist of up to four cycles. Other key focal areas of this phase are conducting integration tests and drawing up end user documentation. Final Preparation

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Turan Erman Erkan In this phase you complete your preparations, including testing, end user training, system management, and cutover activities. You also need to resolve all open issues in this phase. At this stage you need to ensure that all the prerequisites for your system to go live have been fulfilled. Go Live & Support In this phase you move from a pre-production environment to the live system. The most important elements include setting up production support, monitoring system transactions, and optimizing overall system performance.

2. Case study: ERP implementations

A case study approach was employed to identify the projects steps that were held differently among the national and international firm projects. The criterion used to select the case study companies was that each of the case studies should use ERP software from the same vendor. Data was collected primarily through questionnaires and observations. This case study consists of two ERP implementations. In fact, this a monographic study of two distinct firms. Firms are from Turkey because of confidentiality the sector would not be shared. one is multinational the other one is national. The purpose of the case study is to examine the ERP implementation method difference between the national and multinational firms. Both enterprises implemented the same ERP with same modules as it can be seen from Table I. The author also participated to both of the projects as a BPR and ERP consultant. Therefore, data collected from the original source. In case of confidentiality the enterprises would take place as Firm A (international) and Firm B (national) Table 1: ERP modules used in firms
ERP Module FI Financial Accounting CO Controlling TR Treasury IM Investment Management PP Production Planning MM Materials Management SD Sales and Distribution QM Quality Management WM Warehouse Management PM Plant Maintenance CS Customer Service PS Project System HR Human Resources Firm A X X X X X X X X X X X X X Firm B X X X X X X X X X X X X X

In Firm A implementation lasted 14 months and in Firm B implementation lasted 8 months. In both firms ASAP methodology was used. As seen from Table 1 same modules of ERP had been implemented by the same project team. There is something like 50% difference in implementation time of projects. Thus 6 months difference is mainly because of project preparation and business blueprint steps. Those initial and vitals steps considered seriously in the international firm rather than the national one. Table 2 indicates the grades of the project evaluation that was realized by consultant team out of 10 for each project step. Average and standard deviation of those grades calculated for each step of ASAP methodology. According to Table 2, in all steps of ASAP methodology there is an obvious performance evaluation difference between multinational and national firms. The biggest difference is in project preparation (9.90 to 5.80) and business blueprint steps (9.80 to 6.00) which are the essential steps of an ERP project. Starting from realization (9.00 to 7.10) and continuing with final preparation (9.80 to 6.80) and go live & support (9.90 to 8.10) the difference between national and international implementation reduce. Overall average of five steps (project preparation, business

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Turan Erman Erkan blueprint, realization, final preparation, go live & support) are 9,68 and 6.76 respectively in international and national firms. In other words simply one can easily say that implementation quality is 96.8% in international firm and 67.6% in national firm. Table 2: ERP project steps evaluation realized by consultant team
Firm A ASAP Steps Project Preparation Business Blueprint Realization Final Preparation Go Live & Support Overall Average Average 9.90 9.80 9.00 9.80 9.90 9.68 St. D.* 0.32 0.42 0.82 0.42 0.32 Average 5.80 6.00 7.10 6.80 8.10 6.76 Firm B St. D.* 1.03 0.67 0.88 0.79 0.74

St.D.*: Standard Deviation

3. Conclusion
This research attempted to answer the question. Is there a difference in implementing ERP via same project methodology between national and international firms? The answer was quite surprising; primary steps of the ERP implementation such as: project preparation, business blueprint, realization, final preparation and go live & support differ from each other both in national and multinational firms. The major difference is seen in the first steps which are project preparation and business blueprint. Therefore, multinational firm seems to have more probability than the national one in achieving a successful ERP implementation. Since the questions were asked to the ERP consultants that they participated to the project, there was no problem about the perception of the questions and therefore answers were objective. Although this research is a monographic one, it indicates the project management difference between national and international firms in Turkey. As discussed in the previous sections both project period (14 to 8 months) and evaluated performance (9.68 to 6.76) differ among international and national firms. National firms usually do not have budget and time for business process reengineering, organizational change management and so on. In conclusion, there is a recordable ERP project implementation difference between multinational and national firms although they use the same methodology. The difference is mainly on the way of doing business, the planning method and application. This might be because of cultural differences and business circumstances. National firms ERP projects are mostly about configuration of the software to the enterprise not a tailor made customization for them to achieve organisational efficiency through successful ERP implementation. National firms need to redesign their organizations, reengineer their processes, enforce employees in order to increase their chance of ERP well implementation. The research outcome is useful for professionals running implementation projects and those making decisions on ERP implementation. The results can also be used by practitioners managing ERP projects in order to avoid from implementation methodology illusion. This study was subject to further limitations due to the measurements of cultural effects and economically readiness of firms that could be a subject of an other study.

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