Maximizing Return on Investment Using ERP Applications

Step–by–step guidance to achieving maximum return on investment for your company Written by Arthur Worster, Thomas Weirich, and Frank Andera, industry experts at the forefront of the business processes arena, Maximizing Return on Investment Using ERP Applications provides accountants, IT executives, and finance professionals with a new way of looking at enterprise resource planning (ERP)–driven business improvement programs. This timely book explores how leadership can view its organization as an integrated enterprise and what this change in perception might suggest. It considers various aspects of running a business and how a different approach may present new insight. Incorporates all aspects of gaining "Return on Investment" from ERP investments Considers change management from all angles, including working with the executive levels on defining return on investment cases, working through political and cultural issues at the executive leadership level Includes a companion website featuring exercises, reference materials, and case studies With the rapid implementation of ERP systems worldwide, business executives often have difficulty in determining the return on investment from such systems. Along with a companion website featuring exercises, reference materials, and case studies, Maximizing Return on Investment Using ERP Applications offers straightforward and hands–on guidance to lead your organization through the change process and ensure that the intended benefits can be achieved.

Preface xiii

Acknowledgments xxvii

Introduction 1

Action 5

Thinking 6

Context 6

PART I A LEADERSHIP PERSPECTIVE 9

Chapter 1: The Law of Unintended Consequences 11

Introduction 11

What Is the Law of Unintended Consequences? 12

Management Systems 14

The Challenge 23

Summary 24

Notes 25

Chapter 2: Leadership and Change in an Integrated Business World 27

Introduction 28

The Universe Outside, the Universe Within 28

The Journey 29

The Evolution of Integrated Programs for Continuous Improvement 31

A Deeper Look into Integration 32

MRP II Comes to the Mainstream 32

The Move to IT–Related Applications Solutions 34

Leaders and the Leadership Gap 35

Summary 41

Notes 42

Chapter 3: A Historical Business Perspective of ERP 43

Introduction 43

Legacy Systems (19601970/1990) 45

It s All about the Back Office: Getting a Single Version of the Truth (19701990) 46

Improving the Business (19902000) 47

The Business Suite: Enriching the Functionality (19962005) 50

Getting Information and Analysis out of the Data Ocean (19972007) 51

Corporate Reporting and Dashboards (2007Today) 52

The Era of Governance: Implications for the Future 53

Summary 54

Notes 59

PART II CONTEXTUAL ANALYSIS 57

Chapter 4: Return on Investment Developing the Business Case 59

Introduction 60

Example 1: Cost Reduction 61

Example 2: Greater Manufacturing Capacity Leading to Increased Sales 63

Providing Business Value to an Enterprise 64

Summary 74

Note 75

Chapter 5: Business Process Analysis 77

Introduction 77

Where Are We Headed? 78

Business Process Design 80

Process Understanding Reveals Complexity 82

Business Process Management 83

Skills to Include 84

A Plan for Action 89

Summary 90

Notes 90

Chapter 6: Business Culture, Politics, and Organization 91

Introduction 91

Cultural Barriers and Enablers 92

Keys to Understanding Culture, Politics, and Organization 94

Compiling Insights Gained 102

Relating These Insights to the Project Itself 103

Summary 105

Notes 105

Chapter 7: IT Strategy Review 107

Introduction 107

An Example of a Flawed IT Strategy 108

What the Introduction of ERP Meant 110

A Better Way 111

Empowering the Future by Optimizing the Past 117

Summary 118

Note 119

Chapter 8: Workforce Education and Readiness 121

Introduction 121

The Workforce as a Learning Organization 122

Workforce Education 125

Business Education in an Integrated Business World 130

Summary 133

PART III A NEW PROGRAM GOVERNANCE APPROACH 135

Chapter 9: Integration of Organizational Needs 137

Introduction 138

Approach to the Analysis Process 140

Consolidation 146

Summary 148

Chapter 10: Developing a Governance Process 149

Introduction 150

Leadership Challenges 150

Program Governance Process 151

Continuous Improvement Programs 160

Summary 163

Chapter 11: Organizational Change Management 165

Introduction 165

Expanding the Role of OCM 166

Organizational Change Management with Leaders 168

The Trusted Adviser 169

Change Management Process 170

Summary 177

Chapter 12: Conclusions and Opportunities 179

The Journey 179

The Next Step 181

Leadership 183

The Path Forward 184

The Law of Unintended Consequences 186

How Insights Relates to Manufacturing 191

The Story Is Economic 191

Summary 192

Notes 193

Postscript 195

About the Authors 201

About the Website 207

Index 209