Critical Success Factors in BestofBreed ERP

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Critical Success Factors in Best-of-Breed ERP

• Joseph Bradley, University of Missouri Rolla
• Mary Sumner, Southern Illinois University
  Edwardsville

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CSFs

• H1 The level of integration of ERP planning and
  business planning (Reich and Benbaset, 1996).
• H2 Organizing ERP implementation under the
  direction of a project manager whose sole
  responsibilities are the project (Wight, 1974).
• H3 Organizational structure in which the
  project manager reports to the business units
  senior manager (Wight, 1974).
• H4 Staffing the ERP project manager position
  with an individual with extensive experience
  (Brown and Vessey, 2003).
• H5 The quantity and quality of training
  (Lassila and Brancheau, 1999).

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CSFs

• H6 Use of an ERP consultant for guidance
  (Welti, 1999).
• H7 CEO involvement (Laughlin, 1999).
• H8 Existence of a champion (Beath, 1991).
• H9 Managements effectiveness in reducing user
  resistance (Somers, Ragowsky, Nelson, and Stern,
  2001).
• H10 Use of a steering committee that is (1)
  headed by the CEO and (2) meetings at least every
  four weeks (Mabert, Soni, and Venkataramanan,
  2003).

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Multiple Case Studies

• Case Methodology
• Structured interviews
• Questionnaire
• Archival data

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Case 1 M-I Drilling

• Global energy services company (manufacturing and
  distribution) 1billion revenue
• Home-grown, outsourced legacy systems
• Project
• Start date 1995
• Oracle, Datalogix
• Initial Project scope 7 million

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M-I Drilling

• Best of Breed Strategy
• Drilling mud production required a process
  manufacturing package.
• Oracle was selected for financial processes.
• M-I selected Datalogix for purchasing,
  manufacturing, inventory, cost accounting and
  sales order entry.

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Case 2 Boeing

• Boeing Integrated Defense (IDS) 15 billion
  division 140 applications 250 million/year
• Series of legacy, non-integrated mainframe
  systems
• Project
• Start Date 1993
• Overall Strategy Building common systems
• COTS
• Manugistics Defense Procurement
• Baan Commercial Procurement
• Oracle Financials
• Peoplesoft HR
• Initial Project Scope 16 million

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Boeing

• Best of Breed Strategy
• Building capability (enhancements) into ERP
  implementation
• Required vendors to customize ERP software to
  meet unique business requirements (e.g. defense
  contract accounting)
• Vendor partnership

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Best of Breed Pros

• Can pick and choose ERP modules which best
  support business processes
• Supports strategic business processes
• Avoids having to re-engineer business processes
  to fit best practices supported by the supplier
  
• Less resistance to change
• Less dependent on a single supplier

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Best of Breed Cons

• Integration of ERP modules from different
  suppliers (e.g. building interfaces)
• Coordination among multiple suppliers broader
  exposure to vendor failure
• Upgrading to new versions (e.g. new
  customizations, new interfaces)
• Cost implications

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CSFs in Best of Breed

• CSFs Shared with Vanilla ERP Projects
• Alignment with business objectives
• Project managers with extensive business
  knowledge
• Champions
• CSFs Unique to Best of Breed ERP
• Supplier management
• Cost of upgrades
• Closer monitoring of linkage between project
  investment and business results

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Future Research

• What is the impact of vendor consolidation (e.g.
  Oracle bought Peoplesoft and J.D. Edwards)?
• How to attain strategic advantage with vanilla
  ERP (e.g. standard processes)?
• What is the impact of ERP-2?
• Does Best of Breed ERP reduce user resistance?
• What is the ROI associated with Best of Breed
  ERP?
• Do global standard processes make sense, given
  cultural differences, organizational climate,
  business climate?
• Comparative analysis of Best of Breed vs. Vanilla
  ERP.