Week Five – Case Study:
AM Equipment ERP
Create your own case study.
Identify an IS that you currently use and determine its level of success. You should incorporate the results of this weeks survey and the DeLone and McLean IS success model in your methods. Include others individuals in your evaluation process as necessary.
Report your findings in a 3 to 5 page paper. Please thoroughly describe the IS being evaluated, your evaluation technique (including participants), the results, and the problems or limitations of your evaluation.
The IS used for this case study is an Enterprise Resource Planning (ERP) software designed by RLA, named Assist 2K7. AM Equipment implemented this system January 1, 2008 to replace an older custom inventory control system that was replete with bugs and inaccurate information. The old system was not usable for tracking inventory and had to be corrected each month after a full physical inventory. The only useful information available was vendor contacts. Prices, inventory counts, customer information and order history were less than 2% accurate, so it was easy to gain benefits from the new ERP implementation. Assist 2k7 currently has been rolled out into the warehouse, shipping, customer information, order acceptance, purchasing and payment processing.
This paper will evaluate how Assist 2k7 has impacted net benefits. The implementation is in the early stages, so some of the analysis is based on assumptions. Service quality discussion is based on several conversations with the VP/Controller, Picket. Information quality analysis will be a comparison of system use from old to new. System quality will be based on personal experience and the observed interaction between other users and the software. A list of questions used in the evaluation is shown in Appendix A.
The first success marker of an IS is service quality. Since AM Equipment does not have an IT staff, service comes from the software developer or an external network administrator. Service quality is one of the reasons the company left the legacy system for a new IS. The legacy software was custom coded from scratch with very incomplete and non-specific requirements. Many “extras” were added that did not solve problems but typically created them. With all these “bugs” in the code the information was erroneous and the developer had many problems trying to resolve them. Numerous patches and corrections were made typically weeks after the problem was found, but to no avail. With these experiences in mind the company looked for a developer who was capable of giving support during business hours as well as weekends. RLA has been very responsive and has worked well with the network administrators when necessary. No matter what the issue the company (or employee) has, they have been happy to either make modifications or show how others have tackled the same problem. Unfortunately, I did not have access to the cost information for the service provided to AM Equipment.
Information quality has had a dramatic improvement from the legacy system it replaced. Inventory information is now 89 percent accurate; although the target is 100 percent, the company started with approximately five percent accuracy which shows a vast improvement. The system previously used needed to be revised each month after a full physical inventory, which took approximately 52 man hours to complete. That data needed to be changed (as much as 40 percent!) in the system to show even a relatively accurate inventory count. At this early stage of implementation, the company is still doing a month inventory count and is in the midst of a discovery phase to identify where persistent inaccuracies are coming from. Once the problem is identified and corrected, the company anticipates reducing the physical inventory to a random sampling of 20 percent of the inventory part numbers monthly and be further reduced if the IS proves accurate.
System quality evaluation was performed through observation of users and personal experience. Since the inception the system has been extremely reliable. The system needed assistance from the developers only once when it was downed by improper operation internally. Each department interface has been designed similarly to smooth ease of use. Once a module has been learned others can be picked up very quickly because of the intuitive nature of the layout and visual ques. The expandability of this system has aided in the roll-out by using only what was needed and giving the option to add other features as the company matures. As mentioned previously the company is staggering the implementation of different modules to gain full usability while reducing the negative impact of completely restructuring all the companies’ processes.
Net benefits to be discussed are increased efficiency, increased communication, improved individual ease of job and a brief mention of the financial benefit. Assist 2k7 has shown improved efficiency in several aspects from a more integrated system and reduced labor. This better information has enabled employees to depend on system information for most of their information needs without having to ask the customer additional questions or do labor intensive research. Cutting out the additional time spent on research and the irritation of extra questions has increased productivity by approximately 15 percent. Additionally, credit cards are now processed while the customer is still placing their order; this avoids the hassle of getting declined cards and delayed orders while trying to re-contact the customer.
Increased communication has proved to be a huge asset to the management team. Having access to better, more reliable information and standard reports has enabled decisions based on facts rather than partial information and guesswork. Getting information from the previous system was difficult because there was hours of labor intensive data gathering and then it needed to be formatted into a usable format, typically done in Microsoft Excel. Now, virtually any report can be generated with the most current information and ready to present in a matter of minutes. This clarity has enabled managers and employees to see sales trends as they happen, rather than three months afterward discover that many accounts had reduced orders by 30 – 50 percent. The transparency of the new system has enabled the customer service representatives to give accurate information to the customers about shipping status and availability. Giving better information has also reduced the number of customer calls asking about shipping status or delivery dates.
Ease of individual job has been difficult to measure. Customer service and shipping are now required to input more data to accomplish their tasks. This is the main responsibility of each of these departments, so this IS has increased the labor required to fulfill their jobs. However, their secondary responsibility is to problem solve when difficulties arise. This portion has now been made simpler because of the wealth of information that they input for each order. Doing extra work on the front end has enabled turn around for issue resolution to be decreased from 6 hours to less than 10 minutes.
The financial benefit has not been identified at this point. Getting good information about the financial impact of this ERP software will be difficult because we had very little understanding of current state of the business. We anticipate sizable gains, but there is no reliable metric in place to enable quantitative feedback.
This discussion has limitations in that most of the data was gathered from approximations and not recorded information. The company has grown rapidly in the recent years and is just now starting to grow its IS to a maturity capable of providing quality information with enough detail to ascertain trends or analysis from the data available. Additionally, the implementation only started seven months ago and not all portions of the system have been initiated. As implementation continues, company processes will be merged or automated, more limitations as well as benefits will become evident.
Appendix A
Interview Questions:
-Service Quality
1) What is the level of responsiveness compared to the IC (legacy) system?
2) What is the level of attitude of providers compared to the IC (legacy) systems providers?
3) What is the provider’s effectiveness compared to the IC (legacy) systems providers?
4) What is the level of convenience to solve problems compared to the IC (legacy) system?
5) How does the cost of service compare to the IC (legacy) system?
-Information Quality
1) What is the level of usability compared to the IC (legacy) system?
2) What is the level of accuracy compared to the IC (legacy) system?
3) Compared to the IC (legacy) system, how current is the information?
-System Quality
1) What is the level of reliability compared to the IC (legacy) system?
2) How is ease-of-use compared to the IC (legacy) system?
3) What is the versatility compared to the IC (legacy) system?
4) How does the functionality compare to the IC (legacy) system?
-Net Benefits
1) What are the benefits of Assist 2k7 over the IC (legacy) system?
References:
Bailey, J.E., and Pearson, S.W. (1983). Development of a tool for measuring and analyzing computer user satisfaction. Management Science, 29(5), 530-545.
DeLone, W.H., and McLean, E.R. (2003). The DeLone and McLean model of information systems success: A ten-year update. Journal of Management Information Systems, 19(4), 9-30.
Dowlatshahi, S. (2006). Strategic success factors in enterprise resource-planning design and implementation: a case study approach. International Journal of Production Research, 43(18), 3745-3771.
Johnson, S. J. (2002). ERP: payoffs and pitfalls, Harvard Business School: working knowledge for business leaders. Retrieved July 6, 2008 from: http://hbswk.hbs.edu/archive/3141.html
Robey, D., Ross, J.W., & Boudreau, M. (2002). Learning to implement enterprise systems: An exploratory study of the dialectics of change. Journal of Management Information Systems, 19(1), 17-46.
Straw, E (2008). Measuring Information System’s Effectiveness. Retrieved July 11, 2008 from http://converge.corban.edu/file.php/1764/Measuring_IS_Effectivness.pdf
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