Chapter

10

Designing ERP Systems

Part II

Enterprise Resource Planning Systems,

D. E. OLeary, 2000

What are MAPs?

Models
Organiza9on models (e.g., B2C, B2B, Auc9ons,
Centralized, Decentralized)
Ar*facts
(e.g., Charts of accounts and Vendor
numbering schemes)
Processes
(Sales order, Customer management,
Procurement)
Enterprise Resource Planning Systems,
D. E. OLeary, 2000

MAPs
Ar9facts are either nal or intermediate work
products that are produced and used during a
project. Ar9facts are used to capture and convey
project informa9on. An ar9fact can be any of the
following:
A document, such as Business Case or SoSware
Architecture Document
A model, such as the Use-Case Model or the
Design Model
A model element; that is, an element within a
model, such as a class, or a subsystem

MAPs
Models and model elements, have reports
associated with them. A report extracts
informa9on about models and model
elements from a tool. A report presents an
ar9fact or a set of ar9facts. Most ar9facts
have guidelines, which describes the ar9fact in
more detail.

Why are MAPs important?

MAPs (Models, Ar9facts and Processes)
The quality of the MAPs will have a huge impact on
the overall success of the ERP implementa9on.
MAPs that are not ecient or eec9ve for a par9cular rm
can drag down the overall performance of that rm.
Similarly, MAPs that meet the needs of a rm can push it
to be\er performance, giving it a compe99ve edge.

Enterprise Resource Planning Systems,

D. E. OLeary, 2000

Where do MAPs come from?

Nestles decided that it would implement common MAPs in
all three of its United States divisions.
Each of the three divisions exis9ng MAPs became
candidates, that would be evaluated.
Both SAP and the advising consultants best prac9ces
databases were used to generate candidates MAPs.
In some cases, hybrid MAPs were developed, based on
mul9ple sources of informa9on.
A mul9func9onal team used both sets of inputs to decide on
company standard ar9facts and business processes.
Enterprise Resource Planning Systems,
D. E. OLeary, 2000

Why didnt rms have common MAPs

prior to ERP systems?

There are at least three reasons:

1) technology,
2) exploita9on of local dierences, and
3) divisional control.
Technology limita9ons meant each division made their own
decisions
Since each made their own decisions they exploited local
phenomena (e.g., few vendors)
Even common soSware and compu9ng was hard to
integrate.
Enterprise Resource Planning Systems,
D. E. OLeary, 2000

Why do rms need common MAPs for

ERP?

Basically, the soSware requires it

Improved customer response
To get control of an out of control process
Generate a common view of the data
Create value and reduce costs

Enterprise Resource Planning Systems,

D. E. OLeary, 2000

SoSware Requires it
Owens-Corning tradi9onally had operated as a
collec9on of autonomous efs. Each plant had its
own product lines, says Domenico Cecere,
president of the roong and asphalt units. Each
plant also had its own pricing schedules, built up
over the years of cu`ng unique deals with
customers. ... (SAPs) R/3, however, eec9vely
demanded that Mr. Ceceres sta come up with a
single product list and a single price list.
Enterprise Resource Planning Systems,
D. E. OLeary, 2000

Improved Customer Response

Up un9l now, customers called an Owens - Corning
shingle plant to get a load of shingles, placed a
separate call to order siding, and another call to order
the companys well-known pink insula9on.
(The companys new vision was that) Owens -
Corning should oer one stop shopping for all the
exterior siding, insula9on, pipes and roong material
that builders need.
(SAPs) R/3 will give Owens-Corning the ability to
make that happen by allowing sales people to see
what is available at any plant or warehouse and
quickly assemble orders for customers.

Enterprise Resource Planning Systems,

D. E. OLeary, 2000

Get Control of Out of Control

Processes
Vandelays sites opera9ons prac9ces were as varied as their
informa9on systems. There was no uniformly recognized
best way to invoice customers, close the accounts at month
end, reserve warehouse inventory for a customer order or
carry out an of the hundreds of other ac9vi9es in the
produc9on process that required computer usage or
input. ...To alleviate ... problems with systems and prac9ces,
Vandelay decided to purchase and install a single ERP system,
which would incorporate the func9ons of all the previously
fragmented soSware. The company would also standardize
prac9ces across sites.
Enterprise Resource Planning Systems,
D. E. OLeary, 2000

Common View of the Data

Elf Atochem North America Inc.,
Philadelphia ... is moving 13 business units
over to SAP soSware. ... he came to SAP
because its various companies had been
reorganized to work as one. (As a result,
the company) ... had inherited a lot of
dierent computer systems, a lot of
dierent ways of doing business, and a lot
of hand-os. A common view of diverse
data was important ...
Enterprise Resource Planning Systems,
D. E. OLeary, 2000

Value Crea9on and Cost Reduc9on

As noted by Pirellis director of informa9on
technology The more standardiza9on there is, the
easier it is to implement new ideas and respond to
new opportuni9es. In addi9on, Andreoni notes
that standardiza9on can reduce costs. As an
example, before standardiza9on, Pirelli had a full
service back oce and customized soSware in each
of ve countries. ERP soSware was used to replace
the mul9ple back oce stas with a single back
oce sta in Switzerland, cu`ng costs by 25%.
Enterprise Resource Planning Systems,
D. E. OLeary, 2000

Why is it dicult to choose common

standards?
A Vice President of Red Pepper SoSware, who
admits that standard ERP ar9facts are ... useful
where nancial viewers want to consolidate
informa9on across diverse opera9ng units, but ... the
common view may not be op9mum for individual
divisions.
Although standardiza9on coming from
implementa9on of enterprise soSware by
standardizing processes and ar9facts has global
benets, it comes from sacricing local customized
capabili9es.
Enterprise Resource Planning Systems,
D. E. OLeary, 2000

How seriously do divisions take the

choice process?
SAP, however, eec9vely demanded that Mr.
Ceceres sta come up with a single product
list and a single price list. The sta ini9ally
fought ceding control over pricing and
marke9ng to a computer-wielding central
command. My team would have killed if
wed let them, he says.

Enterprise Resource Planning Systems,

D. E. OLeary, 2000

What are some choice mo9va9ons?

Maximize corporate benets (global good)
Minimize divisional change costs (self interest)
Rather than maximizing corporate benets, a
division may work to minimize its change costs,
such as training or hiring.
Divisions unsuccessful in ge`ng their MAPs
adopted can s9ll work to get the MAPs closest to
theirs adopted

Enterprise Resource Planning Systems,

D. E. OLeary, 2000

Choosing Standard Ar9facts and

Processes
Within an ERP, virtually the same processes and ar9facts are
used in all loca9ons, i.e., processes and ar9facts are
standardized
As a result, poten9ally this can lead to conicts between
dierent business units regarding the choice of processes
& ar9facts
Firms refer to this choice as common ... and global
Firms make the choices to facilitate communica9on and
coordina9on

Enterprise Resource Planning Systems,

D. E. OLeary, 2000