Simulating the ERP Implementation Process: Development of a Management Flight Simulator

Simulating the ERP Implementation Process: Development of a Management Flight Simulator

Arnason, S.J.

Van Daalen, C. (mentor)
Thissen, W.A.H. (mentor)
Geertje, B. (mentor)
Deenen, R. (mentor)

Technology, Policy and Management

Policy Analysis

Systems Engineering, Policy Analysis and Management

2012-07-12

An enterprise resource planning (ERP) system is a comprehensive set of integrated software solutions. It is used for example to allow companies to improve their performance by streamlining business processes and to manage the companies’ resources. An ERP system incorporates a central database that supports the various functions of a company by drawing and feeding data to the applications used within the different departments so that the information is integrated throughout the business. ERP implementations are costly and the reason for why companies are willing to spend considerable money on such an endeavor is because they have been associated with benefits that make it worth it. The problem is that the benefits that justify the cost of implementing such a system are often not realized to their potential. That might render the cost associated with the implementation to outweigh the benefits and not the other way around as it should have been. In order to get the most out of the implementation, so at least the benefits outweigh the cost, it is crucial to carry out the implementation process successfully. That means by overcoming the challenges that are manifested not only in the complicated technical rollout and installing of the system but also in the reconfiguration of the organization in terms of its business processes and its structure so that the system fits with the organization. Furthermore, as this leads an organizational change as well as an adoption of a new information system which impose great changes on employees, there is also the challenge to facilitate the transition in order to mitigate the effects of resistance to change. Most companies rely on external consultants to transfer their accumulated knowledge of ERP implementations to their employees to facilitate in-house contribution to successful implementations. This study is carried out for the company Accenture that commonly takes on the role for providing such consultancy. It is carried out in order to develop a product that can assist with getting the knowledge transfer across not only in sessions with clients of Accenture but also for in-house education. Driven by above mentioned motive this study sets out to develop an interactive model that can be used in a gaming session that simulates the process of implementing an ERP system. This model provides a formal system that captures the essence of the systematic challenge of the natural system of ERP implementations in terms of realizing the associated benefits. Here interactive means that it is allowed for multiple inputs (levers) which can be tweaked by users so that they can interact with the formal system in a way that mimics how the natural system is interacted with in reality. Through the interaction with the model the users should experience the systematic challenge of carrying out the implementation process, which brings up one of the purposes of the model. The other purpose is to provide a medium for discussion, as the model is interacted with by several persons (at once) in a group session. The aim of such discussions is to facilitate a common understanding (e.g. between consultants and clients or people from different departments) on the overall process. The interactive model was formulated and supplied with an interface aimed for usability in terms of allowing for game-like experience of going through a simulated process of an ERP implementation. This forms the product of this study which can be summarized as a prototype of a management flight simulator on the process of implementing an ERP system. The model is based on the methodology of system dynamics and the study looks also towards the field of serious gaming as the product is intended for gaming purposes. In order to realize this product so that it meets the purposes stated above the following research questions were stated and answered as follows: 1. When looking at ERP implementations in general, what is the systematic challenge that commonly needs to be overcome so the benefits of the implementation can be realized? 2. What is the best way to represent the process of ERP implementations, what are the foreseen challenges for transforming that representation to a simulation model and what are the implications of the approach taken (for this case and in general)? 3. What is the potential of the product of this study to deliver its purpose? The decision for implementing an ERP system should not be based purely on the benefits that have been generally associated with the technology but on a strategy that identifies if they apply to the organization. A benefit hierarchy was formulated in this study that traces not just what the benefits of ERP implementations are but what constitutes them. The implementation should be justified based on how the specific constituting elements of the benefits fit to solve identified problems or lead to identified opportunities. If this is clear then the systematic challenge remains to carry out the implementation by balancing the resources available for the project between four aspects that commonly need to be aligned in order for the ERP implementations to be successful. These are the aspects of technology, business processes, organizational structure and people. The level of detail for representing the activities of these four common aspects needed to be quite high in order for the challenge to be captured, of balancing resources between the aspects (and the activities within them) while making sure that the aspects are aligned. A design choice was therefore made to represent the activities in terms of what drives them which is reasonably the resource allocation to the activities. All phases of an implementation, from analysis until after the go live, were decided to be included in the simulation. From this and the level of detail for activities a modeling challenge was foreseen due to the great many activities to be included dynamically. Conceptual maps of how the activities relate to each other in terms of dependencies were first constructed in order to model the process of the activities that should be carried out in terms of their effects and dependencies. These conceptual maps were then validated with expert interviews and what remained was to transform them to a simulation model. To make this transformation feasible an approach was taken to use molecules of structures to represent the activities in general. What is meant with that is that the activities are represented by general structures that can be used repeatedly to incorporate all activities in the simulation so that they are represented dynamically. Only two types of molecule structures were needed to allow for each activity to be captured. The dynamic feedback governed behavior of the model of this study is mostly based on the model’s base structure. This base structure is the result of improving upon a pre-existing model of which the model of this study builds upon. The inputs for how this behavior will result are the outputs of the streams of activities that make up the implementation process. These streams of activities were formed by stringing together the molecules that represent the individual activities. The individual molecules are governed by a limiting feedback loop and their behavior is therefore logically characterized by an asymptotic growth of completing an activity. The behavior of entire streams of activities is therefore a combination of the activities being performed where output of activities influence the effectiveness of attaining the completeness of the asymptotic growth of other activities until it has an effect on the base structure. The management flight simulator (the product of this study) allows users to play integral part in the simulation of the ERP implementation process that the model provides for. The users travel through the streams of activities mentioned above by making sure that individual activities are performed by allocating resources to them. It is completely up to the users how they move through the process in terms of when, how much and for how long they allocate resources to the individual activities. Logically, though, the path of direction is from the analysis phase to the deploy phase by moving through the phases of design, build and test. For each of these phases the users allocate resources to the aspects and then further divide that allocation to the individual activities within them. They should try to carry out the implementation by staying within the given planned budget and to make sure that the system can be set to go live on time. If necessary the users can delay the go live point. Since the molecule structures are general they can be used in any other situation where the focus is on the rate performing the activity as driven by some input rather than how the activity is performed; where this input, such as resource allocation, is the main force driving the activity’s rate of completeness or increase in output quality. The use of the molecules is especially relevant if an activity dense process is to be modeled and simulated interactively. What would then set apart the models for the different type of projects would be the interconnections between the activities, the relative difference of the effort needed for them and there would always be some structure of which is influenced by the activities but a separate structure in itself. The evaluation of the product conducted in this thesis provides promising indications for the usability of the product in terms of fulfilling its two purposes mentioned above. Yet this is only an indication, a sneak preview, for the potential usability and usefulness. That is why this is merely a preliminary evaluation and that a more thorough face evaluation and tests for usability are needed. The criteria that the promising indication of the preliminary evaluation is based on is that the questions about the potential for the product to deliver its intended purpose received positive and affirmative answers in two feedback sessions conducted. The preliminary evaluation of the product conducted in this thesis only gives indication that the potential usability is good. What is lacking in this thesis, due to time restrictions, is that the product still needs to be tested directly for its usability. To say if the product actually delivers its purpose would require a testing of it in sessions with people, who are potential users and would play through the simulation.

ERP system implementations
system dynamics
management flight simulator
gaming

http://resolver.tudelft.nl/uuid:87f88494-74f3-47c5-9362-351c31e482a1

2012-07-12

Campus only

Student theses

master thesis

(c) 2012 Arnason, S.J.