ERP Discussion Comments

4a

For-profit companies can have big ERP overruns as well. Big government project cancellations are harder to hide. When a company cancels a project, there is no obligation to report it unless capital assests have to be written off.

ERP can be very valueable to a business once it is working. In fact, there are some businesses that will not suceed without it.

Big projects have big risks. Big projects can also have big benefits. There is a temptation to set the scope "too big" in order to capture the big benefits. In my opinion, healthcare.gov would have worked better if the scope had been cut (instead of cutting the testing time).

You may get what you ask for. Do you encourage vendors to make unrealistic proposals? If you put out a Request for Proposal with an unrealistic timeframe on an unrealistic maximum bid, vendors will respond and hope to increase the budget by getting change orders or by finding areas where the contracting company does not perform as agreed in the contract. Unrealistic Requests for Proposals almost guarntee big budget overruns.

It is easier than you think for a company or government agency to neglect a big project especially if the project is understaffed or underbudgeted. The pressing needs of day-to-day work and the need to make quarterly targets can distract resources from the project. On a small scale, term papers can be neglected due to the more immediate requirements of daily tasks.

Strangely enough, a five billion dollar Air Force overrun is only the cost of purchasing 3,000 missles.

Sometimes it is good business to take big risks. Striking a new oil field can have tremendous pay backs. In 1983 a group of several oil companies spent two billion dollars to drill dry hole in Beaufort Sea in Alaska.

SAP is mentioned because they are the biggest ERP Vendor. This is similar to hearing about incidents in Walmart parking lots because Walmart has more parking lots than anyone else.

I learned early in my career how important it is to process payroll correctly. I worked breifly in a Payroll and Human Resources programming group in a large company. The first thing the head programmer did when he got his pay check was to manually compute all the deductions to make sure his program was working correctly. The Union Contract allowed workers to immediately stop working if paychecks were ever delivered late. Work would not resume until the checks arrived.

4b

It is not possible to "test in" correct business rules in many situations. I am not sure that any amount of specification and testing would allow a University to totally automate determining eligibility for graduation. The rules are complex and exception situations are many. An attempt in ERP systems to automate what should not be automated can lead to budget overruns and systems that do not meet requirements.

Good planning involves doing extensive homework such as understanding what the ERP software is capable of doing and also understanding the critical business requirements. This could be a multi-year homework assignment. Many of you mentioned the importance of planning. I agree. It is importnat to take the time to dive into the appropriate details of the business and the software while preparing the plan. (Planning is serious work)

ERP problems can occur due to lack of corrective action (not just poor planning). There is a "natural" tendency to help problems that you have discovered will "go away" over time and therefore do not need to be reported and addressed now. Sometimes management encourages this by letting it be known that they do not want to hear bad news. This is a recipe for "surprise" cost overruns.

Switching between systems can many times take more time than planned because of low level (detailed) differences between the systems. You gave an example of a company changing bankd where the systems and the banks worked differently.

 

I also think that Canvas is a better system because it clearly shows what needs to be done. I like the list of things that need grading that appears automatically on the right side of my Canvas screen. There was plenty of research and testing done before Canvas was selected. Converting this course to Canvas from Blackboard was time consuming. I think that's why some courses are still being run on Blackboard. Professors have only so much time to devote to course conversions. Dominican will stop paying for Blackboard in June so everything that is going to be used in the future must be out of Blackboard very soon.