Mission Critical: Realizing the Promise of Enterprise Systems

The technical complexity and expense of implementing integrated enterprise systems (ESs), such as SAP, Oracle, or PeopleSoft, are well known and lamented. Yet, despite their difficulties, companies of all sizes are choosing to adopt them. These mammoth software systems, which serve as the backbone of an organization's information needs, offer unrivaled improvements in business processes and the first great opportunity to achieve true connectivity. Data could be shared internally and externally in real-time. Supply and demand could be perfectly coordinated. Managers could understand every aspect of a company's operations and performance with the click of the mouse. However, achieving these benefits is hardly a matter of writing big checks, installing ES software, and flipping a switch.

In his new book Mission Critical, Thomas H. Davenport, shows that to achieve the business benefits ESs make possible, companies must treat their implementations as a business initiative — not a technical one. Davenport, Director of the Andersen Consulting Institute for Strategic Change, argues that this means setting up clearly defined objectives at the beginning and monitoring their achievement throughout the life of the project. It means putting business executives in charge — not technical managers — who can make the organizational changes necessary to achieve benefits. And like all business projects, the responsibility of achieving the set objectives should belong to every manager, not only those involved in the project.

Enterprise systems are unlike any other software systems. They don't merely change the look of an employee's computer screen; they reinvent the way a company and its people operate. Therefore, as an organization changes its information systems, it also must make simultaneous changes in its business processes and its business strategy. Davenport describes these changes in detail with extensive examples of real organizations that have been successful and unsuccessful at managing their implementations including Bay Networks, Dow Chemical, Nike, and Elf Atochem. From these case studies, Davenport demonstrates how companies can balance getting the system in from a technology standpoint and getting benefit from it.

Presenting both the opportunities and perils of enterprise systems, Davenport is quick to point out that they are not the right choice for every company. He provides a set of guidelines to help managers evaluate the benefits and the risks for their organizations, and includes case studies of companies that have decided for and against adoption. For those who decide to forge ahead with an implementation, or are currently living with one, he includes a discussion of how they can move beyond using ES data for purposes other than completing basic business transactions (automating order-taking, paying suppliers, changing human resource benefits status, etc.). Firms that have already completed their implementations could use the ideas in the book to achieve greater value from their ES. For example, ES-supplied information has the potential to transform management practices, including enabling faster and better decision making, lowering management head-counts, and lowering costs for information reporting. Companies can also connect ES backbones to customer-oriented systems and the Internet. In fact, Davenport argues that it is impossible to be effective at electronic commerce without first implementing the capabilities of an ES, and he describes several firms (Cisco and Nortel Networks, for example) that have done so successfully.

Given the business changes, the high cost of implementation, and the importance of the projects to the long-term success of the organization, Davenport argues, business managers cannot afford to abdicate to technology staff on enterprise system decisions.

[ Order this book ]