enterprise systems
DESCRIPTION
A short introduction to the concept of Enterprise Systems.TRANSCRIPT
www.handels.gu.se
2023-04-10Centre for Business Solutions
Johan MagnussonCentre for Business Solutions
School of Business, Economics and Law
University of Gothenburg
Enterprise Systems
www.handels.gu.se
2023-04-10Centrum för Affärssystem
EducationPhD Business Administration "Unpackaging IT Governance", University of Gothenburg (2011)PhL Informatics "Interorganizational Collaboration among SMEs" University of Gothenburg (2005)BSc Psychology: Lund University (2001)BSc Business Administration, Lund University (2001)MSc Systems Engineering, Mid Sweden University (2000)International Faculty Development Program, IESE Business School, University of Navarra (2008)Institutions and Organizations, Stanford University (2005)
Current areas of researchIT Governance, Management Accounting, Enterprise Systems
Current areas of teachingEnterprise SystemsIT Governance
KeynotesManagement Events, IT Executive Forum, Effektiva Affärssystem, Forum Affärssystem, CIO Executive Club, IDG CIO Conference, SANTE
ConsultingProduct evaluation, Product development, Investment evaluation, project management, Coaching
ManagementDirector (Centre for Business Solutions), Director (SANTE Academy), Project Manager (Stanford University Exchange), Coordinator (ECIS), Member of Microsoft Academic Alliance Advisory Board EMEA, Member of CIO Awards jury
www.handels.gu.se
2023-04-10Centre for Business Solutions
2
3 .
www.handels.gu.se
2023-04-10Centre for Business Solutions
Agenda
After the lecture, you will be able to:
1. Describe what ESs are and how they have developed over the years
2. Articulate the technological pre-requisites and pressing issues that impact the future development of ESs
www.handels.gu.se
2023-04-10Centre for Business Solutions
Definition and background
• Standardized, enterprise-wide information systems
• Purpose: Increased Efficiency and Decision quality
• MIS; AIS; MRP, MRPII, SCM, SRM, SEM, PLM, KMS, BI, CPM, LIS, EIS, ES, DSS, BPMS, CRM, ERP…
• Forever bloating, forever changing• Walking hand in hand with advances in
technology and the perception of the firm
www.handels.gu.se
2023-04-10Centre for Business Solutions
1960 1970 1980 1990 2000 20100
50000
100000
150000
200000
250000
300000
Exxon MobilFord MotorGeneral MotorGeneral ElectricIBM
What is the Big Deal?
• We live in a state of constant transition and change
• New markets, new regulation, new opportunities, new disturbances, increased fluctuations in demand, increased demand for personlization, increased demand for collaboration…
• How do we match the need for flexibility with efficiency? Turnover MUSD of the five largest companies 1960-2010. Source Forbes.com
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Control
• How do we manage the organization? • The dream of rationality…• Fetischism of numbers• Rational decision making requires total
information• Control tower metaphor• ”The fog of war”
Läs mer: Dearden, J. 1965. MIS is a mirage. Harvard Business Review.
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“When we understand that slide, we’ll have won the war,” General McChrystal
“It’s dangerous because it can create the illusion of understanding and the illusion of control,” General McMaster
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Infrastructure becomes infostructure
Marginal
Infrastruktur
Personalhantering
Teknikutveckling
Inköp
Ingående logistik Produktion Utgående logistik Marknad och Sälj Service
Database
Database
Database
Database
Database
Database
Database
Database
Database Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
Database
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The reason for buying off-the-shelf…
Källa: Magnusson, J. & Olsson, B. 2005. Affärssystem. Studentlitteratur, Lund.
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2023-04-10Centre for Business Solutions
Historical development
• From MRP to CC• Bloating and Control• Trying to find the correct
composition• MRP, MRPII, ERP, EAI, SOA,
SaaS/CC
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A stilized Alfa Laval
• sa
| Organisationskarta
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1960: Centralization
| Fiktiv beskrivning 1960
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1980: Decentralization
• safsd
| Fiktiv beskrivning 1980
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1998: Centralization á là Enterprise Resource Planning
| Fiktiv beskrivning 1998
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2002: Decentralization with a centralized integration
Enterprise Application Integration / Enterprise Service Bus
| Fiktiv beskrivning 2002
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2010: Decentralization
Service Oriented Architecture
| Fiktiv beskrivning 2010
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2015: Radical Decentralization
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Food for thought: Cloud Service Brokerage
Service/Process Broker
Service/Process Supplier
Service/Process Supplier
Service/Process Supplier
Service/Process Supplier
Client
COBITITILSCOR
Process standards
WSDLXBRLXML
Technology standards
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2023-04-10Centre for Business Solutions
Research perspective: ERP App Stores
• “Apps Market” introduced by ERP vendor 2012
• Inspired from Salesforce.com and Apple
• Empower the end-user to buy apps• Empower the consultant to package
functionality/customizations as apps• Moving towards a Platform strategy
(Gawer, 2009)
Read more: Magnusson and Nilsson. 2013. “Introducing App Stores into a Packaged Software Ecosystem: A negotiated order perspective” International Journal of Business Information Systems.
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2023-04-10Centre for Business Solutions
Research Perspective: Public Procurement
• To reduce the switching cost of public IT procurement by 10%
• Background– High switching costs are detrimental for
competition– Technological developments have reduced the
theoretical switching costs– There is a fundamental potential in reduced
public spending on IT– Building on work by Von Weizäcker (1984) and
Klemperer (1987)• Joint program GU/Stockholms Universitet
2012-2014
Read more: Magnusson and Nilsson. 2011. “Studying the Implications of Cloud-based delivery models on public IT procurement: A switching cost perspective”. eChallenges, Firenze, Italy.
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2023-04-10Centre for Business Solutions
Technological pre-requisites
• Architecture– From technology to service• Costs– From significant to pervasive• Business Needs– From scale to scope
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2023-04-10Centre for Business Solutions
TP: Architecture
• From centralization to decentralization…• Incorporation of new concepts– Business Architecture– Information Architecture– Enterprise Architecture• The fundamental question of alignment
and fit• How should we design the organization?• What happens when services become
the atom of the architecture?
Read more: Magnusson. (forthcoming). “When Centralization and Decentralization clash:A revelatory case study of the ideographic organization of IT at a large Swedish University“. Information Resource Management Journal.
www.handels.gu.se
2023-04-10Centre for Business Solutions
TP: Cost
• Moore’s and Metcalfe’s Laws• Integration cost• Switching cost• Maintenance cost• Upgrade cost• Transition cost• People cost• From CAPEX to OPEX…
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2023-04-10Centre for Business Solutions
TP: Business Needs
• What solution best suits anything?• Ability to reorganize during operations• Ability to set up new branches et cetera• Ability to reformulate business model• Ability to free working capital
• So, what do we want?– Control– Efficiency– Effectiveness
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2023-04-10Centre for Business Solutions
Agility
• .”..the ability to change the body’s position efficiently…”
• Common term for ability to stay in tune with changing demands and the ability to satisfy these
• Flexibility and scalability
• Returning Question: How do we avoid the trade-off with efficiency?
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2023-04-10Centre for Business Solutions
Pressing issues
• Standardization• The competence of the buyer• The scope and function of ES• The interplay with other products and solutions• The shift to services
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2023-04-10Centre for Business Solutions
Recapitulation
1. Describe what ESs are and how they have developed over the years
2. Articulate the technological pre-requisites and pressing issues that impact the future development of ES