Enterprise Resource Planning (ERP) Education Modules

Bob Jensen at Trinity University

It is best to read the following modules before reading this page"

Enterprise Resource Planning (ERP) --- http://en.wikipedia.org/wiki/Enterprise_resource_planning

For example, read about ERP systems at http://en.wikipedia.org/wiki/ERP
Read about database systems at http://en.wikipedia.org/wiki/Database

Enterprise Resource Planning (ERP) --- https://en.wikipedia.org/wiki/Enterprise_resource_planning

An ERP MBA Program at the University of Scranton --- http://elearning.scranton.edu/mba/enterprise-resource-planning-specialization

Jensen Comment
This program surprises me somewhat. Most business schools do not have an ERP specialist on the faculty and have to scramble for an adjunct when they want to seriously cover ERP in the curriculum. It is thus surprising that a university has an entire ERP degree program, especially one that teaches students how to use the complicated software.

"North Carolina State University: Implementing ERP Student Modules," by Marianne Bradford, Issues in Accounting Education, 2011, Vol. 26, No. 3, pp. 507–520 --- (access requires a paid subscription)
http://aaapubs.aip.org/getpdf/servlet/GetPDFServlet?filetype=pdf&id=IAEXXX000026000003000507000001&idtype=cvips&prog=normal

ABSTRACT:
The purpose of this case is to describe the benefits and challenges of an Enterprise Resource Planning (ERP) system at a higher education institution (HEI). The case also focuses on IT risk and systems security issues inherent in an ERP system. The case begins with the implementation of financials and HR modules at North Carolina State University, a land-grant institution with 33,000 students. This background sets the stage for the main focus of the case: the implementation of the ERP Student modules, which required a major overhaul of information systems, including admissions, student financials, and registration and records. Concluding the case is a recent dilemma facing NCSU—the potential merging of ERP systems with The University of North Carolina at Chapel Hill. Students have the opportunity to practice problem-solving skills with regards to this dilemma, as well as offer their opinions on the strengths and weaknesses of the Student implementations.

. . .

THE NEXT STEPS FOR NCSU
Fresh off the heels of the rollout of Student Records will be the implementation of the undergraduate portion of Academic Advising and Financial Aid, and upgrades to the PeopleSoft modules planned for early 2011.

To further complicate matters, beginning in 2008, North Carolina faced a major budget crisis and had twice frozen state spending. Fifteen miles away in Chapel Hill, NCSU’s longtime rival, The University of North Carolina at Chapel Hill (UNC-CH), was implementing their first-ever ERP system. They had also chosen PeopleSoft (all other NC public universities used the Banner ERP system). The new Vice Chancellors for Information Technology at each school, along with the NC Board of Governors, were putting pressure on the two HEIs to reduce spending and find ways to work together (see Exhibit 4 for Triangle-area newspaper announcement). For many, it did not make sense to have separate PeopleSoft systems for two very similar schools a few miles apart.

Projected and actual ERP-related expenses were exorbitant. NCSU had already spent over $31 million on ERP implementations and upgrades since 1998 ($11.6 million of that on the Student modules), which consisted of software licenses (23 percent), hardware purchases (9 percent), implementation consulting (38 percent), additional staffing costs and training (5 percent), recurring software maintenance (22 percent), and recurring hardware maintenance (3 percent). UNC-CH’s initial ERP implementation of Financials, HR, and Student was projected to run $75 million. NCSU had years invested in PeopleSoft, while UNC-CH was just starting. But UNC-CH had deeper pockets with the money to buy hardware, one thing lacking at NCSU under the current budget crisis.

In June of 2009, ERP project teams from the two HEIs met to discuss sharing part, or all, of their ERP systems. There were many obstacles to overcome before moving forward. For instance, the two HEIs have different Charts of Accounts and would need to develop a common one that would meet the needs of both institutions—a major task. Also, NCSU’s HR system is largely customized, and in some areas the two universities use different payroll cycles. Student processes are also likely dissimilar, although the teams were hesitant to divulge these to each other.

Sitting in an office looking back on a decade of ERP implementations and upgrades, Connie, Ron, and Gwen reflected on the work they and the project team had accomplished. With all these issues on the forefront, NCSU OIT staff had much to think about.

Bob Jensen's sadly neglected threads on ERP in academia are at
http://www.trinity.edu/rjensen/245glosap.htm

The modules below are pretty old.

Jerry Trites pointed me to this interesting paper from Accenture on ERP
"A Smart Start to Strong Enterprise Resource Planning Requests for Proposals"

Summary --- Click Here
http://www.accenture.com/Global/Services/By_Industry/Government_and_Public_Service/PS_Global/R_and_I/Smart-Proposals.htm

Full Paper --- Click Here
http://www.accenture.com/NR/rdonlyres/839885D0-A344-4139-A26E-0393B463095B/0/ACC_SmartStartWP.pdf

Question
Are accounting education curricula meeting the information technology preferences of large firms that employ the largest proportion of top gradating students, most of whom are in college for five years because of the 150-credit requirement to sit for the CPA examination?

Answer
Ed Scribner forwarded the following reference:
"Technology generation upgrades: Are educators and employers on the same page?" AccountingWeb, October 16, 2007 --- Click Here
The article is a reprint of a paper published in the Pennsylvania CPA Journal by Susan C. Borkowski, Rose Marie L. Bukics, and Rose Marie L. Bukics

Jensen Comment
The general conclusion is that educators and employers are not on the same page, especially AIS instructors. Employers generally seek higher level knowledge of ERP systems, large database systems such as Oracle, and systems control issues. Instructors tend to teach from traditional textbooks that are out of date and provide little input for competency in the higher level knowledge areas.
For example, read about ERP systems at http://en.wikipedia.org/wiki/ERP
Read about database systems at http://en.wikipedia.org/wiki/Database

The paper does not delve into reasons and excuses for this incongruence between expected and provided AIS/IT skills of graduating accounting majors. For example, serious teaching of ERP requires instructors who have hands on experience with ERP systems. Finding instructors with such skills is about are probable as winning a Megabucks lottery. In fact finding instructors with AIS skills in general is very difficult. Most are teaching AIS after bootstrapping themselves with some lower-level textbooks and playing around with Quickbooks, Great Plains, Peachtree, or some other relatively easy to use accounting software.

Many AIS courses end up wanting or having to teach MS Excel and MS Access because the curriculum did not provide sufficient content in prerequisite MIS courses for AIS courses. The general conclusion of the article is as follows:

We all recognize that IT continues to grow in its use and applications, and is constantly changing. This presents a continual challenge for educators to deliver the very best students, with the very best skill sets, to the marketplace. To solve this conundrum, accounting firms and educators need to maintain close and frequent consultation to make sure everyone is on the same page with respect to providing the right exposure to the right technology.

I don't think the problem is so much knowing what employers want as it is in finding and affording instructors who can deliver the courses that employers wish we had in colleges.

There are a few, very few, programs that dogood jobs with such things as ERP and database systems. I have a badly out of date page on this at http://www.trinity.edu/rjensen/245glosap.htm
Especially note the email messages at the bottom of the document.

Question
Are accounting education curricula meeting the information technology preferences of large firms that employ the largest proportion of top gradating students, most of whom are in college for five years because of the 150-credit requirement to sit for the CPA examination?

Answer
Ed Scribner forwarded the following reference:
"Technology generation upgrades: Are educators and employers on the same page?" AccountingWeb, October 16, 2007 --- Click Here
The article is a reprint of a paper published in the Pennsylvania CPA Journal by Susan C. Borkowski, Rose Marie L. Bukics, and Rose Marie L. Bukics

Jensen Comment
The general conclusion is that educators and employers are not on the same page, especially AIS instructors. Employers generally seek higher level knowledge of ERP systems, large database systems such as Oracle, and systems control issues. Instructors tend to teach from traditional textbooks that are out of date and provide little input for competency in the higher level knowledge areas.
For example, read about ERP systems at http://en.wikipedia.org/wiki/ERP
Read about database systems at http://en.wikipedia.org/wiki/Database

The paper does not delve into reasons and excuses for this incongruence between expected and provided AIS/IT skills of graduating accounting majors. For example, serious teaching of ERP requires instructors who have hands on experience with ERP systems. Finding instructors with such skills is about are probable as winning a Megabucks lottery. In fact finding instructors with AIS skills in general is very difficult. Most are teaching AIS after bootstrapping themselves with some lower-level textbooks and playing around with Quickbooks, Great Plains, Peachtree, or some other relatively easy to use accounting software.

Many AIS courses end up wanting or having to teach MS Excel and MS Access because the curriculum did not provide sufficient content in prerequisite MIS courses for AIS courses. The general conclusion of the article is as follows:

We all recognize that IT continues to grow in its use and applications, and is constantly changing. This presents a continual challenge for educators to deliver the very best students, with the very best skill sets, to the marketplace. To solve this conundrum, accounting firms and educators need to maintain close and frequent consultation to make sure everyone is on the same page with respect to providing the right exposure to the right technology.

I don't think the problem is so much knowing what employers want as it is in finding and affording instructors who can deliver the courses that employers wish we had in colleges.

There are a few, very few, programs that do good jobs with such things as ERP and database systems. I have a badly out of date page on this at http://www.trinity.edu/rjensen/245glosap.htm
Especially note the email messages at the bottom of the document.

"What Will SAP Do Next? The software maker is talking partnerships, says analyst Bruce Richardson, who sees being "ubiquitous as Microsoft" as the chief goal," Business Week, May 18, 2005 --- http://snipurl.com/SAPnext

Few technology analysts have followed German software titan SAP (SAP ) as long as Bruce Richardson has. In 1991, he attended its first major U.S. conference, a small affair in New Orleans. At the time, SAP was a $300 million business selling software big companies used for such functions as inventory management and financial planning.

During the conference in New Orleans, SAP introduced what was then a revolutionary concept called client/server computing. The idea, courtesy of the software gurus at SAP, was actually fairly simple: Big corporations could replace their mainframes with new software that took advantage of increasingly powerful PCs connected to server computers.

By 1996, SAP had grown into a $1 billion company. Today, it's pushing $10 billion in annual sales and ranks as the world's third-largest independent software maker, behind Microsoft (MSFT ) and Oracle (ORCL ). Richardson, the chief research officer at the tech consulting company AMR Research, was at another SAP conference, on May 17 in Boston, where he took a break from meetings with company executives to talk with BusinessWeek Online Technology Editor Jim Kerstetter. The following are edited excerpts of their interview:

Q: So, I understand you met with the top four execs at SAP. What did they have to say?

A: It was widely expected that they would announce their Salesforce.com (CRM ) killer. But they decided to stay on message about their enterprise services architecture. They're talking about Hewlett-Packard (HPQ ) building some sort of appliance to do unbelievably fast analytics. They're talking about a partnership with Cisco (CSCO ) to build networking equipment optimized to work with SAP. And they're talking about several other partners.

But until you have the details on what's in the box, it's difficult to say more specifically what they will be doing. Really, this was about SAP showing their enterprise services strategy, and that it's on track.

Continued in the article

"What Did You Get From ERP And What Can You Get?" by Gregory J. Millman, Financial Executive, May 2004, pp. 38-42.  This will soon be online at http://www.fei.org/mag/ 

The evidence leaves little doubt that for most companies, ERP (enterprise resource planning) has failed to meet expectations or deliver on its value promise.  It's hard to find an expert who things otherwise.  "Based on our data, only a select few companies have gotten value out of their ERP implementations, and those are the world-class companies.  The value for the average company is still many years away," says David Hebert, who leads The Hackett Group's business advisory services program in application ROI.

The latest annual survey of financial executives by FEI and Computer Sciences Corp. found that "only a small minority, 10 percent, believe they are achieving a high return on technology investments."  Scott Phares, vice president of business services for the application software firm Business Engine says, "I hate to beat up on ERP, but it has the most visibility as the most expensive but least-value-derived kind of implementation.  There are tons of partly implemented or partly used products out there."

To be sure, the rap on ERP isn't entirely one-sided.  Peter Greffe, senior vice president for finance at the Bank of Montreal (BMO), says, "When you implement something new like this, it will relocate profitability to a certain extent.  Anybody that gets a positive impact will love the system, and anybody that gets a negative will not."

Jensen Comment:  ERP systems may have greater returns now that firms have to worry about Sarbanes-Oxley compliance.  Also, firms like Union Carbide claim that ERP has been a great help in FAS 133 compliance --- http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm 

ERP Gets New Life in the U.S. (July 22, 2004)

SAP posted a 14% jump in second-quarter net profit, saying it had further improved its market share in the U.S., where its software sales soared 63%. 
The Wall Street Journal, July 22, 2004 --- http://online.wsj.com/article/0,,SB109049161288070819,00.html?mod=home_whats_news_us 

IS ERP DEAD? (February 13, 2003)

"The IT industry likes to play a ghoulish parlor game every few quarters or so, pounding nails into the coffin of a languishing software or hardware category and casting it into oblivion."

So the current debate within the enterprise software industry seems to be focused on whether or not ERP is dead. The answer unfortunately is not that clear. If you talk to David Schmaier, Siebel executive vice president of products, he claims ERP is dead and will be dead for at least the next five years. On the other hand if you speak with CEO Larry Ellison of Oracle he will tell you that Mr. Schmaier's comments are rediculous. The following article explores this topic from many sides and perspectives and the author even admits that while the answer is probably somewhere in between time will only tell for sure.

See http://www.as411.com/AcctSoftware.nsf/nlv/02122003?Edit&4 

February 13, 2003 reply from Gerald Trites [gtrites@STFX.CA] 

Bob,

It depends a lot on what we mean by "dead". and from whose perspective. From the perspective of the many large companies who use ERP, it is very alive and they need a lot of people who understand how to run and use these systems. From the viewpoint of the vendors who wish to sell more installations, it has leveled out, because as the article points out, the market has been sold out. That hardly means it is "dead" - quite the contrary. It just means that sales of new systems will not rise for quite a while - a unique definition of "dead". From the viewpoint of other enterprise systems' vendors, such as Seibel, who of course focus largely on CRM, it's been less relevant for years, but dead seems a significant overstatement.

The article exhibits superficial journalism at its lowest by using headlines of this type.

A system that has been installed and is operational by over 90 % of the large companies in the world can hardly be described as "dead"

Jerry Trites

February 13, 2002 reply from dee.davidson@marshall.usc.edu  

I agree with Jerry and Jagdish. Although Best of Breed may be more optimal for specific processes, until all the kinks are worked out of integrating disparate systems, we'll have ERP as the best solution for the total enterprise. Anyone who has gone through an ERP implementation knows the pain. Try multiplying that pain by all the individual systems than the enterprise would need, then complicate it by linking them all. And, it's not as if CRM hasn't had its share of implementation failures.

Here are a couple more articles on the subject of ERP's status. The first one was published in October by searchCIO from a Harvard Business School study discussing the ROI that can be derived from ERP systems long after the implementation. ERP's payoffs and pitfalls By Harvard Business School, special to SearchCIO.com 23 Oct 2002, HBS Working Knowledge http://searchcio.techtarget.com/originalContent/0,289142,sid19_gci858624,00.html 

This second one is based on a Forrester Research study that says ERP hasn't realized much of its potential ROI because the users are still not fully able to work with the software. One interesting comment in this article is ""Most software companies have little incentive to make their applications more intuitive, because their training programs are an important source of revenue..." This is true of all packages, ERP or CRM. Business apps get bad marks in usability By Alorie Gilbert Staff Writer, CNET News.com January 14, 2003, 5:00 PM PT

Business applications from major software makers are often difficult for the average office worker to use, costing companies millions of dollars and compromising many corporate software projects, according to a new study. http://news.com.com/2100-1017-980648.html?tag=fd_top 

We should continue to expose accounting students to ERP. It's what they'll find in the business world for quite some time. Even Peachtree Complete Accounting now has ERP capability (on a small scale) with AR, AP, Inventory, and GL fully integrated.

dee davidson 
Accounting Systems Specialist 
Marshall School of Business 
Leventhal School of Accounting 
University of Southern California 213.740.5018 
dee.davidson@marshall.usc.edu 

February 13, 2003 reply from Ted Weston [Ted.Weston@business.colostate.edu] 

The question of whether or not ERP is dead is the wrong question.  ERP from five years ago is not the same as ERP today.  ERP II (with apologies to MRP II) is really all about integrated extended enterprise systems.  This includes CRM (front end) and SCM (back end) with what we originally called ERP -- back office systems including acctg, inventory, product data management, etc.

Today, web services are becoming part of ERP II because of the focus on enterprise application integration (EAI).  In addition to web services, which necessarily include B2B and B2C, ERP II includes all the change management and process issues that lie beneath an implementation.  And don’t forget project management – a very cursory review of studies like Chaos (Standish Group) suggests strongly that many of these early (ERP I) and later (ERP II) projects failed or nearly failed because of non-technical issues including people, politics, change management, and organizational issues.

The right question is possibly how can we implement front and back office systems in a shorter time, and that contain the flexibility, adaptability, and responsiveness to react to changes in the business model.  And we must begin to move in the direction that it is the process-based power users of ERP II who can implement process changes independent of the IT Department.

ERP II has barely been born!

F.C. 'Ted' Weston, Jr., Professor
Computer Information Systems Department
College of Business
Colorado State University
Fort Collins, CO 80523
Ph: (970) 491-6518
Fax: (970) 491-5205
email: tweston@lamar.colostate.edu 
http://www.biz.colostate.edu/faculty/tedw

"ERP: The Once and Future King of Campus Computing," by Catherine Murphy, Syllabus, February 2004 --- http://www.syllabus.com/article.asp?id=8868 

In higher education, ERPs are no longer optional. But many approaches exist to fit the individual campus.

ERP, or enterprise resource planning systems, are in place at many colleges and universities, and many more are considering going with ERP in the future. The promise of ERP is that it will integrate disconnected business operations such as student administration, human resources, and financial systems that have been previously handled by disparate legacy systems, while satisfying the need for real-time, on-demand information.

Using the Web, new ERP platforms can not only help streamline university business processes for school administrators, but also for students, faculty, and alumni. Using their own PCs, these constituents can access their own data, look up their own grades, register for classes, and apply for financial aid through the ERP system. Staff can apply for new positions and access their employee records without having to visit human resources.

Connecting the ERP system to a portal pushes the data and applications even closer to the user, eliminating many interim steps, shifting some of the work burden from the provider to the end user.

So far, ERP sounds like a great idea. Yet, converting to an ERP system is a bit like building a new house to replace an old bungalow. You know you need it, and you can imagine how much more functionality the new house will have, but the old house is paid for and hard to give up. Plus there’s bound to be disruption during the building process and of course some surprises along the way.

So the first principle of ERP is: expect the unexpected. According to William Shepard, director of applications integration and development for Cleveland State University, what people expect from an ERP implementation does not always match reality. “When you think of expectations and reality, remember these two words: reduction and increase,” says Shepard. “Everyone thinks they’ll save something–people, costs. The reality is that you usually don’t.”

Many schools don’t anticipate the costs they’ll incur in training and hiring staff. The transition to a new software platform may be a difficult adjustment for some employees. According to Dave Wasik, director, enterprise applications services for the University of Akron, “Unless you spend extra money on staffing, you won’t be able to take advantage of what ERP can do. Training is expensive, but it’s more expensive not to train.”

Ultimately, ERP changes the university’s entire approach to both handling information and serving users. “ERP forces you to change your fundamental approach to problem solving,” says Shepard. He also recommends providing support during the transition. “You have to transform your staff,” he says. “It may be helpful to provide some remedial training for them, so that they’re trained for the systems and software they’re going to have to handle.”

Keep in mind, also, the cost of outside consultants or partners. While these can be expensive, they can also be invaluable, says Dave Swartz, CIO for George Washington University. Swartz recommends spending the money to get the expertise you need. “Recognize that they [the vendors] are your partners. You have to choose a partner that will step up and knock out any problems that come up.”

Still, it’s the CIO or system manager who has to decide what roles to give to in-house staff and what to hire out. Project management is critical to successful implementation. Some institutions may feel more confident hiring an outside consultant with previous experience in implementing ERP systems. Other institutions may want to lead the project from within.

And don’t forget about the costs of hardware. The initial costs can be staggering, especially if new client hardware is involved. It’s helpful to plan this upfront with a strategy for adding and upgrading units as needed. Says Shepard, “You need to keep the PCs relatively current and maintain them, and that takes money and staff. We [at Cleveland State] implemented a PC buying plan and a four-year refresh program to replace the machines every four years.”

Can an ERP installation be done affordably? Yes, depending on your definition of affordable. Says Swartz, “There is an ERP system for every type of institution. For instance, there are some vanilla systems out there that are quite economical.”

Realistically, however, an investment in ERP is one of the most expensive IT investments a university can make. Overall costs in the tens of millions are typical. Wasik says, “The number of decisions are incredible. How much consulting do we need? How do we size processors correctly? These are all difficult decisions, but they have to be managed in order to manage costs.”

Despite the costs involved, Shepard warns not to spend too much time watching the bottom line. “This is a big project,” he says. “Don’t try to be a hero, delivering something cheaper and faster. Go to the board and ask them for the time, money, and flexibility you think you will need. Don’t expect to stay within a budget.”

For Swartz, who has implemented a few of these systems, planning is critical, as is expecting the costs to continue over several years. “Expect the maintenance costs and upgrade costs to be high. They are very expensive and often underestimated.”

Continued in the article

Nope!  ERP is not Dead?
"SAP's Earnings Increase 29% On Strong Sales in Americas," by Joon Knapen, The Wall Street Journal, January 27, 2005, Page B5 --- http://online.wsj.com/article/0,,SB110672499262736451,00.html?mod=todays_us_marketplace 

From The Wall Street Journal Accounting Educators' Reviews on January 14, 2004

TITLE: Large Software Customers Refuse to Get With the Program 
REPORTERS: Kevin J. Delaney and David Bank 
DATE: Jan 02, 2004 
PAGE: A1,6 
LINK: http://online.wsj.com/article_print/0,,SB107300003323708100,00.html  
TOPICS: Accounting Information Systems

SUMMARY: Delaney and Bank report that business software giant SAP blinked in its confrontation when one of its customers refused to upgrade to a newer version of their software. During the economic downturn, SAP, as well as other application software providers, had increased their revenues not so much through new sales, rather they insisted their current customers upgrade their previously purchased software packages. The related article from one year ago reflects that trend.

QUESTIONS: 
1.) How does an ERP impact the relationships in the financing, manufacturing, and other business processes?

2.) Briefly outline how a customer relationship module (CRM) is expected to influence performance for a purchasing firm. Do the same for a supply chain management (SCM) module.

3.) Given the conclusion from Delaney's related article about SAP's return to dominance one year ago, what do you think this bodes for the future of SAP?

Reviewed By: Judy Beckman, University of Rhode Island 
Reviewed By: Benson Wier, Virginia Commonwealth University 
Reviewed By: Kimberly Dunn, Florida Atlantic University

--- RELATED ARTICLES --- 
TITLE: Germany's SAP Regains Edge in U.S. 
REPORTER: Kevin Delaney 
PAGE: B5 
ISSUE: Jan 31, 2003 
LINK: http://online.wsj.com/article/0,,SB1043914959248254464,00.html 

Click here to skip my introduction below and proceed directly to the email messages of educators.

"Spotlight on Midlevel ERP Software," by Roberta Ann Jones, Journal of Accountancy, May 2002 --- http://www.aicpa.org/pubs/jofa/may2002/jones.htm 

Years ago, when the personal computer was just coming into its own, accounting software was relatively simple: Its single function was to automate the task of double-entry accounting and produce a straightforward balance sheet. As computers became more robust and integrated databases standardized, accounting software developers added more functions—including cost accounting, manufacturing resource planning (MRP), customer resource management (CRM), human resources (HR) and payroll. To differentiate these superproducts from the simple accounting programs, marketing-minded vendors christened the new packages enterprise resource planning (ERP) software.

Exhibit 1: Software Vendors

Product Vendor Web address Address Carillon Pettit & Co. www.carillonfinancials.com 100 N. Central Expressway, Suite 1300 Richardson, TX 75080 eEnterprise Microsoft Great Plains www.greatplains.com One Lone Tree Rd. Fargo, ND 58104 E by Epicor Epicor Software www.epicor.com 195 Technology Dr. Irvine, CA 92618 MK Manufact'g Computer Associates’ InterBiz www.interbiz.com One Computer Associates Plaza Islandia, NY 11749 Enterprise IQ IQMS www.iqms.com 4250 Aerotech Center Way, Suite A Paso Robles, CA 93446 Progression Macola www.macola.com 333 E. Center St. P.O. Box 1824 Marion, OH 43301 ERP Plus PowerCerv www.powercerv.com 400 North Ashley Dr., Suite 2700 Tampa, FL 33602 Scala 5.1 Scala Business Solutions www.scalaworld.com 300 International Parkway, Suite 300 Heathrow, FL 32746 Solomon Microsoft Great Plains www.solomon.com 200 East Hardin St. P.O. Box 414 Findlay, OH 45840 Traverse Open Systems Inc. www.osas.com 1157 Valley Park Dr., Suite 105 Shakopee, MN 55379

Exhibit 2: Service, Support, Price, Implementation

Exhibit 3: Manufacturing Process

Exhibit 4: Core Financials

Exhibit 5: Purchasing and Sales Processes

Exhibit 6: Human Resources Process

Exhibit 7: Tax and International Processes

Many accounting software vendors, while eager to jump on the ERP bandwagon but unwilling or unable to develop their own complete ERP functionality, choose instead to license the very best special modules developed by other software companies. This option has gained popularity as advances in Windows and compatibility tools have made it easier to seamlessly link new modules to existing software packages.

Using such best-of-breed, third-party products was a boon to ERP vendors: It saved them money and made their products more powerful and more competitive. Further, it meant that the customer was getting an already proven (read that debugged) product.

Not all customers agree that plugging in third-party products is a good idea. If the licensed product malfunctioned (and what software product is perfect?), the customer now had to deal with two vendors—the ERP vendor and the third-party vendor. More often than not, when such a problem arose, each vendor tended to blame the other, leaving the customer uncertain where to turn for help. In our reviews, we have not provided separate evaluations of any third-party products.

"Spotlight on Midlevel ERP Software," by Roberta Ann Jones, Journal of Accountancy, May 2002 --- http://www.aicpa.org/pubs/jofa/may2002/jones.htm 

Years ago, when the personal computer was just coming into its own, accounting software was relatively simple: Its single function was to automate the task of double-entry accounting and produce a straightforward balance sheet. As computers became more robust and integrated databases standardized, accounting software developers added more functions—including cost accounting, manufacturing resource planning (MRP), customer resource management (CRM), human resources (HR) and payroll. To differentiate these superproducts from the simple accounting programs, marketing-minded vendors christened the new packages enterprise resource planning (ERP) software.

Exhibit 1: Software Vendors

Product Vendor Web address Address Carillon Pettit & Co. www.carillonfinancials.com 100 N. Central Expressway, Suite 1300 Richardson, TX 75080 eEnterprise Microsoft Great Plains www.greatplains.com One Lone Tree Rd. Fargo, ND 58104 E by Epicor Epicor Software www.epicor.com 195 Technology Dr. Irvine, CA 92618 MK Manufact'g Computer Associates’ InterBiz www.interbiz.com One Computer Associates Plaza Islandia, NY 11749 Enterprise IQ IQMS www.iqms.com 4250 Aerotech Center Way, Suite A Paso Robles, CA 93446 Progression Macola www.macola.com 333 E. Center St. P.O. Box 1824 Marion, OH 43301 ERP Plus PowerCerv www.powercerv.com 400 North Ashley Dr., Suite 2700 Tampa, FL 33602 Scala 5.1 Scala Business Solutions www.scalaworld.com 300 International Parkway, Suite 300 Heathrow, FL 32746 Solomon Microsoft Great Plains www.solomon.com 200 East Hardin St. P.O. Box 414 Findlay, OH 45840 Traverse Open Systems Inc. www.osas.com 1157 Valley Park Dr., Suite 105 Shakopee, MN 55379

Exhibit 2: Service, Support, Price, Implementation

Exhibit 3: Manufacturing Process

Exhibit 4: Core Financials

Exhibit 5: Purchasing and Sales Processes

Exhibit 6: Human Resources Process

Exhibit 7: Tax and International Processes

Many accounting software vendors, while eager to jump on the ERP bandwagon but unwilling or unable to develop their own complete ERP functionality, choose instead to license the very best special modules developed by other software companies. This option has gained popularity as advances in Windows and compatibility tools have made it easier to seamlessly link new modules to existing software packages.

Using such best-of-breed, third-party products was a boon to ERP vendors: It saved them money and made their products more powerful and more competitive. Further, it meant that the customer was getting an already proven (read that debugged) product.

Not all customers agree that plugging in third-party products is a good idea. If the licensed product malfunctioned (and what software product is perfect?), the customer now had to deal with two vendors—the ERP vendor and the third-party vendor. More often than not, when such a problem arose, each vendor tended to blame the other, leaving the customer uncertain where to turn for help. In our reviews, we have not provided separate evaluations of any third-party products.

For the latest updates on ERP and SAP, look up "SAP" under the "S" Category in my Technology Glossary at http://www.trinity.edu/rjensen/245gloss.htm   .  For example, you will find an insert on speech recognition in SAP that allows you to talk to your databases.

May 28, 2002 Message from Todd Boyle

257,000 downloads?? http://sourceforge.net/project/stats/?group_id=29057      http://www.compiere.org/ 

Compiere ERP + CRM Business Solution is a large J2EE Java product requiring Oracle database). I test drove it. This is a serious, deep, extensive functionality, reflecting quite an extensive information model. I am frankly, not competent to review it from a big-picture perspective and I'm worried whether the object hierarchies and conceptual models in Compiere are good or bad.

Are there any ERP professionals out there, who have reviewed this, who can provide a whole, big-picture perspective?

After the Compiere code is ported to PostGreSQL database, isn't this something smaller businesses should consider installing a subset from?

Anything that accumulates a large enough user base, creates the possibility of a de-facto standard syntax and vocabulary that everybody else can use, as well, to send and receive orders, invoices, payments and other data over the internet. Commercial vendors are more dedicated than ever to avoiding standardization of transaction formats so, it can only come from something like Compiere. Even standards like ebXML, OAGIS or UBL are relatively useless without software to run them, i.e., they will be usable by SMEs only at the discretion of Sage, Intuit, Microsoft, and other vendors.

Todd Todd Boyle CPA 
9745-128th Ave NE 
Kirkland WA www.gldialtone.com  
425-827-3107 
www.arapxml.net  

SAP = (Acronym for a long German name) SAP is a company from Germany that sells the leading suite of large-scale client-server business software. The US branch is called SAP America. The web site is at http://www.sap.com .  SAP is powerful but very slow and expensive to implement. The following message appears in InformationWeek Online for November 13, 1997:

General Motors has chosen SAP's R/3 software as its global financial application. The decision is part of the automaker's "common platform strategy," a program that aims to reduce costs and complexity by standardizing GM's many businesses on several core IT products. GM says it plans to implement the financial apps in a "phased rollout," beginning with its automotive assembly and components operations in Europe and the Asia-Pacific, and later in North and South America. GM's goal is for full deployment by 2002. The R/3 software will replace a mix of applications GM has running in hundred of locations, a GM spokesman said. SAP software isn't new to GM: The automaker already has SAP human resources modules in a handful of places, including its Opel manufacturing operations in Germany and Delphi parts operations in France. The GM spokesman noted, however, that the new deal with SAP doesn't include HR modules. GM will take the lead in managing the R/3 rollout, while former GM unit EDS will "have some role," probably alongside other third-party service providers, the spokesman said. Financials terms of the deal weren't disclosed.

Major ERP providers include the following: 

• SAP at http://www.sap.com
• JD Edwards at http://www.jdedwards.com/
• Baan at http://www5.baan.com/cgi-bin/bvisapi.dll
• PeopleSoft at http://www.peoplesoft.com/  

More importantly, I worry about the future of ERPs.  In this context I call your attention to an article by Tom Stein entitled "ERP's Fight for Life," in Information Week, April 12, 1999, 59-66.  The online version is at
http://www.informationweek.com/729/erp.htm

On May 5, 1999 InformationWeek Online reported the following:

J.D. Edwards has hit hard times as the demand for ERP software remains stagnant. The company said yesterday it
expects an operating loss of more than $25 million for its second quarter, ended April 30. Company officials blame the 
anticipated shortfall on lower-than-expected license fee revenue, the impact of headcount additions made in the first fiscal 
quarter, investments in product development, and a $2.1 million write-off as a result of the acquisition of the Premisys Corp.
According to preliminary results, J.D. Edwards expects to report total second-quarter revenue in the range of $215 million
 to $235 million, which represents approximately a 3% to 12% increase over revenue of $209 million in the same period last year. License fee revenue is projected to be in the range of $60 million to $65 million. The company says revenue was adversely impacted by a general slowdown in demand for enterprise software as companies focus on year 2000 readiness. Final results for the quarter will be released on May 26.
Brent Thill, a financial analyst with Credit Suisse First Boston Corp., says the shortfall in license revenue is attributable to 
a slippage of new customer orders in the United States. He adds that J.D. Edwards' win rate against market leaders SAP 
and Oracle fell to 30% from 50% six months 
ago.

Some of the disappointments of companies that deployed SAP are reviewed in Information Week, May 24, 1999, pp. 59-68.  The online version is available at http://www.informationweek.com/735/erp.htm .

Attempts are being made to revitalize ERP according to http://www.zdnet.com/pcweek/stories/news/0,4153,2318287,00.html.

Information Week on May 10, 1999, Page 26 elaborates its notices that SpeechWorks International has speech recognition modules for ERP systems.  For example, these modules can now be deployed in SAP.  See http://www.speechworks.com/ .

Various schools of business have moved heavily into SAP.  One example is California State University at Chico.  It would be interesting to hear from some accounting faculty who are using SAP to give some advice to faculty who are contemplating recommending SAP to their administrators.

From InformationWeek Online on March 16, 2000

ERP vendors are adapting to the new IT environment in which businesses are betting on online exchanges, not enterprise resource planning solutions. Both SAP and J.D. Edwards & Co. made significant moves this week to host and develop online marketplace technology.

SAP on Wednesday revealed the formation of SAPMarkets, a subsidiary that, starting in May, will develop, market, and operate marketplaces using SAP technology. Hasso Plattner, co-chairman and CEO of SAP, will act as interim CEO until a permanent one is found.

The vendor's mySAP.com Marketplace efforts will be consolidated into the new company. One goal is to clear up the confusion the mySAP.com moniker created by encompassing the vendor's Internet strategy, software applications, and hosted applications under one name. "I applaud that SAP is finally resolving the confusion 'mySAP.com' brings to customers," says Byron Miller, VP at Giga Information Group. "But before they compete head-on with other companies in a new market, they need to resolve some functionality problems."

J.D. Edwards on Tuesday created a unit to focus on business- to-business solutions and expand development of its online- exchange technology. Michael Schmidt, former VP of worldwide sales and marketing, will head up the unit.

I might add a bit of information about ERP (via SAP) at Union Carbide.  On September 30, 199 in a  Chicago World Research Group conference on FAS 133, we had a presentation by two top executives at Union Carbide. Their names are Rodger M. Pearson (Manager of Accounting Research) and Anthony (Tony) R. Belinfanti (Manager of Currency & Interest Rate Risk). They discussed their huge investment in corporate-wide SAP and reported highly successful results after some painstaking years of development and installation. Some enterprising academic accountant or MIS professor could really write an interesting case about ERP in Union Carbide. The opportunity is especially ripe for an academic somewhere near Danbury, CN.

From Neal Hannon

Here are a couple of ERP articles I found useful. The comments are quotes from the articles.

http://www.informationweek.com/720/hammer.htm  But the most potent and subversive contemporary instrument of business revolution is enterprise resource planning. Although many companies implement ERP systems to ensure year 2000 compliance or reduce maintenance costs, they often drive radical change. Successful ERP implementation depends on understanding and managing these consequences.

http://www.informationweek.com/728/28iuerp.htm  "ERP:  More Than An Application" --- Organizations are turning their enterprise resource planning packages into platforms for application development and integration.

From Steve Hornik

There was a pretty good ERP article in The Journal of Accountancy - September 1999.

Also The Financial Times - May 1999, produced a special technology focus on ERP located at: http://www.ft.com/ftit/bsserp.htm 

Leading firms are presently centralizing massive enterprise-wide data into a database connected to the Internet. Oracle Corporation claims that doing so (shutting down nearly many databases in 38 global data centers) worldwide saved the firm over $1 billion in the initial year.

We thought the Internet was the most astonishing transformation, as far as business was concerned, since James Watt, with the steam powered engine, ushered in the industrial age,: said Larry Ellison, Oracle's outspoken and flamboyant chairman.

The idea is simple: put Oracle's business software for everything from sales management to inventory tracking on a few powerful computer servers running its database software.

By centralizing and organizing masses of data, all employees can get the same information through a Web browser from anywhere at any time.
”Oracle says software saved firm $1 billion,” San Antonio Express-News, May 28, 2000, p. 4J

This enabled 43,000 Oracle employees from all divisions in over 100 countries to collaborate efficiently and effectively. Tracking and accounting for operations became much less costly as well as providing more timely information.

The new enterprise job scheduler at the University of Illinois --- http://www1.internetwire.com/iwire/iwpr?id=26934&cat=ed 

Seeking a job scheduler to manage disparate systems and compliment its new SCT Banner Administrative solution, the University of Illinois has selected the AppWorx enterprise job scheduler from AppWorx Corporation. The AppWorx scheduler will play a key role in the university’s long-term plans to move to a pure distributed environment using one scheduling product that can integrate with all of their systems.

Until now, application batch processing at the University of Illinois meant manually passing files back and forth from the mainframe to other platforms. However, the process grew too complex as operators tried to interface a growing number of systems and upgrades.

“We were searching for a single job scheduler that could manage batch processes associated with existing distributed applications and integrate with our new SCT Banner solution,” said Mary Ellen Gaughan, director of operational support services for the University of Illinois Office of Administrative Information Technology Services. “We anticipate that the AppWorx solution will provide us everything we need to achieve our long-term goals and still be able to grow and add new applications within our IT environment.”

“Only AppWorx can provide the University of Illinois with a true enterprise job scheduler capable of managing all applications across different platforms in a manner that is complimentary with leading solutions such as SCT Banner,” said Bill Wrenn, President and CEO for AppWorx Corporation. “The combination of AppWorx and Banner is quickly becoming the preferred solution for universities nationwide seeking to become more efficient and reduce IT operating expenses."

About AppWorx Corporation

AppWorx Corporation is a leading provider of innovative enterprise scheduling products that have automated application business processes, improved efficiency, and significantly reduced IT operating expenses for over 300 corporations worldwide. AppWorx’s revolutionary technology and expertise in optimizing software application processing allow organizations worldwide to automate their application business processes across applications and platforms encompassing the entire enterprise. For more information visit our website at www.appworx.com  or call toll free at 1.877.APPWORX or +44 (0) 1293 897128 in the U.K.

Update messages and links

March 8, 2001

The Enterprise Resource Planning (ERP)  and Supply Chain Management System at the University of Illinois System (Chicago, Urbana-Champaign, and Springfield).  Interestingly, the system chosen is not (as of yet) a well-known ERP system.  After a careful study of alternative systems, the relatively unknown SCT ERP system was chosen..  See http://www.ecominfocenter.com/index.html?page=/b2b/erp.html 

This system is under development and will eventually cover over 250 fields of study, 5,000 faculty, and nearly 50,000 employees.   Like its counterpart in industry, this ERP system will drill down from the top to the very bottom of the organization in organizing, planning, administration, and delivery of education, research, and service.

See http://www.aits.uillinois.edu/publications/erpfinal_article.html 

The University Administrative Systems Project (ASP) -- to select and implement an Enterprise Resource Planning (ERP) solution -- is progressing well. In the last three months we have gathered a great deal of information about how integrated software suites really work at other universities. We have also engaged in extensive discussions with our functional and technical experts about whether and how our University might benefit from such a solution. The project remains on schedule with the plan we presented in our May newsletter article on ERP systems. In that article we also explained the apparent advantages of ERP software systems and the reasons for the University's interest in them. What we have learned suggests that these systems, while complex and challenging to implement, do deliver attractive capabilities that warrant thorough investigation.

Campus and University leadership have monitored the project closely, and continue to support the plan to replace all financial, human resources, and student information systems with a single, integrated suite of software applications. The next steps in this process will provide the detailed information required by management in order to make an informed systems replacement decision. The following ERP project status update discusses recent activities and previews future steps.

Recent Activities

The System Strategy Assessment Team (SSAT) and related functional teams have completed the information-gathering process and are moving to the evaluation phase. During the information-gathering phase, team members visited other educational institutions that are implementing ERP solutions, to discuss product capabilities, and the challenges presented by such an undertaking. Project teams studied other schools' Requests for Proposals (RFPs) for ERP systems, examined a cross section of the vendor product market, and prepared requirements lists.

A major project milestone just reached is the issuance of a University of Illinois RFP for an ERP software suite. This is significant for two reasons. First, the RFP is the culmination of efforts of more than one hundred University employees representing student administration, human resources and payroll, business affairs, and AITS, working together to document the vision for the ERP. This is the largest and most successful collaborative effort of administrative and student services units conducted at the University of Illinois in recent memory. Second, this is the first time the University has issued a major RFP via electronic posting and the first time we have encouraged vendor response in kind.

Information-Gathering Stage and Lessons Learned

The information-gathering stage brought our teams into contact with other institutions in the ERP implementation process. Perhaps the most valuable information we gathered relates to "Lessons Learned"-- what to do and what not to do in assessing and implementing ERP products. Our colleagues at other schools were quite candid about their experiences. They provided information to help appraise what we need in a system and what today's systems can provide. They gave us advice and told us of pitfalls. While they confirmed that ERP implementations are difficult, in every case they expressed agreement with the decision to pursue the integrated suite solution.

One particularly significant recommendation was to create an effective decision-support system to complement the new transaction processing systems. Transaction processing is an ERP product's strong point. In the June article on Data Warehousing, we explained that the University is assembling resources and a steering structure to implement a decision-support environment. Tightly linked to the ERP effort, this environment will complement the ERP and consolidate our vast stores of historical data.

Evaluation Stage

We have completed our preliminary information-gathering and progressed to the project's formal evaluation phase. We have issued an RFP, and will evaluate vendor responses in terms of their product's ability to meet our stated needs. The RFP contains both a Crucial Requirements and a Scenarios section. Responses to crucial requirements are designed to reveal general product suitability with respect to functionality and potential improvement in services. The scenarios are designed to elicit more detailed information about product functionality and performance in an environment like ours. The evaluation stage extends from the receipt of completed proposals in early September, through the end of the scenario presentations by vendors in mid-October. Completed proposals will pass through multiple evaluation phases, each designed to assess vendor and product in increasing detail. In the last phase, those vendors that meet the University's general requirements will present their scenarios. Finally, the SSAT will recommend its vendor selection to the Vice Presidents and their respective University management teams. The President and University Officers will review the information presented to them and recommend action to the Board of Trustees at its November meeting.

Future Steps and a Look Back

Now that the ERP RFP has been issued, the SSAT and functional teams are laying the groundwork for the ERP implementation. We are drafting a companion RFP to acquire services from Implementation Partners (IPs), who will be needed to assist with the organization and execution of the system after it is chosen. The RFP for IP services will detail specific requirements relating to project management, business process re-engineering, and training administration. Our goal is to maximize reliance on University personnel to manage and execute the project by acquiring only need-specific supplemental support from consultants. This approach will also help University staff develop product expertise in a timely fashion, and allow them to assume progressively more responsibility for system operation and maintenance.

Enthusiasm remains high among team members as we begin the evaluation and selection processes. A great deal of work remains to be done, but everyone involved shares the belief that it is important and will yield positive results. Be assured that we will continue to provide updates as the project progresses.

For a brief summary see "Enterprise Resource Planning:  An IT Solution, Syllabus, March 2001, p. 40. The article is not yet online, but eventually it will be posted to http://www.syllabus.com/

August 16, 2000

If you are going to teach a course or course module on ERP you may be  interested in the ERP course materials at   http://www.usc.edu/schools/business/atisp/ERP   

Cheers!  
Dan O'Leary 
University of Southern California
<oleary@RCF.USC.EDU>

February 25, 2000
SAP flips switch on new ASP venture.  The subsidiary, introduced Thursday at CeBIT, will target small and medium-size businesses with SAP software and services --- http://www.pcweek.com/a/pcwt0002244/2445618 

From InformationWeek Newsletter on May 29, 2000

SAP Faces More Internet Skepticism

BERLIN -- At its annual European user conference, SAP was selling mySAP.com as a significant e-commerce play. But not everyone was buying.

SAP is under fire for being an Internet laggard, and its assertions this week that mySAP.com has evolved from a marketing concept to a viable product line didn't change matters much. Overall, the conference has underwhelmed some attendees, who lament SAP's lack of marketing prowess and its defensive posture as it struggles to become an e-commerce player.

From InformationWeek Newsletter, August 8, 2000

Cutting ERP Down To Size

Large financial enterprise systems from vendors such as Lawson, Oracle, Peoplesoft and SAP are suitable for Fortune 1000 companies with large IT and accounting departments. But if a company has a small IT department and no accounting department at all, ERP applications have very little to offer.

The Internet may change that. Small and midsize companies will soon have access to the power of larger financial and ERP systems through a new breed of application service providers. Web-hosting financial applications is not a new concept; Oracle's application hosting unit, Oracle Business OnLine, has being offering that service for over a year. But new accounting-service ASPs are offering more than just the hosted application. They also offer bookkeeping, accounting and back-end transaction services. Some also simplify the interface to make it friendlier for small business users.

"A standard ASP might have reduced our IT responsibilities, but we'd still have to staff up a complete accounting department," says Robert Krolik, CFO at Karna LLC in San Francisco. The company, which makes optical technology used in computer mice for the gaming and medical equipment industries, hired ReSourcePhoenix.com to deliver Web-hosted access to Oracle Financials and general accounting services. - Larry Stevens

Read on: http://www.internetwk.com/lead/lead080700.htm 

Email Messages To and From SAP Educators

Bob Jensen's Four Questions Message

Response from Jane Fedorowicz

Bob Jensen's Response to Jane's Question About Legal Liability

Response from Richard J. Campbell

Response from Mohammad Abdolmohammadi

Response from Ian Sims

Response from Joe Brady

Response from James Weisel

Response from Julie Smith David 

• Initial Response from Jule
• A Reading List From Julie
• An Updated Message from Julie

Response from Ed Scribner

Response from Bill McCarthy

A 10/7/99 Message from Jim Borden

A 10/13/99 Message from Paul Krause

Selected News Items

Email message from Dan O'Leary on August 7, 2001

Bob Jensen's Four Question Message

Various schools of business have moved heavily into ERPs. One example is the SAP installation at California State University at Chico. It would be interesting to hear from some accounting faculty who are using SAP to give some advice to faculty who are contemplating recommending SAP to their administrators.

Response from Jane Fedorowicz on May 5, 1999

Jane Fedorowicz
Bentley College
jfedorowicz@LNMTA.BENTLEY.EDU

Bob Jensen's Response to Jane's Question About Legal Liability

Perhaps some legal departments are just being paaanoid.

Bob Jensen
Trinity University
rjensen@trinity.edu

Response from Richard J. Campbell on May 5, 1999

Bob:

Sometimes lawyers need to justify their existence by bringing up scary scenarios. I, for one, am really not interested in getting into the ERP environs. I do however think that a huge gap in the accounting / IT course curriculum is coverage of Visual Basic for Applications. Most midrange accounting packages (Great Plains, Macola, Solomon) allow integration with VBA. It would seem to me that knowledge of VBA would be more marketable in the long range than concentrating on a company like peoplesoft (which seems to be self-destructing - (see today's Wall Street Journal)

Response from Mohammad Abdolmohammadi on May 5, 1999

1. What software are you using (e.g., SAP, JD Edwards, Baan, or whatever)?

WE HAVE JUST INSTALLED SAP

2. What have the benefits been to date and do you feel the benefits were worth the cost and legal risks?

SO FAR IT HAS BEEN COST IN TERMS OF FACULTY TRAINING AND SAP INSTALLATION. ONE PROFESSOR HAS STARTED USING IT IN HER ADVANCED AIS COURSE. USING SAP IN OTHER COURSES IS AT THE PLANNING STAGE FOR NEXT SEMESTER.

3. Did the faculty members that you trained for the software find the learning curve overwhelming?

YES! LEARNING VARIOUS MODULES TAKES MONTHS OF TEDIOUS WORK. SOME OF MY COLLEAGUES HAVE GONE THROUGH BASIC TRAINING (ONE WEEK).

4. Are the students able to perform at the level intended when you commenced using the ERP software?

NOT YET KNOWN.

Mohammad Abdolmohammadi
Bentley College
MABDOLMOHAMM@LNMTA.BENTLEY.EDU

Response from Ian Sims on May 5, 1999

> )1. What software are you using (e.g., SAP, JD Edwards, Baan, or whatever)?

>2. What have the benefits been to date and do you feel the benefits were worth the cost and legal risks?

> 3. Did the faculty members that you trained for the software find the learning curve overwhelming?

> 4. Are the students able to perform at the level intended when you commenced using the ERP software?

> It is important for those of you who have experience with ERP modules in business school curricula to share your experiences with aecm subscribers who may be contemplating making major curriculum revisions to accommodate  ERP software. I know of several schools that are at critical decision points. I do not know if legal risks only apply to SAP users who have been willing to take on some risk copyright infringement risks when signing SAP installation contracts.

Response from Joe Brady on May 6, 1999

My colleagues and I (Joe Brady, Bret Wagner, Ellen Monk) recently reported on our SAP experience at a University of Virginia-sponsored conference on Business school education (TIBEC99). Much of what we had to say, in effect, answered Bob Jensen’s four questions. I summarize below.

Joe Brady

You have to start very, very basic. If you do, students will be able to handle what you give them. Progress is very slow however, at least at first.

SAP is a very confusing interface for the beginner. Reminds me very much of a complex CASE tool. Also reminds me very much of the confusing MS Project package. One heuristic for the educator might be: find out how successful CASE tool (or MS Project) industrial training works, and use those practices.

Joseph Albert Brady
brady@UDEL.EDU

Response from James Weisel on May 6, 1999

Response from Julie Smith David on May 6, 1999

> 1. What software are you using (e.g., SAP, JD Edwards, Baan, or whatever)?

> 2. What have the benefits been to date and do you feel the benefits were worth the cost and legal risks?

> 3. Did the faculty members that you trained for the software find the learning curve overwhelming?

> 4. Are the students able to perform at the level intended when you commenced using the ERP software?

Julie Smith David
julie.smith.david@ASU.EDU

A Reading List from Julie Smith David on October 7, 1999

I spend several days on ERP in my graduate class, and below is the reading list I will be using next trimester. I want to impress four ideas on students: 1) ERP is an integrated technical architecture that becomes a foundtational platform for much of many organization's IT opportunities, 2) companies make huge investments to implement these systems, and they're very complex, so success is not guaranteed, 3) the performance measurement tools that come standard in even the biggest and brightest packages leaves much to be desired, and 4) there are systems beyond ERP. Now that most firms have ERP, the "halo" is dimming. Vendors are trying to incorporate features of more advanced, niche, vendors with varying levels of success. Additionally, there are a lot of integration and collaboration questions that must be resolved in the near future -- decisions that our students will likely be making.

Here are the readings that support these discussions:

OVERVIEW OF ERP: Appleton, E.L. (1997) How to survive ERP. Datamation (Mar; v43 n3) 50-53. Hecht, B. (1997) Choose the right ERP software. Datamation (Mar; v43 n3) 56-58. McCann, S. (1998) Quick study: ERP. Datamation (September 14) 63. Pinkus, A. (1999) Parameters-The difference between a panda and a grizzly ERP. Midrange ERP. 24-25. Xenakis, J.J. (1999) A mile wide and a mile deep. CFO (Feb).

COMPLEXITY AND PERFORMANCE MEASUREMENT Davenport, T.H. (1998) Putting the enterprise into the enterprise system. Harvard Business Review (July-Aug.) 121-133. O'Donnel, D. (1998) Bridging the application divide. Software Magazine (September). Marion, L. (1999) Snap, crackle, pop -- and crash -- go the income statements. Datamation (February). McKie, S. (1999) Getting lean with best of breed. Business Finance (July) 27-30.

BEYOND ERP Brahm, A. (1999) Beyond the Storefront: Enterprise-strength E-business. DB2 Magazine (Fall) 31-44. Gill, P.J. (1999) ERP vendors stake claim to application outsourcing market. Datamation (September). Greenbaum. (1999) ERP Portals: Too Little, Too Late. Intelligent Enterprise. (September 14) 14-15. Marion, L. (1998) Limitations of extended ERP. Datamation. (November). Melymukia, K. (1998) An expanding universe. ComputerWorld. (September 14). Ritter, D. (1999) The Long View. Intelligent Enterprise (August 24) 58-67.

Julie Smith David V: 
480.965.8603   F: 480.965.8392
Arizona State University 
 Box 873606 
Tempe AZ 85287-3606

http://www.cob.asu.edu/fac/jsmithdavid 

Year 2001 Source Materials --- http://www.cob.asu.edu/secure/courses/acc591/resources/index.html 

Arizona State University Student ERP Projects --- http://www.cob.asu.edu/fac/jsmithdavid/enterprise/   

University of Scranton's Online ERP Program --- http://elearning.scranton.edu/mba/enterprise-resource-planning-specialization 

Updated Response from Julie Smith David on October 8, 1999

I agree 100% with Jim that the ERP wave has crested. That's why I included articles about "beyond ERP" in my last posting. My class continues from that point by studying several types of the new wave systems: advanced planning/supply chain such as Numetrix and i2's Rhythm, CRM, Sales Force Automation (SFA) and Operations Resource Management Systems such as Ariba and Commerce One (ORMS). Here are the readings for that portion of the course (which is MUCH more fun to teach since it's rapidly evolving, students haven't heard much about it, and it's new!).

SUPPLY CHAIN/ADVANCED PLANNING Abramson, G. (1999) Chain Safety. CIO Enterprise Magazine (September 15). Freeman, E. (1997) Supply chain: Modeling makes the difference. Datamation (October) Magretta, J. (1998) Fast, Global, and Entrepreneurial: Supply Chain Management, Hong Kong Style. Harvard Business Review (Sept-Oct) 102-117. Slater, D. (1999) The power of positive linking. CIO Magazine (August 15). Wheatley, M. (1999) Lighten up. CIO Enterprise Magazine (February 15). Berger, M. (1997) Can you supply on time? Sales and Marketing Management (Sept v149 n10) 99-103. Feldman, B. (1998) Constraint-Based Forecasting. Midrange ERP (September) 26-30. Sherman, R. (1999) Expanding enterprise systems for economic response. Midrange ERP (August) 40-46. Williams, I. And M. Maguire (1996) Intelligent resource planning. Manufacturing Systems (Nov, v14 n11) 68-74.

CRM Harney, J. (1999) CRM Workflow. Intelligent Enterprise (September 14) 28-35. Kay, A. (1999) Smooth sailing in the channel. CIO Magazine. (June 15). Marion, L. (1999) Watch out for wacky CRM pricing. Datamation. (September 1999). Morris, H. (1999) Closing the loop to optimize customer relationships. CIO (sponsored supplement) (September 15). Puckley, D. ed. (1998) Modeling customer relationships. Sequent Computer Systems.

SFA Adrian, M., C. Zetie, and D. Rasmus. (1999) Connections are everything. Intelligent Enterprise (June 22) 23-32. Bresnahan, J. (1998) Hard sell. CIO Magazine (March 15). Frank, D. (1998) The IT of selling. Datamation (March).

ORMS Fredman, C. (1999) The devil is in the details. Executive Edge from the Gartner Group (April-May v1, n3). Kay, E. (1999) Boost your purchasing power with Web software. Datamation (January). McKie, S. (1999) Stamping out buyer's remorse. Business Finance (August) 35-37. Vigoroso, M. (1999) Ariba Portal takes next step in e-commerce. Purchasing Online (June 17).

Hope this helps! ********* 
Julie Smith David 
V: 480.965.8603   F: 480.965.8392
Arizona State University  Box 873606 
Tempe AZ 85287-3606

http://www.cob.asu.edu/fac/jsmithdavid 

Response from Ed Scribner on April 26, 1999

Response from Bill McCarthy

http://www.cob.asu.edu/faculty/jsdavid/smap/smap98/

Bill McCarthy, Michigan State University
William E. McCarthy mccarth4@PILOT.MSU.EDU

An October 7, 1999 Message from Jim Borden

Updated message from Paul Krause on October 13, 1999

Updated Message from Paul Krause on November 18, 1999

Selected News Items

Industry observers say IRP is poised to be the next enterprise resource planning-with Peregrine as the next SAP.

"SAP plans try-before-you-buy program for ERP" http://www.zdnet.com/pcweek/stories/news/0,4153,2298434,00.html

In a previous online document, I provided audio excerpts from executives at Union Carbide praising their worldwide integrated installation of ERP (via SAP).  The web address is http://www.cs.trinity.edu/~rjensen/000overview/133suma.htm 

Now we have a chilling account of a disastrous installation of ERP (via SAP) at Hershey.  Shall I say the ERP was not even bitter sweet? (Sorry about that.)  One report of this is entitled "Hershey's Biggest Dud Has Turned Out to Be Its New Technology," in a lead article in The Wall Street Journal, October 29, 1999, pg 1.  In fairness the SAP experts are pointing fingers elsewhere, but then every player in this fiasco is pointing fingers of blame on someone else.

I received this message from the former Chairman of the Financial Accounting Standards Board.  It concerns my comments above and the Union Carbide audio clips in http://www.cs.trinity.edu/~rjensen/000overview/133suma.htm

Bob,

In reading your latest bookmarks last night I noticed your comment about problems with Hershey's ERP system. You also made reference to your previous "praise" of Union Carbide. You might have missed it but Union Carbide has had some problems too. Its press release for the September quarter included the following paragraph:

In addition, the corporation reported that it has restated net earnings for the first and second quarters of 1999 upward by $6 million ($0.04 per diluted share) and $7 million ($0.05 per diluted share), respectively. The fourth quarter of 1998 earnings were also understated by $2 million, after tax ($0.01 per diluted share), the adjustment for which has been included in the third quarter of 1999. These adjustments correct an overstatement of cost of sales of $22 million ($15 million, after tax). The overstatement was the result of human error associated with a work process change in conjunction with Union Carbide's enterprise-wide information systems implementation. The overstatement did not impact cash flow. As restated, diluted earnings per share for the second quarter of 1999 were $0.46, including a net gain of $0.06 from a litigation settlement.

There's a related item in this morning's (November 2, 1999) Wall Street Journal that notes that the company that makes GoreTex products is suing Deloitte & Touche and PeopleSoft for a faulty ERP system that, among other things, made incorrect payments to Donald Duck.

Denny Beresford
University of Georgia

The bottom line is that Enterprise Resource Planning implementations are tricky no matter how much is spent and how deep the commitment to make them work.  When they succeed, everybody toasts their glasses to the celebration "Treats."  When an ERP installation is a dud for a candy company's wholesale shipments in the months leading up to Halloween, ERP is the costly trick part of "Trick or Treat."

How can the Big Five international accounting firms possibly have more than ten clients?

BP Amoco to Outsource Accounting, Back-Office Work to Pricewaterhouse 
By STEVE LIESMAN Staff Reporter of THE WALL STREET JOURNAL

BP Amoco PLC, taking a further step in its cost-cutting efforts, said Wednesday that it will transfer much of its U.S. accounting and back-office operations to PricewaterhouseCoopers LLP in a $1.1 billion, 10-year deal.

The transaction is among the largest of its kind in the fast-growing business-outsourcing industry, in which companies have been unloading functions that once were thought inseparable in a multinational corporation. PricewaterhouseCoopers executives credited technology with enabling such outsourcing, making it possible to conceive of a company that concentrates on areas where it has an advantage and leaves noncore functions to others.

"It's a relatively new and emerging way for large organizations like BP Amoco to focus on what they do best and improve their performance," said Ray Bayley, partner in charge of business-process outsourcing at the accounting firm.

Under the deal, the oil giant's back-office and accounting operations in Tulsa, Okla., Chicago and Houston will be taken over by PricewaterhouseCoopers. About 1,200 employees, mostly in Tulsa, will be transferred from BP Amoco to the accounting firm, but there won't be employee reductions or salary cuts.

PricewaterhouseCoopers will assume the financial-reporting, accounts-payable and accounting responsibilities for BP Amoco's chemical and oil-exploration and production units in the U.S., excluding Alaska. The U.S. refining and marketing operation isn't part of the arrangement. The sides are currently negotiating a deal for the Canadian operations that could be announced early next year. PricewaterhouseCoopers will also take over the acquisition, maintenance and upgrading of technology linked with providing the services.

Mr. Bayley declined to estimate the savings for BP Amoco but said other companies have seen their accounting expenses reduced 10% to 20%. He said companies often turn to outsourcing when they have wrung as much savings out of an operation internally as they can.

PricewaterhouseCoopers will, in turn, try to use the same operations and employees to serve additional clients. For example, as many as 300 of the 1,200 BP Amoco employees are involved in maintaining the accounting technology. They could as easily service several companies as a single company, Mr. Bayley said.

Arthur W. Bowman, editor of the newsletter Bowman's Accounting Report in Atlanta, cautioned that it is too early to know if such deals deliver the promised results. But, he added, "No one has yet been fired from one of these contracts because it didn't pay off." He said an added benefit for the accounting firm is that it will inherit trained employees, the lack of which have been a major barrier to growth. At the same time, accounting employees moving from the oil company to PricewaterhouseCoopers could find greater opportunities to advance because their skills will no longer be peripheral to their company's business.

I started this section by asking how the Big Five accounting firms can possibly have more than 10 FinTrust (traditional financial audit) and SysTrust (new information system assurance) clients.  For example, in the above illustration where PricewaterhouseCoopers (PwC) is doing the back-office accounting for BP Amoco, there are only four remaining firms in the Big Five who can perform a FinTrust traditional audit and/or a SysTrust assurance service engagement.  Suppose that Ernst & Young (E&Y) performs a FinTrust audit of BP Amoco.  There would seem to be a back-scratching conflict of interest if should take on the back-office accounting of, say, Shell Oil Corporation.  Hence, only three of the remaining Big Five firms remain to do the Shell Oil FinTrust audit and/or SysAudit.  

Using the familiar n!/[(n-2)!2!] combinatorial formula, we set the total upper limit of Big Five clients to 10 that can be audited without reciprocal-pair conflicts of interest where Client X has Firm A as an auditor and Firm B doing the back-office accounting when Client Y has Firm B as an auditor and Firm A doing the back-office accounting.  It will be impossible to avoid this on the eleventh client that elects to have a Big Five firm do its back-office accounting.  Since PwC has latched onto BP Armoco, only nine more corporations worldwide that are audited by a Big Five firm can chose another Big Five firm for a back-office accounting engagement.  After that reciprocal-pair conflicts of interest are inevitable.

If you follow the above chain of logic, I think you see where this is leading.  With hundreds of clients having both FinTrust traditional audits (or SysTrust assurances) and back-office accounting engagements, the concept of "independence" becomes an outright sham.  With nothing to do after the Microsoft Corporation judgment, Judge Thomas Penfield Jackson and Federal prosecutors will be looking for new monopolies to bust up.  How about public accounting firms that divide up more than ten FinTrust, SysTrust, and back-office accounting clients.  The potential reciprocal-pair moral hazards will be immense and Judge Jackson may once again smell a monopoly that needs busting up.

The CEO of SAP says that nobody should blame SAP for the costly snafus (such as the loss of millions of dollars in candy shipments from Hershey just prior to Halloween).  I guess we have to blame the back-office accountants (Oh! Oh!).  Read the rest of the story at http://www.zdnet.com/pcweek/stories/news/0,4153,1018078,00.html .  

Hasso Plattner, head of SAP, of Walldorf, Germany, said Tuesday at an event here that customers are too reluctant to call in help from SAP when problems with implementations arise. As a result, he said, SAP is often left to fix a major problem that might have been minor had the customer notified SAP earlier.

"The better the relationship [with a customer], the faster we can fix a problem," he said.

SAP has acknowledged recent problems with enterprise resource planning implementations at Whirlpool Corp. and Hershey Foods Corp., but Plattner said these were mainly issues revolving around failed integration of non-SAP systems. He also said SAP has remedied the Whirlpool situation. The main problem, Plattner said, is that in-house IT staff is too insistent upon trying to fix problems without bringing in experts from SAP.

From InformationWeek Online on February 21, 2001

SAP has been reinventing itself during the last year from a staid, monolithic ERP company to a dynamic E-business company. It looks like the transformation is finally paying off for the world's third-largest software maker.

SAP's R/3 program was launched nine years ago to let companies control and monitor various finance and human-resource functions. One drawback was a lengthy installation process; another was its proprietary nature, which made R/3 ill-suited for a Web-based environment.

SAP, like many other ERP companies, suffered badly in late 1999 from a slowdown in spending on enterprise apps because of Y2K. Meanwhile, the Internet was taking the world by storm, and it became clear that SAP had little to offer in this new world order. Instead, the spotlight was on companies such as Siebel Systems Inc., with its customer-relationship management software, and i2 Technologies Inc., with its supply-chain management software. In response, SAP launched mySAP.com, but the effort lacked focus, leaving potential customers to conclude it didn't apply to them.

SAP could have retreated to its original market and slowly become another corporate dinosaur. Instead, it decided to leverage its customer base of 13,500 businesses and restructured its 6,000 software developers to focus on mySAP. The company concentrated on opening itself to other applications; changing the R/3 interface to be more Web-friendly; and developing applications such as CRM, supply-chain management, business intelligence, and knowledge management. SAP also has had to stop developing every application in-house. As a result, SAP invested $250 million for a 2% stake in Commerce One Inc., which develops E-marketplaces in competition with Ariba Inc. and BroadVision Inc. SAP now sells Commerce One's software to customers wanting to develop public and private exchanges.

While the old R/3 was monolithic, mySAP is truly modular. It lets companies purchase only one application and not the entire suite of products. A key benefit for customers is the ease of integration among the various mySAP products. Typically, the difficulty in integrating back-end and front-end systems is underestimated, and poor integration might keep a company from realizing the full potential of software. SAP and Oracle have an edge over foes such as Siebel and i2 on this front.

The competition is extremely intense in the E-business space. Competitors such as Siebel and i2 continue to produce best-of-breed products, and many companies are still willing to buy and integrate them.

Siebel and i2 report outstanding results this quarter and continue to sign new customers. I2 scored big when it signed Siemens to use its customer-management software, even though Siemens has already implemented SAP R/3.

While SAP's new products are heading in the right direction, many of its customers are already SAP clients. SAP must sign new customers to remain on the ERP throne.

Despite this, it appears that SAP's restructuring efforts are finally paying off. For the fourth quarter last year, SAP reported a year-over-year revenue gain of 31%.

Software sales, which account for 49% of total revenue, increased 30% from the fourth quarter of 1999. Perhaps more interesting, mySAP makes up 63% of all software sales, an indication that SAP's E-business products are gaining acceptance in the marketplace.

Sales of non-R/3 applications increased 286% in the fourth quarter of 2000 vs. the same quarter in 1999 to make up 32% of total software revenue. SAP also reported that earnings per share increased 15%.

Management expects revenue to grow more than 25% in the first half of this year. Earnings per share will likely grow slightly faster because of an expansion of operating margins.

However, with SAP trading at 64 times 2001 earnings-per-share estimates, much of the good news appears already to be factored into the stock price.

Sprint, Compuware take on wireless Web

Hoping to make the wireless data experience less cumbersome, the companies are working together to develop customized business apps for the Sprint Wireless Web --- http://www.eweek.com/a/pcwt0103051/2692286/ 

With the grand hope of making the wireless data experience more productive and less cumbersome, Sprint PCS Group and Compuware Corp. are working together to develop customized business applications for use on the Sprint Wireless Web.

But the new tools, which will include a variety of vertical and general business applications such as ERP (enterprise resource planning) and CRM (customer relationship management), will face continued resistance from users still wrestling with the usefulness, efficiency and security of wireless applications.

Scheduled to begin rolling out later this year, the tools will be customized according to client needs, said officials at Sprint, in Kansas City, Mo. For example, Compuware will provide advisory, design and implementation services to customers to help them create programs that include wireless meter reading and real-time vehicle tracking for the transportation industry.

In addition to ERP and CRM, applications already in development include sales force automation and remote user support.

Despite the advances, users and vendors agree that the new applications alone won't solve the logistical problems of the wireless-Web carriers.

"If you look at the usability that exists within [Wireless Application Protocol] today, it's horrible," said Paul Toenjes, director of professional services at Compuware, in Farmington Hills, Mich.

Some of the blame for that falls to the carriers, which sold home screen space to numerous portal vendors. As a result, when a cell phone user attempts to access a Web home page on a Sprint phone, he or she must first click through links to America Online, The Microsoft Network, Fidelity, Yahoo or those of several other sites.

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University of Scranton's Online ERP Program --- http://onlinemba.scranton.edu/mba/mba-enterprise-resource-planning.asp

Email Message from Dan O'leary on August 7, 2001

I have some pages on ERP systems at

http://www.usc.edu/schools/business/atisp/  and a book on ERP available on Amazon:

http://www.amazon.com/exec/obidos/ASIN/0521791529/o/qid%3D960316580/sr%3D8-1/ref%3Daps%5Fsr%5Fb%5F1%5F1/102-9729454-5368160 

At USC ERP systems are extensively integrated into the AIS curriculum and have been since ~1997-98. Students can gain access to a range of ERP systems including SAP, JDE, Great Plains and MAS 90. These last three systems are supported on our Citrix server so that students will have 7x24 Access.

If you have any questions contact Les Porter <LPorter@marshall.usc.edu>  or me.

Closely related to Enterprise systems are e-business systems and processes that we also integrate into the graduate curriculum. There are some workshops on Sunday at AAA on those topics.

Dan O'Leary [oleary@RCF.USC.EDU]

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Arizona State University Student ERP Projects --- http://www.cob.asu.edu/fac/jsmithdavid/enterprise/ 

Year 2001 Source Materials --- http://www.cob.asu.edu/secure/courses/acc591/resources/index.html