Executive Summary
In today’s competitive business environment organizations have to provide customers with
products and services of greater quality and at a faster pace to sustain in the market. The
information systems have eased the business processes by automating certain processes but
integration of the systems has led to increased efficiency and more efficient management of
the business processes. Enterprise Resource Planning (ERP) system is one such tool, which
allows the companies to integrate its business operations by providing company-wide computing
environment that includes sharing a single database. This database provides the company with
consistent data across all business processes in real time enabling the organization to deliver
quality and effective services to its customers. Central Queensland University was one of
the first universities, which introduced distance learning few decades ago and to enhance its
operations implemented an enterprise system developed by PeopleSoft. The system was a
failure since there were many shortfalls in the implementation process, which include lack of
communication leadership employee involvement, vendor selection and project management.
CQU’s decision of replacing it with new ERP system to be implemented by a new local vendor
TechnologyOne would enable it to overcome the issues faced in the previous system but there
are possible risks developed due to the previous implementations such as inconsistency in the
system and software, integration of the various data, which has increased due to the merger and
low morale of the employees due to the failure of the previous implementation of the enterprise
system. To avoid these risks it is recommended that the university has clear understanding of the
requirements, increased involvement of senior management and employees, effective training
and testing of the new system before it goes live and effective communication with all the
stakeholders.
Table of Contents
Introduction 3
Critical Review of Enterprise Resource Planning (ERP) Systems 3
Enterprise Systems at Central Queensland University 9
About TechnologyOne 11
Possible Risks to CQU during Implementation of new ERP System by TechnologyOne 13
Recommendations 15
Conclusion 17
References 18
Introduction
Today, the complexity in the business environment is increasing due to changing market
trends, increased competition and increasing customer demands. The integration of the business
processes enables organization to work more effectively and efficiently since the entire
organization works in towards common goals. Enterprise Resource Planning (ERP) system is
one such system, which enables organizations to integrate all the primary business processes to
enhance efficiency and have a competitive advantage. The ERP systems have become important
strategic tools in today’s complex business environment. If the ERP system is not implemented
successfully it can lead to several issues in the business processes. The report talks about the
existing enterprise systems of Central Queensland University (CQU), which was ineffective due
to poor implementation process hence it has decided on replacing it with new ERP system from
a different vendor. The report discusses the possible risks Central Queensland University might
face while changing its old enterprise system to new ERP system to be implemented by a new
vendor. The report also provides recommendations to overcome the identified risks.
Critical Review of Enterprise Resource Planning (ERP) Systems
With growing complexity, demand of increasing efficiency and technological advancement
has forced organizations to implement latest technologies and solutions to enhance their
overall performance and effectiveness. Gable, Rosemann and Klaus define ERP systems as
“comprehensive packaged software solutions seek to integrate the complete range of business
processes and functions in order to present a holistic view of the business from a single
information and IT architecture” (Harley et al., 2006). ERP systems enable the organizations
to link their various departments and processes, which include manufacturing, sales order
processing, human resource functions, financial systems, processes involving suppliers and
customers (Rabaa’I et al., 2009). The system integrates these various functions, which allows
sharing of data and increases the visibility (Rabaa’I et al., 2009). ERP systems enable companies
to organize and improve the effectiveness of the various business processes and decrease the cost
of carrying out the processes. Beheshti (2006), states that enterprise systems enable organizations
to have effective communication and coordination by centralizing the administrative activities
and improve ability of the system to store, retrieve and use the information from the ERP
system efficiently and easily and also reduce the maintenance cost of the ERP system (Addo-
Tenkorang & Helo, 2011). A successfully implemented ERP system enables the organization
to maintain strong business intelligence for the company by giving the respective managers and
staff integrated view of the various business processes and also provide the required information
in a better manner, which enables the managers in making quick decisions (Simon & Webster,
2010). Every organization and institution has the scope of implementing an ERP system since
it integrates the main processes of the business in an effective manner. Education sector is one
such industry, which has increased need of ERP systems due to the continuously growing student
numbers, increasing competition, changes in nature of academic work, need for improvement of
operational efficiency and changing expectations of the stakeholders. Due to the substantial and
continuing changes in the sector there is a demand for more efficient management process and
improved operations of administrative processes. According to Zornada and Velkavrh (2005)
the education sector in inclined towards adopting ERP system with an intention to integrate
administrative functions, which include student administration, facilities management, financial
management and human resource management which traditionally have separate legacy system
(Harley et al., 2006). Deloitte & ToucheConsulting carried out a study to analyze the benefits of
implementing ERP system and classified them as tangible and intangible (Magal & Word, 2011).
The tangible benefits include increased productivity, inventory reduction, reduction of personnel,
reduction of IT and procurement costs, improved cash flow management, increase in revenues
and improvement in on-time delivery (Behrens & Sedera, 2004). The intangible benefits include
improved business processes, increased transparency of corporate data, improved responsiveness
to customers, increased integration between systems and standardization (Behrens & Sedera,
2004).
The effectiveness and success of ERP systems depends on various factors, which need to be
identified and considered during the implementation otherwise the system can lead to significant
losses and disruption in the overall business processes. The more complex the processes
get, there is increased complexity in the software development (Simon & Webster, 2010). It
is estimated that for every 25% increase in the complexity of a given task in the system, the
complexity of the software solution increases by 100% (Addo-Tenkorang & Helo, 2011).
According to Martin Campbell-Kelly, a computer historian, the management of any business
inevitably wants changes in the automated processes due to the changing and evolving needs of
the market (Phillips, 2012). Thus, it is very essential to identify the success and failure factors to
ensure the successful implementation of the ERP system.
Business Process Reengineering and Customization
To successfully implement an ERP system it is very essential for the organization to make
structural changes and have a clear understanding of how the business processes will be carried
out after implementation of the ERP system (Harley et al., 2006). Customization is an important
part of ERP implementation and has the goal of ensuring that company’s requirements match
ERP solution (Magal & Word, 2011). The degree of customization is very important decision
since it influences the complexity of the system. It relates the success of ERP and achieving user
satisfaction. Kumar suggests that the customization should be less than 30% since increased
customization can further complicate the system (Magal & Word, 2011).
Project Management
The project management should be effective for successfully implementing the ERP system. The
scope of the project, deadlines, milestones, resources required should all be clearly defined and
documented before the start of the project (Harley et al., 2006). The developers should also have
a risk management plan and continuously monitor the progress of the project.
End-user Involvement
The involvement of the end-user is very important for the success of the system. The end-users
have better knowledge about the requirement from the system and since they would be using the
system they can highlight the various risks or issues, which can arise during the implementation
process (Monk & Wagner, 2012).
Knowledge Management
This refers to exchange of information between all stakeholders within the organization. It is
essential that the company build effective channels and environment to exchange information
within the company and with the developers to have up to date information about the
development and working of the system. By exchanging information the employees would be
able to understand the ERP system better. It is very essential for the users to understand the
system to use it effectively (Magal & Word, 2011).
Software Selection
There is a direct and string relationship between the success of ERP system and software
selection. By selecting the software, which allows them to automate the crucial processes, the
system will help the organization in increasing the effectiveness of the organization (Malhotra
& Temponi, 2010). The company should identify the core business processes and choose
the software, which can integrate them and allow the organization to automate the main
functionalities and support the rest of the processes by integrating them effectively (Malhotra &
Temponi, 2010).
Effective communication
The success of ERP system implementation highly depends on effective communication between
all the stakeholders. The goals and expectations of implementing the ERP system should
be clearly communicated throughout the organization and to the vendor (Monk & Wagner,
2012). The capabilities and limitation of the ERP system should be well understood by all the
stakeholders (Malhotra & Temponi, 2010). The centralization and sharing of information among
all stakeholders enables organization to make quicker and effective decisions (Malhotra &
Temponi, 2010)..
Top Management Commitment and Support
This factor refers to the effective leadership at the top level and need for the involvement of
the senior management in strategy planning and has involvement in technical orientation. The
support from the top management regarding allocation of required resources and involvement in
the decisions related to the system is very essential. The leaders should involve and encourage
the involvement of the other stakeholders and establish effective communication between all and
lead the entire project with the support of the developers and implement the system as per the
requirements of the company (Monk & Wagner, 2012).
The factors, which can lead to the failure of ERP system implementation, are:
Lack of understanding of the business requirements
The implementation of the ERP system can have negative consequences if there is lack of
understanding about the requirements from the system (Behrens & Sedera, 2004). This is one of
the major factors, which can lead to several issues in the implementation as well as in the end
product. Since the requirements are not clear the integration cannot be established effectively,
which can lead to drawbacks in every process leading to slow down of the process and errors
(Behrens & Sedera, 2004).
Not choosing the right Vendor
The software selection is another common mistake made by the organization. The choice of
vendor is very crucial for the success since it is essential to choose a vendor who is aware and
has knowledge of the company’s business. The company should choose a vendor who has the
knowledge of the respective industry, which will enable the vendor to deliver cost-effective and
appropriate business solutions (Ifinedo et al., 2010).
Lack of communication, coordination and leadership
The ERP system implementation needs effective communication among all the stakeholders.
This would enable the vendor to have a clear understanding of the requirement and in turn the
users will be able to understand the capabilities of the system. The lack of communication,
coordination and leadership can result in a system, which might not fully serve the purpose and
might also end up producing errors, which can affect the other business processes (Behrens &
Sedera, 2004). This will also lower the morale of the staff since they might fear that the system is
too difficult to adapt to and it might affect their efficiency as well (Ifinedo et al., 2010).
Enterprise Systems at Central Queensland University
Central Queensland University (CQU) is a public university based in Queensland, Australia
(CQU, 2014). It is the largest and fastest growing university in Australia and the graduates from
this university are among the highest paid in the country (CQU, 2014). CQU was among the first
universities to start comprehensive distance learning in 1974 and started with full-time student
load since 1994, by establishing on-shore teaching site in Sydney followed by Melbourne,
Brisbane and Gold Coast (CQU, 2014). The university with a goal of becoming a leader in
flexible teaching the university along with many others opted for enterprise resource system to
improve its administrative processes. In 1990s the Enterprise Resource Planning (ERP) systems
were the standard option to replace the legacy systems in larger organization, which involved
several processes and department (Hellens et al., 2005). Markus (2001) defines ERP systems as
software packages, which include integration of transaction oriented data and business activities
(Simon & Webster, 2010). According to Pastor (2001), enterprise systems enable cross-
organization integration by embedding business processes and are composed of various modules
(Harley et al., 2006). To enhance the administration process CQU chose PeopleSoft ERP, which
was implemented over a period of three years.
The system delivered to CQU suffered various problems, which include the system ended up
being too time consuming due to use of two separate applications (Abugabah & Sanzogni,
2010). Due to the use of different applications it made the staff wait more than 20 minutes to
access records and involved several steps to retrieve the required results. The system ended up
being very confusing and difficult due to the use of two applications to complete a single task.
The processes became complicated and difficult for the users since the application was not user
friendly and was quite complex for the users to make selections. The parameters used were quite
confusing, which made the work difficult for the end users. The system also had geographic
restriction and the users were able to use all the three systems from computers located on
CQU network. The staffs were not able to access student records from outside CQU campus
effectively, which made it very inconvenient. The applications also had platform restrictions and
the users were not able to access information from other operating systems such as Apple and
Linux (Hellens et al., 2005). Thus, in the first enterprise system of PeopleSoft ERP there were
several drawbacks from the part of university as well as the developer.
The shortfall on the part of university and the developers included lack of communication, the
differences in the administration systems among all the campuses, lack of technical support
since there was no central software developer assigned to support the various divisions in
using the implemented software and the technology used was not very effective since it could
not integrate with other software thus offering limited support in accessing information in
the Student system (Hellens et al., 2005). The other mistake on the part of the university was
that they opted for customizing the system, which resulted in greater operational costs, slower
deployment of technology and reduction of flexibility of the system. After the implementation
of the system a study was carried out to identify the causes of the system failure, which included
interviews and focus groups of the most experienced staff of the university who were also
involved in implementation of the new enterprise system (Abugabah & Sanzogni, 2010). The
issues identified included perceived lack of direction, poor control over implementation process,
distrust of implementation partners assisting with the project, poor leadership, and inadequate
training perception of low morale since there was no effective engagement of the stakeholders
(Abugabah & Sanzogni, 2010). To overcome the in efficiency of the system and to control the
cost of its maintenance the university’s decision of enhancing their system by opting for local
vendor Technology One shows its positive approach of overcoming the issues created by the
previous system.
About TechnologyOne
TechnologyOne is the largest publicly listed software company of Australia, which is in to
development of business-to-business software and creates solutions for over 1000 leading
corporations, government departments and statutory authorities (TechnologyOneCorp, 2014).
The company has the vision of providing single, integrated enterprise solution built on the
modern platform with consistency in the working of the system. TechnologyOne has a holistic
approach towards providing solutions and takes responsibility for developing, selling, marketing
and supporting to the provided solution using new technology and concepts. TechnologyOne not
only has business prospects in Australia but also has increased footprint in New Zealand
TechnologyOneCorp, 2014). It is one of the leading providers of enterprise software solutions to
most of the government departments for financial management. The company provides solution
to Ministry of Agriculture and Forestry, Ministry of Justice, Ministry of Economic Development
and Ministry of Environment (TechnologyOneCorp, 2013). It is a dominant provider of Business
Intelligence and Enterprise Budgeting products (TechnologyOneCorp, 2014). The solutions
provided by the company are highly integrated, which enable the developers and end users to act
effectively on the information provided. The company’s Enterprising Business solution enables
the operational and financial department of the company to work together in controlling the
budget (TechnologyOneCorp, 2013). The solution provides budgeting information in such a
manner that it provides information to end users in terms of business and not accounting. The
approach of the company in building the solution includes working with the customers.
TechnologyOne has provided several solutions to local government departments, which includes
solution for OneCouncil and has delivered solution to integrate information from many
operational systems (TechnologyOneCorp, 2013). The company has implemented an integrated
system, which includes customer management, building, planning, finance, billing, grants
management, human resource and payroll (TechnologyOneCorp, 2014). TechnologyOne has
also provided effective solution to the SGE Credit Union, which has been able to enhance its
efficiency, productivity, data management and generate reports at a faster rate using the
OneBanking solution (TechnologyOneCorp, 2013). The company was able to integrate the new
solution effectively with its core banking system and enabled it to capture data more effectively,
which enabled the Union to increase the productivity, data accuracy and enhance overall
performance of their systems, which enabled the organization to perform more effectively and
efficiently. Thus, the company has supported various business areas by providing integrated
solutions in a manner that it has helped various organizations to increase effectiveness of their
business processes ns increase the overall productivity of the organizations.
CQU by merging with CQU TAFE led to marking a new era of education and training, which
introduced a comprehensive university, which delivers new opportunities for students and
provides new opportunities for the investing on the local skill base. This demanded a better
maintenance of student records due the merging of more information and processes. CQU
and CQU TAFE chose TechnologyOne because of its success in delivering various solutions.
The university chose TehnologyOne after an extensive tendering process and determined that
Technology One can deliver effective solutions for student management and fulfill their long-
term requirements.
Possible Risks to CQU during Implementation of new ERP System by
TechnologyOne
The ineffectiveness of CQU’s old enterprise system was due to several factors, which can act as
risk while implementing the new ERP system to be provided by TechnologyOne
The main risks involved during implementation of the new ERP system at CQU are:
Inconsistency in its existing System
The PeopleSoft enterprise system used various applications within one task, which made the
business process more time consuming and difficult. The existing system cannot be used on
different platforms. Also, the existing system is not very user friendly. This risk factor of
inconsistency in data and applications can make the implementation of new system complex.
The inconsistency can lead to several other risks such as compatibility of the new system with
existing systems (Hellens et al., 2005). The new vendor might have to identify the changes
in system for all departments and since the new system requires integration of data there is
a possibility of losing data or having errors in the data since they would have been stored in
different formats. There is a risk of inconsistency in the data for the StudentOne solution, which
if not handled might make it difficult for staff to carry out certain transactions.
Increased requirements due to merger with CQU TAFE
Due to the merger with CQU TAFE the data integration would be complex and essential.
The merger would involve addition of further processes of student administration, which
might require the developers to integrate different data types and in the course there is a risk
of misinterpreting or calculating certain data. The merger would require the system to add
additional parameters and report development, which can clash with the stored data.
Low morale of the staff due to ineffectiveness of existing system
CQU’s earlier enterprise system implementation was a failure since there was lack of
communication, coordination and leadership with similar approach there is an increased risk
of failure and loads of issues in implementing the new ERP system. With the experience of the
previous enterprise system there is an increased risk of resistance from the people. The people
might not prefer upgrading to new system since they fear it might make their tasks difficult and
time consuming. In the previous implementation process the testing and training were not done
adequately, which can further add to the resistance of the employees and might not involve in the
development and decision making of the new ERP system. There is a risk of non-participation of
the employees in bringing the change effectively. This might not enable the developers to fulfill
the business requirements.
Thus, there is a risk of compatibility of the existing software and systems, data inconsistency and
resistance from the staff, which can further affect the other related processes. There is a risk of
financial loss if the requirements are not clearly defined and documented and if the employees
are not involved during the implementation. Also, if the organization insists on customization,
as done in the case of previous enterprise system can further increase the inconsistency in the
system and data.
Recommendations
ERP systems require significant level of resources, changes and commitment throughout the
organization. The risks involved in the implementation of the system are a major concern since
there is increased investment of time, money and efforts. The failure of the system can disrupt
the business processes to a greater extent, which can not only lead to loss of money but also
business since the system might provide inconsistent data and slow down the processes. CQU
has already faced a significant negative consequence due to the failure of the implementation of
the previous enterprise system. The previous implementation lacked several factors such as lack
of clear understanding of business requirements, communication, leadership and inconsistency
in the systems and software implemented. The impact of the previous mistakes can cause further
risks while implementing the new ERP system, which can reduce the effectiveness of the new
system in spite of choosing the right vendor.
It is recommended that the university should have a collaborative approach in decision making
and planning for the ERP implementation. It is recommended that the top management and all
the stakeholders who would e influenced by the change of the system should be involved in the
implementation process. The top management and the staff should have clear understanding of
the requirements from the system, which should be discussed with the vendor and they should
ensure that those requirements can be met with minimum complexity in the system. It is
recommended that the university should reduce the level of customization, which would make
the system less complex and also allow the system to have greater consistency in the data and the
system. Thus, the confusion would be less and all the end users would be able to use the new
system effectively and efficiently. It is essential that the university integrates the data of CQU
TAFE with the CQU data beforehand so that the developers would be able to create database
accordingly and there would not be any issues in data retrieval and addition. It is recommended
that the management will ensure that there is no resistance from the employees by discussing the
need for change to new system. The management in the implementation of this new system
should encourage the participation of all the stakeholders, which would reduce the resistance and
get them interested in bringing the proposed change. The management should involve to a
greater extent and participate in every decision made in the implementation process and
document all the details right from requirements of the system to the final testing. It is
recommended that the university has effective training to all the users and allow them to actively
participate in the implementation process. The effective testing and involvement of the staff is
recommended so that the inconsistency in the functionality can be identified before the system
goes live. CQU by changing its management approach can avoid all the possible risks involved
in implementing the new system. The risks can be avoided by effective communication,
coordination and involvement in the implementation process.
Conclusion
ERP systems enable organizations to integrate its business processes and increase the efficiency
and effectiveness of the processes by automating them and provide comprehensive information
required by the respective departments. ERP systems are complex systems and require increased
participation by all the stakeholders, clear understanding of the requirements from the system
and effective training and testing of the system before it goes live. CQU’s first enterprise
system implemented in the 1990s did not fulfill the requirements of the university since the
implementation process had several drawbacks. There was increased lack of understanding,
communication and coordination, which led to making the systems more complex and made it
difficult for the end users to use the implemented system. This created dissatisfaction among
the end users and led to several issues in accessing the system. The university’s decision of
adopting new ERP system from a local vendor would enable it to overcome the shortfalls
of the previous system but also involve increased risks due to the underperformance of the
previous emprise system. The possible risks include inconsistency I the systems and software,
employee resistance, increased business requirements due to the merger. By increased employee
and management involvement, standardization and effective training and testing the system
delivered by new vendor, the new ERP system would help in meeting all the requirements of the
university.
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