Digging deeper into ERP

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Digging deeper into ERP

• Leveraging the material to date

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Analogy with Taylorism

• first attempt to systematically analyze human
  behavior at work
• attempt to make organizations look like machines
  easier to fix and update
• look at interaction of human characteristics,
  social environment, task, and physical
  environment, capacity, speed, durability, cost
• reduce human variability

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The two levels of Taylorism

• Practical intelligence workers
• Conceptual intelligence managers
• Mediated by the administration function of the
  firm

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Principles of Scientific management

• describe and bread down a task to its smallest
  unit science for each element of work
• restrict behavioral alternatives facing worker
• remove worker discretion in planning, organizing,
  controlling
• use time and motion studies to find one best way
  to do work
• provide incentives to perform job one best way
  -tie pay to performance
• use experts (industrial engineers) to establish
  various conditions of work

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Impacts and problems

• new departments-
• industrial engineering, personnel, quality
  control
• growth in middle management
• separation of planning from operations
• rational rules and procedures
• increase in efficiency
• formalized management, mass production
• human problems
• dehumanization of work sabotage, group
  resistance, hated by workers

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IS and Taylorism
One reason, then, that we expect top acceptance
of information technology is its implicit promise
to allow the top to control the middle just as
Taylorism allowed the middle to control the
bottom. Leavitt and Whisler (1958)
The computer and the new decision-making
techniques associated with it are bringing
changes to white-collar, executive and
professional work as momentous as those that the
introduction of machinery has brought to manual
jobs. Simon (1977)
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ERP is the closest we have come

• Earlier forms of systems have not had such an
  impact on middle management
• No one has studied to what extent these changes
  are positive
• Taylor has been somewhat discredited after all

One must consider the impact of IT in terms of a
"radical re-organisation of middle management
..., with certain classes of middle management
jobs moving downward in status and compensation
(because they will require less autonomy and
skill), while other classes move upward into
the top management group. Leavitt and Whisler
(1958)
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Parameters in ERP implementations

• Integration
• Application
• Services
• Standardisation
• Business practices
• Centralisation
• Decision making
• Control
• Acceleration
• Information flows
• Business cycle
• Cost reduction

And the two levels at play are Top
management Users of ERP system Managers at
local level / Operators
It is very similar to Taylorism
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Second degree impact

• Trivialisation of tasks
• Automation of decision making
• Middle managers should be monitoring How the
  system is being used system process versus
  physical process
• How does this fundamentally affect the firm?
• HRM / change management
• Knowledge management / Know how
• Responsiveness
• What will the firm look like?

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Two interpretations of the same story

• Software vendors are like the Sorcerers
  Apprentice
• They created software that has dangerous side
  effects
• Managers are ignorant of the impact they are
  having when implementing ERP
• Software vendors have finally delivered on top
  management everlasting dream of grinding the firm
  to its simplest form.
• Top managers knowingly use ERP as Trojan horse
  for imposing restructuring of a kind that would
  not be acceptable otherwise.

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So is ERP
Or
?
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Evidence

• Scenario 1
• Case studies of reported problems Hershey /
  Whirlpool
• Belongs in the past?
• Scenario 2
• Exemplar case studies Microsoft / Erickson
• Modern scenario?