ERP Selection Facts and Figures Case Study
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Overview
of the Selection
A mid-market Engineer-to-Order manufacturer in the aerospace and defense
sector retained the services of TEC to help select an Enterprise Resource
Planning System. This system is intended to replace disparate applications
that lacked the functionality and integration to support the company's
Lean Manufacturing initiatives.
One
of the most important steps in TEC's selection methodology is the Scripted
Scenarios sessions. This step requires vendors that make the short list
to validate their functionality with respect to the client's business
requirements through product demonstrations (To learn more about TEC's
selection methodology see An
Overview Of The Knowledge Based Selection Process). The sessions require
the vendor to spend over 15 hours of demonstration time showing the client
how their software can be used to address specific business issues. Flexibility,
Ease of Use/Navigation and Process Fit were also evaluated. Four vendors
made the short list:
| Vendor |
Package |
| Oracle |
Oracle
Applications 11i |
| J.D.
Edwards |
OneWorld
Xe |
| SAP |
MySAP.com
R/3 v4.6 |
| IFS |
IFS
Applications 2000 |
The Scripted
Scenarios allowed TEC to gain a detailed understanding of the strengths
and weaknesses of each product. ERGO 2001, TEC's decision support tool,
was used to record and analyze the results of the scenarios (For more
information on ERGO 2001 see ERGO
2001 IT Evaluation Tool).
About
this note: This is a two part note. Part 1 includes the Business Scenarios
Model and Results. Part 2 contains the Qualitative Assessments and Analysis,
and User Recommendations.
Business
Scenario Model
TEC worked in conjunction with the client to develop over 450 specific
functional software requirements resulting from business issues (scenarios)
organized into a hierarchical tree. The high level illustration of the
business scenarios model below indicates how the scenarios were organized.
Figure
1. Business Scenarios Model Tree.
Hierarchical
functional requirements exist within each of the categories under Business
Scenarios. The client weighs the importance of each of these categories
as it relates to their business and scores each vendor on their ability
to demonstrate the product's functionality. The weights appear below.
Figure
2. Business Scenarios Model Weights.
Results
Figure 3 illustrates the overall percent match for each of the vendors
within Business Scenarios. Percent match is an optimal decision method
which measures the compatibility of the detailed expectations of the decision
maker, and compares it to ERGO 2001's detailed analysis of the options,
using pattern matching statistical loss function approaches. It is usually
a non-linear method of comparison.
Figure
3. Business Scenarios Results.
Figure
3 indicates that IFS took the overall lead in Business Scenarios by a
slim margin over SAP. IFS also fared well in Product Ease of Use/Navigation,
Process Fit and Flexibility. Figure 4 illustrates the results in Product
Ease of Use/Navigation. The client generally felt that both IFS' and JD
Edwards' products were intuitive and easy to use. JD Edwards' screens
mimic the windows explorer environment and IFS uses customizable, instinctive
right mouse click menu options. The client was impressed with the breadth
and depth of SAP, but was dismayed by the cumbersome screen navigation
and perceived steep learning curve. TEC felt that Oracle could have scored
higher in this area, but the demonstration did not run smoothly and may
have impacted client scores.
Figure
4. Product Ease of Use/Navigation Results
One
of the key differentiators during the demonstration was the vendors' fit
with the client's processes. This criterion, Process Fit, accounted for
13.5% of the model's overall weight. Figure 5 shows that IFS was the strongest
in demonstrating the best match to the client's processes while Oracle
and SAP were virtually tied for second place. JD Edwards' was not as strong
due to a very weak fit in Product Repair and Customer Service. This criterion
was dominated by Oracle, while JD Edwards showed the best fit with regards
to Production Material Management and Cost Accounting. IFS led the pack
in Product Definition, Supplier Definition and Procurement, Customer Definition
and Proposal, Sales Order Processing, and System Overhauls and Upgrades.
All vendors scored equally well in Goods Receipt & Handling, Goods Inspection,
and Goods Shipment & Delivery.
Figure
5. Process Fit
To
assess flexibility, TEC developed the criteria in Figure 6 with the client.
These factors measured the perceived cost and risk associated with the
implementation and modification of each vendor's proposed solution.
Figure
6. Flexibility Model Tree
Figure
7 illustrates the results in Flexibility. Both JD Edwards and IFS scored
well in Flexibility primarily because both vendors focus on reduced implementation
time and adaptable reporting and workflow features. Furthermore, IFS sells
applications as a set of integrated, loosely coupled components. Implementation
can be easily phased by choosing to implement a few components at a time.
Oracle and SAP were perceived by the client as being rigid, monolithic
applications that have a number of interdependencies amongst modules,
thus requiring significantly more implementation time.
Figure
7. Flexibility Results
Although
IFS had the overall highest score, it did not score the highest in each
section. Figure 8 is a radar diagram that reveals how well each vendor
did among the Business Scenarios sections as well as Product Ease of Use/Navigation
and Flexibility.
Figure
8. Radar Diagram of Vendor Scores
The
radar diagram indicates that all four vendors have very comparable products
with regard to functionality. What particularly differentiated the vendors
were Product Ease of Use/Navigation, Process Fit and Flexibility. These
areas of the model can significantly impact the final selection decision
depending on the importance assigned by the client. These three criteria
were significant differentiators in the decision because they carried
a combined weight of 36.5% in the model.
See
Part 2 of this note for the Qualitative Assessments and Analysis of the
vendors, and User Recommendations.
Sidebar
Information
The
graphs shown have been generated using the TEC's patented decision analysis
software ERGO (formerlyTESS), which uses the Multi-Attribute Utility theory
(MAU), Analytic Hierarchy Process (AHP) and TEC's patented decision science
to compare vendors and products relative to one another in a statistically
valid model.