10

CHAPTER 2

THEORETICAL FOUNDATION

2. Theoretical Foundation

This chapter will describe the theories that include the history of ERP and substances of

terms, concepts, and methodology that will be used inside the Discussion, Evaluation,

and Analysis.

2.1 Information System Definition

2.1.1 Definition of Information

According to Rob and Coronel, Information is data processed to reveal specific

meaning

.

According to Liu

Information as a variable carried by signs of one kind or another,

processing and communicating of information is performed by creating, passing, and

utilizing signs.

Information described by MacNurlin and Sprague

as data in context, or in other

word the data with explicit meaning in a specific context.

P.Rob, C.Coronel, Database Systems: Design,Implementation, and Management, 8 ed. , United States:

2009.

K.Liu, Semiotics in Information Systems Engineering, Cambridge: Press Syndicate of The University

of Cambridge, 2000.

11

2.1.2 Definition of System

System is collection of units or component that is well organized and interrelated one

to another intended to accomplish a single purpose or specific set of functions

.

According to Grady

system is any objects consisting of more than one part that

cooperatively working together to achieve some common goal, function, or purpose

Kerzner define system as a collection of subsystem that interacting at each other and

if organized properly can provide a synergist output

2.1.2.1 Use Case Diagram

Use case diagram shows the users interaction with systems. Use Case Diagram is

very useful to determine user‟s requirement for the systems and is often used as a

tool to gather user requirements.

B.C. McNurlin,R H. Sprague, Jr., Information Systems Management in Practice, sixth ed. , Delhi:

Dorling Kindersly, 2004.

P. Gupta, Structured System Analysis and Design, First ed , Delhi: Firewall Media, 2005.

J.O Grady, System Requirements Analysis, USA: Elseiver Inc., 2006.

12

Figure 1 - Use Case Example

2.1.3 Definition of Information System

Information system is an integrated component working together to collect, produce,

store, and spreading information that support in decision making, problem handling,

analyzing, and engineering inside an organization

.

2.2 Project Management Definition

A project is a temporary effort performed to create unique product, service and result

.

According to Scwhalbe

Project management is the application of skills, knowledge,

tools and techniques to perform project to meet project objectives.

Potter,Turban,Efraim,Rainer,R.Kelly, Jr.,Richard E., Introduction to Information Technology, John Wiley & Sons,

Inc., 2001.

13

According to McNurlin

, a project management can be considered as successful when

it has the following characteristics:

1. Delivered on time

2. Finished on or under budget

3. Meets the original objective

Figure 2 - Time, Scope, and Budget Relations

Scope Creep: changes or request made to a project after the project has been approved or

under process. Often results in increased cost, time, and effort to complete the project

.

PMBOK Guide(2004), , Third ed. , January 3,2006.

Schwalbe, Information Technology Project Management, Fourth ed. , Thomson Course Technology, 2000.

G.H. Gaynor, What Every New Managers Nead To Know, Fourth ed. , USA: G.H.Gaynor and Associates, Inc.,

2004.

14

According to the Standish group (2006) there are 10 factors that help information

technology project to be successful:

Table 2 - Standish Group Successful IT Project Factors

10 Factors for successful IT project.

1. User Involvement

2. Executive Management Support

3. Clear Business Objective

4. Optimizing Scope

5. Agile Process

6. Project Management Expertise

7. Financial Management

8. Skilled Resources

9. Formal Methodology

10. Standard Tools and Infrastructure

The lists are constructed according to the level of importance. The user‟s involvement

has become the most important factor for an IT project to be successful, it even surpass

15

the necessity of executive support in a project in which was the most important project

success factor according to previous research.

A recent study of 247 information system project practitioner in china stated that

relationship management is the key success factor in china and surprisingly the result of

the study stated that competence team member is not highly considered in china.

However, it is believed that executive support, user‟s involvement, and experienced

project manager are still considered as top key success factor

.

2.2.1 SDLC Project Development Phase:

SDLC: System Development Life Cycle: A method of developing system by

following several phase from Requirements Design Implementation

Verification Maintenance.

Traditional (Waterfall) Model: The project follow specified phase, each phase

fall into the next phase, once arrived at the next phase of SDLC, it is unable to go

back to previous phase.

Iteration Model: Work activities are repeated in iteration. Each iteration

performed will evaluate previous result and performs changes or reconstruction of

the previous phase. Only after the results are satisfying that the development

begins.

16

Figure 3 - Iteration Model SDLC

Agile Software Development: Development activities that break task of

developing software into several tiny increments. Each increment is performed in

fast short time frames (around 1 to 4 weeks). Each iteration will follow a full

SDLC phase similar to Iteration Model. Agile Software Development model

enable to adapt with changes and minimize overall risks. Agile Software

Development is not easy to achieve and usually require (1) cross-functional project

team, (2) face-to-face communication, (3) strong customer involvement, etc

2.3 ERP Description

ERP stands for Enterprise Resource Planning and Jacobs and Whybark

clearly

explained in their book that ERP is not software but rather a method that allows

company to integrate the business process to provide management with up-to-date data

which is necessary to help in performing quick and accurate decision making. When

people think of ERP as software, what they thought was actually known as Enterprise

System or Enterprise Software. Jacobs and Whybark provide a diagram that shows the

differences between ERP and Enterprise System.

F.R. Jacobs and D. C. Whybark, WHY ERP? A primer on SAP Implementation, Fourth ed. , USA: Jeffrey J.

Shelstad, 2000.

17

It is important to note that what we know nowadays as ERP is not the same like what it

was in the past. ERP was more specified as a tool to help manufacturing company in

their supply chain of materials and it was known as the Material Requirement Planning

system (MRP). The idea of creating MRP system was generated from the fact that a

company can no longer utilize the method of „reorder-point-system‟, the system that

assume customers would continue to order what they had before and there will be no

significant change in the order so it is only important to keep the inventory supplied with

enough goods to fulfill the historical demand.

As the business grow, people began to think about more efficient way in handling the

inventory system to prevent the oversupply or undersupply condition to occurs since

E

R

P

E

S

ERP PROCESSES NOT

PART OF A TYPICAL ES:

Sales forecasting Sales and Operations

Planning Advanced Planning System

Supplier Rating Systems

Performance Metrics

ERP PROCESSES FOUND IN A TYPICAL ES:

Master Production Scheduling Rough-Cut Capacity Planning

Material Requirements Planning

Capacity Requirement Planning

Distribution Requirements Planning

Customer Order Entry and Promising

Performance Metrics

NON-ERP PROCESSES FOUND IN A

TYPICAL ES:

Accounts Receivable

Accounts Payable

General Ledger

Cash Management

Customer Relations Management

Human Resources

Data Warehousing

Figure 4 - ERP Processes

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both problems are quite costly to handle. Thus people began to emerge for management

operating system. In 1967 IBM helped bring to market the first management operating

systems (MOS). It then continued to bring field developed programs to plan and manage

inventory to the general market. In 1970 the terms “Material requirements planning”

were commonly used.

The MRP system is the first inventory management system to provide manufacturing

industry with planning function by automatically arranges the scheduling of not only for

what was going to be produced but also the scheduling of the required materials that

were needed to finish the product and reordering time. The MRP will then evolve to

handle bigger scope. Inside MRP, there is the original main idea of the ERP system,

which is to automatically process abstract data to provide crucial information that is

required in decision making.

Figure 5 - ERP Growth Rings

19

Figure 5 shows the growth of system until it became an ERP. Each layer is built on the

fundamentals and principles developed in the previous layer.

BOM Processor

It was started with BOM Processor written on a 1400 disk computer in Milwaukee.

BOM stance for Bills of Materials, BOMs is software once used by the engineering

department to create and edit company bill of materials. BOMs helps company to create

and edit bill of materials by providing descriptions and other detail information of a

selected parts using a dropdown combo box.

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Material Requirements Planning

The next layer is MRP. The main capability of MRP system is to answer the question

WHAT. This capability is based on its function in scheduling an item that was going to

be produced. The detail information of the under process product is supported by BOMs

processor capability that shows the list of materials that were needed to finish the item.

Moreover, this system also includes the capability to calculate the total need of materials

and compare it to what was already on hand. Thus it is possible to get a clear view of

what item is to be produced, what is the needed materials, and what is existed inside the

inventory. All these data will enable company to plan for reordering materials.

Closed Loop MRP

The third layer is the Closed loop MRP. Soon after people becoming more familiar with

the MRP system, they began to realize that the MRP system has more far greater

Figure 6 - BOM Software

21

capability than just giving signals of reordering materials. It is found out that MRP

system also has the capability to keep order due dates valid after the orders has been

released to production or to suppliers. Hence, MRP will be able to determine when

orders are scheduled to arrive and combine it with when it is required. Therefore, the

closed loop MRP or known as “big MRP” was created, it upgrade the old MRP system

with the priority planning that is the functions of keeping order due dates valid and

synchronized with changes. Furthermore, it also introduces technique to deal with

capacity requirements planning.

Manufacturing Resource Planning

The fourth layer is MRP II in which stands for Manufacturing Resource Planning. It was

started from the realization that when an inventory moved the other department such as

finance or accounting, the other departments also need to cope with the movement by

performing some changes on their data. With the current technology, it was possible to

link between the materials with the financial accounting system and financial

management system. Basically MRP II provides a method for effective planning of all

resources of the manufacturing company by integrating business planning, sales and

operations planning, capacity requirement planning, and the execution support systems

for capacity and materials. The MRP II systems will integrate the product output with

financial reports. This is the main idea of the Manufacturing Resource Planning.

Enterprise Resource Planning

The last layer is ERP which stands for Enterprise Resource Planning and is the system

that we commonly see being used by many major companies. Despite the fact that it was

22

Figure 7 - Scope of ERP applications

originated from resource management system, today ERP systems include every

functional area that exist in an organization regardless the type of business it has. We

can see that each layer provide additional link with a new functional area, this is

continued by the ERP that it provide the capability of linking not only one or two areas

but all of them because it see an organization as an entity in which each areas are in need

of one another.

ERP will consider every aspect inside the whole organization as part of the system and

create link between each aspect to enable the sharing of information throughout the

entire organization. ERP allow the implementation of only parts of the software

depending on the needs or requirements of the organization. However, a complete ERP

implementation will provide an organization with highly integrated system and enjoy the

full benefit of ERP system.

23

According to Wallace & Kremzar

, Enterprise Resource Planning systems (ERP) can

be described as:

An enterprise-wide set of management tools that balance demand and supply

Containing the ability to link customers and suppliers into a complete supply

chain

Employing proven business processes for decision making

Providing high degrees of cross-functional integration among sales, marketing,

manufacturing, operations, logistics, purchasing, finance, new product

development, and human resources, thereby

Enabling people to run their business with high level of customer service and

productivity, and simultaneously lowering costs and inventories and providing

the foundation for effective e-commerce

This theory is synch with the illustration that F.Rober Jacobs and D. Clay Whybark [12],

provide in their book “WHY ERP? A Primer on SAP Implementation”. In their book

they depict a company as a star.

Each of the point represents one

functional areas of an organization; in

this case there are 5 functional areas.

This figure shows the common database

usage in a company. The arrow from

T.F. Wallace and M.H. Kremzar, ERP: Making It Happen, Canada: Jhon Willey & Sons,Inc., 2001.

Figure 2.4 Legacy Systems

Manufacturing

Marketing

Accounting Finance

Information Technology

Marketing

Figure 8 - Common Legacy System

24

the point of the star shows the flows of data, the data goes from the points of the stars

which is the departments in the company to the center which is the shared database.

People from different functional areas will take the information out from the shared

database according to their needs. This process allows flexibility in how information is

used on each functional area. Note that we can also see that there is a possibility problem

when one department is performing data mining. It is common that each functional areas

use different software from a specific vendor to best meet their requirement and

therefore the actual story is that although each functional areas share the same database,

they actually store the data in an abstract or different format one to another. In that way,

the process of data mining will require another program to convert the different format

into the same type. This process is very time consuming, complicated, and risky.

F.Rober Jacbos & D. Clay Whybark[12] then insert the ERP system into this Figure 8

and thus providing us with a

vision of ERP functionality in an

organization. If we look at the

Figure 9, we can see that each

functional area are now linked one

to another not only through the

database but directly from the

application as well. The difference in this Figure 9 and Figure 8 lies in the linkage or

information sharing between each functional area is performed automatically by the

systems and no longer by people from different department. Hence, we can conclude

that all the departments are using single software (that is ERP) which is running under

Manufacturing

Information Technology

Marketing

Accounting Finance

Figure 9 - ERP systems overview

25

the same platform and stored in the database with the same format in a way that already

specified by the software. Thus, this fact eliminates the problem of the legacy system of

many companies.

2.4 SAP

SAP is one example of ERP and it is the market leader in ERP solutions. SAP stands for

System Application and Product for data processing. SAP was developed in German and

now has been widely used by many companies all around the globe.

Align with ERP, SAP provides integration for the business process and it consists of

several modules available to support the business process.

26

Figure 10 - SAP R/3 Modules

In a complete implementation, all the modules are linked together and formed an

integrated business process of a company.

2.4.1 SAP Product

SAP Business Suite: SAP Business Suite is a set of integrated application that enable

small and midsize enterprise to optimize business and IT strategy. SAP Business Suite is

the most expensive type of SAP product because this software is the most flexible

software among the other entire SAP product. SAP Business Suite allow customer to

27

perform modification and customization on the modules and capability to link the

system with other system. SAP BS software provides company with best practice in

specific industry applications. SAP Business Suite consists of:

SAP Customer Relationship Management

SAP ERP (Enterprise Resource Planning)

SAP Product Lifecycle Management

SAP Supply Chain Management

SAP Supplier Relationship Management

SAP Business One: SAP Business One is another example of SAP product. Unlike SAP

Business Suite, SAP Business One only allow small modification on the module and

function of SAP and therefore are less flexible but cheaper compared to SAP Business

Suite.

SAP Business All-in-One: SAP Business All-In-One is the most rigid software among

SAP Business Suite and SAP Business One. SAP Business All-In-One is in the form of

fixed software and will not allow any modification on the system. SAP Business All-In-

One is the cheapest SAP Product.

SAP ERP: SAP ERP is SAP company main product and is part of SAP Business Suite.

SAP ERP consists of several modules that support key functional areas, The SAP ERP

products are:

SAP ERP Financials

28

SAP ERP Logistics

SAP ERP Human Resource Management

SAP Specific Industry: Extended SAP software that provides best-practice ERP system

for specific industry specified in Table 1.

SAP NetWeaver: SAP NetWeaver is a web-based, open integration, and application

platform that serves as foundation for Service-oriented architecture (SOA). It allows the

integration of people, information, and business process across the organization

boundaries. SAP NetWeaver is the foundation of SAP Business Suite.

mySAP: mySAP can be considered as an e-business software that enable users to work

with SAP application by using Web browser or Internet appliance tools to access

mySAP via web portal called a “workplace”.

ABAP: ABAP stands for Advanced Business Application Programming and is a very

high level programming language created by SAP that is being used to develop SAP R/3

system applications. SAP customers can develop their own report format and interfaces

with ABAP programming.

SAP R/3: SAP R/3 is the former name of SAP ERP. The R from R/3 was for „Real time‟

data processing and the „3‟ was for 3-tier client-server architecture being used. SAP R/3

has been updated through several versions.

29

2.4.2 SAP Higher Education and Research

SAP Industry Specific product that focusing on the core business of education industry.

SAP Higher Education and Research helps to enhances operational efficiency and

improve faculty, student service, and staff by:

Performing Efficient Management that support all processes from front office to

back office that includes students, alumni, financials, operations, procurement,

reporting, human resources, and analytic

Unifying people, information, and process by using NetWeaver as the integration

platform of the systems that allows spread of information via mobile or portal,

provide solutions for knowledge management, business intelligence, master data

management, and application server technology. It Changes the nature of every

organization from using heterogeneous systems into homogeneous systems.

Promoting a Customer-Focused Mind-Set by improving the efficiency of

communication with various stakeholders.

SAP Higher Education and Research support the following business activity:

Student life-cycle Management – support all aspects of students life cycle from

potential student until alumni.

Grants and Funds Management - sponsored grant programs and all involved in it

Financial management, budgeting, and planning

Relationship management, institutional development, and enrollment

management – multichannel communication to internal and external elements.

30

Governance and compliance – help in document creation when dealing with

executives, auditors, and regulators

Human Capital Management – build better relationship with employees,

streamline and integrates important processes such as administration, payroll,

and time management.

2.4.3 SAP ERP Finance Module

Each module in ERP consists of many functions and each function consists of several

applications. The SAP FI (Finance) enable company to get greater visibility across

organization, increase operational efficiency and effectiveness, and perform efficient

accounting and reporting. FI modules have 4 main functions consisting of:

Analyzing

o Management of Internal controls

o Strategic Enterprise Management

o xAPP analytics

Account

o Account Payables, Account Receivables, and Fixed Assets

o Cash and Liquidity Treasury

o Cost Center Internal Orders Profit Center

Report

o Financial Analytics

o Audit Support / AIS

o Business Consolidation

31

Closing

o Intercompany Reconciliation

o Closing Cockpit

o General Ledger

The functions can be implemented on a step-by-step basis depending on the business

requirements some of the applications can be ignored.

In SAP ERP, Accounting function is integrated inside the finance module.

An integrated SAP ERP Financial module will also be able to enhance the supply

chain of accounting process which includes :

o General ledger management

Figure 11 - SAP ERP Financial Modules Functions

32

o Account Receivable and Account Payable functions

o Financial Closing function.

SAP FI modules enable the management of overhead cost, profitability analysis,

controlling structured reports, and ensuring accuracy of financial statements.

2.5 A.S.A.P

A.S.A.P stands for AcceleratedSAP and it is a method developed by SAP to deal with

both organizational and technical affair in the implementation project. ASAP will help in

minimizing the time required and perform more cost-effective implementation process.

ASAP provides guidelines of the task required, who needs to do the task, and how to do

the task.

ASAP was generated from the best practice in SAP implementation process by

analyzing SAP customers implementation experience from around the world.

Figure 12 - ASAP Roadmap

33

Figure 13 - ASAP category and flow

Every task to be performed in the ASAP method must follow the specified phase

generated by ASAP and they are:

1. Project Preparation

The initiation of the project and perform plan for the successful implementation this

includes define goal, objective, scope, budge, time, project team, and other strategic

decisions.

2. Business Blueprint

Gathering requirements and developing a conceptual design for the specific process.

3. Realization

The solutions are being developed; this is where the solutions are being tested by

project team and the first phase of end-users training performed.

34

4. Final Preparation

The final tests before the system go live. Data migration and end-user testing will be

conducted in this phase.

5. Go live and support

The new systems are being used as part to support the business process. During this

phase, end-users must provided with a long-term support

ASAP usually suggest the availability of three systems upon performing software

development, code modification, or handling the change request. Each of the systems

will perform different functions consisting of three main systems. They are:

Development System

Quality Assurance System

Realization System

35

Project

Preparation

Business

Blueprint Realization Final

Preparation

Go Live and

Support

Development

Quality Assurance

Production

Conceptual

design

performed

Planning for

software

development

Developing

system based on

trial and error

method

Customize the

System

Perform Change

Request

Import the

change request

performed in

the

development

system

Test and

validate the

customization

of software

Develop error-

free

customization

on the system.

Import the

released change

request form

Quality

Assurance system

Run customized

application

System I System II System III

Installation

Installation

Installation

Figure 14 - Systems Utilization and Function

36

2.6 Client Server Architecture

2 Tier

Two-Tier Client-Server architecture consist of the client (tier1) which is responsible

for the presentation of data to the user, and the server (tier2) which responsible for

supplying serviced data to the client.

o The presentation layer will handle User Interface application.

o Client will take user‟s request perform check on the syntax and automatically

generate database request into a database language and transmit the data into the

server.

Figure 15 - Two Tier and Three Tier Client Server Architecture

37

o The server will take the request, process the request and transmits the result to

the client.

Three-Tier Client-Server architecture consists of Client (tier1), Application Server

(tier2), and Server (tier3).

o The three-client server architecture will enable reduction in resource required to

run application in Client computer .

o Three-tier client able to reduce the amount of workload to the server by using

the application server to handle data processing logic and balance the client

request to the server

.

Architecture Low

Hardware

Cost

Low

Communication

Cost

High

Consistency

Level

‘Thin’

Client

Load

Balancing

Two-Tier √ √ √ x x

Three-Tier √ √ √ √ √

T.M. Connolly and C.E.Begg, Database Systems, Fourth ed. , USA: Pearson Education Limited, 2005.

38

2.7 System topology

Brand

explained that there are two topologies in implementing SAP R/3, they are:

Linked R/3 Systems

In linked R/3 systems, the SAP is installed in every client. All of the client are

link to the R/3 system installed in the central / headquarters trough an interface

developed by SAP, Application Link Enabling (ALE)

Central R/3 Systems

In Central R/3 Systems, the SAP system is installed in the central/headquarters

only and all the users in the client can access the SAP system on the front end via

wide area network (WAN) or Local Area Network (LAN) connections.

2.8 System Migration

Upon changing into an SAP, it is important to decide the strategy to replace the legacy

system with the new system and how to perform data migration from the legacy system

into the new system.

There are two options to perform changes, the changes can be done either by performing

full migration (Big Bang) style or Step-by-step migration (cooperative operation)

Big Bang

Using this plan, R/3 will replaces all application in the legacy system at a given

time. Thus, a permanent interface of the legacy system is unnecessary.

H. Brand, SAP R/3 Implementation With ASAP : The Official SAP Guide, 1999.

39

Step-by-step migration

With this option R/3 will replaces only part of the legacy system depending on

the priority and other considerations from the project management team. The

new system application then will require a permanent interface to the legacy

system. This approach will be able to protect the investment in the mainframe

hardware and knowledge and provide less risk of failure.

2.9 Data Migration

There are three types of data to be exchange from the legacy system into SAP, master

data, open transaction data, and completed transaction data.

Master data is data of customers, suppliers, and account. Normally, all the

master data from the legacy system can be used for the master data in SAP and

therefore it is possible to be imported into SAP.

Open transaction data refers to the business processes that are still ongoing

such as open customer orders. Importing open transaction data require the related

business process within R/3 to be repeated until the data or transaction left the

legacy system.

Completed transaction data is data that belongs to the transactions that are

already completed.

40

There are three ways to exchange data automatically from legacy system into the SAP

system. The three processes are Batch Input, Call Transaction, and Direct Input.

Figure 16 - Data Migration Process

Batch Input

Batch input is the method that often used to perform data transfer into SAP

system automatically and therefore it is suitable to enter large amount of data.

Also, batch input system is good for periodic data transfers but not suitable for

near real time data transfers.

There are two typical uses of batch input:

One-Time Data Exchange: All the data from legacy systems are formed

in a bulk and imported at the same time into the SAP system.

41

Periodic Data Transfer: The transfer of data is performed for every

specified/periodic time. The data transfer can be performed either daily or

hourly but not real time.

SAP provide program/application support for batch input transfer that are ready to

use but customers can also create their own “data transfer” program to convert data

from external system into the format required by SAP batch input program. After the

data format from external system equal to that of batch input requirement, an

automatic data transfer can be performed.

Figure 17 - Batch Input Process Flow

The batch input process started with decisions of migrating data from external source

into SAP. The external source can be:

Data from legacy system

Data from another SAP system ( system I, II or III)

Data from other systems (outside legacy system)

Next stage is to decide the process for data transfer. The questions such as how often

data is available from the external system, how often should the conversion process

42

performed, and should the conversion program runs on external system or other SAP

system must also be decided. During the second state, the converted data are stored

in the batch input folder. The third stage is where the data conversion begins. The

reformatted data from the batch input folder are transferred automatically into SAP

system and the next stage is to check for errors during transaction should they

occurred, the errors then be analyzed and corrected. The batch system ensures that

completed transaction can only performed once, means an error transaction should

be reprocessed for correction.

Call Transaction

Call transaction is an alternative data conversion other than bath input procedure.

The first stage is about the same with Bath Input procedure, the data from externally

systems are reformatted to match the SAP batch input requirement. However, Call

Transaction procedure does not require the data to be stored in batch input folder,

instead the reformatted data directly inserted into SAP system. Call Transaction

procedure is therefore faster but riskier than batch input file.

43

Figure 18 - Batch input and Call dialog data migration

Direct Input

Direct input procedure will writes the data directly into SAP database using a

standard function module. A Direct Input procedure is useful to import a lot of data

very quickly, however Direct Input procedure is difficult to program and only a

limited number of Direct Input programs are provided by SAP. Without a

44

standardized format in the data from external systems Direct Input procedure cannot

be used. Direct Input process has the highest risk in performing data migration.

Table 3- Direct input Program Supported by SAP

Program Name Functions

RMDATIND MM Create Material master data

RFBIBL00 FI Create Account documents

RVAFSS00 SD Invoicing external transactions

RAALTD11 AM Create Asset Account documents

RKEVEXT0 CO-PA External data transfer to CO

2.10 CSF and ASAP process relevance

Estevez and Pastor

developed a guideline to check CSF relevance in accordance to

ASAP process.

Figure 19- ASAP - CSF relevance Diagram

Esteves J., Chan R., Pastor J., Rosemann M 2003."An exploratory Study of Knowledge Types Relevance along

Enterprise Systems Implementation Phases", The fourth European Conference on Organizational Knowledge,

Learning and Capabilities, April 2003.

45

Process Quality Management Method: Method developed by IBM to assist the

management team to gain idea of the most critical business activities whose

performances will cause the biggest impact on the success or failure of an enterprise

Estevez and Pastor use PQM method to develop the CSF to determine factors on

implementation process that has the biggest impact on the success or failure of a project.

Four steps were used by Estevez and Pastor for PQM method

First Step: Devine the mission, Estevez and Pastor define their mission as “to

implement the SAP system, according to the organization‟s business and

organizational needs” and “to show that the SAP implementation will add value

through the satisfaction of the organization requirements previously defined”

Second Step: Define the CSF. The CSF defined by Estevez and Pastor will be

used as the variable.

Third Step: Define the process. The process used will be the process in ASAP

methodology

Fourth Step: Establish the relationship between CSF and ASAP methodology by

using Grounded Theory Method.

Grounded Theory Method: An approach of research methodology that require

existence of principal data and discovery of independent variable, categories, or

component and try to find their interrelationship

.

Ward, B. "Planning for Profit", "Managing Information Systems for Profit", T. J. Lincoln, John Wiles

& Sons Ltd., 1990, pp. 103-146.

Glaser and Strauss. 1967. The Discovery of Grounded Theory.

46

The grounded theory method will find the interrelationship between ASAP process with

CSF proposed by Estevez and Pastor using a matrix as shown on Table 4.

Table 4 - Relationship between CSF and ASAP process for Project Preparation Phase

The matrix will show the CSF relevance on each phase existed in ASAP. The values

were generated by accumulating the occurrence number of a particular CSF in the

specified project phase. Table 4 stated that during the project preparation phase, the

number of management required were two and the adequate project champion role were

seven, this means that during the project preparation phase the role of project champion

is more important compared to management support.

Estevez and Pastor has finished the research on every ASAP phase and the results are

presented below.

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Table 5-CSF Relevance Along the ASAP implementation Process

The scores specified in Table 5 are not the raw scores taken from Table 4. Instead,

Estevez and Pastor perform normative scale of ten scores to define the scores in Table 5.

The scores will define how high is the relevancy between the particular CSF with the

ASAP phases.

1-3: No relevant

4-7: Normal Relevant

8-10: High relevance

The scores for scales were determined by the comparing the particular CSF score with

the total score generated for the particular phase.

The result of Estevez and Pastor is very useful upon:

1. Understanding the relevance of each CSF in each ASAP phase towards the SAP

implementation project.

2. Get clear view of CSF that need consideration for each ASAP phase.

3. Better control and monitor the success of SAP implementation project.