GSB 522
PEIT – Processing Enabling
Information Technologies
Implementation Model
1-1
PEIT:
Technologies that facilitate the execution of entire
business processes by fixing parameters such as
tasks, sequences, roles, responsibilities,
authorizations, options, and possible branches.
(Information Systems that embed business processes)
PEIT implementations are infrequent and difficult to
re-visit. It is not the case that managers can use
PEIT to fine-tune their organizations; instead the
decisions that get embedded during implementation
are long-lasting ones.
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Using IT to Forge New Business Processes
PEIT implementation brings new business processes
and business process change is organizational
change:
- Externally imposed
- Interdependence-increasing
- Sudden
- Large-scale
- Core
- Unignorable
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The Centrality of General Managers for IT Success
Types of decisions facing general managers with
respect to PEIT have far-reaching consequences:
- Organizational structure
- Performance
- Competitive strategy
- Relations with partner companies
-
Does a General Manager need to be deeply versed in
the technologies under consideration?
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IT’s Potential to Lower Boundaries,
and to Raise Them
How do PEITs increase the importance of internal
boundaries?
What effect does a PEIT have that crosses company
boundaries?
Respond to the proposition:
The dominant business organization of the future may not
be a stable, permanent corporation, but rather an elastic
network that may sometimes exist for no more than a
day or two …
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A Model for Implementing Process-Enabling
Information Technology
Descriptive causal link between factors and pitfalls
Prescriptive strategies for managers to influence
implementation
Groups
Pitfalls
Process
Technology
People
Strategies
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Pitfalls: undesirable circumstances in which an organization
implementing PEIT could find itself.
Pitfalls are not negative project outcomes (e.g., project delays,
cost overruns, deteriorating operational performance,
dissatisfied users, etc.) Pitfalls are the causes of these
outcomes.
Model seeks to identify not the symptoms of troubled
implementations, but instead the sources.

Inertia

Resistance

Mis-Specification

Misuse

Nonuse
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Factors:
Processes being enabled or changed;
Technology selected to do so;
People who will use the new technology;
Groups affected by the effort.
Process: Three Dimensions to Business Process
Change
1.
Volume
2.
Novelty
3.
Complexity
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Factor:
Technology: Two Dimensions
Template: specify, often with little flexibility, roles,
tasks, and sequences for accomplishing a process.
Promoted as “embedding best practices”
Tools: can be used by an organization to construct its
own processes. Sometimes accompanied by
recommended best practices.
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Factor:
People: Two Dimensions
Discretion: a person’s freedom to use the technology or
not when executing a process. ERP systems are
generally mandatory systems.
Sophistication: the technical sophistication of users has
been found to be a significant predictor of success in
implementation of software; this includes an
understanding of the idea of process interdependence
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Demand & Supply
Planning
Demand Planning &
Forecasting
Warehousing
Service Parts Planning
Invoicing
Production Planning & Detailed
Scheduling
Manufacturing Visibility & Execution &
Collaboration
MRP based Detailed Scheduling
Inbound Processing &
Receipt Confirmation
Outbound Processing
Cross Docking
Freight Management
Billing
Planning & Dispatching
Supply Network
Collaboration
Supply Chain
Management with Duet
Supplier Collaboration
Physical Inventory
Service Parts Order Fulfillment
Rating & Billing &
Settlement
Supply Chain Event Management
Strategic Supply Chain Design
Warehousing & Storage
Driver & Asset
Management
Network Collaboration
SAP NetWeaver
Sales Order Processing
Real World Awareness
Supply Chain Visibility
Distribution Planning
Purchase Order Processing
Order Fulfillment
Transportation
Supply Network
Planning
Strategic Sourcing
Procurement
Manufacturing
Safety Stock Planning
Auto ID / RFID and Sensor Integration
Supply Chain Analytics
Supply Chain Risk Management Sales & Operations Planning
Customer Collaboration
Outsourced Manufacturing
Demand Planning in MS Excel
Copyright SAP AG 2008
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Magal and Word ! Essentials of
Business Processes and Information
© 2009
11
© Systems
2006 The| McGraw-Hill
Companies, Inc. All rights reserved.
Factor:
Groups: Three Dimensions
Span: number of groups affected by a PEIT initiative –
can be inter- or intra-firm groups
Core: process is core to a group if members consider it to
be an important part of their mission
Autonomy: decision-making freedom of group with
respect to IT
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Understanding causal links between factors and pitfalls can
help managers identify ex ante the most significant nontechnical threats a given PEIT implementation project will
face.
Strategy categories to attempt to counter threats:
Level: at which project is governed
Style: managerial style adopted
Phasing: intended timeline and milestones
Scope: number of sites, divisions, geographies, functionality
Preparation: resources devoted to preparing the organization
and its members prior to cutover
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Categories of Benefit from IT Adoption
IT Infrastructure Improvement
Application heterogeneity is an important driver of overall IT
cost;
Performance Improvement
Response times, inventory levels, measures of process quality;
Business Process Standardization
Specify parameters that make non-compliance difficult
Organization Design
Software becomes enabler of new organizational model; e.g.,
centralized vs. decentralized decision structures
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