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Improving Air Force Enterprise Resource Planning-Enabled Business Transformation

Improving Air Force Enterprise Resource Planning-Enabled Business Transformation

Jessie Riposo
Guy Weichenberg
Chelsea Kaihoi Duran
Bernard Fox
William Shelton
Andreas Thorsen
Copyright Date: 2013
Published by: RAND Corporation
Pages: 88
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  • Book Info
    Improving Air Force Enterprise Resource Planning-Enabled Business Transformation
    Book Description:

    RAND Project AIR FORCE identified key conditions to aid the success of business transformation enabled by enterprise resource planning systems, challenges the Air Force must address to achieve them, and options for overcoming these challenges.

    eISBN: 978-0-8330-8372-2
    Subjects: Technology, Business, Management & Organizational Behavior

Table of Contents

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  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures
    (pp. vii-viii)
  5. Tables
    (pp. ix-x)
  6. Summary
    (pp. xi-xvi)
  7. Acknowledgments
    (pp. xvii-xviii)
  8. Abbreviations
    (pp. xix-xx)
  9. 1. Introduction
    (pp. 1-6)

    Over the years, information technology (IT) has played an increasingly significant role in the way organizations conduct business. Initially, IT was used chiefly to achieve operational efficiencies by automating routine tasks of existing business processes. Subsequently, IT began to be used to enable improved management planning and decisionmaking, primarily through the collection, analysis, and timely dissemination of improved data. In some instances, IT has even served as the key enabler of an organization’s strategic goals.¹ In sum, IT has evolved from a narrow tool for automation to a potential enabler of business transformation.²

    Enterprise Resource Planning (ERP) systems, which grew...

  10. 2. Business Case
    (pp. 7-12)

    The purpose of the business case for an IT project has traditionally been to justify the investment required for the project, usually in financial terms. However, as the role of IT evolved from automating routine tasks of existing business processes to enabling fundamental business change—such as improving visibility of personnel and other assets in the case of Air Force ERPs—the role of the business case has expanded too.

    The initial purpose of a business case is to justify a project’s required investment. However, this justification must reflect the fact that projects involving IT—especially multifunctional IT, such as...

  11. 3. Governance
    (pp. 13-18)

    Governance should support focused decisionmaking using criteria based on the business case to achieve the organization’s overall goals. Because these decisions affect all levels and areas of the transformation, governance needs to be consistent across echelons (from the enterprise to the specific program level); align stovepipes; and be applied across BPR, OCM, and IT acquisition.

    Decisionmaking criteria are a direct output of the business case. These criteria establish a foundation for resolving issues in a timely and effective manner—regardless of the governance structure selected (multi-echelon or multifunctional).¹ Value-added governance must be timely and effective enough to support the success...

  12. 4. Business Process Reengineering
    (pp. 19-22)

    BPR is defined as the radical redesign of business processes to achieve dramatic improvement in business performance (Hammer and Champy, 2003). BPR is typically pursued to improve processes, increase productivity, reduce costs, improve customer service, and provide a competitive advantage. Continuous process improvement (CPI) is similar to BPR in that the objective is to reduce cost, improve productivity, or improve some other aspect of business operations. Both are important activities that the Air Force should pursue. However, CPI is generally associated with marginal changes, rather than the radical transformations sought in BPR.

    Achieving the goals and objectives of BPR often...

  13. 5. Organizational Change Management
    (pp. 23-28)

    As has been discussed, transformational efforts, including those associated with ERP system implementations, typically affect a large number of organizations and processes. While change in general can be difficult to navigate, the tension and disruption involved in a business transformation and ERP implementation are somewhat unusual. For example, the integration, transparency, and process-oriented management enabled by an ERP system are often highly valued by top-level leadership, but can be at odds with an organization’s structure, processes, and culture. This is particularly true for hierarchical organizations structured around independently operating, or stovepiped, business units, as is the case with the military...

  14. 6. IT Acquisition
    (pp. 29-36)

    In all but the rarest cases, technology should not drive business system selection. Any of the technology alternatives discussed below can be made to work given sufficient time and resources. However, some are better suited to achieving particular organizational objectives than others. Therefore, clear thinking about enterprise goals, constraints and expectations in the initial planning stages is crucial. Once these goals and expectations are set, they should be consistently reinforced through communication, acquisition activities, metrics, incentives, and governance to develop shared commitment of all parties.

    Once the enterprise objectives have been decided upon and communicated, and initial BPR has been...

  15. 7. Summary and Recommendations
    (pp. 37-46)

    In this report, we have defined success of an ERP-enabled business transformation as the realization of business benefits aligned with enterprise goals, within designated cost and schedule constraints. This could become increasingly important to the Air Force as today’s fiscally constrained environment further drives the need for increased efficiencies and savings. As noted in the introduction, the conditions to realize success apply to both the private and public sectors. But the Air Force faces challenges that increase the difficulty of achieving these conditions. Based on RAND interviews and literature reviews, the fundamental motivation for undertaking an ERP acquisition is to...

  16. Appendix A. Planning Activities
    (pp. 47-52)
  17. Appendix B. Implications for Program Assessment
    (pp. 53-60)
  18. References
    (pp. 61-68)