‘ S o m e c o m p a n i e s h a v e b u i l t t h e i r v e r y b u s i n e s s e s o n t h e i r a b i l i t y t o c o l l e c t , a n a l y s e a n d a c t o n d a t a . E v e r y c o m p a n y c a n l e a r n f r o m w h a t t h e s e f i r m s d o . ’
Jurgen Kolkman
Improving information
quality @ Plymovent
Author Ing. J.G. Kolkman Bsc. Email: jurgenkolkman@gmail.com Student Number: S1403443 Institution Rijksuniversiteit GroningenFaculty of Economics and Business Msc. Technology management
Supervisors University of Groningen
Preface
This report is the final deliverable of my Master’s thesis project of the program Technology Management at the University of Groningen. I performed a research at Plymovent in Alkmaar in the field of Information Management and ERP
implementations. In random order, I would like to thank the following people who helped me during the project.
First, I would like to thank my supervisor dr. Van Wezel of the University of Groningen for his guidance and feedback. It took a long way to finalize this thesis, but he always gave me relevant feedback when I needed it.
Furthermore, I thank my colleagues of Plymovent for providing me a wonderful time a great support during my internship. I have special thanks for my
supervisors Kees Zuurmond and Chris Achterkamp. They always supported me during my research and provided me with a lot of knowledge about Information Management.
Finally, I would like to thank my family and friends for their faith, support and lots of patience. It was really hard for me to fulfil this thesis and I am very proud they always kept believing in me. In particular my girlfriend Marloes, I couldn’t do it without you.
Jurgen Kolkman
Management Summary
Plymovent is a leading company in providing solutions for air extraction and filtration. Over the last decades, the Plymovent organization extended by acquiring several subsidiaries. Almost every subsidiary has its own, separate information system to manage the information available. As a consequence, managing the information company became very difficult and caused many issues related to the quality of information. And for making justified business decisions, the quality of the business information is crucial. Now they are planning to implement a new, globally implemented ERP system
Therefore this research is set up to find possibilities to improve the quality of information at Plymovent. In the diagnosis, a measurement on the quality of Information at Plymovent led the conclusion the information quality at Plymovent is unsatisfactory and especially on four dimensions. These are the dimensions Accuracy, Availability, Currency and Consistency.
The research is based on the following central research question:
‘How can Plymovent realize an alignment between their business
requirements and their new information systems in such a way that the quality of information used for decision making increases as much as possible?’
Finding the solution on improving information quality has focused on the field of Information Management. Special attention has been paid to the alignment between the information systems and information requirements at Plymovent. Plymovent indicated there are several issues caused by discrepancies between their information requirements and the current information systems. Some
identified issues are inconsistency of output from the current information systems and limited information exchange possibilities.
Second, the research focussed on realizing the alignment between the new SAP system and the information requirements of Plymovent. The approach consisted of two stages with a focus on Supply Chain Management. First, to facilitate the alignment a list with suitable information requirements for Plymovent has been developed. Secondly, the alignment is actually realized by analysing the
opportunities in SAP for this information requirements framework. SAP can offer an ERP solution with a Business Intelligence module, which includes predefined KPI’s. For the main part the predefined KPI’s agree with the information
requirements framework. Recommendations are developed for the remaining information requirements that not directly agree with the predefined KPI’s.
TABLE OF CONTENTS
PREFACE
3
MANAGEMENT SUMMARY
4
1.
INTRODUCTION
9
1.1
B
USINESS ANDI
NFORMATIONS
YSTEMS9
1.2
PLYMOVENT
10
1.3
REASON FOR RESEARCH
11
1.4
PROJECT PEGAESYS BACKGROUND
11
2.
RESEARCH FRAMEWORK
13
2.1.
PROBLEM SITUATION
13
2.2.
RESEARCH CONDITIONS
13
2.3.
DATA COLLECTION
14
2.4.
R
ESEARCHS
TRUCTURE15
3.
PROBLEM BACKGROUND
16
3.1.
THEORETICAL CONCEPTS
16
3.1.1
I
NFORMATION16
3.1.2.
I
NFORMATIONQ
UALITY17
3.1.3
I
NFORMATIONM
ANAGEMENT17
3.2.
I
SSUES ATP
LYMOVENT19
3.3.
P
ROBLEM DEFINITION21
4.
DIAGNOSIS
22
4.1.
INFORMATION QUALITY MEASUREMENT
22
4.1.1.
O
PERATIONALIZATION OFI
NFORMATIONQ
UALITY22
4.1.2.
S
TRATEGICI
NFORMATION24
4.1.3.
T
ACTICAL/
OPERATIONALI
NFORMATION24
4.1.4.
M
EASUREMENTR
ESULTS25
4.2.
INFORMATION MANAGEMENT AT PLYMOVENT
26
4.2.1.
I
NFORMATIONS
YSTEMS ATP
LYMOVENT26
4.2.2.
I
NFORMATIONR
EQUIREMENTS ATP
LYMOVENT27
4.2.3.
A
LIGNMENT BETWEENI
NFORMATIONS
YSTEMS ANDI
NFORMATIONR
EQUIREMENTS ATP
LYMOVENT29
4.3.
DIAGNOSIS RESULTS
29
5.
RESEARCH MODEL AND RESEARCH QUESTIONS
31
5.1.
R
ESEARCH MODEL31
5.2.
R
ESEARCHQ
UESTIONS33
5.2.
S
COPE OF THE RESEARCH34
6.
DESIGN PHASE
36
6.1.
STRATEGIC ALIGNMENT MODEL
36
6.2.
ERP IMPLEMENTATION MODEL
37
7.
ERP/VENDOR SELECTION
39
7.1.
METHODOLOGY
39
7.1.1.
M
ULTI-‐C
RITERIAD
ECISIONM
AKING39
7.1.2.
A
NALYTICH
IERARCHYP
ROCESS40
7.2.
ERP
SYSTEM/
VENDOR SELECTION ATP
LYMOVENT41
7.2.1.
D
ECISION CRITERIA41
7.2.2.
A
LTERNATIVES44
7.2.3.
C
ALCULATIONS ON PRIORITIES49
7.2.4.
D
ETERMINATION OF CHOICE52
8.
INFORMATION REQUIREMENTS DETERMINATION
53
8.1.
DETERMINING INFORMATION REQUIREMENTS WITH THEORETICAL FRAMEWORK
54
8.2.
CHARACTERISTICS OF SUPPLY CHAIN MANAGEMENT AT PLYMOVENT
58
8.3.
A
NALYSIS ON‘R
EMAINING’
INFORMATION REQUIREMENTSP
LYMOVENT59
8.3.1.
R
EMAININGP
LAN INFORMATION REQUIREMENTS60
8.3.2.
R
EMAININGS
OURCE INFORMATION REQUIREMENTS61
8.3.3.
R
EMAINING‘
OTHER’
INFORMATION REQUIREMENTS61
8.3.4.
R
EMAININGI
NFORMATIONR
EQUIREMENTS TO INVOLVE INSAP
I
MPLEMENTATION62
8.4.
NEW INFORMATION REQUIREMENTS BASED ON SUPPLY CHAIN RESTRUCTURING
63
8.4.1.
A
VAILABLE-‐
TO-‐P
ROMISE63
8.4.2.
D
EMANDP
LANNING64
8.4.3.
B
UY TO ASSEMBLY ORDER ANDV
ENDORM
ANAGEDI
NVENTORY65
8.5.
RESULT OF INFORMATION REQUIREMENT DETERMINATION
66
8.6.
ALIGNING THE INFORMATION REQUIREMENTS WITH SAP
69
8.6.1.
SAP
SOLUTIONS ANDB
USINESSI
NTELLIGENCE69
8.6.2.
R
EALIZINGI
NFORMATION REQUIREMENTS ALIGNMENT WITHSAP
70
9.
CONCLUSION
74
10.
DISCUSSION AND FURTHER RESEARCH
75
11.
REFERENCES
77
APPENDICES
APPENDIX 1: PLYMOVENT ORGANIZATION STRUCTURE
83
APPENDIX 2: ISSUE LIST PLYMOVENT
84
APPENDIX 3: BUSINESS INTELLIGENCE FRAMEWORK
87
APPENDIX 4: INTERVIEW QUESTIONS INFORMATION QUALITY MEASUREMENT
89
APPENDIX 5: TAXONOMY OF MCDM METHODS
90
APPENDIX 6: THE ANALYTIC HIERARCHY PROCESS METHOD
91
APPENDIX 7: PROJECT TEAM & STEERING COMMITTEE PEGAESYS PROJECT
93
APPENDIX 8: RESULTS AHP METHOD
95
APPENDIX 9: FUNCTIONAL REQUIREMENTS REQUIRED BY SAP
99
APPENDIX 10: SCOR MODEL (LEVEL 1 AND LEVEL 2 PROCESSES)
100
APPENDIX 11: PERFORMANCE METRICS FROM SCOR MODEL
102
APPENDIX 12: PERFORMANCE METRICS GUNASEKARAN & KOBU (2007)
107
APPENDIX 13: SCM INFORMATION REQUIREMENTS IDENTIFIED BY PLYMOVENT
108
APPENDIX 14: DEMAND PLANNING PERFORMANCE METRICS
109
1.
Introduction
1.1 Business and Information Systems
Information is a top priority for properly managing, decision making and
controlling an organization compliant to the business strategy. The last decades, this information is more and more realized with the support of IT. The use of Information Systems is a well-known example and has the potential be very valuable for a company. Information Systems are defined as ‘The effective design, delivery, use and impact of information [and communication]
technologies in organizations and society’ (Avison and Fitzgerald, 2003). This definition accentuates the movement of research in Information Systems, from the initial ‘techno-centric’ focus towards a more integrated technology,
management, organizational and social focus.
The alignment between the design of Information Systems in a company and the business strategy, or business requirements plays a major role in the actual value Information Systems offer to a company. Information Systems provide high quality information for a company when they are aligned with business processes and the business strategy (Gorla et al, 2010). But Gorla et al. (2010) also notice that often Information Systems are not aligned with business strategy and do not meet the requirements of the business. This results in low information quality. Providing high quality information to the business for decision making is one of the major functions of Information Systems (Negash, 2004). This function can be expressed in the process of gathering data, transforming it into valuable
knowledge for the company and presenting it to the business users. The better this process and IT infrastructure is designed and aligned with the business requirements, the higher the quality of the information will be and the better it will support decision making (Baars and Kemper, 2008; Negash,2004; Kohli, 2007; Kohli and Groover, 2008).
Upcoming, next generation Information Systems are often based on Business Intelligence. Business Intelligence (BI) is a concept that improves the
transformation process of data, information and knowledge (Moss and
Hobermann, 2004). BI is a broadly used term with many different definitions. Here in this research, the definition of Moss and Hobermann is applied. This definition is chosen because it specifically includes the process of transforming data into knowledge. They define BI as: The processes, technologies and tools needed to turn data into information, information into knowledge and knowledge into plans that drive profitable business action. The purpose of BI is to facilitate decision makers’ work by improving the quality of inputs (information) to the decision process (Negash & Gray, 2008). According to the Gartner group (2006) the BI concept is increasingly gaining in visibility and relevance within the
business realm. There is strong evidence on the importance and benefits of BI for companies (Davenport, 2006). As mentioned earlier, the higher the information quality the better it will support decision making.
1.2 Plymovent
This research is executed at Plymovent Group. Plymovent is a company that provides solutions for air extraction and filtration. Plymovent is a company with worldwide subsidiaries established through several acquisitions in the last 30 years. From January 2011 Plymovent is the new brand name of the holding Clean Air Group (2005) consisting of Plymovent (1975) and Euromate (1975)
subsidiaries.
Plymovent has manufacturing sites in Alkmaar, Lycksele (Sweden) and South Africa (for the local market). They have 11 sales offices in Belgium, Canada, China, France, Germany, India, The Netherlands, Sweden, South Africa, United States and United Kingdom. Plymovent is represented in more than 45 other countries by a network of authorized distributors. The head quarter is located in Heerhugowaard. The company consists of more than 300 employees divided over 10 countries. The annual turnover from last year is around €50 million
in several product groups, through increased market penetration, selective expansion into new countries and in some cases by maintaining the current market share.
The focus of Plymovent is on their 3 core business areas Sales & Marketing, Product Innovation and Supply Chain Management. This is shown in the organization structure in appendix 1.
1.3 Reason for research
The reason for this research at Plymovent is the identification of several issues related to the quality of management information. The Board and middle
management find it hard to make justified business decisions, because they need to be taken based on, what they think, unreliable management information. In order to increase the quality of management information within Plymovent, the Board introduced one global IT platform between 2011 and 2013. The Board considers this as a next logical step towards global business integration. They recognized that standardizing the business processes and automating these into one application platform creates the opportunity to increase turnover, reduce operating costs and eliminate current risks of outage of critical business applications.
Consequently, the Global IT manager took action by means of starting an ERP implementation project called Pegaesys. In relation to this project the global IT manager requested a research to analyse (1) the current quality of management information and (2) define actions to take for realizing improvements on the information quality.
Therefore, the following objective of this research is formulated:
‘Define directions for improvement of the Information Quality at Plymovent’
1.4 Project Pegaesys background
Plymovent defined a list of objectives they want to accomplish. The main objectives of Project Pegaesys can be defined as followed:
• Improve business efficiency and effectiveness
• Lower annual IT costs
• Facilitate the change in business processes and organizational setup
• Eliminate business risk due to application outage and/or termination by
suppliers
• Timely and accurate (cross company) business information
The concrete product that Project Pegaesys is going to deliver is:
“The development and implementation of a standardized business application landscape in the complete Plymovent organization”
Planning
The project Pegaesys is started in April 2010. From that moment a project organization has been set up. In September 2010 the project started with the first project team meeting consisting of a project leader and eight key users. This research is executed in the timespan of September 2010 till May 2011. Within this timespan project Pegaesys proceeded:
- The ERP package/vendor selection phase,
- The As-is description phase
- And started the Blueprint phase where functional and information
requirements will be set up.
The project is expected to be finished in 2014. This is shown in figure 1. But some delay took place and the ‘Go Live’ is expected to be at the start of 2012.
The plant in Alkmaar and head office/subsidiary in Heerhugowaard are the first sites that are planned to Go Live. Alkmaar is the main plant of Plymovent and Heerhugowaard is besides a head office also a sales subsidiary for national and international Sales.
Figure 1: Planning Project Pegaesys
2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 IT department initialization
Site Alkmaar (NL) preparation analysis analysis blue print roll out roll out Site Heerhugowaard (NL) roll out roll out Site Bad Honnef (D) preparation roll out Site Cranbury (USA) preparation roll out Site Mississauga (CA) preparation roll out
Site Banbury (UK) preparation roll out
Site Neuville (FR) preparation roll out
Site Shanghai (CH) preparation roll out
Site Capetown (SA) preparation roll out
Site Lycksele (S) preparation analysis roll out
Site Malmo (S) preparation roll out
2.
Research framework
The research framework will start with a description of the problem situation. This is done, by providing information on what this research is about and for whom it is executed. Hereafter, the research limitations and the data collection methods used will be described.
2.1. Problem situation
This research aims to diagnose and solve the issues indicated by the customer Plymovent. In the description of this problem situation the focus will be on what needs to be solved, for whom and for what reasons.
The members of the Plymovent organization face issues concerning the quality of information. The information they use for making business decisions does not meet their needs. The information systems used are considered as a potential source where the issues are coming from. This research will analyse the issues by means of theoretical concepts. Subsequently, based on these theoretical concepts a direction for solutions will be determined.
The outcomes of this research are meant for different customers within
Plymovent. The IT department of Plymovent is responsible for the maintenance and functionality of the information systems and is therefore one of the main customers. Because the use of information and decision making is mainly done by Tier 1 and Tier 2 managers, they are also important customers.
The outcomes of the research should improve the quality of information in order to make justified decisions and solve the actual problem Plymovent is facing.
2.2. Research conditions
The research conditions provide insight in the limitations where to this research is subjected. There are conditions related to the process of this research and
conditions related to the final result of this research (De Leeuw,2003)
- The duration of this research is limited to a period of 6 months.
This means that the solutions identified during this research are described and executed as much as possible. But a full
- The research might contain company sensitive information and therefore needs to be reviewed by Plymovent it self before it is published to external parties.
2.3. Data collection
Gathering data is from crucial importance for this research. Two factors should be distinguished here. At first it is important to determine the source of the data, but secondly it is also important how the data is observed or measured (De Leeuw, 2003).
There are several kinds of sources available for gathering data applicable to this research. In this research data will be gathered through desk research and empirical data from real business situations at Plymovent.
By means of desk research scientific literature will be used to gather the required data for setting up a theoretical framework.
Other documentation like existing documents of Plymovent is also used. Together with data about the actual business situation it will be used to apply the
theoretical framework on the situation at Plymovent.
But the next question is how to extract useful information from the data sources mentioned. Reading and scanning the documentation is a proper way of
extracting useful information from the documents.
For finding proper information of the actual business situation other instruments need to be used. In this research the interview method as well as a survey method is used. Both are used to gather the right information in the diagnose phase of this research as well as in the design phase of this research.
Research Introduction
Diagnosis
Design
2.4. Research StructureH1 Introduction
H2 Research Framework
H3 Problem Background
H5 Research Model and research Questions
H4 Diagnosis
H6 Design Phase
H7 ERP/Vendor selection
3.
Problem background
Plymovent indicated to have issues concerning the quality of management information. In this chapter these issues will be analysed in order to determine the real management problem. First the theoretical concepts used for analysing the issues faced by Plymovent will be introduced. Subsequently, analysis takes place to uncover the management problem of this research by comparing the issues of Plymovent with the theoretical concepts.
3.1. Theoretical concepts
An analysis takes place on the issues indicated by Plymovent. Therefore,
theoretical concepts are selected to get a clear view on the issues. This will finally result in the actual management problem (De Leeuw, 2003).
As mentioned in section 2 improving information quality is the goal of this
research. But what is information quality according to the scientific literature and what kind of factors do affect the quality of information and will be taken along in this research. Those questions will be answered in this paragraph.
3.1.1 Information
What is meant with information in the term ‘information quality’? The information discussed in this research is about information used for decision making that, in many cases, is derived from Information Systems. A distinction is made on three different kinds of ‘information’ that are interrelated and are related to Information Systems also. Those are the terms data, information and knowledge.
The terms data, information and knowledge play a role in the process of
transforming data via information into knowledge with the support of Information Systems. As mentioned in section 1 decision making is dependent on this
process.
Zhang et al. (2009) use a general definition where data is a certain form of the representation of facts. In computing, they define that data is referred to distinct pieces of information, which can be translated into a different form to move or process. Viewed from different perspectives data includes structured data, semi-structured data, unsemi-structured data, text, multimedia, network and space.
interpreted by humans, using certain means. In case of this research information is the data that is interpreted by business users using means of their companies. The last step is the step from information to knowledge. The term knowledge also has many definitions and can be viewed from many different perspectives. In this research the definition of Zack (1999) is used. Knowledge is that which we come to believe and value based on the meaningfully organized accumulation of information through experience, communication or inference. Knowledge can be viewed both as a thing to be stored and manipulated and as a process of
simultaneously knowing and acting - that is, applying expertise. As a practical matter, organizations need to manage knowledge both as object and process. 3.1.2. Information Quality
Reeves and Bednar(1994) define quality in terms of quality as excellence, quality as value, quality as conformity to specifications, and quality as meeting
expectations.
Information quality as a concept can be described in terms of Information
Systems outputs that are useful for business users, relevant for decision making and easy-to-understand (representing information quality as value) as well as outputs that meet users’ specifications (representing information quality as conformity to specifications) (Gorla et al., 2010). The outputs from Information Systems can be in form of reports or online screens (DeLone and McLean, 1992). Information Quality is broadly researched in the last decennia and is defined in many different ways using many different dimensions of Information Quality. Examples of information quality dimensions used by researchers are
completeness, currency, availability and consistency (Lemieux, 1997; DeLone & McLean, 2003; Nelson, 2005).
3.1.3 Information Management
The quality of information can be affected by several factors. One of the main factors is the way in which companies organize their Information Management (Gorla et al.,2010; Seddon et al,.2010). In this research Information
Management is used to analyse the information quality issues indicated by Plymovent.
acquired, organized, stored, distributed and used. The goal of Information Management is to help people and organizations access, process and use
information efficiently and effectively (Detlor, 2010). Many researchers consider eliciting information requirements and matching those information needs
in the design and delivery of information systems to promote effective and
efficient information use, as
the most critical issue faced by information managers (Choo, 2002; Detlor, 2004; Karim & Hussein, 2008).
Hicks et al. (2006) identified 18 core issues on Information Management in SME’s. This framework of core issues will be used in order to analyse the issues Plymovent is facing. This framework gives a clear view of the possible Information Management issues and is particularly suitable for companies from the size of Plymovent.
All issues indicated by Plymovent will be compared with the core issues of Hicks et al. (2006). When the Plymovent issues have similarities with the theory a clear problem definition can be set up. Four of the core issues mentioned by Hicks et al. (2006) are shortly discussed here.
Information exchange:
Information exchange relates to the inability or difficulties of exchange of information between different computer-based systems. These include Product Data Management (PDM), Materials Resource Planning (MRP) and Customer Relationship Management systems. In addition, difficulties concerning information exchange were also prevalent where different standards were adopted. This includes the exchange of data between different sites and also with different customers, and where different part numbering conventions were used. Manual systems and data entry:
In part this issue arises as a direct consequence of the issues associated with exchange information. Many of the related sub issues can be attributed to the inability to automatically exchange information between different systems. Reasons for this include hardware and software issues and also implementation issues. In contrast to this, in some cases data is manually entered to overcome limitations of a new system.
Information flow from customer and sales:
and in particular the information supplied to the organization by their sales representatives.
Functionality of IS:
The failure of computer-based IS to deliver the required functionality was cited as another core issue. These issues relate to the inability of information systems to manage and analyze costing and contact data and the failure of their PDM systems to handle drawing files created within different systems
.
3.2. Issues at Plymovent
There is an indication of the top management that they do not have the
possibility to get insight in the right information, at the right time and with the right characteristics. To uncover the real problem the indicated issues need to be analysed with the support of the theoretical concepts mentioned in paragraph 3.1. Several involved parties, responsible for decision making or responsible for the information used for decision making, are incorporated to warrant pluriformity in the beginning stage of the research.
Not only the Tier 1 management is questioned on the issues they face, but Tier 2 management, regular employees and the IT department are also involved. As a result, in appendix 2 an overview of all identified issues at Plymovent is shown. This list is set up based on interviews with the involved parties about the Information Management issues they face. Appendix 2 does also describe the approach and content of the interviews.
Considering the list of issues in appendix 2 a judgement is required. This
judgement is meant to select those problems that are applicable for research. It might occur that the indicated issues are based on a wrong perception on the involved party, or on unfeasible or undesirable goals. When there is a reality problem, it means an aspect causes the problem in reality (De Leeuw, 2003). A structure on the reality problems remaining is identified with the support of a Business Intelligence framework. Structuring the issues will create more
framework of Baars & Kemper (2008), described in appendix 3, is suitable for structuring the identified problems. The framework consists of three layers, a data layer, a logic layer and an access layer. In every layer a transformation of the information takes place. In figure 2 this problem structure is shown.
Figure 2: Structure of Information Management Problem at Plymovent Access Layer
1.1 No available structured formats of reports 1.2 Requests from Board for subsidiary wide
1.3 Information gathering sometimes takes more than 3 weeks before completion of request.
1.4 Not much possibilities for comparing cross-functional information. 1.5 No real time information available
1.6 No user friendly way of presenting or sharing the information Logic Layer
2.1 Analysis mainly based on manually MS Excel sheets 2.2 Inflexibility of MS Excel Sheets
2.3 Dependence on the knowledge of the owner of the MS Excel sheets 2.4 Not much possibilities and supporting tools for analysis
2.5 Inconsistency of reports delivered by the different subsidiaries causes extra work for analysis.
2.6 Per subsidiary different formulas are used (storage valuation, cost pricing etc.) Data Layer
3.1 High diversity of data types 3.2 Many different data sources
3.3 Inflexibility in meeting new information requirements
3.4 Cost and time expensive to meet new information requirements 3.5 Dependence on one IT specialist for maintenance
The majority of the problems mentioned in figure 2 do have a significant overlap with issues identified by Hicks et al. (2006).
For instance the issue of ‘information exchange’. This problem does have overlap with the problems 1.4, 1.6, 2.5, 3.1 and 3.2 identified at Plymovent in figure 2. ‘Manual systems and data entry’ is another example. This problem is directly influenced by ‘Information exchange’ issues. It has overlap with the Plymovent problems 2.1, 2.2, 2.3 and 3.4 from figure 2.
The issue ‘functionality of Information Systems’ is identified by Hicks et al. and present at Plymovent also. This issue has a relation with the problems 1.4, 1.6 and 2.4 from figure 2. The ‘maintenance of Information Systems’ issues are related to the problem 3.4 and 3.5.
3.3. Problem definition
It can be concluded that the majority of the issues can be allocated to a lack of attention to Information Management at Plymovent. So it is clear now the real problem of Plymovent on Information Quality is influenced by their Information Management practices. Many researchers have proved the positive impact
Information Management can have on Information Quality (Detlor, 2010; Gorla et al.,2010; Karim & Hussein, 2008). Therefore this concept is used for deeper investigation and possible direction for fulfilling the research goal, improving the Information Quality.
As mentioned before Information Management is a broadly used concept with many variables that have influence on the way of using Information Management. This is subscribed by the definition used in this research: ‘Information
Management concerns all aspects related to the control on how information is created, acquired, organized, stored, distributed and used’ (Detlor, 2010). A high amount of the indicated issues concerns the misalignment between the current Information Systems and the current information requirements of Plymovent. Therefore, this research will focus on this aspect of Information Management. Several researchers (Choo, 2002; Detlor, 2004; Karim & Hussein, 2008) considered this as most important aspect in the field of Information
Management. They defined it as: ‘Organizations must pay much attention to align their information requirements with the Information Systems to be able to
4.
Diagnosis
In the previous section it is determined that the focus of this research is on improving the information quality by finding solutions in the field of Information Management. Due to the broad character of Information Management a focus is determined within the field of Information Management; information
requirements, Information Systems and the alignment between them. In this section a diagnosis takes place on the current situation about this part of
Information Management. This will provide deeper understanding on the current problem. The section starts with a measurement on the current Information Quality in order to quantify the current problem.
4.1. Information Quality Measurement
To develop a clear view on the current quality of information used for decision making a measurement is executed by means of a survey. The set up of this survey is explained in appendix 4. The result of the information quality
measurement will determine the most delicate information quality dimensions. This will help to take the right steps to finally improve the information quality at Plymovent. This paragraph will commence with a sub paragraph on the
operationalization of what is meant with Information Quality in this research. Furthermore, a distinction is made on the information used for strategic decision making and the information used for tactical and operational decision making. Both measurements are discussed in separate sub paragraphs.
4.1.1. Operationalization of Information Quality
In section 3 Information Quality is already defined. Researchers in the past used many different dimension of Information Quality in their researches. Some of them are already mentioned in section 3.
The research of Nelson et al. (2005) on dimensions of Information Quality, is often cited by other researchers. After an extensive literature research they identified four main dimensions. The dimensions are: Accuracy, Completeness, Currency, Format. The outcomes of Nelson et al. (2005) are widely adopted and therefore will be involved in this research.
To get a broader view and match this view with Plymovents indicated isues, three extra dimensions are added. Based on the interviews discussed in the previous section some indicated issues correspond with information quality dimensions discussed in literature. The corresponding three dimensions that will be included in this research are: Relevance, Consistency and Availability (DeLone and
a complete picture of Information Quality as agreed by the customer Plymovent and the author of this research. All dimensions are used to measure the current information quality and are described below.
Accuracy
Accuracy is the degree to which information is correct, unambiguous, meaningful, believable and consistent.
Completeness
Completeness is the degree in which all possible states relevant to the user population are represented in the stored information.
Currency
The degree to which information is up-to-date, or the degree to which the information precisely reflects the current state of the world that it
represents. Format
The degree to which information is presented in a manner that is understandable and representational interpretable to the user and thus aids in the completion of a task.
Relevance
Relevance is the degree to which information is compliant with the purpose for which it was initially collected and if it is a useful element of information for this end user at that time.
Consistency
Consistency refers to an absence of conflict between two or more datasets. It is the degree to which Information keeps the same characteristics over a set of individual systems, or parts thereof.
Availability
4.1.2. Strategic Information
The information used for strategic decision making is also known as management information. Generally speaking, the users of management information are the top managers. In case of Plymovent it are the Tier 1 managers already mentioned in section 3 that are involved in this measurement. At Plymovent Tier 2 managers who use their subsidiary specific information systems, produce the management information. The information from all subsidiaries is sent to the head quarter, where further analysis takes place by the Tier 1 managers or their assistants. The analysis takes place without use of Business Intelligence tools, but with MS Excel. In figure 3 the results of the measurement is shown of the information quality in the current situation experienced by the Tier 1 managers as well as their desired situation.
Figure 3: Information quality experienced by Board members
The main results from this measurement is the gap the Board wants to bridge in the dimensions Accuracy, Completeness, Consistency and Availability, where Consistency is rated with the biggest gap. The Accuracy, Currency and
Consistency of the strategic management information are the most important dimensions according to this figure. In the current situation the information dimensions Completeness, Format and Availability have the lowest rankings.
4.1.3. Tactical/operational Information
Tactical and operational information is often used by Tier 2 managers, or
employees lower in the company hierarchy. The main part of this information is data directly coming from tactical/operational systems as ERP. Subsequently, this data will be interpreted by means of analysis that takes place in MS Excel. Unlike
management information, tactical and operational information is not about cross-functional and cross-subsidiary analysis.
In figure 4 the average scores are shown of the information quality in the current situation experienced by the Tier 2 managers as well as their desired situation.
Figure 4: Information quality experienced by Tier 2 managers
This measurement points out that improving the currency of information has the highest priority for the Tier 2 management. A big change has to be realized to come to the desired level of currency. The consistency and availability of the current information has pointed out to be important for the Tier 2 management too. They indicated there is a significant need for improvement on those
dimensions. The other information dimensions are also suitable for improvements, but have a lower ranking.
4.1.4. Measurement Results
Based on the results of both measurements some conclusions can be drawn on the information quality problems Plymovent is facing in the current situation. According to both measurements the Currency, Accuracy and Availability of
information have to bridge a significant gap towards the desired situation. But the Consistency of the information experienced by the Board has the biggest gap to fulfill. Both measurements point out that none of the information quality
dimensions are on the desired level.
4.2. Information Management at Plymovent
Here, the current situation at Plymovent is discussed on the Information Management topic: Information Systems, Information Requirements and the alignment between them.
4.2.1. Information Systems at Plymovent
In the introduction a definition of Information Systems and in particular ERP systems is discussed. Currently, Plymovent uses a lot of different Information Systems. Every subsidiary has its own Information Systems to produce the
operational, tactical as well as strategic information that is required by the Board. In figure 5 an overview is presented which Information Systems are currently used. In figure 6 an overview is presented of how many Information Systems are used companywide, per subsidiary and per business process. Almost every subsidiary has its own unique Information System. Like Hicks et al. (2006) mentioned this is one of the main IM issues many companies face, that the high diversity of information Systems causes inability or difficulties in information exchange.
The Information Systems are mainly used for making operational and tactical business decisions and at a much lower level for strategic decision making. But the provided management information for the Board, is originally derived from the current Information Systems. The raw data that came in, transformed, is transported to, and interpreted by means of manually made MS Excel spread sheets, has finally become strategic management information.
Plymovent does not have a Business Intelligence system applicable for providing strategic information and used for strategic decision making. The main part of the required management information used for strategic decision making is produced with the Finance application ‘Cartesis’. This application is used for financial
consolidation. This means that the results (lots of data) of all the subsidiaries are merged to be able to compare the results in a proper way by means of the ‘Cartesis’ data analysis solutions.
4.2.2. Information Requirements at Plymovent Theory
Information requirements can be split up based on the three levels of
management, Strategic, Tactical and Operational information requirements. Information requirements are set up to provide appropriate and right information that is used for making justified decisions (Sun & Lui, 2011).
The determination of Information requirements is argued often as the most critical step in Information System development (Brown, 2002). Information Requirement Determination is a set of activities used by a systems analyst when assessing the functionality required in a proposed system. Types of information gathered include goals for the system, business processes, data needs, design constraints, and behaviours of users.
This research has a special focus on data needs for Performance Management and reporting purposes. In specific, the performance indicators/metrics that are used and suitable to control the business processes of Plymovent. That is what is meant with information requirements in this research. The reason for this focus is based on the high amount of complaints about the current information quality in management reports. Where these management reports mainly consist of performance metrics.
Information requirements are tight related to the concept of Performance
Management. Performance Management is a concept used to measure, evaluate and manage the performance of business processes (Cai et al., 2009). For a significant part, the measurements are based on information derived from the Information Systems. Performance Indicators need to be identified to define metrics that are appropriate for evaluating performance (Cai et al., 2009). The
performance indicators are measured with the provided information coming from
the Information System.This output is based on the information requirements
that are adjusted and configured in the Information System. Current situation
The input for measuring process performance at Plymovent consists of
fundamental data, as for instance delivery times, storage levels or production rates derived from the Information Systems. Characteristics of this data can be expressed in information quality dimensions, like stock valuation based on consistent formulas (information consistency) or real-time sales information (information currency).
The current information systems at Plymovent are all developed with a different set of information requirements, mainly because during the original development of those information systems the subsidiaries where not even part of the
Plymovent organization as it is right now. These information requirements consist of fundamental data needs. The output of the current information Systems does not always meet the requirements that are needed right now. It often does not meet the required information quality.
The goals and objectives set by the strategic (Tier 1) management right now are controlled by means of measurements on Key Performance Indicators (KPI’s) and Performance Indicators(PI’s). These measurements are based on what is called above, fundamental data. Detailed organizational information is necessary to execute the measurements and analyse the performance of the organizations. The Tier 1 managers and the Supervisory Board decide which KPI’s will be measured and what the minimum or maximum value should be. The request for the status on KPI’s (measurement) can be requested in time spans of days, weeks, months or years. The outcomes are presented by means of
with each other. Information quality requirements requested by Tier 1 managers, as consistency and currency, cannot be guaranteed in the current situation. For tactical and operational management KPI’s as well as PI’s are used to control the business processes at Plymovent. PI’s represent the performance of business processes that are not of the highest importance to the strategic management. Just as the KPI’s, PI’s can only be measured correctly if they are based on the right information. When comparisons between subsidiaries take place on a certain PI’s the same problem on information consistency is recognized as mentioned above.
4.2.3. Alignment between Information Systems and Information Requirements at Plymovent
Many of the problems mentioned in this chapter are related to the alignment between the information systems and the information requirements. The issues concerning information systems and issues concerning information requirements do all have influence on the alignment. Due to the list of identified problems it became clear that the alignment at Plymovent is insufficient in the current situation and applicable for improvement.
4.3. Diagnosis Results
During the diagnosis the indicated problems at Plymovent are analysed. After mapping the issues, analysing the issues, comparing them with theoretical concepts and the strategy of Plymovent, the main problems came up front. Many issues related to the quality of information were identified. A few aspects will be emphasized during the design phase of this research.
After the measurement it became clear that the information quality at Plymovent need an improvement on the quality characteristics Consistency, Currency, Availability and Accuracy.
Requirements used to for decision making and controlling the business processes. A substantial part of the problems can be assigned to this field. The main
problems identified so far, with relation to this field of Information Management are listed here concisely and will be taken into account in the design phase. Information Systems
- To many different Information Systems
- Inflexible Information Systems make it hard to establish new
information requirements
- Information Systems do not have enough possibilities on data analysis
for strategic, tactical and operational requirements Fit between Information requirements and Information Systems
- The required information is unavailable in many cases.
- Often, the required information cannot be delivered on time
- Gathered information is inconsistent.
- No strict procedures available when new information requirements
arise
- Justified decisions are often impossible due to current misfit between
information requirements and Information Systems
5.
Research model and research questions
Based on the outcomes of the diagnosis and the focus that is determined now a research model with related research questions is presented. The research model will visualize the problem situation and the dependent variables that are
incorporated in this research. Based on the research model, research questions are formulated. Those questions need to be answered in order to achieve the research objective.
5.1. Research model
Based on the diagnosis the research model used in this research project is shown in figure 7. The purpose of the model is to set boundaries of the research and create an insight into the problem of Plymovent. In order to meet the research objective, relations between (theoretical) concepts and related aspects of this objective need to be explained. In the diagnose phase of this research some of those relations are already elaborated. In the research model the relations are visualized and now the research model will be described.
As mentioned in the research objective, the final goal of this research is to achieve an increase in the Information Quality. According to Lin (2010); Gorla et al.(2010) and Seddon et al.(2010) Information Management, with all its related aspects and especially IT related aspects, is one of the concepts that can influence this objective.
Information Management is already elaborated in the theoretical framework and defined as management of the processes and systems that create, acquire, organize, store, distribute and use information. To improve Information
Management organizations implement a variety of tools, techniques, standards, languages, processes, methods and hardware. Many of these are embodied in, or form part of, an information system or information management system (Hicks et al, 2006).
As discussed in the problem definition, this research at Plymovent will focus on the by Choo (2002) indicated as critical issue in this field of Information
Management; matching the information requirements with the Information Systems.
These information requirements are subdivided over three hierarchical levels of information, strategic, tactical and operational information. The strategic information requirements come from top management level where the
information is used for strategic planning and the setting of goals and objectives. The tactical and operational information requirements come from lower levels in the organizations where the information is respectively used to analyse and for daily operational processes.
The Information Systems on the other side of the model are already defined as ‘The effective design, delivery, use and impact of information [and
communication] technologies in organizations and society’ (Avison and Fitzgerald, 2003). Information Systems entail the Enterprise Resource Planning (ERP)
systems, Customer Relationship Management (CRM) systems Material
applied within an organization the higher is positive effect on the Information Quality (Karim & Hussein,2008).
5.2. Research Questions
In order to meet the research objective, several research questions are
formulated and need to be answered in the design phase of this research. As De Leeuw (2003) mentioned, the formulation of research questions is based on the research model. Like the research model the research questions will also set the focus of the research. The central research question is formulated as follows:
‘How can Plymovent realize an alignment between their business
requirements and their new information systems in such a way that the quality of information used for decision making increases as much as possible?’
Like already mentioned in the introduction Plymovent wants to implement a new global ERP system for all subsidiaries of Plymovent. This might have a positive impact on the Information Quality problems Plymovent is facing. Because, ERP systems can improve the information consistency, accuracy, completeness, currency (Davenport et al., 2002), relevance and availability (Wixom & Watson, 2001; Shang & Seddon, 2002). It is also a potential solution to realize the required alignment, because a new set up should be developed for the new ERP system, which is adjusted to the requirements and has high similarity for every subsidiary of Plymovent. This improvement in the field of Information
Management will also cause an increase in the information quality (Seddon et al., 2010; Gorla et al., 2010). In the design phase of this research the answers will be given how the potential positive impact can actually be realized.
The first research question is about the critical step of selecting the right information system and vendor. The ERP systems available in the market have different characteristics and should match the requirements of Plymovent. This research question will take care of this selection.
1. Which Information Systems are applicable for Plymovent and should be implemented in the future situation?
business processes of Plymovent. In other words, the Information System needs to be aligned with the requirements of Plymovent. This means that Plymovent should design the standardized future processes, with all their information requirements they want to have included in the new Information System. This raises the following sub question:
2. How can Plymovent realize alignment between their new Information System and their business requirements on strategical, tactical and operational level?
5.2. Scope of the research
The scope of the research points out the constraints the research results and methods are subject to. It also includes the research requirements and constraints commanded by the principal (De Leeuw, 2003).
The ERP implementation is a huge project. Therefore, this research cannot involve all steps that need to be taken in the ERP implementation process. The scope of this research is determined by focussing on two important steps of the ERP implementation process. In section 6 the theoretical foundation of these steps are elaborated. Both steps are already translated in to research questions and per research question the research constraints are listed below.
The first research question is about the selection of the right Information System and vendor for Plymovent. This research will fulfil a selection procedure based on a short list of Information Systems and vendors that is already determined by the Global IT Manager of Plymovent. The selection procedure should involve decision criteria based on the information system characteristics as well as vendor
characteristics.
The second research question is about realizing alignment between the business and the new Information System of Plymovent. As discussed earlier this is a very broadly field of research. To set the scope, this research should only focus on the alignment between the new ERP system and the information requirements related to the main Supply Chain Management processes at Plymovent. Subsequently, the term information requirements, is also considered as very broad. Information requirements are part of the functional requirements when developing an
Information System. Therefore, an additional focus is determined, by means of a focus towards the information requirements, required for performance
develop a list with Performance Indicators suitable for SCM performance
management at Plymovent in order to facilitate better alignment. Subsequently, the possibilities of alignment between those Performance indicators and the new ERP system should be researched in order to realize the alignment.
6.
Design phase
Based on the outcomes of the diagnosis the design of this research is set up. The main outcomes of the diagnosis are discussed in section 4.3 and represent the base of the design phase with the goal to fulfil the research objective. In section 5 the set up of this research is determined to actually accomplish this research objective.
In the diagnosis it is concluded that the Information Quality is unsatisfactory and especially on the dimensions Accuracy, Availability, Currency and Consistency. As the research model showed, one of the dependent variables determined is the alignment between Information Systems and Information requirements.
Literature reveals that improvements on this alignment can be found in implementing a new ERP system that provides information conform the information requirements of the company (Seddon et al., 2010; Gorla et al., 2010). In this way information requirements can already be matched with the Information Systems in its developing stage. Subsequently, an improvement in alignment will contribute to the information quality too.
6.1. Strategic Alignment Model
But before directly implementing the ERP system it is wise to exceed the current point of view and look from a strategic perspective to the problem situation. This will help the to determine the strategic role of the IT strategy and infrastructure within Plymovent. Venkatraman & Henderson (1993) developed a framework with four adjustment perspectives to align Business and IT. The Strategic Alignment Model (figure 8a) supports determining the direction related to the strategic management of IT. Although the model is relatively old, it is still widely used by many researchers.
The model consists of 4 fundamental domains with two external domains related to strategy and two internal domains related to organizational infrastructure and processes. Figure 8b represent the four adjustment perspectives on business and IT alignment. The first perspective is representative for Plymovent. This
perspective is anchored on the notion that a business strategy has been
articulated and is the driver of both organizational design choices and the design of Information Systems infrastructure. In this perspective the top management should play the role of business strategy formulator. And the IT manager should play the role of strategy implementer who designs and implements the required IT infrastructure and processes that support the chosen business strategy (Venkratraman & Henderson, 1993).
6.2. ERP Implementation Model
It is clear now that an ERP implementation in principle can form a fundamental step towards an improvement in information quality. But there are important steps and decisions to make to complete a successful ERP implementation that fits the expectations and goals an organization wants to achieve with an ERP implementation. In figure 10 an ERP implementation model of Rajagopal (2002) is shown that is used for this research. The model consists of six stages;
Figure 10: ERP Implementation Model
7.
ERP/Vendor selection
The main commencing step to take for implementing an ERP system is the selection of an ERP system and a vendor of that system. In this section
recommendations will be provided on which ERP system and which vendor should be selected by Plymovent. Within the selection process there is special attention for the information quality dimensions (results of the diagnosis) that need to be improved.
The final choice is in hands of the Steering Committee of Project Pegaesys, whereas the outcome of the selection process in this research serves as input to their choice. Plymovent is facing a decision to be made on a limited number of alternatives, which have to be prioritized on several criteria that might be
conflicting. That is why there is a need for a systematic vendor selection process.
7.1. Methodology
7.1.1. Multi-Criteria Decision Making
Multi-criteria-decision making (MCDM) is an approach dealing with the ranking and selection of one or more vendors from of pool of providers. The MCDM provides an effective framework for vendor comparison based on the evaluation of multiple conflict criteria (Shyur & Shih, 2006). Several MCDM methods have been developed. Shyur & Shih (2006) identified five categories of MCDM, where each category consists of related methods. In appendix 5 those categories and methods are shown.
Analytic hierarchy process (AHP) is one of those methods and is applicable to support decision making in many business functions such as Accounting,
Marketing, Production and Logistics to select for example Manufacturing systems, suppliers, drugs, sites, strategy, recycling technology or ERP systems (Ishizaka & Labib, 2011; Huizingh & Vrolijk; 1995).
For several reasons the use of AHP is chosen in this research instead of other methods.
First, AHP is practically usable if the number of alternatives and criteria is small (Shyur &Shih, 2006). Second, with AHP it is also possible to evaluate quantitative as well as qualitative criteria and alternatives on the same preference scale. And third, Ghodsypour and O’Brien (1998) argue that AHP is more accurate than other scoring methods for vendor selection.
7.1.2. Analytic Hierarchy Process
Saaty (1977) was the first who described the AHP method. In this research the AHP method will be described based on the research of Huizingh & Vrolijk(1995). The method consists of nine phases and is shown in figure 11. The textual
description of the AHP method is described in appendix 6.
7.2. ERP system/vendor selection at Plymovent
Plymovent has the problem of making a multi-criteria decision on the choice of a new ERP system/vendor. To come to a justified choice the, selection procedure is based on the AHP method described in the previous paragraph.
The decision makers are separated over two groups. The set up the groups is shown in appendix 7.
1. The decision makers that rank the system and vendor criteria are
members of the Project Team of Project Pegaesys.
2. The decision makers on cost criteria and the final choice consist of
members of the Steering Committee of Project Pegaesys.
The decision of the Project Team is input for the Steering Committee and they will make the final decision based on cost criteria and the decision of the Project Team. This research focuses on the decision made by the Project Team and therefore the cost criteria are out of scope. The decisions are based on the demos and workshops presented by the vendors.
In this section first the selected decision criteria will be described. Subsequently, the alternatives will be judged based on the decision criteria. The rest of this section contains of a decision hierarchy, calculations on rankings and the final determination of the choice.
7.2.1. Decision criteria
The decision criteria used in this research are based on criteria identified by Wei et al. (2005). Wei et al. (2005) identified system factors as well as vendor factors that are appropriate for this selection process. This corresponds with the scope determination of this research. It is already mentioned that ERP implementations have a positive effect on the information quality dimensions. But special attention will be paid to them in this selection process of the system and vendor.
