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4 Chapter 1 • Introduction to Enterprise Systems for Management

beginning to end during the 2002 upgrade phase and hired a CIO to oversee the project. The
following are some key lessons learned from Hershey’s ERP implementation:

•Go slowly and stick to the initial implementation plan
• Using a phased strategy can be a slow but safe choice.
•Spend appropriate time and resources to test the new system thoroughly.
•Keep things simple by limiting the number of software applications.
•Functional groups must communicate their specific data requirements to the implementation
team. Spend extra time to ensure that all of the data requirements from all groups are mapped
correctly before proceeding with the implementation.
•Definitions of basic business processes that should be addressed by insiders are often left
for outsiders (e.g., consultants).
• Oversight matters, especially with a project of this magnitude.
•A steering committee must include such top management as the CEO and CIO.
Hershey’s successful upgrade of SAP/R3, after the initial disaster, clearly shows that the
company learned from its mistakes and has moved forward. Hershey has also met its business
and IT goals since the full ERP implementation took place. Other companies can use
the Hershey case to their advantage as they embark on their own ERP journeys. There are no
shortcuts when it comes to implementing an enterprise system similar in scope to Hershey’s. The
most important lesson that Hershey learned might have been to proceed with the project slowly
so nothing is left out during implementation.

ENTERPRISE SYSTEMS IN ORGANIZATIONS
Before delving into the details of ERP systems, we will quickly review the evolution of enter-
prise systems in organizations.
Business organizations have become very complex. This is due to an increased layer of
management hierarchy and an increased level of coordination across departments. Each staff role
and management layer has different information needs and requirements. As such, no single
information system can support all the business needs. Figure 1-1 shows the typical levels of
management and corresponding information needs. Management is generally categorized into
three levels: strategic, middle or mid-management, and operational. At the strategic level,
functions are highly unstructured and resources are undefined, whereas functions are highly
structured and resources are predefined at the operational level. The mid-management level is
somewhere in between depending on the hierarchy and organizational size.
The pyramid shape in Figure 1-1 illustrates the information needs at each level of management.
The quantitative requirements are much less at the strategic level than they are at the operational level;
however, the quality of information needed at the top requires sophisticated processing and presenta-
tion. The pyramid should assess and display the performance of the entire organization. For example,
the CEO of a company may need a report that quickly states how a particular product is performing
in the market vis-à-vis other company products over a period of time and in different geographical
regions. Such a report is not useful to an operations manager, who is more interested in the detailed
sales report of all products he or she is responsible for in the last month. The pyramid therefore sug-
gests that managers at the higher level require a smaller quantity of information, but that it is a very
high quality of information. On the other hand, the operational-level manager requires more detailed
information and does not require a high level of analysis or aggregation as do their strategic counter-
parts. Today’s enterprise systems are designed to serve these varied organizational requirements.