Business Planning and Control System (BPCS), developed by System Software Associates (SSA), is a highly versatile ERP system that can be applied to Finance, Planning, Distribution, Manufacturing, and Systems Applications. The key to the BPCS diversity is its compatibility with a variety of programming languages like RPG, SQL, as well as several obscure IBM languages unique to SSA partnerships with specific suppliers and vendors.
In the time since the case was written, Software Systems Associates changed their name to SSA Global Technologies and, through several acquisitions, was earning in the neighborhood of $800 million annually ("Infor closes SSA", 2006). In 2006 SSA Global was acquired by Infor Global Solutions for $1.36 billion ("Infor to buy SSA Global", 2006), making Infor the third largest ERP provider in the world.
Geneva regrettably made a few blunders during Phase I. The Director of Supply Chain Management was selected to be the project manager, despite having literally no prior experience with R/3. When it came time to bring in a team of outside consultants, Geneva hired a firm called Whitman-Hart that neglected to send any personnel with experience on the business aspect; their technical knowledge was exceptionally good but their business sense was lacking. Additionally, despite Geneva's need for extensive customization, the Phase I project manager chose to use an accelerated implementation method (fittingly called ASAP) that was simply too rigid and too cookie-cutter.
In early 1998, Geneva hired a new CIO named Randy Weldon, who had extensive experience with R/3. Weldon gutted the project management team and appointed personnel from all three stakeholder groups: users, IS staff, and consultants. However, Weldon found that certain solutions would not be easy to apply because he had come along too late in the implementation phase to start making drastic changes. He and his IS team leader decided to finish Phase I with Whitman-Hart and ASAP because they had crossed the point of no return.
The new project management team found at the end of Phase I that R/3 had improved the performance of some of their business metrics, which allowed them to streamline and consolidate job roles—they were able to free up a considerable amount of manpower that had traditionally been used for data rekeying and validation, and reemploy it elsewhere in Geneva.
It wasn't until 1998, four years after the originally planned start date, that Phase three actually took off. Verne Evans, director of Supply Chain Management was to be in charge of the R/3 initiative to integrate both the supply and demand side of their business into the SAP system. The problem with their SOP for demand and supply was essentially there lack of any formal one. Most of Geneva's operations were separated from each other and acted independently. There number one goal was remove this independence and integrate all operations together. Once they had created a formal SAP process, which included manual entry of data and teams to analyze that data, they ran into somewhat of a problem. The production planning team occasionally was able to determine the production schedule of the next month one month prior, which essentially made their SOP redundant and time consuming.
SAP is an excellent database system, but that is all that the Geneva team saw it as. The goal of phase three was to integrate phase one (demand) and phase two (supply) in order to forecast an approximate production schedule based on that demand. Geneva's team didn't think SAP as it was had the capability of analyzing this data to create production schedules. SAP was used for data storage, not analysis. However, SAP eventually added the Advanced Purchase Optimizer module, otherwise known as APO. The APO added analytic functions to eh SAP software. This new module, combined with SAP's already existing SOP module, was believed to finally be able to meet Geneva's SOP needs.
A big part of phase 3 was Geneva's ATP, or available to promise. This referred to whether or not Geneva would be able to fulfill customer orders as was originally told to the customer. (citation.) With an accurate production schedule planner using SAP's SOP and APO modules, Geneva believed they would be in better position to inform their customers when to expect their orders, which would vastly improve their ATP business metric.
Valencia makes some exceptionally good points: the airline business model has not changed much over the years, and the rationale behind most processes seems to be "well, we've always done it this way," rather than "because this is the best practice." He wants to be a catalyst for big changes in the industry.
The benefit of the e-gatematrix IT system is an improved functionality, automation, and information sharing platform, which gives the airline more operational agility and a better ability to make forecasts. The risks, however, can be huge. Crucially, airline systems are inflexible and intolerant of change—they are using cutting edge software that most of their potential clients cannot (or will not) adopt. Another big risk is that certain firms are contracted to certain software providers—for example if a certain airline works exclusively with SAP, they won't want to be seen cooperating with an SAP competitor and risk breach of contract for the benefit of being compatible with e-gatematrix.
Outsourcing involves contracting a certain business process out to a third party who specializes in that particular process. There are both pros and cons to outsourcing, as well as important considerations to take into account before deciding whether or not to outsource. One advantage involves receiving expertise and guidance in a business process you may not be familiar with. By outsourcing, you are delegating a specific business process to third party who specialized in that process, whereas you may not have enough time to deal with it (Benefits of outsourcing). This allows you to focus on your core business processes while you delegate the support processes to some other company. Risk sharing is also another advantage. Outsourcing and delegating business responsibilities allows you to decrease your risk by handing some of it over to the third party; they are just as responsible for that business process as you are (unless your contract specifies otherwise). Other advantages include reducing operational and recruitment costs due to the fact you won't need to hire in house for your business process anymore; that responsibility now belongs to the third party. Finally, one interesting advantage is the time zone advantage. If you outsource overseas, you potentially can have a business functioning twenty-four seven (Benefits of outsourcing).
There are disadvantages as well, though. For example, there could be a lack of customer focus. Third parties outsource companies may be helping many other businesses, so your company may not be its top priority. This increases the risk of hurting your company's service level. Also, it could potentially increase your risk of exposing data to a third party such as payroll.
Outsourcing is an important decision and requires a lot of consideration before executing. Progressive entrepreneurs realize the unstoppable power of outsourcing to handle aspects of their business that are essential but simply don't make sense for them to deal with personally," says David Walsh, entrepreneur and author of Source Control, (Jackson, N). If you are struggling meeting your core business goals, it may be a good time to consider outsourcing. A company must also decide what to outsource Sometimes there are things you don't want to do but they are important to your core business (Jackson, N). Also it is important to find the right contractor and do plenty of research to make sure your third party is aligned with your business goals as well.