Written Case Analysis 1 Our case: Wolf Peak International: Failure and Success in Application Software for the

Small-to-Medium Enterprise. Question 1: What problems occurred when Wolf Peak upgraded from QuickBooks to a new accounting software package? How could these problems have been avoided? The study brings about many issues encountered by Wolf Peak: some explicit and others merely implied implicitly. Clearly the explicit challenges include additional expenses, a lack of training and a business disconnect. A little less obvious are the implicit issues and they include employee frustration as well as a general lack of business savvy. It seems apparent that all of these problems could have been addressed and avoided simply by using good business judgment and a little knowledge about Information systems. For example, it seems reasonable to assume that the people responsible for purchasing the initial replacement for Quick Books lacked a fundamental understanding of what they needed the software to do. Had they thought about this new system as being not only a decision support system, but also a strategic information system, they may have involved someone with more knowledge as the seriousness of the decision may have weighed more heavily with the decision makers. Basically I am unsure if they knew of the gravity that the replacement system carried. Wolf Peak purchased a software package (and unless the study simply left out details), without even doing any research, viewing software capability demos or even consulting a financial professional to see what features their type of business would need. This proves to be a major oversight and leads to the loss of a substantial amount of company resources. A quick visit to SAP's website would have told them "The SAP Business One application integrates all core business functions across your entire company including financials, sales, customer relationship management, inventory, and operations. Unlike many other small business solutions on the market today, SAP Business One is a single application, eliminating the need for separate installations and complex integration of multiple modules" 1. If you remove the marketing jargon, you see that the system focuses on many different aspects of their business and encompasses all of these things in one package. While the unnamed system did seem to encompass functions of both operations and management support systems, the management component was unable to meet the needs of the business. One of the largest concerns they seemed to have with the old package was its lack of acceptable outputs. This damaged Wolf Peaks competitive advantage by way of hampering its primary business processes. If the employees cannot use the system and management cannot depend on it to make decisions, it becomes a huge liability. Additionally there was the lack of research towards any additional integration. For example, would this new software be able to talk to our manufacturing system for invoicing or would it be able to send information to the payroll system and vice verse? A quick search for reviews revealed that the SAP system included not only financials but also CRM and distribution functionality. 2 Another shocking portion of the study is that it appears the old software company did very little to maintain or even assist with Wolf Peaks issues as they had to hire outside consultants for any and all of the added value features. Wolf Peak seemed to just assume, as if by magic, that those features would be there. In the end, it appears logic and business sense did return to Wolf Peak as they put in the homework time for a new system. Another good business decision was they recognized that even though they paid a handsome sum for the old system, it would cost them less to replace it in the long run: not everyone would have foreseen this. The new SAP system worked out beautifully (at least according to the study) but not before months of heartache. Hopefully it is a lesson learned. Question 2: Why did SAP's Business One prove to be a better choice for Wolf Peak's management than the new accounting software? Give several examples to illustrate your answer. There are so many reasons why SAP's Business One was the better accounting software for management. First, it proved to be cost effective, as there was no need for external contractors to develop new reports. Current resources were easily able to develop the reports because of its usable interface. In addition, implementation took only seven weeks and was not only seamless but also required little to no training. What is impressive with this implementation was that it was not disruptive; the transition happened during office hours and employees were still able to use the system. The interface was so user friendly that users did not need extra training. This is compared to the old software that took a year and half of installation and implementation. The time savings from implementation to enterprise-wide usage almost instantly paid for the system. Another interesting positive is the extensibility of the software to go beyond requirements. This kind of functionality brings about distributed collectivism, and is common in well-designed systems. The software was extended as it was used in other areas of the company beyond financial use, such as warehouse management and CRM. And because Business One is an integrated software packages, any events that happen at any point will automatically update other data in the system. For example, if inventory is low because the system recorded a sale, it can automatically communicate with the supplier and update the ledger of the transactions. Because Business One centralizes all financial data, mining and researching is very intuitive. As a reviewer of the system indicates, "the Drag & Relate feature invites users to dig for information, and the incorporation of the sales process/CRM functionality make understanding the state of the business easy" 3 Now all their business data, from financials to sales to inventory, are kept in Business One and therefore provides managers the ability to monitor the whole business from one application. And with a very usable interface, the types of information managers can imagine is attainable right at their fingertips. It is imperative that SMEs have one central repository of information. This is because the lack of human resources mean that information must be close at hand to the owners at any time. This depends on any business, but even more important for data driven business, such as insurance companies. Our insurance company did not make this executive decision because of our inability to convert data from different systems. Therefore, we are currently using at least three different data systems to manage our business. Data integrity and system maintenance are difficult to manage. At least Wolf Peak was able to understand the benefit of a single data repository and made executive sacrifices in keeping it so.

Question 3: Should most SMEs use an integrated business software suite like SAP Business One instead of specialized accounting and other business software packages? Why or why not? Efficiency, accuracy and ease of use are some of the needs of small to medium size enterprises (SME), and these needs are best met with integrated business software suites, like SAP Business One, versus more specialized software for individual departments. Integrated business software, such as SAP Business One, is constructed in a manner so that organizations can communicate information between departments, offering a more transparent view of company activity. This in turn allows for accurate reports and accounting of data. Information is shared and accessible to most users, whether they are in marketing or operations, cutting down on delays that would otherwise be incurred if employees had to contact coworkers for data to finish their task. This process became clearer after watching a demo video on SAPs website. Here, a business owner illustrated that not only is information shared amongst departments, but when an employee enters in a sale, the warehouse is notified and the order is picked, packed and shipped. Once the order has been shipped, the client is sent an email notifying them of their purchases tracking information. All the while, SAP Business One is automatically maintaining an accurate account of the companys inventory as well as the clients account balance.4 This video clearly illustrates the communication between departments as well as the softwares ability to keep accurate records. In addition, the interface is regarded as being easy to use and frequently requires no further training of staff, thereby resulting in the added benefit of saving the company money. Employees can continue to work instead of learning how to operate the new software system thus maintaining the profitability of the company. By comparison, specialized business software is inefficient, inaccurate and complicated to use. As evidenced by the Wolf Peak case, time was wasted in using the specialized accounting software. Users were not able to sift through all of the data and make sense of the information that the system was recording. This resulted in the outsourcing of reporting work in the hopes that consultants could make sense of the information extracted from the software. Another fault with specialized software is that information is not easily imported or exported. Wolf Peak used QuickBooks prior to purchasing the more sophisticated software, and the format of their financial history was not compatible. Records were not easily transferred from QuickBooks to the new software. Manual entry of this data could have resulted in serious problems for the company if important information was mistyped. (It should be noted, that SAP Business One allows for the integration of information from various systems, even those that are proprietary.)5 All in all, the users found the specialized software to be difficult to use and a waste of time. Ultimately, the benefit of selecting integrated business software is that it provides the user with a comprehensive look at the entire companys activities while the specialized software merely offers a glance at a singular department.
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SAP AG, 2011. SAP Business One. <http://www.sap.com/sme/solutions/businessmanagement/businessone/index.epx> One Hundred & Eighty Degrees Systems Limited, 2010. SAP BusinessOne Review. <http://www.180systems.com/SapBusinessOneReview.php> 3 Koegler, Scott, 2004. Software Review: SAP's BusinessOne. <http://www.informationweek.com/news/18400336?pgno=4> 4 SAP, 2011. SAP Business One Demo <http://www.sap.com/demos/RichMedia/rm_3p_mediaPlayer.epx?movieSource=/demos/mmov/media/sap-business-one-software-designed-withsmall-businesses-in-mind.mp4&mWidth=640&mHeight=360> 5 Real Solutions, 2005. SAP Business One: Business Benefits <http://www.realsolutions-us.com/sap_benefits.html>

Write Up # 1 Wolf Peak International: Failure and Success in Application Software for Small-to-Medium Enterprise

1) What problems occurred when Wolf Peak upgraded from QuickBooks to a new accounting software package? How could these problems have been avoided? The problems encountered by Wolf Peak when they changed to the new accounting software all stemmed from the complexity of the new software compared to QuickBooks and the lack of research and preparation on the part of Wolf Peak. This complexity led to a year of training for the employees, using time and resources that Wolf Peak could have used to grow their business. However, six months after the year of training, the employees were still not comfortable with the new accounting software. Unfortunately this is common in business. According to one study, one in four companies implementing new software has a performance drop.[i] Another problem was that Kurt Daems, the founder of Wolf Peak, could not create the reports that he was accustomed to creating in QuickBooks. Wolf Peak was not alone however, for many companies; new software fails because the company realizes that one of their important business processes is not supported.[ii] Other typical reports the company used were also difficult to obtain with the new software and they had to outsource these reports to other companies, which was time consuming and expensive. The inability to create the accounting reports interfered with daily operations and made it hard to keep track of where the business was going. For a SME to waste more than a years worth of time and resources on a single project can drive the company into bankruptcy. Fortunately Wolf Peak was in a better situation and was able to recover from this costly mistake. Wolf Peak could have avoided all of these problems if they had comprehensively looked at the software and how it would have fit into what they needed. Wolf Peak seemed to have rushed into picking a software package without really caring what it offered and if it would have worked for them. Furthermore, there was no person on staff that had any comprehensive knowledge about finance or accounting software packages. When implementing a new technology it is best to treat it like a new project, with dedicated funding and personnel.[iii]

Having the right people and a careful selection and review process is essential when planning on implementing new solutions, whether it involves IT or not. Wolf Peaks failure to have a sufficient staff and choosing the first accounting software, without review, cost them more than a year of time and money. When Wolf Peak hired a man with a financial background, he instantly knew the issues and worked with Daems to correct the problem. Eventually, Wolf Peak found accounting software that worked with their company, but only after hiring the right people and carefully reviewing the options available. [i] Raymond F. Boykin, ( 2001, Enterprise resource planning software: a solution to the return material authorization problem, Computers in Industry, 45, OMPUTERS IN THE SEMICONDUCTOR INDUSTRY, pp. 99-109, ScienceDirect, EBSCOhost, viewed 31 January 2012 [ii] Raymond F. Boykin, ( 2001, Enterprise resource planning software: a solution to the return material authorization problem, Computers in Industry, 45, OMPUTERS IN THE SEMICONDUCTOR INDUSTRY, pp. 99-109, ScienceDirect, EBSCOhost, viewed 31 January 2012 [iii] Beatty, R, & Williams, C 2006, ERP II: Best Practices for Successfully Implementing an ERP Upgrade, Communications Of The ACM, 49, 3, pp. 105-109, Applied Science & Technology Full Text (H.W. Wilson), EBSCOhost, viewed 31 January 2012

2) Why did SAPs Business One prove to be a better choice for Wolf Peaks management than the new accounting software? Give several examples to illustrate your answer. SAPs Business One proved to be a better choice for Wolf Peaks management rather than the new accounting software because it was developed and designed more specifically for SMEs who need quick information. Part of the core needs for Wolf Peak is the ability to generate specific reporting figures for managements evaluation. Business One is simplistic and provides users with a very consistent, intuitive environment to allow learning to take place quickly and effectively. This was not the case with the previous software Wolf Peak chose as a replacement for QuickBooks. It was also very critical to management that they had the ability to build certain functionalities based on input from managers. Business One was able to accomplish this in one day as compared to the previous new accounting software which had according to Schwab, taken several thousands of dollars and several months, only to never be produced. Implementation was also much quicker and seamless than that of their new accounting software. For example, it only took 7 weeks to implement and train for the SAP software, where in contrast it took a full year for the previous accounting software upgrade and they still were not satisfied. It seems that Wolf Peaks main accounting software objectives focused primarily on the ability to drill down to specific data, get quick results, and the capability of building reports on the fly. Business One was able to help Wolf Peak with their complicated commission structure, warehouse management, and customer relationship management. This was not possible with the previous accounting software. So while SAPS Business One was able to simplify the companys accounting and reporting process, it also proved to be a better choice for Wolf Peak as it was able to serve many different valuable functions. I think it is safe to say that the company should not have sought out new accounting software just because it was more complicated than the previous QuickBooks they were using. Wolf Peak could have saved a lot of capital and time had they consulted or hired a qualified financial officer with experience in selecting accounting software that would meet the companies objectives.

3) Should most SMEs use an integrated business software suite like SAP Business One instead of specialized accounting and other business software package? Why or why not? In SMEs (Small and Medium Enterprises), there is often insufficient sharing of business information between managers and employees and among employees in part because the personnels daily routine tends to be extremely busy. To improve a firms responsiveness to customers, client feedback and information on employees professional experience, such as know-how for winning a contract, can be electronically stored and thus available to be shared within the company. Some SMEs have exploited ICT effectively to improve internal communications and have improved their reputation through swift responses to customers complaints and an ability to capture clients (hidden) needs.[i] Recently, an integrated suite allows e-tailers the ability to efficiently manage single web store or cross-store operations and consolidate the entire breadth of ecommerce business activities: all of the accounting, order management, warehouse management, returns management, billing, customer support, marketing, sales force automation, and customer relationship tracking and management data is in a single repository, allowing all aspects of ecommerce to be managed from within one single application.[ii] As a downside of the use of integrated business software suite is that the internal complexity of these systems increases exponentially due to the fact that these systems are designed to be used in all sorts of enterprises. Although software product lines promise remedy by the conscious use of variability, it creates new demands on quality assurance.[iii] The quality assurance is in many occasions pretty costly, not to mention of the cost of a suite itself. Every industry goes through four life cycle stages: Entrepreneurial, Collectivity, Formalization, and Elaboration.[iv] Entering businesses start at a stage where establishing a Website or adopting e-commerce would be the main issue. Later those seek the next stage of ICT use and e-business, dealing with internal and external business effectiveness/efficiency. Eventually, electronic commerce will have to become components of SMEs overall e-business strategy and normal business that are supported by ICTs and carried out on electronic networks.[v] At this point, it is reasonable to state that the software selection is an often overlooked but extremely important process in each business life cycle stage: For a small entering business, it is costly and not rational to directly go for an expensive integrated business software suite, which has

multiple functions that the small business does not need. Some of the small businesses like not-for-profit organizations will never use the entire function of an integrated business software suite. Therefore, those entering small businesses do not have much choice, but to go for a specialized business software package. In this case, it would be wise for a small business to choose a specialized business software package that is compatible with one of major integrated business software. For a medium size business, which is almost formalized in its life cycle, an integrated business software suite would be essential for its operation, and major care needs to be placed in selection and adjustments of the suite for the business environment.