Conclusions 48

The main goal of this research was to design and validate a measurement instrument which can be used to measure the cost of maintenance and the extent to which a standard packaged ERP system is customized to the needs of the organization using it. This instrument is designed using knowledge from the literature combined with findings from a field research through a case study and validated using another case study.

7.1.1 Cost of maintenance

The following maintenance categories are identified: modifications, user support, training, patch maintenance, upgrades, bug fixes and extension of used functionality. The total cost of maintaining a packaged ERP system can be obtained by evaluating for these maintenance activities the costs along three dimensions: people, process and products and services. The people dimension refers to the amount of effort spent by employees on maintenance; the process dimension refers to costs incurred at the business side as a result of conducting maintenance and the products and services dimension refers to all purchased goods and services such as software support from an external party or consulting services during an upgrade project. By evaluating costs along these three dimensions we have ensured that all costs are included and nothing has been left out.

The first step was to identify which maintenance activities are performed and how costs are incurred and the second step was to find out how these costs can be measured in an organization. It was found out that the most important sources of information are the people who are responsible for maintaining the specific ERP application: the technical application managers (DBA’s, PeopleSoft developers) and the functional application managers.

7.1.2 Degree of customization

To design the DOC measurement instrument first all the object types which can be modified are identified for the specific package under study and subsequently grouped into different customization types based on their functionality. The development time is taken here as a complexity measure.

The degree of customization can be determined either by evaluating together with the functional application manger which customization types are built and what their development time were or evaluating which specific object types are modified within the system with the technical application manager. The first approach can be seen as a top down assessment approach where customizations are grouped together and the total effort is estimated in order to determine the DOC whereas the latter approach is more of a bottom up approach where each single object modification is assessed separately.

49

Having this possibility to measure the DOC in two ways brings a number of advantages. First of all we are not dependent on a single source of information. For example when the technical application manager does not know which objects are modified, the functional application manager can provide a good estimation of which customization types are built into the system and the other way around. Secondly, the information of one source can be validated by comparing it to another source. For example, the calculated DOC as a result of the top down approach can be compared to the DOC calculated by evaluating each object modification to see whether there is an inconsistency.

7.1.3 Findings

From the findings of the two case studies we can conclude that there is a positive relation between the degree of customization and the cost of maintenance for the PeopleSoft HRMS package. The differences in costs are for the People and products&services dimension largest and for the process dimension the smallest. This could be due to careful planning and execution of maintenance activities at both organizations whereby there are no disruptions to daily operational processes.

However, these conclusions are drawn based on only two case studies and therefore their reliability is something which can be questioned here. Moreover, due to an upgrade project in 2008 at the LUMC, we cannot compare the two cases fairly with each other. This problem can also be resolved by conducting more case studies, since in that case the effect of an upgrade project on costs of maintenance would be negligible due a large data set.

7.2 Future work

The goal of the measurement instrument which is designed and validated in this research is to gather data on cost of maintenance and degree of customization in order to gain insights in the exact relation between the two. In order to do this, more data is needed from the practice.

Furthermore, the instrument designed in this research can specifically be used for PeopleSoft packages. To be able to gather more data, the instrument should be adjusted and designed in such way that it can also be used to measure maintenance cost and DOC of ERP packages from other vendors such as SAP and Oracle.

50

8 References

Abran, A., and Nguyenkim, H. "Analysis of maintenance work categories through measurement." Conference on Software Maintenance, Sorrento, Italy, 104-113.

Abts, C., Boehm, B. W., and Clark, E. B. "COCOTS: A COTS software integration lifecycle cost model-model overview and preliminary data collection findings."

Boehm, B. W. (1981). Software engineering economics, Prentice Hall: Englewood Cliffs N.Y. Brehm, L., Heinzl, A., and Markus, M. (2001). "Tailoring ERP Systems: A Spectrum of Choices

and their Implications." Proceedings of the 34th Annual Hawaii International Conference on System Sciences ( HICSS-34)-Volume 8 - Volume 8, IEEE Computer Society.

Brehm, L., and Markus, M. L. "The Divided Software Life Cycle of ERP Packages." Global Information Technology Management (GITM) World Conference, Memphis (Tennessee, USA), 43-46.

Burch, J. G., and Grupe, F. H. (1993). "Improved software maintenance management." Information Systems Management, 10(1), 24-32.

Carmines, E. G., and Zeller, R. A. (1994). Reliability and validity assessment, Sage Publications, Inc.

Cooper, D. R., and Schindler, P. S. (2001). Business research methods, McGraw-Hill/Irwin. David, J. S., Schuff, D., and Louis, R. S. (2002). "Managing your total IT cost of ownership."

Communications of the ACM, 45(1), 101-106.

Ehsary, A. S. (2009). "The fit between business processes and standard ERP software, Master thesis preparation - Literature study." Eindhoven University of Technology.

Esteves, J., and Pastor, J. "An ERP lifecycle-based research agenda." International Workshop on Enterprise Management Resource and Planning Systems EMRPS, Venice, Italy, 359-371. Gable, G., Scott, J. E., and Davenport, T. D. "Cooperative ERP life-cycle knowledge

management." 227-240.

Gartner Research. (2009). "Customization: the cost that keeps on costing." Gartner Inc. Hong, K. K., and Kim, Y. G. (2002). "The critical success factors for ERP implementation: an

organizational fit perspective." Information & Management, 40(1), 25-40.

Hybertson, D. W., Ta, A. D., and Thomas, W. M. (1997). "Maintenance of COTS-intensive software systems." Journal of Software Maintenance: Research and Practice, 9(4). Irani, Z., Ghoneim, A., and Love, P. E. D. (2006). "Evaluating cost taxonomies for information

systems management." European Journal of Operational Research, 173(3), 1103-1122. Klaus, H., Rosemann, M., and Gable, G. G. (2000). "What is ERP?" Information Systems

Frontiers, 2(2), 141-162.

Landres, G., Rivera, I., and Sankaran, P. (2000). "Essential Guide to Peoplesoft Development and Customization." Manning Publications.

51

Light, B. (2001). "The maintenance implications of the customization of ERP software." Journal of Software Maintenance and Evolution: Research and Practice, 13(6), 415–429.

Looijen, M. (2004). Beheer van informatiesystemen, ten Hagen & Stam Uitgevers, Den Haag. Markus, M. L., and Tanis, C. (1999). "The enterprise systems experience-from adoption to

success." Framing the domains of IT research: Glimpsing the future through the past, 1- 46.

Meijer, M., and Smalley, M. (2006). "Economisch beheer van ict." IT Economics, 22-27. Moon, Y. B. (2007). "Enterprise resource planning (ERP): a review of the literature."

International Journal of Management and Enterprise Development, 4(3), 235-264. Ng, C. S. P., Gable, G. G., and Chan, T. (2002). "An ERP-client benefit-oriented maintenance

taxonomy." The Journal of Systems & Software, 64(2), 87-109.

Soh, C., Kien, S. S., and Tay-Yap, J. (2000). "Enterprise resource planning: cultural fits and misfits: is ERP a universal solution?"

Somers, T. M., and Nelson, K. G. (2004). "A taxonomy of players and activities across the ERP project life cycle." Information & Management, 41(3), 257-278.

Swanson, E. B. "The dimensions of maintenance." International Conference on Software Engineering, San Francisco, 492-497.

Vigder, M., and Kark, A. W. "Maintaining COTS-based systems: start with the design." Commercial-off-the-Shelf (COTS)-Based Software Systems, 2006. Fifth International Conference on, 8 pp.

Wagner, E. L., and Newell, S. (2004). "‘Best’for whom?: the tension between ‘best practice’ERP packages and diverse epistemic cultures in a university context." Journal of Strategic Information Systems, 13(4), 305-328.

Wei, H. L., Wang, E. T. G., and Ju, P. H. (2005). "Understanding misalignment and cascading change of ERP implementation: a stage view of process analysis." European Journal of Information Systems, 14(4), 324-334.

Yin, R. K. (2008). Case study research: Design and methods, Sage Publications, Inc. Zuse, H. (1990). Software complexity: measures and methods, Walter de Gruyter & Co.

52

Appendix A – Customization objects in PeopleSoft