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Copyright © 2006. HEC Montréal. Tous droits réservés pour tous pays. Toute trad

Copyright © 2006. HEC Montréal. Tous droits réservés pour tous pays. Toute traduction et toute reproduction sous quelque forme que ce soit sont interdites. HEC Montréal, 3000, chemin de la Côte-Sainte-Catherine, Montréal, Québec, Canada H3T 2A7. Les textes publiés dans la série des Cahiers du GReSI n'engagent que la responsabilité de leurs auteurs. ISSN 0832-7203 Using a Simulation Game Approach to Teach ERP Concepts Par : Pierre-Majorique Léger Cahier du GReSI no 06-02 Février 2006 Using a Simulation Game Approach to Teach ERP Concepts Pierre-Majorique Leger HEC Montréal 3000, chemin de la Côte-Sainte-Catherine Montréal, Québec, Canada H3T 2A7 tél : 514 340 7013 fax : 514 340 6132 pierre-majorique.leger@hec.ca Using a Simulation Game Approach to Teach ERP Concepts Pierre-Majorique Léger ________________ Copyright © 2006. HEC Montréal. 3 Résumé Cet article propose une approche innovatrice à l’enseignement des concepts sous-jacents au progiciel de gestion intégrée (PGI). A travers le biais d’une simulation d’affaires, les participants doivent opérer une entreprise en utilisant un PGI (SAP R/3). En utilisant les outils analytiques de l’application ainsi que le module d’intelligence d’affaires, les étudiants doivent analyser les données transactionnelles afin de prendre des décisions d’affaires et ainsi assurer la profitabilité de leurs opérations. Les objectifs pédagogiques de cet approche sont : i) le développement d’une compréhension pratique des concepts sous-jacents aux PGI, ii) d’expérimenter les bénéfices de l’intégration intra-organisationnelle et iii) de développer des habiletés technique à l’utilisation d’un PGI. Cette approche a été utilisée avec succès avec des étudiants de baccalauréat et de maîtrise en administration se spécialisant en technologie de l’information dans une école de gestion membre de l’AACSB. Abstract This paper proposes an innovative “learning-by-doing” approach for teaching ERP concepts. Based on turn-based simulation games, students are put in a situation in which they have to run their business with a real-life ERP (SAP R/3). Using standard reports and the business intelligence module of the ERP, students must analyze these transactional data to make business decisions and ensure the profitability of their operations. The pedagogical objectives of this game are threefold: i) to develop a hands-on understanding of the concepts underlying enterprise systems, ii) to experience the benefits of enterprise integration firsthand, and iii) to develop technical skill at using ERP software. This approach was successfully tested with both undergraduate and graduate business administration students majoring in information technologies in an AACSB school. Mots-clés Enterprise Resource Planning, Simulation Game Using a Simulation Game Approach to Teach ERP Concepts Pierre-Majorique Léger ________________ Copyright © 2006. HEC Montréal. 4 1. Introduction Teaching the concepts underlying an Enterprise Resource Planning (ERP) system is a difficult task. Many students have very little IT experience to which they can relate these concepts. They may have acquired business experience in one or two functional areas, but many of them have only a limited understanding of the operational aspects supporting the value creation process in modern firms. Moreover, they have usually had no firsthand experience with the functional un- integrated software that the ERP system was designed to replace. For these students, the horizontal integration of the firm, one of the greatest benefits of implementing an ERP system, can be very abstract due to their lack of hands-on experience with legacy systems. Yet business students are very computer-literate these days. Born after the first personal computers came onto the market, many of them have never experienced life without a keyboard or a mouse. Most of them had not even begun high school when the Internet started its exponential growth in the early 1990s. Therefore, if they get hands-on experience with an ERP system, undergraduate and graduate students can learn the system and its core concepts very quickly. A number of authors have suggested the use of simulation games as an innovative pedagogical approach to teaching business concepts (Aldrich, 2003; Prensky, 2001). Simulation games replicate, in a simplified manner, the complexity of a real-life environment, giving the participants experience with a particular phenomenon. Simulation games have been widely used in different managerial disciplines such as strategic management, operations management and accounting (e.g., Mitchell, 2004; Sparling, 2002; Springer and Borthick, 2004). Simulations have also been used in the field of IT. For example, Nulden and Scheepers (2002) suggest a learning methodology to guide students through the experience of software development failure and escalation so that they can learn firsthand from this experience. Draijer and Schenk (2004) report using business simulations in companies to teach ERP-related concepts and best practices. Bodoff and Forster (2005) used an e-market simulation to introduce IT students to market- oriented information systems. This paper proposes an innovative “learning-by-doing” approach to teaching ERP concepts. Building on the approach proposed by Draijer and Schenk (2004), the article presents a simulation game in which students have to run a business with a real-life ERP (SAP R/3). Groups of five to six students each operate a firm in a made-to-stock manufacturing supply chain and must interact with suppliers and customers by sending and receiving orders, delivering their products and completing the whole cash-to-cash cycle. A simulation software program and computer-automated script were developed to automate the sales process, so that every firm receives a large number of orders in each quarter of the simulation. Using standard reports and the business intelligence module of the ERP, students have to analyze these transactions and make business decisions to ensure the profitability of their operations. This business simulation is set to last seven weeks (half a regular semester) and concludes with one day of business simulation games that take the place of the regular mid-term exam. The pedagogical objectives of this game are threefold: i) to develop a hands-on understanding of the concepts underlying enterprise systems, ii) to experience the benefits of enterprise integration firsthand, and iii) to develop technical skill at using ERP software. This approach was Using a Simulation Game Approach to Teach ERP Concepts Pierre-Majorique Léger ________________ Copyright © 2006. HEC Montréal. 5 successfully tested in an ERP course with both undergraduate and graduate business administration students majoring in information technologies in an AACSB school (Association to Advance Collegiate Schools of Business). The experience elicited much enthusiasm on the part of the students, who became genuinely involved in the game. With very high student ratings in both the undergrad and graduate programs, the SAP Simulation Game was awarded the 2005 academic prize for the best use of technology in teaching in the business school of the author1. The aim of this paper is to present an approach to conducting a pedagogical simulation game with an ERP system. While this paper used SAP R/3 as an example of an ERP system, it is our belief that the same approach could be used with another enterprise system. The paper describes the most important aspects of the game in order to help replication of the approach in a classroom. This paper begins by presenting the supply chain setting and the rules of the proposed business game. The article goes on to present the organizational business processes on which the business game is based. Then the specific technologies developed to run the game are presented. The next section presents the seven-week curriculum used to train students to use the SAP R/3 system in order to prepare them for this business simulation. The paper concludes with a discussion of what was learned and future avenues for this new approach to teaching ERP concepts. 2. Description of the business simulation game The business game requires between 15 and 30 students distributed among five companies (A to E). Each plant is an independent company fully accountable for its profits and losses. The five student companies are all involved in the manufacturing and distribution of muesli cereals. Each company can have a product line of up to six muesli cereals, each with its own distinct flavor. As shown in Figure 1, there are six different muesli varieties that a manufacturer can choose to produce: Muesli Original, Muesli and Nuts, Muesli and Strawberries, Muesli and Blueberries, Muesli and Raisins and Muesli and Mixed Fruit. Six ingredients are available to produce the different varieties of muesli: wheat flakes, oats, strawberries, blueberries, raisins and nuts. Manufacturers create their own recipes for each of the flavors in their product line. In addition, cardboard boxes and plastic bags are needed to package the cereals. All grains are bought on a spot market. 1 http://www.hec.ca/en/headlines/2005/2005046i_en.html Figure 1: Bill of Material Using a Simulation Game Approach to Teach ERP Concepts Pierre-Majorique Léger ________________ Copyright © 2006. HEC Montréal. 6 Each commodity is acquired from a specialized commodity trader. The simulation manager manages these traders. Spot prices and information on market trends are published at the beginning of each quarter of the game. All five muesli manufacturers sell their products in the German agri-food retail industry, composed of 100 retailers. There are three categories of retailers (distribution channels): independent grocers, grocery chains, and hypermarkets. The buying behavior of the retailer is driven by end customer needs and may be influenced to various degrees by prices and marketing uploads/Industriel/description-of-sap-simulation-game 1 .pdf