Technology in an ERP Implementation - Essay Example

 Technology in an ERP Implementation Introduction PowerIT is a large international company, which has employed thousands of people all around the world. The company’s origin can be traced back to Taiwan. The company is a self-directed company with its own management and decision-making processes (Edwards and Humphries 2005, 143). The company’s management is interested to polish the skills of its employees by providing them training facilities. The company also shows interest in its overall progress as the management wants to implement ERP (Enterprise Resource Planning) system for increasing the efficacy of its processing. Previously, the company made use of MRPII (Materials Resource Planning) system, however, in 2000, the management acquired ERP system (Edwards and Humphries 2005, 144). The new system proved to be a failure because of a number of problems identified by the investigative team. Organizational and technical changes are required to be implemented so that the newly developed system is according to the needs of the users. Training must also be given. This paper evaluates the case study in terms of change management and implementation of ERP successfully. PowerIT’s Acquisition Strategy of ERP The company consisted of an IT department but that department lacked the expertise required for the development of a software of that scale for which, the company required a software (Edwards and Humphries 2005, 147). The company is quite interested in improving the expertise of its employees but at the time when new system is required, the staff of IT department is somewhat lacking due to which, an outside vendor is selected for buying the solution. Figure number 2 that is entitled as “Acquisition Strategies & their Areas of Relative Strength” displays the selected option of the company. The chosen option is “3rd-Party modified off-the-shelf solution. This solution is opted because software development expertise is high, application domain expertise is high, however, local company knowledge is low (Edwards and Humphries 2005, 147). The third party vendor is the most suitable choice for the company as the company does not have to rely on its own IT staff that is good at local company knowledge but lack the other two expertise. Company’s local knowledge can be attained but expertise of software development and application domain must be there in order to get the software developed according to the requirements of the company. The case writers assert that the "areas of relative strength" of this option rank as "High", "High", and "Low" because the third party vendor are expert for the first two fields, so high is ranked and lack local knowledge to a certain extent, so low is ranked. Major Problems before and after Implementation PowerIT faced many problems before and after implementation of ERP system. During the selection and implementation phases of the project of ERP, the management of PowerIT showed concern towards inefficient working of the old system that was MRPII. The management also identified a problem with the MRPII system, which was that it was an antique system and because of its usage, they were left behind as compared to their competitors (Edwards and Humphries 2005, 148). Therefore, they showed unwillingness for the old system’s further improvement. When the management accepted the system, they evaluated the system’s inadequacies to fulfil all the requirements of the business. In addition, the newly developed system and its requirements asked for additional budget that was not previously set by the company (Edwards and Humphries 2005, 149). The internal IT department of the company also faced problems with the support service, as they were unable to understand and use the system due to which, they showed resistance towards the newly developed system. According to the investigation team, the project was not of high preference for operational levels of the company. There were also personality clashes between managers working in the company due to which, the project implementation faced problems (Edwards and Humphries 2005, 150). The resistance of the users to cooperate with the newly developed system was also a problem, which was met during the implementation phase of the project. Dissatisfaction was there among the users of the system because of its inability to meet all the requirements of the users. Another identified problem was that along with MRPII, other software packages were also used. Nevertheless, MRPII was fully replaced by ERP system and the other software packages were still functional (Edwards and Humphries 2005, 152). This element was neglected when the acquisition of the new system was considered. The managers were not fully aware of the software packages used along with MRPII. Even after implementation of the ERP system, the data was not fully transferred and results were inaccurate, which was again a problem. The user interface design was also reported to be poor, which was causing dissatisfaction for the users. In addition, the users were deprived of adequate training that was to be given to them to use the newly developed system (Edwards and Humphries 2005, 152). The managers and supervisors were not able to generate all kinds of reports that they required, which was a major issue for them. Users lacked the expertise to use ERP system and also were not given full documentation as to what should be done for handling the system, which was problematic for them (Edwards and Humphries 2005, 153). Technical and Organizational Changes The investigation team has recognized technical as well as organizational changes for the company because according to the needs of the newly developed ERP system, it appears that the company requires both changes. As far as technical changes are concerned, they are not very much difficult to achieve, as they will be done with some training and vendor assistance. However, in terms of organizational changes, much is required to be done. According to my consideration, organizational changes are more difficult to achieve. It has been reported in the case study that the managers have personality clashes with one another due to which, there can be problems of communication and relationship creation that will eventually affect the successful acquisition of the new system. The management as a whole has to correspond to a new company that is the vendor of ERP system and without successful correspondence, successful implementation of the system is not possible. The management should be communicative and understanding in order to support the vendors of the new system. Training about the new system is also required to be given to the users so that they can use the system with competence. The business development manager is also reported to be lacking in social skills that needs to be improved so that he can participate in the support process. Therefore, it is quite clear that organizational changes are much challenging. ERP Success and PowerIT By analyzing figure 1 that is entitled as “Classification of Enterprise Resource Planning Success”, it is quite clear that at this juncture, the class of the project is “C”. As we can notice inaccurate and incomplete data, the usage of the ERP system is not successful in all departments and the benefits that were previously wished are not achieved until now. Therefore, the project is in the category of Class C. Available Options to PowerIT There are three options available to PowerIT in terms of ERP usage. These options are ‘re-implement the current ERP system’, ‘consideration of upgrade proposals from vendors’ and ‘scrap the current system and replace it with new one’ (Edwards and Humphries 2005, 149). Re-implementation, scraping and replacement options for the ERP system are not valid, as the company has to invest much more in the options. It has already invested to a much more extent. Therefore, the first and third options are not appropriate at all. The option that seems quite applicable to me is option no two that is to upgrade. The vendor should be contacted to upgrade the present system with some modifications that are required by the users. The developed ERP system is already not known to the users. They must be given some training on the usage of ERP system and their requirements and needs related to usage of system much be evaluated and upgraded by the vendors so that the system can be supportive for their needs. Conclusion After analyzing the case study, it is quite clear that the ERP system in which, the management has shown interest in terms of acquisition is not fully successful for the company because of a number of factors. The newly developed system is not fully capable to meet the needs of the users and lacks some inaccuracy due to which, the users of the system are dissatisfied. Training must be given to the users so that they can understand the system and can use it with accuracy. There must be some organizational changes in order to accommodate the new system. the management has to be communicative and understanding in order to support the vendors to install the system correctly. Works Cited Edwards, Helen M. and Humphries, Lynne P. Change Management of People and Technology in an ERP Implementation. Journal of Cases in Information Technology 7(4) (2005): 143-159. Read More