Texas Instruments - Case Study Example

Texas Instruments Case Study Texas Instruments claim to have aligned their IS strategy with its business goals; discuss how well they have achievedthis aim. Explain the methods and models the organisation could have used to ensure the IS strategy was aligned with business objectives. Using relevant examples from the case, discuss why these approaches would have helped. In deciding to revamp their information system on a global scale, Texas Instruments (TI) envisioned that the enterprise resource planning method (ERP) would prove adequate in reaching company goals. Despite the sceptical outlook that a majority of executives had with respect to ERP, it was chosen as the methodology that could bring answers to the issues Texas Instruments faced in the late 1990s. As the case study outlines, the executives at TI felt that granted the fast paced trend of information technology, it was necessary for the company to make some considerable changes as to their methods and processes, in a manner that would allow them to compete more favourably in their market. According to the authors Sarkis et. al, TI was facing some serious issues in handling large international orders and delivery demands. For instance, the study refers to a Taiwan customer asking for product orders to be made in California and delivered at a given location to be decided just before delivery time. Such procedural complications in the ordering procedure would cause logistics issues that would eventually impact delivery time. As pointed out in the study, TI was facing several similar problems where the customer requests would be delayed as the information system in place was not flexible enough to streamline the ordering process or to meet customer demands adequately. The executive decision to invest 250 million dollars in a brand new web based ERP system was made to help address the several issues caused by the internal and incompatible information systems used for inventory, manufacturing, and sourcing. Consequently the overall decision to implement a novel IS strategy to better meet customer demands was handled properly. In implementing a web based ERP system, the company would help reorganize the many processes that tie suppliers, manufacturers, and resellers on a worldwide scale, and thereby meet market demands in a preferred fashion to become competitive again. In upgrading their internal information system, I believe TI executives made the right choice in partnering with Andersen Consulting for their consulting expertise in the area. Considering the size and impact of the project in the long term, it makes perfect sense to consider that managers would employ significant resources to plan and execute this strategy for an up-to-date information system capable of handling customizable orders in an effort to enhance overall customer satisfaction and loyalty to the company. The team in charge of the project, after meeting and evaluating the solutions of several vendors, eventually choose the SAP solution for its ability to handle large amounts of data. Due to the widespread nature of the project, reliance and pragmatism of the solution become imperative to make the transition to a more productive system. In considering the processes involved in the decision making for the adoption of the SAP based ERP system; there are few objections when taking into account the pre-established goals of the company. However, in considering the results that came off the newly implemented system, there were some methods and processes that could have been considered for a better turn out. In fact, Texas Instruments experienced issues of delivery and lower productivity immediately after product launch within their enterprise. As reported in the study, it appears that the 13,000 thousand users of the ERP system were not properly trained on the new system prior to its implementation. The previous reasoning would explain in part the apparent low productivity pattern which occurred during the "go live" phase of the ERP system. The report mentions, however, that the business leaders assigned to oversee the ERP system development and implementation in Dallas returned to their respective locations during the go live phase to train the future users of the system. In retrospective, this issue may have been handled more efficiently in organizing proper training of staff during the implementation phase of the information system. Based the case study, there is hardly any mention of a formal process put into place by TI to insure that users of the system would fully be prepared to use the ERP system upon completion. In further consideration, that aspect could have save some meaningful dollars to the company. Additionally, a progressive implementation of the system by specific geographical areas could have served as a practical testing ground prior to releasing the application on a worldwide scale. A step by step approach in developing and releasing the application on a territorial basis could have helped executive managers foresee certain issues with the system and make the necessary changes prior to the company wide roll out of the application. The progressive implementation may have helped in accelerating certain functions in priority to others, thereby rendering the system more productive within a shorter time period. The implementation of recursive quality control metrics to insure that the ERP system was fully inline with company targets would have been useful as well. Considering the project size, separating these processes and insuring they were all appropriately implemented so as to minimize customer learning curve would have been highly beneficial in terms of added productivity. Because these aspects of the implementation of the information system were neglected, it contributed to delaying the real impact that the project could have had in meeting market demands upon completion. Critically discuss the approach Texas Instruments used to justify the adoption of the ERP system and assess its value to the business afterwards. Explain the methods they could have adopted to ensure the right choice and to ensure the business recognised the benefits. Using relevant examples from the case, discuss why these approaches would have helped. The case study briefly presents the needs for adopting a newer internal information system at Texas Instruments. However, the study fails to identify the previous state of the company as it was using "disparate systems". In showing the importance of implementing the newer method as the ERP system, it would have been interesting to have additional metrics concerning what the company previously employed. It is stated several times in the study that Texas Instruments used several information systems which lacked continuity to facilitate the various company processes for competitive productivity. It seems also that a solid presentation of the disadvantages of the previous systems was certainly a major influence to the TI executives in making the decision to adopt the new level of system information throughout the company. Therefore in estimating the drawbacks and in justifying the transfer to an ERP based solution, the study could have outline the financial impact older system had as well as their affect on productivity and on-time delivery. Texas Instruments company executives and managers justified the need for an ERP system in demonstrating that it would allow the company to better face market trends, as well as streamline several key company processes by making them entirely web-based and therefore accessible worldwide. Based on the perceived benefits of the system, it made sense financially to take the necessary steps to get the project going. In fact, as described by the study, the new ERP system was projected to save the company several hundreds of millions of dollars in helping to alleviate some of the issues that the distributed and separate information systems used to cause. By applying this new ERP, executives partly justified the need for such transition in insisting that "supplier-managed" inventory and "customer managed" orders could significantly aid in reaching company goals from an infrastructure standpoint. Initially, the company had estimates showing that the ERP system would lead to productivity enhancement of around 3-5% upon completion. From a technical aspect, the novel ERP system was justified as the adequate replacement of the previous Texas Instruments proprietary system which was also incompatible with the desired web based implementation. The company, as previously mentioned, relied on a multitude of separate information systems that were causing several logistics issues in transferring information from one system to the next. The study reports that the company had several thousands of such systems to handle their portfolio of over 120,000 monthly orders, based on an inventory of 45,000 products. Overall, there were several valuable justifications for the company to adopt an ERP system as their previous methods presented financial issues, were technically outdated, and made for a complicated system which became difficult to utilize while staying competitive in the TTL and DSP semiconductor marketplace. During the implementation phase, company executives at Texas Instruments made the decision to employ an alternate software system solely for "advanced planning". They made the executive decision to change the "advanced planning" software from Red Pepper to i2 which was a more recognized platform in the industry at the time. The error in making the choice of Red Pepper is barely discussed in the study although it shows that there were some disparities in the decision making process as to how to structure the novel infrastructure at TI. Although the process of hiring the Andersen Consulting firm, reviewing vendor products, and determining a project team were recognized and accepted methods in industry; some aspects were not properly handled as they led to several changes along the way. In determining to take the SAP based ERP system, all aspects were not considered as the choice of Red Pepper as the planning software for the system would prove to be the wrong choice. An alternate approach to choosing the various components of the system would have been to have the experts and consultants prepare a comparison study of similar companies utilizing various combinations of software tools to streamline their processes. It appears that aside from the fact that Red Pepper was initially considered as the preferred complement to the ERP package, there is little in the study to suggest that the initial decision to use Red Pepper over similar competitive packages was driven by other information than the one suggested by the vendor. In this aspect, a more thorough analysis or study of functioning ERP systems using various advanced planning software applications would have prove valuable, and may have avoided the change in the middle of the implementation phase. Evaluate the approach used at Texas Instruments for managing the change and the implementation of the ERP system. In your discussion consider the interaction with the business users, and the subsequent management of the system implementation. Explain the approaches the organisation could have used to ensure the system was implemented successfully. Using relevant examples from the cage, discuss why these approaches would have helped. For any large organization such as Texas Instruments, having over 10,000 employees worldwide, any major restructuring such as the implementation of an ERP system demands some intensive management to be successful for the company. TI's approach in preparing and subsequently implementing the change is recommendable for any company of their size wanting to update its information infrastructure. As the study widely reports, TI managers and executives decided to hire outside consulting and expertise from the very beginning of the project. According to the study, the proposal was presented and finally embraced by the president and leading managers at Texas Instruments prior to engaging in the upgrade process. In fact, as soon as the transition to an ERP system was justified and approved by TI company leaders and executives, several meetings with vendors took place with the added expertise of Andersen consulting. The overall steps taken by the company to insure a successful transition from their current proprietary system to a global solution was manifest. The vendor meeting was the opportunity for TI decision makers to estimate along with various teams of experts the capabilities of the systems they were being offered, and thereby be able to establish a framework to choose a vendor and plan out the configuration, implementation and testing of the system. As a technology company, TI had its own IT department participate in the process, making the management aspect of the project easier to handle internally. Considering the size of the task and the sizeable budget involved, the company decided to assign an ERP specific team, which relocated in Dallas temporarily for the implementation of the SAP based ERP system that was eventually chosen among all vendors. Over 250 employees were put on the Andersen Consulting payroll to take part of the consulting aspect of the project. Another aspect of the project which outlines adequate management procedure is the frequency of leadership meetings and the involvement of top executives in the process, from the vendor meetings to the actual implementation of the system. The report outlines that the CEOs of the various solution providers for the ERP system met regularly with the president and managers at TI to oversee the direction of the project and insure its success. Outside expertise was brought in as a resource to assist the users of the system. A help desk was put in place to facilitate the handling of issues in the implementation phase that may have required specific expertise. The use of a ticketing system to prioritize and organize the management aspect of miscellaneous problems was also put into effect during the implementation phase. In transitioning from a proprietary system to a company-wide web based solution, management at TI realized the need for training the users and made the decision to have the team leaders who had relocated in Dallas, TX return to their respective territories for the purpose of training the users of the system. In summary, the TI approach in the managing and implementing the ERP system became a company wide endeavour involving top level executives, to end users, in addition to outside consulting expertise. However, the external preparation for the roll out of the ERP system could have been handled in a more efficient way. The study shows that about 3000 customers were to use the system to manage orders, and for suppliers to handle inventory; although these users were barely involved in the implementation phase of the system. Management should have considered assigning a training team for these specific users prior to the application coming online, in order to avoid the low productivity phase that occurred upon release on the ERP system. It is unclear from the study whether the users trained by the business leaders included some of the clients, although is it highly probable. However, a more hands on approach would have been beneficial to insure that the internal and external training were being handled in parallel for the best possible outcome of the ERP system launch. Despite the suggested approaches in this debate, the results of the system proved satisfying as it reached its objectives within 9 months of being in use even if it demanded several years to fully design and implement. Due to the system, a large majority of the transactions could be handled in a matter of seconds, with enhanced response time, and reduced inventory. In such a large project, it is often difficult to foresee the problems that may arise during or after implementation; which is why the constant task dividing and handling was a key approach. Eventually, the outcome may have been better for TI in terms of productivity and time delivery had there been additional training provided well before the go live phase of the ERP system. Overall, this shows a very well managed system which met the goals it was meant for in a matter of two quarters, and that is recommendable to any company. Read More