Change Management of People Issues - Case Study Example

?“Change Management of People…” Table of Contents 0 Reason behind Case Assertion 3 2.0 Major Problems Encountered During the Selection and Implementation Phases of the Project 3 3.0 Problems Encountered After Implementation 5 4.0 “Class" of Project 6 5.0 Difficulties in Achieving Technical and Organizational Changes 7 6.0 Attribute for ERP Success 9 7.0 Discussion on Managing Project 11 8.0 Justification on the Options Available to Power IT 12 References 13 Bibliography 15 1.0 Reason behind Case Writers Assertion The case writer asserts the ‘areas of relative strength’ of the strategy i.e. ‘3rd party modified off-the-shelf solution’ as high, high, low because the staffs of the internal department of the organization were not adapt at developing software of large magnitude. They also lacked the domain knowledge and lacked the capability to complete the task within the stipulated timeframe. Thus, from this point of view use of 3rd party option would provide them high level of software development expertise and application domain expertise. Though, they are from outside of the company they lacked the local company related knowledge. 2.0 Major Problems Encountered During the Selection and Implementation Phases of the Project Enterprise Resource Planning (ERP) system at present situation is in huge demand by both manufacturing as well as service organizations since they provide a strong integrated result to the information system as organization needs. With ERP package an employee can be able to run their company with a single system which can incorporate the whole business process and can make an enterprise-wide view of major corporate information. ERP software is a set of functions that connect various systems in an organization such as manufacturing, sales force, human resources, financial, data warehousing and document management. It also helps the organizations to handle task which may include order processing along with production scheduling. Companies experience huge challenges and problems at selection as well as implementation of the all stages of ERP system life cycle (Almahdi, “Introduction”). The Chief Executive Officer of Power IT decided to implement ERP system in the organization by purchasing it from the third party vendor. The staffs were not able to develop such software due to lack of domain knowledge. Thus, through tendering process the software was acquired. For the selection process the CEO, financial director and business development manager need to undergo various selection processes. An invitation was sent to the potential stakeholder by the business development manager. The tender was then reviewed properly by comparing it to the major requirements of the system and three vendors were selected. They again made presentation about the product to Power IT and desired vendors got the contract. The process of implementing the software throughout the organization was discussed with the vendor. Regardless of the major benefits that ERP software packages provide in incorporating and managing multi-functional procedures of business, there are several problems and barriers that can be related to such an implementation. The most important challenge is to amalgamate existing legacy method and function with the ERP system in an attempt to provide a common interface. Moreover, implementation of ERP systems is intricate, challenging, high-priced project and time consuming for every organization. The difficulties of ERP implementation assist to plan in a better way and facilitate more successful ERP implementation. The different barriers that can be raised during implementation of ERP system are organizational, technical and managerial barrier (Almahdi, “Barriers and Difficulties of ERP Implementation”). 3.0 Problems Encountered After Implementation ERP system was implemented in order to fulfill the requirements of the business. However, after eight months of using this system it was found that the system was not performing well and it was not meeting the business criteria of the company. Thus, various modifications were done in the system. The employees of the IT department was facing problem while handling the system properly due to poor service from the vendors. The problem was also due to the organizational resistance to change. The employees were not getting any support from the top management. The staffs were not provided effective training for properly handling the system. As a result numerous problems perked up while managing the system. They were not having relevant knowledge of using ERP system within Power IT. The major thing is the correct operation of ERP projects as it is related to the various functions of the organization. Poor service may lead to organizational failure. Various modifications were done after implementation and as a result displeasure grew among the users. An ERP system is expected to transform a great number of business processes as well as activities in the organization (Almahdi, “Barriers and Difficulties of ERP Implementation”). Thus, the senior management team hired a team for investigating the matter in concern. The team investigated the reason for poor functioning of the organization. 4.0 “Class" of Project Enterprise Resource Planning is implemented in an attempt to bring change and make the business successful. Power IT is an autonomous decision making company where business strategy along with direction of management is focused on the requirement of the customer. Four classes had explained the success of ERP system. Class A indicated total success and class D indicated total failure. Success is based on various organizational factors, system integration as well as data accuracy. Power IT Company falls under Class C because whatever criteria had been explained in this class about the company after implementation of ERP system, matched with Power IT Company. Under this class a company uses ERP systems either in sales record or accounting. They had not implemented the system in all the departments. The data which was used for functioning was also incomplete and incorrect. After implementing the system the company did not gain advantage over the business. The employees were not skilled enough to handle the system and thus caused business failure in the achievement of success. 5.0 Difficulties in Achieving Technical and Organizational Changes Various modifications need to be done in technical system. 29 modifications were identified for modifications in the ERP system; in ten items system modification was required, 5 items needed additional functionality, 4 items were identified within the original specification but not in top priority. In three items, one in production and other two in accounts had technical problems and needed modification. The other five alterations had no relationship with the original system modification but it would have been required later if the ERP system was kept. These are all the system changes that were required to make the company successful. Along with the technical changes organizational changes are also essential. The changes which required to be modified in the organization are “Communication and Relationship” as well as “Understanding the Business”. The close relationship and trust between the company and consultant was lost because the consultant was less bothered and usually made delays while handling the company’s problems. The new consultant was also not expert in handling ERP system and failed to help the staffs for using the system. The three departments did not receive any basic training regarding the use of ERP. They had no idea related to the system for managing current practices of work. Thus, the investigator observed that structured training program need to be implemented within the organization for improving the skills of the employees in operating the system. The employees were not acquainted with the business process in which they work in. A few staffs could understand the business in which they were involved. Thus, both technical as well as organizational changes are required in the organization. Implementing organizational change would be relatively challenging as compared to technical change. It is required to understand at first the problems in the organization and based on it sophisticated technology should be implemented. 6.0 Attribute for ERP Success A large number of factors have an influence in attributes of successful ERP implementation. The major factors are support of top management and their involvement, technological competence, project planning, change management. Till now there has been no systematic effort for identification, organizing and producing factors related with ERP successes and failures. The significant success factors related to the implementation of ERP system may include top management support, user training and education, project champion, management of expectations along with vendor/customer relationships. The basic objective of implementing this system is to transfer the knowledge along with using the software in the work process, understanding the process of business inside the organization as well as be familiar with the industry’s best practices. The aspect of the structural dimension requires to be managed well which includes careful selection of the technology, the steering committee, project management and the use of consultants. Simple project will help to make successful implementation of the system. Success of ERP is also related to knowledge, abilities, skills and experience of the project manager. The selection of the efficient along with effective team members is required, who has to be technologically competent as well as know the company and its business needs (Somer & Et. Al., “Critical Success Factors in ERP Implementations”). Power IT in order to develop and bring advancement in their operations implemented ERP system but the attribute for success in the organization was not effective. There was no support from the top management, effective training was not provided to the employees for handling new operations and the decision was not taken by analyzing the need of the organization and the capability of the employees. As a result they could not gain success through the implementation of new ERP system. 7.0 Discussion on Managing Project The three key areas of project management are people management, process management and performance management. People management is vital with respect to project management. The project manager acts as a leader and guides the team member in fulfilling the objectives of the project. Power IT planned to implement ERP system which is primarily “people focused” project. When the decision was taken for implementing the project, Chief Executive Officer and Senior Management were sincerely involved in the project, but the employees were not much devoted in the project. The ideas clashes between the project manager and other employees during project. Process management is equally important as people management. For successful outcome of the project the project manager regulates sound as well as effective process that may lead to success in project implementation. In the process management, various problems and failure arise after implementing the system. Power IT implemented the ERP system for making profits but due to incapability of managing the technical process the business was not gaining the anticipated profits. The final area is the performance management. Project manager can understand the actual progress and performance of the project and keep informing the top management. Power IT focuses on various performance areas such as technology and product innovation, environment management, responsiveness, cost, quality, effective customer service and delivery on time. The system which was implemented required modification for good performance. It was not meeting the entire performance standards that the company maintained. Thus, these three key areas are significant for successful project management (Thom, “The Three P's of Project Management”). 8.0 Justification on the Options Available to Power IT The term “upgrade” means to make advancement as well as improve the system which was provided by the vendor for implementing in the organization because the system was not functioning well as per the requirements. The term scrap and replacement means the old system needs to be completely removed from the organization and in place of it new system to be introduced. ‘Re-implement’ denotes that the existing system is removed and new system is implemented in place of the old one. ‘Modification’ in the business process signifies that the old process is not totally altered but modification is done based on the current requirements of the organization. Re-implementation of current ERP system in the organization means the existing system needs to be modified by replacing it with new system. This results when the existing system is not functioning well causing failure while handling the process. Business processes are primary to the success of the organization during producing its services as well as goods. In order to maximize the competitiveness of an organization, it is required to include processes that are both well planned and work effectively as well. The strategic value of a process view comes not only for analyzing existing processes in the organization but also for recognizing the areas which need to be improved. For improving alignment of business process the understanding of organizational objective lies at the process perspective. The business process should not include unnecessary activities. Thus, modification need to be done in business process if it is not functioning well which may be the outcome of well designed business process which results in improved efficiency as well as effectiveness. Thus, in Power IT “re-implement and modify” can be done as it will be beneficial for the functioning of the organization (Student Accountant, “Business process and Strategy”). References Almahdi, M S Ibrahim. “Barriers and Difficulties of ERP Implementation”. March 07, 2011. What Organizations Should Know About Enterprise Resource Planning (ERP) System, 2010. Almahdi M. S. Ibrahim. “Introduction”. March 07, 2011. A Framework for the Implementation of ERP to Improve Business Performance: A Case Study, 2008. Somer, M Toni. & Et. Al. “Critical Success Factors in ERP Implementations”. March 07, 2011. Enterprise Resource Planning (ERP) for the Next Millennium: Development of an Integrative Framework and Implications for Research. 2000. Student Accountant. “Business Process and Strategy”. March 07, 2011. Business Process Change, 2008. Thom, William. “The Three P's of Project Management”. March 07, 2011. Articles. 2011. Bibliography Baltzan, Paige. & Phillips, Amy. M: Information Systems McGraw-Hill, 2010. Edwards, Helen M. & Humphries, Lynne P. Change Management of People & Technology in an ERP Implementation IDEA Group Publishing, 2005. Read More