ERP Implementation Issues - Case Study Example

September 24, ERP Story Write Up The main characteristics and challenges for the project as identifiedby Jean Roberge are as follows – With the implementation of ABC software package there will be uniformity in the business processes of the three companies. Managers at all levels would be able to track the financial as well as the marketing growth of the company, from both a cost and profit perspective. The company will be able to take proactive decisions as the global picture will become clear after the implementation of ERP package. Operations of the company will improve. Many obsolete systems as well as practices being followed by the three autonomous companies will be eliminated with the implementation of ERP package. The ERP implementation project is one of the first big software implementation challenges that ABS ltd is going to take up. Its cost is $50 million which is huge and any failure or setback will mean a lot of pressure from top management. The top management expects strict adherence to timelines and deliverance of a quality product. One of the challenges is to provide training to all the employees in order to get them used to the new systems and also the new business practices. In my opinion Jean Roberge is making a mistake at the start of the project itself. He wants IT people to take ownership of the project and push it down the throat of business. This is certainly not what the top management wants.ABC software package is just the means and not the end. The important motive here is not implementation of the ABC software package but business processre-engineering.ABS is looking forward to merge its three entities; shell out old ways of doing business and adopt best practices in order to push growth of the company.ABC software package is only a helping tool in this process. In my opinion two things need to be done immediately – the first is that ownership of the project should be taken by business; IT person should only help as finally the business will not be done by IT persons. (Bernard Grabot) The project manager can be a person from the technical side but ownership of the project should not be with him, he should be seen as doing something which the top management wants. The news of the implementation and the final authority should be with a person who is well respected within the three firms and has a lot of functional knowledge about business practices of the three companies. IT knowledge is secondary in such business reengineering projects; even consultants can provide that. Lastly the project implementation team should be comprised of both IT persons as well as functional people from the three companies. This will ensure a proper implementation. (Bernard Grabot) The main points which should have been projected by the consultants in their presentation should have been the following - The current situation in which ABS ltd. is and a brief description of the various legacy systems being used by the three firms. The disadvantages of the legacy systems in the three firms. The presentation should harp on the point how these systems are obsolete and a hindrance to proper business flow. The benefits of ABC software package – this point should deal as to how the problems posed by legacy systems will be removed by ABC. The best practices of the business which will be adopted by ABS with the implementation of the software package. The annual savings by implementing the package – cost of implementation should not shown separately but should be shown as an investment leading to savings. Finally the presentation should contain success stories – various companies in which the consultants implemented ERP and how they turned around their business. Most of these stories should be from insurance firms as well as service sector firms. In order to choose the best project manager from the list which has been provided we will use the following grading rubric for the three prospects - functional knowledge, ABC implementation knowledge and experience; Project management experience; Change management experience (managing changes caused due to ERP implementation); experience of various technical systems (Bill Holtsnider) (needed in order to understand which legacy systems need to be preserved.)On the basis of the above points we will analyze the three candidates – Candidate A B C Functional Knowledge Minimal – has not worked in a finance company Almost none –thoroughly an IT person Excellent finance knowledge – but almost none HR or sales knowledge ABC Implementation Experience Suspect –fate of first project not known, second one was a support project. Excellent experience – has experience of replacing legacy systems as well as ABC implementation experience in different business units. ABC experience strictly finance related – integration with sales will be problem for her Project Management Experience Decent – but suspect in case of ABC Excellent – knows how to implement project within timeframe – an essential requirement for ABS Decent – but has led only finance projects and implementations. Change Management Experience Good experience as was responsible for end to end tasks including training of employees. None. Decent – has provided support even after implementation Technical Systems Knowledge Decent Excellent – has worked in varied environments. Decent – not an extensive knowledge of IT systems By looking at the above rubric in which the three candidates have been analyzed and according to the requirements specified by Jean Roberge the person who is most suitable for the job is B. He has almost no functional experience but has an excellent track record of IT implementation. He has extensive knowledge of ABC implementation as well as knowledge of various legacy systems. Going from the above analysis B should be selected as the project manager. The main issues being faced by the project at this stage are the following – Inadequate Requirement Definition – Almost no input was taken at the design stage from the functional people; the design of the project has been prepared by IT personnel; so there has been a lack of functional requirement definitions. (Leon) Lack of Buy in – A strong resistance has developed among the employees and they are opposing the implementation of ABC software. This has happened due to the following reasons – a proper case as to why the change is required was not built, no involvement in the implementation of the people who will finally work with the system; arrogance of the new project manager. (Lau) Misfit of application software with the business processes – The project implementation has failed to study the underlying business processes and has not aligned the implementation of the project with the improvement of these processes. Poor communication between the Project manager and the various functional people has led them to develop a hostile attitude towards each other. (Abdullah Rashid Al Dhaheri) The project manager wants to push the project within the deadline whereas the functional people are not willing to support any of her endeavors. Two possible solutions which can be implemented by Mr. Roberge are the following – replace the project leader or use two in a box theory. Replace Project Leader – The authoritative style of the project manager is the main reason of the hostility caused toward the implementation project. The advantage of this move will be that the functional heads will feel vindicated and much of the anger caused will be removed. However the disadvantage is that almost all the progress made till now will be thwarted and the costs of the project will substantially increase as the new project manager comes in. The deadlines will also be severely affected. Use Two in a box theory – This solution simply says that do not leave everything to technical people – for every position including the position of project manager – responsibility should be shared between two people – one should be fully technical and the other one should be functional person or a person from the business side. The advantage of the process will be that the complaint of the business people that business processes are not being given due importance will be sorted. There will also be buy in from the functional side as they see their people being involved in the project. The disadvantage of this is increased project costs and non-adherence to deadlines. A consultative approach always takes more time than a dictatorial one. (Bill Holtsnider) The lessons learnt through the ERP implementation in ABS are the following – The need for the project needs to be defined- At the very beginning of the project the first thing which needs to be done is to make the end users aware about the project and the need for this implementation. Universal buy in should be there for the project from the functional people. The software package is a means not an end in itself. Business processes which are too changed with the help of this software package are more important and should be given due importance by the management. Proper training as well as education should be provided to the employees. Training will help them to master the system and education will make them aware about the benefits of the process. Poor communication between the project lead and the various functional heads is a recipe for disaster. There should be proper communication in order to ensure success of the project. The functional head should be given due importance as they are the ones who are running the business and brining the dollars in the company. Works Cited Abdullah Rashid Al Dhaheri, Queensland University of Technology. Centre for Information Technology Innovation. ERP implementation issues: a case study of Abu Dhabi finance departments implementation of Oracle Financial. Abu dhabhi: Queensland University of Technology, 2003. Bernard Grabot, Anne Mayère, Isabelle Bazet. ERP systems and organisational change: a socio-technical insight. London: Springer, 2008. Bill Holtsnider, Brian D. Jaffe. IT Managers Handbook : Getting your new job done. New York: Morgan Kaufmann, 2006. Lau, Linda K. Managing Business With SAP : planning , implementation and evaluation. New Jersey: Idea Group Inc, 2005. Leon, Alexis. Erp Demystified, 2/E. Washington DC: Tata McGraw-Hill Education, 2007. Read More