BKK Mobile Oil ICT - Case Study Example

BKK MOBILE OIL ICT It is now a reality that Information and communication technology is the backbone of every organization in that every major department in the organization cannot be run without incorporating full technology coverage. All systems have now shifted from the traditional way of running a business to the new modern way. This modern way comes equipped with adequate technologies including programs put in place to run the systems. This paper aims to examine the change brought out through the introduction of a technological system and how the transformation has taken place. The system in question here is the enterprise resource system which comes in the form of three modules namely performance management, private customers’ management and corporate customers’ management. For this to happen, the study will review the situation the organization was before the change, the process of change in that given period of time. The change will be identified on different frameworks. The study also reviews the upcoming issues that arise from implementation of this system including the costs incurred, the personnel affected, and that benefits that will be reaped from such. In conclusion, the study directs the motives to favor the success of the implementation and who are involved in making such a project a success. BKK Mobile Oil ICT Introduction In an effort to compete favorably in this highly intensive challenging and changing corporate and business environment, there is every need to embrace the only solution that will bring about smooth running of businesses in the course of those changes. The study as researched below clearly depicts how the introduction of ERP systems into BKK mobile oil has impacted the management ranging form performance to customers. The study is divided into three categories or parts. The first part will cover a detailed background of the company stating the origin and the products or services offered, the environment, both internal and external environment of the organization, the surrounding and the far end markets and the reasons behind the changes that led to the introduction of the system. The second part exposes the process of change and all the upcoming issues accompanying the changes, including any challenge faced. The last part focuses on the widespread of the technology, the costs incurred in an effort to smoothly shift and the benefits that will accompany. Company Background BKK Mobile Oil is a health insurance company whose headquarters are located in the BKK mobile Celle with administration located in Hamburg. This company was founded on 1st October 1952. The company is a public entity and has its operations directed by the health insurance funds. The company takes pride in over one million insured people. BKK mobile oil has employed around 1300 employees totaled from both Celle and Hamburg. It is worth 3,612 United States dollars as has been arrived at on the criteria of daily revenue potential of the website in a period of 12 months (Ebbesen 2012). BKK Mobile Oil Organizational Environment and Marketplace The firm has market dominance abruptly emerged when the German legislation allowed insurance to other parties; the previous dominated market was German territory this has increased to over the regions. Position in Supply Chain Figure 1 Supply Chain of BKK Mobile Oil The supply chain model above illustrates the business to customer model (B2C) of the BKK Mobile Oil. Since the market is well defined, the service is widely offered throughout Germany directly to the customers. BKK Mobile Oil Hierarchy before the Change This part analyzes the situation that existed before the introduction of Oscar as was analyzed and classified by the AOK system. The system classified the management processes in place and the IT system as critical since it was not possible to immediately inform the customers about the updates on their insurance state (Ebbesen 2012). Similarly, the master data were found not to be centralized. Due to lack of standardized interfaces, exchanges of direct date between the stand alone applications were processed through the email. As a result of all this, the BKK mobile oil company looked for a unified process management. This could only be attained through incorporation of a standardized user interface or program. There was the lack of transparency in that the company was suffering from poor visibility of the company trends. This was followed by resistance to make a decision due to the poor exchange of information. This made it difficult to react quickly to the changing business needs and delivering of information (Ebbesen 2012). The following figure illustrates the organizational structure of BKK Mobile Oil before the ERP-System was introduced. Figure 2: Organizational hierarchy at BKK Mobile Oil before change Context to Change at BKK Mobile Oil The project to introduce the ERP system commenced on 26th March 2010 and ended on 17th January 2013. The agenda was to replace the legacy system with the ERP system. BKK Mobil Oils business processes were supported by the ISKV base system, other third-party applications including add-on products and in house developed software. These were all stand alone programs and had different user interfaces and partially different system concepts. The intention of Mobil Oil was to introduce a new IT Business solutions based on SAP / Oscar to replace the legacy environment. The Company AOK was supplier of the new system SAP-Oscar and support for data migration and data ISKV Add-on products for SAP / Oscar. The AOK System provides the qualified data center services, including counseling, both for the project as well as for the subsequent production operation (Ebbesen 2012). In addition, include in particular assistance in the project, the construction of the Facility Services in 2011 and 2012, the early part of operating in accordance with milestone planning and Go-live operation of the remaining. The legacy systems reduce the ability of companies to succeed and grow and of reaping the economies of scale globally. This happens because they prevent continuous coordination and visibility. BKK mobile oil had every intention of expanding to the international market after the German legislature allowed. However, the legal systems increase the difficulty of doing this through inhibiting the ability to gain or acquire influential business insight. The ICT enabled technique was improvised to deal with this (Ebbesen 2012). Oscar ERP systems were then proposed to cater for the corporate customers’ management, performance management and the private customer management. Oscar ERP is software that is based on SAP modules with the advantage of being extended to individual health insurance requirements (Ebbesen 2012). It was concluded that the local presence and the global widespread of an ERP system supplier supported a timely and cost efficient implementation and establishment of a long lasting relationship. This is what facilitated the purchase of the Oscar ERP. It is also efficient in enhancing the growth of a company and enlarging the portfolio of the company’s product (Ebbesen 2012). According to Ebbesen (2012) the ability to speed up the implementation of the ERP system or framework even to other units of the business supports the expansion of business. In the situation where there is little or no customization done at all, the supplier of the ERP is required to understand the specific needs of the customer with reference to the industry. Another reason that led to change from the legacy systems to ERP is the need to eliminate the challenges that were faced in the firm as a result of executing the multiple systems at all levels of the company. ERP offered a central application framework to help in delivering the specific common infrastructure efficiently (Ebbesen 2012). There was the need to improve the access of the data relating to the missions of the business. An ERP solution improves the customer relations visibility and identification of the trends of the customer. According to Ebbesen (2012) this allows the firm to react faster and effectively in order to meet the customer requirements. ERP systems offer wide and improved transparency in the running of the firm, support the business processes and provide the best framework for expanding and growing businesses (Ebbesen 2012). Existence of no end to end automation in the organization where different activities were made in different systems, for instance, if the accounting of data was done in a system different from invoicing and sales orders, and stock inventory done in another different system, there would be limited transparency all through the organization due to a lot of double entry and manual work. The legacy systems in place were less supportive of decision making. This was attributed to the facts that it as impossible to export the low quality data (Ebbesen 2012). There was the inability of the IT department to support the upcoming new business initiatives within a specified time frame at a manageable cost. The legacy systems also support the multiple and not the central integration methods; hence since they contain a lot of custom modification, they may reduce the ability of a given company to respond to the environmental changes or to support the new businesses projects. Integrations of the party systems may not be possible (Ebbesen 2012). The introduction of the ERP system will bring with it a common intuitive system among the employees working in different departments, for instance employees working in the finance department, others working in the customer service and the rest working in the shop floor will be involved in a lot of manual work in the process of communicating or during the manual entries (Ebbesen 2012). The cumbersome and time consuming tasks are made easier when the new technology is embraced. This results to empowering of the employees who are rather demoralized by the work-around within the organization. Analysis of ERP Change Process at BKK Mobile Oil In order to estimate the costs of upgrading the existing software and shift from the legacy systems and the manual systems, SWOT analysis was carried out to determine the various strengths and weaknesses of the new systems. The benefits that come with this new ERP model are way better compared to the weaknesses and the challenges that come with the transition. Hence the management agreed to the project that was meant to introduce the ERP systems. Based on the SWOT analysis and modules that needed to be improved, that is the corporate customer management, the performance management and the private customer’s management, the best software to use was the Oscar Enterprise resource system (Ebbesen 2012). Project Management Challenges The biggest challenge was how to begin the project. There was a need to have a well detailed plan to enable each step to be followed consistently and also to ensure the project was completed in the timeframe framework. Carrying out implementation of the project with the knowledge that the sales process and other departments are still running is the most challenging task. There was a need to educate or bring to attention to every employee that the project was undergoing. The staff therefore, needed to be persuaded to accept the challenge presented by the change or the transition. Lewis change model was therefore, adapted (Ebbesen 2012). The model consists of three stages namely; the unfreezing, change and the refreezing stages. The fist stage that is the unfreezing stage involves enabling the organization to accept that the change is necessary. This process will involve breaking down the status quo that exists and developing a new and better way of doing things. This will be done through pointing out some of the issues that have led to the transition. This could include high service cost or poor financial results or customer un-satisfaction. For this to happen successfully, there is a need to challenge the values and attitudes that currently define it (Ebbesen 2012). Convincing the existing staff to abandon their normal way of doing things is the most difficult and the most stressful. There will be expected the reactions or tensions from the employees. The only way of overcoming that is by enabling the organization to re-examine the background which creates a crisis leading to a strong motivation to do things in the new way. The next stage is change. This is the process through which the employees begin to reduce their uncertainty by looking at new ways of doing things. It is expected that people will take time to embrace the new way and participate in the change. For them to accelerate their acceptance of the change there is a need for them to understand how the change will benefit them (Ebbesen 2012). There need to communicate to employees and give them time to understand the changes in order for them to feel highly connected. The next stage is refreezing stage. The signs of this stage include a stable organization chart or better job descriptions. This stage allows the organization to use the changes fully and will be incorporated in the everyday business. This enables employees to feel confident and much comfortable with the new way. This stage is also beneficial in that it helps the employees not to be caught in the transition trap. The changes are anchored in the system, and ways to sustain that change developed. Support and training is provided to employees and finally the success is celebrated (Ebbesen 2012). Levin’s change model (1951) below illustrates how the staffs of BKK Mobile Oil were persuaded to accept the challenge presented by the change. Figure 3: Levins change model (1951) at BKK Mobile Oil Analysis of ERP project implementation The Oscar Enterprise Resource Planning (ERP) system from the SAP Solutions provided a modular structure that could be easily adapted to the requirements of the BKK Mobile Oil customers. The three modules used include the corporate customer management, the performance management and the private customers’ management. The project plan was finished on 17th January 2013 where the legacy systems were replaced with the Enterprise resource planning software. According to Zuboff’s automate versus Informate Model (1988) the change that was brought about by the installation of the ERP systems was classified as informate. This is because the data that was processed in an effort to replace human capital and improve the continuity as well as to add value to the company through collecting and generating information. During the analysis and design phases, the key users were trained on the on the usage and advised on every detail. Then later, a departmental workshop was adapted to enable employees to teach their fellow colleagues. The following phase was the configuration stage where the documentation of all the programs is handed over. Productive deployment is prepared as the integration tests are carried out (Ebbesen 2012). The launching of the three modules was not done at the same time due data’s low quality. It was agreed that the modules be launched in different phases to enable good integration into the system. The performance management module was first released followed by the corporate customer management then the private customer management (Ebbesen 2012). Impacts and Benefits ERP Change After the implementation of the enterprise resource system, transparency has been enhanced. This has been advanced by the integration of all the departments. This is because the accounting and finance and sales departments can now transfer data in the system enabling tracking of any missing information or any manipulated information. The Oscar enterprise resource system has also ensured that the company with the legal health insurance is competitive. The customer responsive is enhanced in that timely information is passed to them with immediate delivery. This has also helped to simplify the group work (Ebbesen 2012). The manual system involved cumbersome behavior of working in groups. The Oscar enterprise resource planning has brought together this group through the introduction of the integrated system. The system has also increased efficiency and working with the same database. It also supports the management and organization portfolios and payment services. It has increased the effectiveness in making of the decisions since it supports the ideas with facts and figures. With reference to the legislation and amendment or renewal, Oscar enterprise resource system provides a high secure standard and is flexible in dealing with contentious issues (Ebbesen 2012). The system has been able to improve the function part of the legacy systems; for instance, the lack in the accounting system has been filled up by third party applications. The system has also been accepted by the users due to its consistent user interface and a good menu structure even in cases where there are different program modules. ERP Investment and the Condition of BKK Mobile Oil Today The total costs of thee project were duly defined. The major inclusions of the costs include the license fees, acquisition of the materials and for installation, fees from consulting and technical training of the employees. The financial position of BKK Mobile Oil has improved since full implementation of the program. The key role played by ERP in eliminating unnecessary costs and keeping good customer reputation in terms of service delivery contributed to constant financial improvement (Ebbesen 2012). Conclusion It can be concluded that investing in the enterprise resource planning is critical when in need to improve the business processes and to increase the efficiency of all the operations. This study has proven that ICT can influence the running of the entire firm and cause significant contributions to the success of the company. The study has also formulated the implementation stages and the persuasive manner to reach the employees. The user can therefore, understand the advantages of such a system. The challenges that come up also need to be accepted since it’s a step by step process. Finally, the study has concluded that the decision to be made should not be based on the industries key players but on the products and models that will fit the organization’s requirement in an appropriate way as will be depicted in the company analysis reports. Bibliography Anders Munk Ebbesen 2012. Seven ROI Drivers for ERP Based on International Implementations. Academic Press: New York. Appendices Appendix A: Full PEST Analysis Table 1: PEST Analysis Political Economical Socio cultural Technological Implementation of the policies put in place German law allowing insuring people from other countries The exchange rate fluctuations High taxes from hosts governments Adapting to the different culture used to people from other countries Harboring high innovation potential The need to adapt to the systems Appendix B: Full SWOT Analysis at BKK Mobile Oil Table 2 SWOT Analysis Internal External Strengths Weaknesses Opportunities Threats Loyal professionalism Modern innovative technology Company reputation Dominant in local market only Slow transition rate Lack of process transparency Quality service to the market Campaigns for more people to be insured Increased need for safety Global market already taken over by competitors High costs for transition Customer dissatisfaction Read More