The Implementation of Enterprise Resource Planning at DUBAL - Assignment Example

ERP SURVEY: ERP IMPLEMENTATION AT DUBAL ERP Survey: ERP Implementation At DUBAL Customer Name: Lecturer Name: Date: Introduction about the organization The Dubai Aluminium Company Limited (DUBAL) is an Aluminiun focused company in the United Arab Emirates; which deals with several other products. The company has achieved paramount growth since its inception, which has complicated the management operations of the company; DUBAL was facing escalating operation costs as well as insufficient human expertise, due to the expansion programs. In its quest to deal with the emerging challenges, the company had implemented proprietary, highly customized business applications. The applications were however an impediment to the company’s ambitious growth plans. This necessitated a long term solution, and the company replaced the legendary systems with the SAP® ERP application. The DUBAL ERP combines the activities like Human Resource management, production operations of manufacturing, general ledger book keeping, finance activities of purchases, products warehousing and transportation, accounts receipting and invoicing among other activities which has enabled the company afford paradigm shift in the entire organization, due to the ERP offering the requisite functionality, integration, and scalability. DUBAL was founded in the year 1975 and is a limited liability company, entirely owned by the Government of Dubai and is located in Jebel Ali, DUBAL owns fifty percent of Emirates Aluminium Company Limited (“EMAL”) and is among the largest industrial companies in the United Arab Emirates. DUBAL owns and operates primary aluminium smelters, and is among the largest non-oil contributors to the Country’s economy. There are several services offered by DUBAL including aluminium based Raw materials, electric power generation, port and storage facilities, Desalinization plant and Smelter complex. The services are offered by the company’s complex which comprises of a 990,000 mtpa smelter, a 2,350 MW power station, a huge carbon plant and casting operations. DUBAL is accredited with several OHAS and ISO certifications namely ISO 9001, ISO 14001, ISO/IEC 20000, ISO/TS 16949, OHSAS 18001 certification, and ISO/IEC 27001. The implementation of the ERP was in consideration of the fact that the changing technology has immensely impacted on the company’s workforce, Bruch and Vinnichenko, (2007). This was fostered by the fact that the company has been dedicated to continuous innovation in the aluminium smelting process, aimed at producing the best quality aluminium products globally, customized and tailor made products to suit customers’ specifications as well as achieving maximum operating efficiencies DUBAL envisions to be recognised globally while being committed locally, the company’s mission is to achieve maximum shareholder value through sustainable utilization of resources. The company has several objectives such as strengthening safety performance, cultivating talent, attaining operational excellence, energizing the work environment and optimizing domestic and International Portfolios. 1. Who are the intended users of the system include all functional areas in the organization? The SAP Enterprise Resource Planning implemented at DUBAL is expected to serve all the company’s sections in the finance and plant departments. The SAP Enterprise Resource Planning implemented has impacted on the entire company where more than three thousand employees have received training on the Enterprise Resource Planning and approximately two thousand employees working on the system. The system focuses on connecting all the departments and offering the same information base. The connected departments are the raw materials departments, electric power generation, port and storage facilities, Desalinisation plant and Smelter sections. As at present however, the production processes have not been connected entirely to the system, but plans are ongoing. 2. How did the project come about? The implementation of Enterprise Resource Planning at DUBAL was a result of several interrelating occurrences. The growth of the company meant that the legendary systems previously in place could not hold the expanded computing requirements. Previously, DUBAL used Oracle Financials for accounting and purchasing combined with in-house solutions, which were costly since several challenges such as incompatibilities existed. In addition, the changing technology meant that the traditional systems in place where slowly becoming outdated, therefore the company scouted for a new product and SAP ERP application and Oracle software were the most probable alternatives. Since functionality was the most important metric in choosing the Enterprise Resource Planning, SAP ERP application was chosen. What are the critical success factors that were used to make this project successful? The implementation of SAP Enterprise Resource Planning at DUBAL was founded and based on several critical success factors addressed during system implementation, these critical success factors were of paramount importance to the success of the project. DUBAL addressed both tactical and strategic critical success factors. The tactical critical success factors included the human resource in the company, Enterprise Resource Planning implementation monitoring and feedback, and communication. The company also considered strategic factors which included Legacy systems, DUBAL vision and mission, SAP ERP strategy, project schedule and plans and management support. 3. What are some of the failure factors that could have been avoided during the post-implementation process? Whereas ERP implementation at DUBAL has been cited as among the most exemplary successful implementations, there are several reports citing ERP implementation debacles and alarming industry implementation failure rate. It is estimated that 55 percent to 75% of all ERP projects globally fail to meet their objectives. In addition, several ERP projects cost more than the original estimates, considering that the lost opportunity costs are immeasurable, but most likely exceed the out of pocket expenses. This were the challenging factors that the company recognized, appreciating that identifying the repeated causes of failure sanction thoughtful, anticipatory occurrence and proactive risk mitigation strategies. Some of the failure factors that could have been avoided during the post-implementation process include:- Dirty data which substantially impacted on project delivery timeframe. Considering that the customized systems which were initially used by the company used a different data platform with the SAP ERP, the customer could have avoided project delays by scheduling sufficient time for data cleaning and making the data retrieved from the Oracle database is compatible with the SAP system. After the SAP ERP implementation, dirty data delay occurred at the critical path and consequently delayed all other tasks for the remainder of the project. Troubled user adoption was also a failure factor. Whereas DUBAL trained 3000 employees on the new system, getting users to accept a new system was a challenge. This was as a result of change anxiety as well as unfamiliarity for the new system and nervousness from only completing partial training in SAP ERP. Some users felt that the training offered could not sufficiently enable them to use the ERP. The Insufficient training perception by some users are resultant from the feeling that SAP ERP are complicated systems d which demand a lot of understanding, in addition, users had not used any ERP previously. Moreover, since the ERP was implemented in the year 2008, there have been version upgrades of SAP. This challenge could have been dealt with, by regularly training staff, to update their skills on SAP. In addition DUBAL should have a proactive change management team, to guide the users accept the change and to address user adoption challenges. Decision-making process for initiating the project. The process of initiating Enterprise Resource Planning implementation was a result of consultation between the users, the management and other stakeholders. The process was initiated by several users’ reports concerning the legendary system in place. The users complains were referred to Information Technology system experts, who after examining the system in place were in agreement that there was need to Information Technology scalability and flexibility in order to support growth, it was important that the system provide accurate, timely information to decision makers, the organization had to reduce maintenance and support costs, there was need to automate and integrate business processes and that the company was spending a lot of time in reconciling discrepancies, fixing errors, and duplicating tasks. Considering the informed report, which originated from the challenges identified by the users, the management decided to initiate the Enterprise Resource Planning implementation project. The initiation was therefore an agreed upon decision by all the concerned stakeholders. • Were there any changes in the processes during the implementation phase (BPR)? Implementing the SAP Enterprise Resource Planning impacted on the organization’s processes as presented by Trent , (2007). The departmental reporting structures at DUBAL had to change to accommodate the changes. Initially, every section was considered autonomous since they use to work independently, with the Enterprise Resource Planning however, all departments’ source and store data in a centralised database. The Enterprise Resource Planning has also impacted on decision making process. Decision making which is defined as the process of reaching a decision by searching, identifying, analysing and assimilating data through communication and drawing inferences has had to change at DUBAL. For decision making to be effective, it demands timeliness & currency, accuracy & precision, conciseness, cost-effectiveness, completeness, good presentation and relevance. The implemented Enterprise Resource Planning has fostered decision making due to several associated benefits including decrease of communication barriers, noised and uncertainty which has regulated decision making process. Furthermore, the business processes have been altered. The sales process in the company has been linked to the production, therefore the company has been able to implement a customer focussed sales. The Enterprise Resource Planning has also enabled the firm to predict the future demand for its products. The company’s production has therefore been altered to suit the envisioned demand to avoid instances of too much or too little production. The changes have impacted on the users both positively and negatively. On the positive note, the Enterprise Resource Planning has brought about interactions and tends to cultivate healthy relationships between the company’s departments which would have otherwise remained isolated. In this case, users have benefited from knowledge sharing an interacting with other persons in other departments, and as such, the challenges of coordination faced by every section can be determined hence assisting the users of those sections to better use the system. Users also are able to collaborate and communicate effectively, therefore appreciating and understanding the work of other departments and arriving at a better means of doing things. The change of the company’s processes has however negatively impacted on change phobic employees. Some persons have stayed with the company for decades and are accustomed to some ways of doing things, with the Enterprise Resource Planning in place however, such ways have had to be dropped. In this case, the users feel that the new system is unnecessarily forcing them to do the common things in new ways. Some users have are fearful that the SAP system may declare their jobs redundant, In this case, some employees have felt threatened by the Enterprise Resource Planning, since the effectiveness offered by the Enterprise Resource Planning is viewed as a threat to job security. 4. Indicate senior management roles in this implementation. The senior management played a leading role from the initiation to the completion of Enterprise Resource Planning implementation. During the initiation stage, the senior management assisted in defining the project scope and the boundaries. The management also informed all the stakeholders of the need to implement the Enterprise Resource Planning and determined the methodology to be used as well as the expected outputs. The senior management also appointed the project management team and the project manager. The management also played a leading role in the planning phase, where it identified the possible tasks that exist in the project and allocated targets to the project management team. At this stage, the senior management also explored and agreed on the probable communication channels. During the execution and controlling stage, senior management availed funds for purchasing and implementing the Enterprise Resource Planning, before the closure, the senior management approved the system, that it could perform the desired functions. The senior management also facilitated the training of employees to be conversant with the system, this fosters acceptance of the system as argued by Smith, & Seifert, (2005). 5. Indicate users’ involvement in this implementation. The users were involved in the entire system implementation from the beginning to the end. Users were involved in identifying the most suitable system, where the opinions were considered in choosing the SAP ERP, in addition, users were involved in assisting the implementation team customize the system to suit their requirements. Some users who had been trained on the system were also involved in training other users to understand the system. The users were also involved in ensuring that the system developed meets the business requirements of the company, from their perspective. Indicate the phases that the organization took to complete this project. Enterprise Resource planning implementation at DUBAL was not a single isolated activity, but was rather a process. To effectively complete the Enterprise Resource Planning implementation within the nine months period, the first phase was the Project assessment stage which was combined with initiation stage. This foremost phase was concerned with delineating the business problem or opportunity, in this in this phase that the company defined a business case and sought various optional solutions, and as well defined the purpose and scope of the project. The first phase was essentially concerned with justifying the initiation of the project after the assessment and the expected solution. This was followed by the planning phase which involved setting out the path for the project by creating the following plans several plans such as project plan, monetary and resource plan, quality assurance plan and communications plan. A project plan is used to direct project control and project execution, as well as documenting diverse concerns to assist communication among stakeholders. Monetary and resource plan is used to compute the resources needed and includes financial resources in terms of budget estimates. The implementation also entered the Design phase which was an amalgamation and combination of several steps, which are further categorized as Preliminary design and Final design. Design phase involved reports, SAP Enterprise Resource Planning customization, and accurate costing and schedule. Preliminary design involves all blueprint constructs in the ERP project. The Project Execution phase involved constructing the deliverables which were delivered from the SAP Company to DUBAL. This phase involved controlling the project delivery, suppliers, change, customer’s scope, costs, quality, risks and issues concerned in the project. Project closing stage was concerned with winding-down the project by giving the deliverable to the DUBAL users, releasing the human resource and effecting post implementation review. This phase is made up of Project close and contract closure. The maintenance phase is required to ensure that the project is maintained in case of unforeseen challenges or changes as presented by Castells, (2003). 6. Were there any flaws in the system after the implementation? There are no documented flaws of any nature concerning ERP implementation at DUBAL. 7. Based on your results, what strategic factors the company can use for any future upgrades? This can be answered from all senior management of the organization. 8. Overall, were the users satisfied with the new system? Explain. The new system was billed as a success story by the users. Based on the positive reviews posted on the web by users, the advantages associated with the system such as Alignment of IT with the company’s expansion strategy, reduced administration costs, elimination of duplications and reconciliations, Enhanced information security, Increased information availability, enhanced decision making, Integrated planning with operations and improved reporting capability have fostered the users acceptance as argued by Papadopoulos, et al. (2009). Indicate your recommendation for any future upgrades. 9. Based on your findings, what suggestions and recommendations do you have for improving the quality of any future implementation that may increase the successfulness of this project? 10. Conclusion Implementation of Enterprise Resource Planning at DUBAL has been billed as a success story. Whereas the implementation took relatively a shorter time, the several benefits which have been offered by the system have increased user satisfaction. All users were involved in the Enterprise Resource Planning implementation, at the critical success factors and failure factors were considered in advance. References Bruch, M, and Vinnichenko, S. (2007). Comparative Analysis of Enterprise Resource Planning Systems in Russia and Sweden. London : Cengage Learning. Castells, M. (2003). The galaxy of the internet: reflections on the Internet, business, and ERP systems. London: Oxford University Press. Papadopoulos, A. et al. (2009). Information Systems Development: towards a Service Provision Society. London: Cengage Learning. Smith, S.M., & Seifert, W.J. (2005). The reality of the Internet: an overview of key technology policy issues affecting its use and growth. Illinois: Nova Publishers. Trent ,Robert. (2007). Strategic Supply Management: Creating the Next Source of Competitive Advantage. Conyers : J. Ross Publishing, Read More