The Issues That Arise When a Large Company Decides to Integrate ERP into Its Operations - Case Study Example

Running head: ERP ERP Story Write-up Insert Insert Insert 26 September ERP Story Write-up Introduction Typical organizations have different sections all of which contributes towards its overall operational objectives. The human resource department, the accounting and finance department, and the marketing department are some key sections in a business organization. It has been traditional that these different organizations do operate independently with little information sharing among them. Information then becomes specific to some department. The traditional approach may be appropriate for small organizations. However, for large organizations with a complex structure, the top management will find it easy to carry their operations if there is a quick access to information from all the departments. The operations in HR like vacancy advertisement and subsequent hiring of employees, effective management of the entire supply chain, and providing transparent and timely financial reports may not be possible in such cases due to untimely passage of information. The use of Enterprise Resource Planning (ERP) software provides some solution to these problems. This is achieved if the software is installed correctly (Walgium, 1). However, the success of introducing ERP system into an organization is not obvious. Instead, the use of ERP may be associated with a series of challenges to the management as well as the employees. Some changes may be required in the system of operations of each of the sections (Walgium, 1). There is also need to have hardware and software compatibility for the applications used by different sections to be brought together. Due to such complications, an organization should thoroughly examine its worth as well the available resources before installing an ERP. Otherwise, the new technology may be worse than the traditional approach. This paper focuses on the different issues that arise when a large company decides to integrate ERP into its operations. It provides specific reference to ABS Canada, an insurance company that has three different parent organizations brought together to operate as a single entity. ABS Canada wishes to consolidate its operations in the three sections namely marketing management, human resource management, and finance management. ERP at ABS Canada Aux Bons Soins (ABS) has been in the insurance industry in Canada for several decades (Case study). Over the years, various developments have been seen that have significant impacts on its operations. The company has acquired two other subsidiary insurance companies in the last few years. The parent company as well as its subsidiaries has always executed their operations independently with different information processes and systems (Case study). The company sees the need to bring its operations under one entity (ABS Canada) since the insurance industry in Canada has been consolidated over the recent past. Under the leadership of Jean Roberge, experts develop IT plan that enables the three departments in each of the three member companies to consolidate their operations. The team has recommended an integrated management system and processes that could be shared by the finance department, sales and marketing department, and human resource department. Before installing an ERP, an organization needs to consider why it really needs the system (Walgium, 2). Its use in a relatively small organization will be uneconomical since the ERP project is quite expensive and its installation takes relatively long time. The compatibility of the systems of operations in different sections also needs to be considered. An analysis of the processes in different companies showed that the accounting and financial processes, the human resource management processes, and the sales and marketing processes were specific to each of the three companies. The subsidiary companies have been observed to have an obsolete system of operations. The project requires that the way business is operated should be changed to match the requirements of the new application. It involves the integration of all the processes of the three entities into a single IT function. The introduction of new system may not favor the employees. The project requires a change in the way the employees do their jobs (Walgium, 1). Even though there have been introduction of new systems in the past, this new project will require the employees to learn new software. The employees need to have thorough understanding of the larger integrated system as opposed to the software applications specific to their departments. There is need to provide thorough training on the employees on the usage of the new system. This is an additional cost on the implementation and subsequent success of the project. Besides, the management of the project requires IT professionals under the management of more experienced personnel. It has been observed that the company does not have the necessary expertise that can help the management of this project (Case study). In effect, the company is forced to outsource the expertise for managing the project. Jean has not touched on another important consideration that needs to be made to ensure the success of the project. The cost of the whole project as well as the duration that is required before its completion should be considered. There is no doubt that the organization needs to consolidate its operations, but consideration of these factors will give an insight of its possible success. Choosing the Project Leader It has been stated that the management of the project from its start to completion and final adoption of the system is a challenging task that requires teamwork. The team has to comprise individuals of good expertise in IT solutions. The success of the team will in turn be influenced by the credibility of the team leader. The project entails an introduction of a new integrated software packages. Besides, the ERP project is very crucial to the operations of the organization. The team manager should then have the necessary skills and experience to manage the important project. The project manager should have an evident experience in the management of large-scale project. He or she should be excellent in people management, and quick and effective decision-making. In order to obtain the right candidate for such a position, there is need to advertise the vacancy extensively through reliable media. The applicants should also be provided with sufficient time to submit their applications. In the preliminary presentations, the consultants should explain to the IT manager the steps that they used to obtain the applications (the means of vacancy announcement and the duration of application). Some applications are often received that are far below the stated minimum requirements, and so they can be ignored by the consultants at reception. Such cases should also be quoted if they were encountered. The three candidates that presented their curriculum vitae for the position of project manager all have education and work experience that meet this job description. For instance, the manager has asserted ABS Canada has extensive experience in systems implementation and thus organizational factors should be of little consideration. He further explains that their main problem is little or no understanding of the ABC software package. All the named candidates have extensive experience in the ABC environment having upgraded their skills in the area. Besides, each of the three applicants has successfully managed large enterprise projects, in different sectors of the economy. Coming up with the best candidate consists in examining the closeness of the past successful projects spearheaded by the applicants to the project at hand. Candidate A has good education and long-term experience. His other desirable achievements include good financial management. However, his people skills are not evidenced. The second candidate (B) has an extensive educational background in Information Technology with some upgrading in ABC software. The candidate has managed various large-scale projects to completion. It is also observed that the candidate led a number of experts as well as other members of the team in the different projects. The experience at large telecommunications enterprise is of particular significance for this role. Candidate C has good work experience. However, the leadership skills are not so pronounced. Besides, the candidate’s training history is more inclined towards business administration as opposed to IT solutions. Thus, in as much as all the candidates have good qualifications, it would be appropriate to consider the second applicant for the position. Reasons for Failure and Later Success of the Project The project did not move in the intended direction due to certain reasons. Firstly, the project manager (and the other candidates) had no experience in the insurance industry. Besides, the issue of corporate social responsibility seemed not be clear to the manager. The manager did not consider that the success of the project was dependent on the implementers. He/she was more focused on the success of the project rather than the needs of the employees. Besides, the manager gave much attention to the IT department and sidelined other departments like Finance and Accounting (Case Study). It also seems that ABC was not taught well to the IT experts within the organization The new problem can be solved by hiring another experienced specialist to lead the project. Project will be implemented successful but it is expensive since the hiring process had been performed. Alternatively, the management of the organization could exercise full authority in the management of the project. CSR should apply to the project management as well. This will also ensure success but it is likely to create conflict between the project manager and the top management. The success that was finally witnessed followed the replacement of the project leader with another professional with advanced qualifications in Accounting and Information systems. The candidate had extensive experience in systems development project. The manager understood the need to include all departments in the management of the project. He reorganized the project team into smaller teams with experts from every business units (Case study). While focusing on the organizational constraints and objectives, the manager still managed to include the users in the project. As such, the users feel part of the project team and become accountable for the future encounters in their respective business tasks. Works Cited Walgium, Thomas. ERP Definition and Solutions: ERP (Enterprise Resource Planning) topics covering definition, objectives, systems and solutions. 2008. 26 September 2011. http://www.cio.com/article/40323/ERP_Definition_and_Solutions Case study Read More