Summarizing a case study - Essay Example

Case Study Summary Introduction FoxMeyer was a $5 billion company and a pharmaceutical giant which also ranked as United s fourth largest distributor of pharmaceuticals. The company management believed that increased application of technology would improve its operational efficiency. As a result, the company launched its Delta III project in 1993. By the end of 1993, it purchased SAP R/3 and also obtained warehouse-automation. The FoxMeyer appointed Andersen Consulting to integrate and implement the two selected systems.

This paper tends to summarize the case facts with regard to different concepts of the organizational readiness to identify the areas where the management flawed in its strategic management. Analysis From the case study, it is clear that the Delta III project was at risk for several reasons. In the opinion of Scott (1999), the project risks at Delta III can be categorized into four such as ‘customer mandate, scope and requirements, execution, and environment (p.223). Since the Pinnacle warehouse automation integrated with SAP R/3 had threatened job opportunities, it raised severe ethical problems among the warehouse employees.

It seems that an effective change management program might eliminate such labor issues to a large extent. Change management programs are very crucial for an organization to change its structure from the current state to a desired future state. According to Stewart (2000), change management programs play a vital role in overcoming resistance from employees and other officials. The unprecedented volume of R/3 transactions that arose as a result of a large contract between FoxMeyer and University HealthSystem Consortium (UHC) also exacerbated the situation.

Shortage of skilled and knowledgeable personnel was another issue that added to the failure of Delta III project and thereby bankruptcy of FoxMeyer Drugs. In addition, the company management did not get adequate control over the project due to its overdependence on consultants and vendors. While analyzing the implementation of the Delta III project, it is precise that inefficiency in leadership was another major reason that contributed to FoxMeyer Drugs’ bankruptcy. Managers could not find potential risks that would threaten the flexibility as well as the sustainability of the project.

Efficient managerial strategies might assist the firm to identify the risk factors earlier and to resolve it. Psychological factors such as the company’s overreliance on the project adversely affected its efficiency since the management had not willing to revise the terms of the project. The external project promoters such as Andersen Consulting and SAP gave too much emphasis on their personal gains rather than the sustainability of the company and hence they did not consider de-escalating the project.

Although a change in management structure was greatly required to promote de-escalation, FoxMeyer was late with this as a result of its inefficient leadership policies. It is also essential to consider concepts like organizational culture and risk orientation before implementing an ERP system. In the view of McNamara (2000), organizational culture refers to the personality of an organization. The FoxMeyer have not considered its structural organizational elements before giving approval of the implementation of ERP systems.

The company neither researched various risk elements associated with the project nor made provisions for risk orientation. Conclusion The case study indicates that the failure of newly implemented ERP systems caused the collapse of FoxMeyer. In addition, by neglecting essential organizational readiness concepts such as organizational culture, leadership, change management programs, and risk orientation it intensified FoxMeyer Drugs’ strategic failure and bankruptcy. References McNamara, C 2000, Organisational Culture, viewed 4 June 2011 Scott, J 1999, “The FoxMeyer Drugs’ Bankruptcy: Was it a Failure of ERP?

”, AMCIS, Association for Information Systems. pp. 223-225 Stewart, G 2000, “Organizational Readiness for ERP Implementation”, AMCIS, Association for Information Systems. pp. 966-970