Executive Summary
Wei Corporation a booming company in the technology sector has been experiencing steady growth and progress, in terms of overall sales, profits, and revenues. This information could be best evidenced by the growth of company’s employee population to over 3,000 employees. A steady growth and improvement has also been identified on Wei Corporation’s independent, corporate, and industrial client base. In fact, its supplier base could reach as far as overseas.
Now, according to predictions, Wei Corporation will continue to benefit from rapid growth and expansion in the coming years and that’s actually why the members of the company’s senior management department have decided to start creating provisions for such expansions. They are planning to start making provisions by upgrading the Data Processing (DP) capacity of the DP department by replacing the old IT systems used by the company. This was actually identified as the main dilemma in this case.
The senior management team was able to assemble a dedicated team for that purpose and they were able to allot a total of two years for the integration process, in an attempt to overthrow the current Legacy System and replace it with a new ERP system because of its perceived increases in reliability, consistency, accuracy, and efficiency of digitalizing transactions that have something to do with the financial and accounting department.
Wei Corporation’s senior management had wanted to replace the current Legacy System too much that they have lengthened the original 1 year deadline to a 24-month one and have also increased the number of the Information Technology team that will take care of the technicalities of the migration into the new ERP system.
In short, the company has invested so much for this migration. Unfortunately, the first integration attempt was a complete failure. Some of the main problems identified upon revisiting the case were the Data Processing Department’s strong resistance on the use of the ERP systems. It seems that there is hidden politics inside the company’s Data Processing Department, making it resistant to changes that were intended to make provisions for future expansions and improvements.
There are actually two recommended ways, or rather, approaches how the senior management team could make this right and it is actually their call what type of approach to use. They can either be lenient and not mind the hidden politics inside the company and think of a better alternative to the ERP system or if possible, a more recent and user-friendly version of the old one used in the first integration attempt and they can also be authoritative and strictly impose new company rules and regulations that will now hopefully make the use of the ERP system instead of the old system official. According to Gattiker and Goodhue (2002), there are two ways to deal with the organizational members’ resistance to change: the lenient and transparent way, and the authoritarian way.
Introduction
The root of Wei Corporation’s problem has actually been identified as the strong presence of internal resistance to change, against the migration of the Data Processing Department from the old Legacy System to the new Oracle ERP system. The senior management alongside the Information Technology team it has assembled for the entire migration process has actually tried their best, in fact very hard, to successfully complete the integration process, only to find out that their efforts will all be in vain because the company’s employees are totally against the thought of change.
After several attempts the company’s senior management finally yielded and called the first attempt to use the new Oracle ERP system a failure. After some time, a new version of the same system was released by Oracle and the senior management, eager to secure provisions for the upcoming company growth and progress in the next few years.
Identifying the Causes of the Problems
Introducing a new system to a company, or practically any type of organization that has been using an old information management system prior to the introduction of the new one can be hard and tricky. It needs to be gradual but not too slow.
One of the most common problems being encountered by senior management members in introducing new IT platforms which is most likely intended for the betterment of the company in terms of data processing is internal resistance. Overall, introducing new IT systems or platforms poses a significant amount of risk towards the company as a whole. It takes a considerable amount of time and resources to integrate an entire information technology platform with the current information processing processes of the organization. There are several possible reasons why Wei Corporation’s first attempt to formally introduce the use of the new ERP system instead of the old-school Legacy System.
1. Lack of Compliance to Change
The employee’s lack of compliance to change is actually the main reason why Wei Corporation’s Senior Management Team failed to successfully execute the migration process. It seems that the employees have been very much attached to the use of the old Legacy System that they do not want to change the way how data are processed digitally anymore.
In cases like this, the ones who should be prompted to adjust are usually the junior and not the senior members of the organization. This is clearly not what happened in Wei Corporation’s case. It seems that the junior members of the organization are the ones that dictate the senior management what to do or what’s best for the company. This should not be the case. Cooperation between the senior and junior members of any organization is always necessary for a successful collaboration, particularly in the DP Department’s migration to the use of the new ERP system. Both should contribute and do their part.
The senior management has to make the migration process as gradual as possible because doing so minimizes the risk or possibilities that the junior members will oppose the upcoming change. The junior management on the other hand has to be compliant enough to possible changes—this is what they all have to do. Some information systems are not that user-friendly, especially if the processes being attempted to digitalize are complicated such as the ones we could presumably find on Wei Corporation’s Data Processing Department.
a. Delay in Acquiring or Manifesting the Financial and Procedural Benefits that Should Be more Easily Sought Using the New System
The main reason why most senior management likes to introduce an organizational change is because they want to improve how things are done. In Wei Corporation’s case, they want to reduce the gap between the amount of data that the DP processing department could process and the required amount of financial and accounting data to be processed which is most likely dependent on the number of clients and the volume of information.
One of the secondary reasons why Wei Corporation’s senior management encountered strong internal resistance against the use of the new ERP system is the management’s failure to show to the employees how the new data processing system could improve the overall quality and efficiency of their work. However, the expected outcome did not happen and instead of making things easier, the ERP system actually made things worse and far more complicated than when they were using the old Legacy system to process their information.
If only the senior management and IT team were able to practically demonstrate the new ERP system’s capabilities to make things lighter and more efficient, the DP department employees would have been much more compliant to cope with the transition. This is actually one of the common problems in introducing a new information processing system to an organization comprised of several thousand employees, they always stick to the old ways how their jobs are done and the likelihood that they will resist any upcoming changes would remain high unless the management could prove to directly or indirectly relay to them that they have no other option but to cope with the change or make them realize that it is undeniably easier with the new system.
2. Unpreparedness prior to the launch date
Sometimes, failure on the introduction of a new data processing information system could also be attributed to the software development or information technology’s level of preparedness. How did the team prepare for the upcoming launch date? Were they able to provide the necessary training materials and programs for the employees? Were all bugs fixed prior to the launch date?
Based on the information given, it appears that even after several days after the previous version of Oracle’s ERP system’s launch date, there were still bugs and glitches. This only means that the preparations that the team made prior to the launch date were not enough.
The senior management together with the IT team was already handicapped by the fact that the employees do not want to change the current data processing information technology platform as much as possible. Knowing this alone should have motivated the senior management and the information management team already to double their efforts in making the previous version of Oracle’s ERP system as visually and practically appealing as possible. This is clearly not what happened. Even after a few months after the release of the ERP system, the senior management’s promise that with the new information management platform the company’s data processing processes will be considerably more efficient than when they were still using the old Legacy system was not fulfilled, adding up to the DP Department employees’ then current long list of reasons to boycott the introduction of the new ERP system.
a. Troubles in the Use of the Current Generation of IT Systems
This particular problem may have indirectly caused the failure of the official implementation of the new ERP data processing system. It could be that the information technology team was not competent or knowledgeable enough to flawlessly do tasks required to make the migration process successful. So far, no information was provided regarding the use of appropriate training materials and programs to decrease the risks of internal resistance.
Mitigation Steps
There are several things that the senior management could have done to mitigate the effects of their shortcomings on their first attempt to introduce the new ERP system. Firstly, the senior management could have employed a more credible and skilled information technology team that will handle every technical aspect of the new ERP system.
This is not to denounce the capabilities of the original IT team that was assigned to the project. But if we are going to base on the results of the migration process, it appears that the IT team employed by the senior management is either not skilled enough or suitable to the job. Some of the evidences that we could use to support this theory are the presence of glitches, errors, and bugs on the previous version of Oracle’s ERP system despite the fact that the IT team was given a total of 24 months or even more than that to modulate and integrate everything in one piece.
Another mitigation strategy they could have initiated prior to the official launching of the new ERP system is cessation of any Maverick behavior or on a wider scale, avoiding politics inside the DP department. Doing so addresses uproots and roots of the problem which is the employees’ resistance to change. Using a new data processing system is actually a brilliant idea considering the fact that higher data processing demands will come over the next few years as a result of unstoppable organizational growth and client-base expansion. It is just that the problem lies within the organization.
And lastly, the senior management could have issued a memorandum to all employees. The memo should state that they should wait or hold on for a little longer until the senior management objectively determine whether the launching of the new ERP system is indeed a failure or not, or if the failures could still be remedied and then turned into success or not. Here, we have reason to believe that the migration process was terminated because the senior management was pressured by the employees’ resistance to the transition and not because of anything else.
Recommendations
Now that the senior management has another chance to introduce a new ERP system through the new version of Oracle’s data processing platform, it would be very useful for them to reflect on their past mistakes and make sure to not commit the same problems they have committed back then. Implementing the mitigation strategies discussed in the previous section will not, in any way, hurt the company or its resources. In fact, it might prove to be useful once the slightest symptoms of the same problems they have encountered in the past manifest.
A perfect recommendation for any type of transition or migration process is to keep the employees oriented. This could be effectively done through the use of seminars and provision of detailed and appropriate training materials explaining how the new ERP system could and should be used and basically everything that could hasten the learning process and make the learning curve steeper.
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