ERP: case study evaluation
This paper seeks to develop a summary and comparison of ERP business systems for companies in both the private and public sector. To begin with, the paper looks at the business system for the US Department of Defense. Since 2008, the DOD has invested in an enterprise resource planning system to improve on its day to day operations. The ERP system of the Navy follows a process effective for identifying the documentation requirements of the organization . It specifically emphasizes on management of requirements because this is presents an important blueprint for program managers and system developers to implement, test, develop and design a system that can be used to improve organizational operations.
The ERP system in the Navy has high potential to address financial management that has always been a big problem within the organization. Despite this potential, the current system still lacks in providing an effective solution for the DOD as a corporate entity. The system also has a challenge of offering the effective solution by integrating all the other systems within the organization and converting information from the previous systems to the new ERP system. The navy decided to implement the enterprise resource planning system because the best option to help the organization with some of the business challenges it faced. Basically the organization has been having management and financial issues from the past. According to reports by the Navy, the ERP system when fully implemented is expected to manage over the 80 percent of the funds appropriated to the organization. Before the full implementation of the integral ERP system, the navy had to conduct a series of four piloting projects. The pilot projects lacked oversight for development and as a result failed causing the organization to think of better systems for implementation.
According to Soh et al. (2003), many organizations when implementing the ERP packages, will always find it difficult integrating organizational requirements and the features of the ERP packages. This could be the main problem that the DOD faced during the running of the four piloting projects that never succeeded. The gap created between the requirements and the features of the packages can only be filled in two ways. The first one is through changing organizational practices so that can fit into the features of the ERP packages. The second option is customizing the ERP packages to fit into the requirements of the organization. Basically for the Navy, they could not adopt the procedures of the ERP system or work around them. They only had to get a more customized system that meets at least very requirement of the organization.
According to the case or Rolls Royce, the company adopted the ERP system to be able to compete within the recent market and its dynamics. Basically, every company that seeks to have a wider scope of operation or market base has to internationalize every operation. In order to remain competitive, companies have to focus on the performance objectives such as prices and quality. In addition, the tow objectives must be coupled with flexibility and responsiveness. The ERP system implemented by the company, Rolls Royce, serves the purpose of reducing cost and increasing the quality of the operational system.
The modern ERP systems are built in such a way that the business process can be pre determined. One of the major failures of the ERP systems has been established to be the difficulty in implementing the systems. As a result organizations end up paying huge costs just to change its organizational practices to fit into the features of the ERP packages or to customize the package to meet the requirements of the organization. The situation at Rolls Royce, before ERP system was implemented was such that the company had to rely on over 1500 independent IT systems. Some of the systems had to be developed within the company. It became obvious that using these legacy systems was costing the company a lot of money. Maintaining and operating them also was very involving. In other words, the legacy systems did not provide timely, accessible, consistent, and accurate data to assist in effective decision making and assessment of the organizational performance. The modern environment for manufacturing did not allow the company to rely on the legacy system and therefore it had to adopt the ERP systems.
During implementation of the project, the company had to involve the management as a well the specialist team from an outsourced company to implement the project. Some of the obvious problems and challenges involved during the implementation included cultural problems, business and technical difficulty. In order to curb the challenges relating to cultural problems, the company had to initiate training seminars that would apprise every employee to the ERP system. The legacy systems, used to segregate departments, however, the new ERP system in the company treated every improvement as whole. In order to address the challenges relating to business problems, the implementation team ensured that the business structure is fairly rigid. This was done through a reengineering program for the internal business process. This basically involved restructuring of the old business process to be in line with the SAP. With the successful implementation of the ERP system in the company, Rolls Royce was able to meet the market demands of its aerospace products as well as other products.
According to Backker and Frollicks (2003) case, enterprise resource planning systems are supposed to meet the shortcomings of the manufacturing resource planning systems. It basically involves creating a system that helps in planning and managing of every resource that belongs to the organization. With the ERP system, management and planning of these resources is more efficient, profitable, and productive relative to the legacy systems. Rolls Royce as a company had to improve its response to the demands of the market and the ERP system offered the best solution to the problem. Basically, the business environment has also of dynamics and changes. Companies have to be in a flexible position to respond appropriately to the changes. The case of Backler and Frollicks (2003) reviews the ERP system implemented by a Bottler company.
The company was able to complete implementation but this involved a lot of cost to the company. During the process of implementation, the company decided to rely on its own internal specialist to implement the program without any eternal consultations. This was a move to reduce the cost of implementation. Despite successfully completing the process, the company had to face a high turnover rate and communication problems. This resulted to key people within the workforce being dismissed, others quitting their jobs, and a lot of animosity among the employees. From this case, it is apparent that the companies face a lot of challenges when implementing the ERP systems. However, it does not limit the pitfalls to just the implementation process, but also the organizations themselves.
The bottling company decided to adopt the ERP systems because of the changes and requirements of the market. It was experiencing growth as result demand was on the rise. The primary need in which the company intended to meet was the territorial growth and additions of new products. Consumers kept on demanding and this required that the company stays prepared for the huge demand. Even though the implementation process was very costly to the organization in terms of personal and organization functionality, there were a lot of lessons to be learned from the process. The first important was the involvement of employees. A company should consider the input of the employees during the implementation process. There is need to evaluate the staff team to identify their needs for the ERP project. The other lesson is provision of job assistance during the implementation process. Employees need to be assisted to use the ERP system rather than a company hiring someone else on part time basis in replacement of a good employee who knows the company well enough. Lastly, the bottling company had to learn the lesson of the need for a supportive management team during the implantation process.
According to the Tchokogu et al (2005) case, not every company will have to go through difficulties in implementation of the ERP systems. The article the P&WC Company which is one of the success stories for implementation of the enterprise resource planning system. During the implementation process, there are various levels involved. The first level is the strategic level and the key players are the top managers . The managers have to establish clear vision for the process and the role that the ERP will have to the entire organization. In addition, the management will have to give clear communication for the strategic priorities . According to the company, the top management was able to communicate the need of urgency and create the feeling within the organization. After determining the project scope, the management embarked on resource allocation for the various stages of the implementation process .
The second level of the implementation process is the tactical level. The company was able to redesign the view of the organization so that coherence is increased within the organization . The third and final level is the operational level. This involved transfer of knowledge and change of leadership . The company had to assess the impact the ERP system will had on its employees. The company took account of every aspect involved in all the three levels and created a supportive environment for the successful implementation of the ERP project.
References
Backler, T., & Florricks, M. (2003). ERP implementation failure: a case study. Information system management, 43-49.
Mandal, P. (2003). Issues in implementing ERP: A case study. European journal of operational research, 274-83.
Soh, C., Sia, S. K., Boh, W. F., & Tang, M. (2003). Misalignments in ERP Implementation: A Dialectic Perspective. Internationa journal of human computer interaction, 81-100.
Tchokogu, A., Bareil, C., & Duguay, C. R. (2005). Key lessons from the implementation of an ERP at Pratt & Whitney Canada. International journal of production economics, 151-163.
United States Government Accountability Office. (2005). Navy ERP Adherence to best business Practices Critical to avoid past failures. Washington: GAO.
Yusuf, Y., Gunasekaran, A., & Abthorpe, M. S. (2004). Enterprise information systems project implementation: A case study of ERP in Rolls-Royce. International journal of production economics, 251-66.
