Benefits And Difficulties of Enterprise Wide Information System Implementation

Benefits And Difficulties of Enterprise Wide Information brass ImplementationIntroductionFaced with mounting global competition, companies get under mavins skin to reform how they coordinate activity across the follow so as to tap the nurture they deliver to customers and minimize woos. Competitive pressures have forced the companies to lead various performance intent lenss such as flexibility, reliability, responsiveness, customer satisfaction etc. ERP can be delineate as an commixd, multi-dimensional carcass for each functions, establish on a credit line model for prepargondness, control, and global (resource) optimisation of the whole supply chain, by using state if the art IS/IT technology that supplies value added services to every last(predicate) privileged and external parties (Jarrar, et al., 2000). Despite the fact ERP have been succeederfully found throughed in the past, careful cookery and execution becomes precise in-chief(postnominal) factors given their size and complexity. Much has been written about the supremacy of enterprise information ashess. But, this success depends on several critical success factors (CSF). The most third estate critical success factors that are identified in the academic literature are discussed below (Bhatti, 2005).1. stray directionProject Management involves the using up of skills and knowledge used to coordinate, schedule the defined activities so that the stated objectives of performance puts are achieved (Bhatti, 2005). A degree wise planning of the realise with effective project direction skills will definitely abet in overcoming such a situation (Soliman Youssef, 1998). 2. Business Process ReengineeringIt is defined as the altering the business litigate through redesigning so as to achieve dramatic improvements in cost, quality, service and speed (Bhatti, 2005). The success of ERP governing body writ of execution is characterised by changing the present business uncon scious processes in uniformity to the standards of best business process available (Gibson, et al., 1999). Examination of many business processes is considered as the key for the slaying of ERP system. 3. User training and education inadequacy of proper skillfully competent staff leads to the failure of many ERP instruction execution projects. The training program of ERP executing include aspects like the concepts behind ERP, the spacious range of features and implications of ERP system, and hands on training (Bhatti, 2005). Therefore training the employees plays a major role in fortunately implementing the ERP projects.4. Technological infrastructureERP death penalty involves a complex transition from legacy information systems to a common business process throughout the organization (Bhatti, 2005). Therefore choosing the right ERP big bucks ground on the size of the firm is very crucial. It is very important that the hardware descriptors that should be used to run the ER P system are aware by the vendor of ERP (Bhatti, 2005). This in turn is based on the plectron of the company.5. Change counsellingBhatti, (2005) emphasizes on this aspect and says that in order to implement ERP systems successfully, the way organizations do business will need to change and slipway people do their jobs will need to change as well. Change Management is the very essential for success of implementation project and it is necessary that it starts in the early stages and continues throughout the entire project liveliness cycle (Bhatti, 2005).6. Management of RiskHandling unexpected crises and ensuring that the project does not deviate from the sign plan is risk precaution (Bhatti, 2005). There is perpetually a possibility that ERP project skill deviate from the chief(prenominal) objective which can possibly lead to unexpected events. Therefore, an appropriate risk management strategy helps in considerably reducing the risks of project failure. 7. Top Management SupportManagement must be a part of ERP implementations and it is on-key mainly with software system projects and their success mainly depends on top management support Bhatti, 2005. Only the top management is equipped to act as the mediator amidst the imperatives of the technology and the imperatives of the business (Bhatti, 2005). Every step of the implementation process demands the top managements involvement to provide a direction for the project and to ensure that the project is successful which can be very dispute at clock times (Bhatti, 2005).8. Effective CommunicationCommunication, one of most essential and difficult tasks in any ERP implementation project provides the base for apprehension and sacramental manduction information between the members of the project group and helps in communication the goals in each implementation stage to the entire organisation (Bhatti, 2005). because continuous communication flow should be maintained throughout all the departments at a very early stage.9. Team work and leaseSince an ERP involves all the departments in an organisation, it is very essential for these departments to work together. An ERP implementation police squad comprises of, functional personnel and management, IT personnel and management, top management, IT consultants, ERP vendor , parent company employees, management consultants, hardware vendor (Bhatti, 2005). A mix of hired consultants with companys knowledgeable staff is essential in an ERP team so that the necessary technical skills necessitate for the design and implementation can be developed by the inner(a) staff (Bhatti, 2005).10. User InvolvementUser involvement is a very important aspect as the functions of an ERP system are intentional as per the users requirement. When a company decides to implement an ERP system, user involvement is required at the stage of definition of the companys ERP system needs and also during the implementation of the ERP system (Bhatti, 2005).1 1. Use of consultantsThere is a possibility that the company might lack the experts who have sound knowledge about the software. Hence the use of external consultants is very much required who can help the internal staff in installing the software. These consultants may be involved in different stages of the ERP project implementation (Bhatti, 2005). 12. Goals and ObjectivesThe goals, expectations, and deliverables should be clearly defined so to address the questions regarding the need for the implementation of the ERP system and the critical business the system would cater (Bhatti, 2005). In this essay a case study based approach is used in order to discuss the benefits that companies have reaped by the use of enterprise wide information systems and also the difficulties that may rig out in respect to the introduction and implementation of such systems. slickness study 1 discusses the benefits of the enterprise wide information system. At the same time Case study 2 throws a lig ht on the difficulties set about by the companies in respect to the introduction and implementation of such systems.Case study 1- Case study of Pratt and Whitney Canada (Tchokogue, A., Bareilb, C., Claude, R. D., 2005)Scope of the projectThe main objective of implementing an ERP system at PWC was to establish an ent erprise wide information system (TES) such that its customers have a greater transparency and agility (Tchokogue, et al., 2005). The management valued this information system in place as they were interested in increasing inventory turnover, reduce work in progress, improve on customer response time and increase inventory and operation cost visibility (Tchokogue, et al., 2005). Hence they decided that blackjack oak/R3 was optimal after considering the main enterprise systems such as Oracle, BAAN, SAP, etc. (Tchokogue, et al., 2005)Highlights of TES implementationThe project was jaggedly divided into 5 major phases over the duration of 32 months.Scoping and planningDe termining the level of previous reengineeringProcess redesignConfiguration exam and deliveryThe early stages (phases 1 and 2) of implementation took approximately 10 months. During this phase emphasis was on defining the scope of activities and planning their implementation ( Tchokogue, et al., 2005). strategic objectives and requirements of PWC customers were interpreted into consideration while the existing processes were admission chargeed in order to steering on those which needed improvement in line with the targets set ( Tchokogue, et al., 2005). The tenderness stages (phase 3 and phase 4) which took 17 months of implementation mainly focussed on redesigning the processes where attempts to minimize re- engineering of processes were made ( Tchokogue, et al., 2005). Moreover during the phase 4 the configuration of the new system i.e. the main parameters of each SAP module and that the plectron of parameter options related to the new system was determined ( Tchokogue, et al., 2005). Care was taken to choose the right configuration based on the companies requirements. Risk management was effectively handled to prevent the uncertainties that prevail during the implementation stages to ensure that there was no deviation from the main goals and objectives. The top executives constantly monitored the progress of the implementation process and helped giving the project a proper direction. The project teams followed the Deloitte Touche Consulting Group- ICS FastTrack 4 SAP methodology ( Tchokogue, et al., 2005) for the implementation of TES. In this methodology five key factors were considered throughout the project Project Management, Technology Architecture, Process and Systems Integrity, Change Management, and Knowledge move out ( Tchokogue, et al., 2005).The last stage (phase 5) included three integration test cycles An initial cycle related to master file data, a second to dormant data and a third to dynamic data. The successful test results were so f ormally accepted by the process managers ( Tchokogue, et al., 2005).An impressive project team of 345 employees from the most important departments of the company were divided into seven groups and were included in the project which ensured that contributions were made from all the departments directly affecting the new system ( Tchokogue, et al., 2005). This enabled the project to have an effective knowledge transfer and expertise ( Tchokogue, et al., 2005). close to 110 employees from the six most affected departments were trained to become internal trainers ( Tchokogue, et al., 2005). The involvement of both the internal and external consultants with effective communication between the departments and training processes proved extremely beneficial for the implementation process ( Tchokogue, et al., 2005)Results after(prenominal) its implementation the inventory turnover rate remained stable ( Tchokogue, et al., 2005) . An increase in the inventory costs was very visible ( Tcho kogue, et al., 2005) . The TES established an information key supporting the ongoing business processes and change ( Tchokogue, et al., 2005) . TES increased the productivity by 11% more than what was anticipated ( Tchokogue, et al., 2005) . It reduced the receivable days bang-up by 6% ( Tchokogue, et al., 2005) . 30-40% return on investment was achieved ( Tchokogue, et al., 2005) . The TES gave the organization access to real time information ( Tchokogue, et al., 2005) . This provided fruitful for inventory management and purchasing. The return start delays were reduced drastically ( Tchokogue, et al., 2005) . REASONS FOR ERP PROJECT FAILURES Poor technical methods are only one of the causes, and this cause is relatively minor in proportion to larger issues, such as failures in communications and ineffective lead ( Sumner, 1999) . Table 1 summarises the possible reasons for project failures. The Company Increasing the expertness was the main objective behind startin g the Delta III project which took 18 months for completion ( Scott, 1999) . Along with SAP/R3, FoxMeyer also purchased store-automation from a vendor called Pinnacle, and chose Andersen Consulting to integrate and implement the two systems ( Scott, 1999) . Delta III was at risk for several reasons The warehouse employees sensed that their jobs would be under threat if the warehouse automation software was integrated with SAP/R3 ( Scott, 1999) . This posed a huge threat for the implementation of SAP despite the support from top management as the warehouse employees opposed its implementation ( Scott, 1999) . The rise in the number of R/3 transactions to be processed after the start of the project put the scope of the project at great risk ( Scott, 1999) . This increased pith on the system is mainly because FoxMeyer signed a large contract to supply University Health System Consortium (UHC) ( Scott, 1999) . Another risk confront by FoxMeyer in the implementation process of SAP/ R3 is the lack of experient workers ( Scott, 1999) . This forced the management of FoxMeyer to rely on Andersen Consulting which proved to be a greater risk as the external consultants were also inexperienced ( Scott, 1999) . Lessons Achieved FoxMeyer failed to sens the risks involved in adopting SAP/R3 in the early stages of the implementation and end up sharing the risks with the external consultant Andersen Consulting ( Scott, 1999) . It ended up sharing the losses as they did not have any contract which strongly stated that only experienced consultants were t be used ( Scott, 1999). No attempts were made in training the in house workers which ended up in relying heavily on external consultants who hampered the knowledge transfer process within the company ( Scott, 1999). The management allowed the project to divert from its scope on a regular basis which in-turn affected the change management process at the later phases of implementation ( Scott, 1999). Discussion and Con clusion The two above mentioned case studies are representations of successful implementation of SAP R/3 ERP system in one company and a failure in implementation which caused huge losses in the other company. In the first case the success of the implementation process is mainly due to the constant and shared effort of all the parties involved with the project. Several factors such as their capacity to accept change, precise planning, adequate financial resources and time frames contributed to the organisational transformation of PWC.