IT Management: ERP Systems and Relevant Case Studies

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IT Management: ERP Systems and Relevant Case Studies

This paper is going to discuss the relevance of an ERP System, it will cover the three cases of three different companies detailing each one of them. The paper begins with discussion of importance of ERP System, then it goes further to cover Harley Davidson case, Keda's SAP Implementation and Bombardier ERP implementation. Finally the paper covers vendor selection for Harley and reasons for success for Bombardier Company.

ERP, their uses and importance.

ERP is a software system that is used to integrate all business departments, roles and operations of a firm into a single system while serving each of the department’s unique needs. The ERP is designed to help business make smarter decisions, offer better services and increase efficiency in the by automating company’s business processes and workflows. There are various advantages of having an ERP system which includes its functions. They are: To promote efficient transfer of information between departments, to allow employees to get access to information they require from everywhere, to make it ease processes across different departments, to provide general view of the business’s overall operations and finally better manage the firm’s financial rsources. These are all accomplished by using the various ERP modules for each of the areas. With these benefits and capabilities, the ERP ensures that the company records a higher productivity, efficient business processes and operations and greatly reduced errors in the business procedures, processes and tasks of the company. With an ERP, a company is able to see how the company/firm is doing as a one unit and reveals areas of business chances and opportunities that can be improved. With the valuable analytics and data from the ERP, the company understands its customer’s well getting better insight to tailor their marketing strategy. Communication is also made easier with the ERP system since customer, users and customer services can be accessed easily and quickly.

The main differences on the three cases regarding their reasons for implementing them; the process used to choose and build the project/system; and the relationship and fit of the company, software, and software vendor

Harley Davidson’s Enterprise Software Selection.

In 1903, Harley-Davidson Motor Company was formed by Harley William and Davidson Arthur. The company has survived many huddles and finance issues in the 80’s and has since been the biggest motor cycle manufacturer among others in the United States. The company has a great sense of community and has developed due to the spirit of reckless, youthful and independent operations. The teams of the company are divided into three including Produce Product Team, Create Demand Team and the team that provides support. Gerry Berryman joined the company in 1995 and came up with the idea of optimizing supplier relationship with the company. This resulted in the development of Supply Management System (SMS) in 1996 that resulted in migration from transactional-site specific mentality to strategic focus on supplier relationships. The company held the initial planning meeting in 1997 for coming up with the Supplier Information Link (SiLK) as their integrated procurement system. There were rigorous and thorough activities which gave the company time to adjust and engage to the new philosophy. Procurement Managers decided to move the SiLK project from strategy-based to action-based and by 1998 several of full-time resources were dedicated for development of the system. There was a team made to work on the specifications in details and maintained proper communication with the stakeholders. The functional specification for SiLK system were finished and RFQ distributed to probable providers in October, 1998. The companies were invited to providers meeting in November, 1998 to go through the RFQ. Eight proposals were submitted and the list was then narrowed to three suppliers. Final evaluation was done in January, 1999 by the SiLK team verified each of the three software suppliers who demonstrated the ten scenarios provided by Harley –Davidson Company. On 30^th January 1999, the team wanted to make the final decision on the vendor selection for the SiLK procurement system. The team has to ensure that they select the best software provider and the same team must balance extend by which the software functional design and implementation meets the need of the company. This was a crucial step that would bring the company closer to the culture shift brought about by Berryman. The team has to consider the Business Integration model of the company as their guide (Process, people and technology).

The recommendations for this project were to select a suitable provider for the Silk Project that considered the strategic road map of the business model which was driven by 49-74% people, 19-38.5% process and 4.9-11% technology. Each provider had pros and cons. Provider 1 had clear attention to Harley-Davidson’s company virtues and values and fitted their culture well. Provider 1 had a drawback of only meeting the requirements by use of partner based solutions that they use in their web enablement processes. Provider 2 offered the best functionality with 98.7% fit for the company but presented extremely formal, consultant attitude that could match well with Company’s culture. Provider 3 had a potential technology advantage since they had participated in another of Harleys-Davidson software project before. Their disadvantage was that their boilerplate functions were not impressive and their team was poor at discovering and acknowledging the company’s culture. The team had also to remain intact with the existing company members who were expected to give 100% of their time for the project.

Keda's SAP Implementation

This model was aimed at promoting innovation and entrepreneurial culture but it faced challenges in terms of redundancy in its business units which resulted into high costs and lowered efficiency. Business managers could not make complete strategic decisions resulting to improper assessment of costs and profits. This resulted to a struggle to meet the market demand as there was poor usage of resources. There were various problems that Keda faced, while it tried to add variety to its business lines and production lines in 2004, their existing Manufacturing Resources planning MRP-II system did not offer support to the plant activities and operations. The vendor also stopped the support of the system and the Chinese Government pressured the companies to implement an IT approach in their processes. This force Keda to implement a new IT solution for their operations. Since the government was running campaigns and giving Incentives, Keda had to adopt ERP. The decision for Ked was made by the management who identified that most problems facing their company could be solved by a well implemented ERP. They wanted a single database which handled all data from the different business units. This solved the problems of fragmentation of company information and data and streamlined data flow through the business processes. This means that managers could now make the right decision all the times since they had all the required information.

Keda’s process for implementing the ERP followed 5 phases which were the design phase, implementation phase, stabilization phase, continuous improvement phase and finally transformation phase. Planning involved selection of ERP system, production of use cases, and identification of manager for the project and designing the system architecture. The implementation phase covered configuration and implementation of software. This meant that Keda had to modify and streamline their operations to match the organization structure. Stabilization phase fixed the implementation problems to increase the performance of the enterprise. In the improvement phase the organization includes increments to their performance improvement. The leaders had a set of best practices that included: focusing on the new plan for computerization, identification of business competencies and discovering building in-house ERP will be expensive, selecting the right members for the project team, involving senior management and directors in all the phases, implementing a good reward system and identification system for workers and finally monitoring of the progress of the project continuously.

Keda faced several challenges which include inadequate time solved through testing the system and training the users concurrently. Reluctance and resistance to work with ERP project was solved by formation of a reward system that ensured punishment to the unsupportive employees. Disagreements between consultants and owners of modules was solved by adopting consultant’s recommendations all the time. Technical problems after implementations were solved by keeping the management updated of all possible production delays. User resistance problem was solved by promptly imposing organizational culture and replacing those who disagreed with it.

Bombardier Successfully Navigating the Turbulent Skies of a Large-Scale ERP Implementation.

Bombardier began replacing its old system with a new integrated system which was supposed to increase efficiency in their operations. The management saw the need of an ERP that will be used for sustaining them in handling their market competition. In 2000, first ERP attempt failed since they had a large complex system and changes to the system resulted to reduced performance. This project was abandoned mid-way with a cost of $130 million. Later on Bombardier hired a consultant team to create an implementation plan for the ERP. They involved senior management and came with a common vision for the company. The second round was successful than the first because the planning and in the late 2001, the company was ready start implementing the Bombardier Manufacturing Information System (BMIS). This was a new Integrated Information System which was implemented using SAP. This was first done at Mirabel plant and then at St-Laurent.

For Bombardier to implement best practices for the ERP, it was expected to come up with clear goals and objectives of each group which was to be done by management. This would have to affect all the departments and business processes. There is need for the firm to produce for a business transformation. This means that rules and process were to be changed during implementation of the ERP. This calls for surety that a clear process is put in place and implemented to ease the change. The need to select the best software also calls for matching the software to the information requirements, processes, functional requirements and workflows. The management thoroughly considered the needs and decided that SAP was the best option for development.

Vendor Selection for Harley Davidson and why?

I would elect Provider 1 would be my selection for Harley-Davidson since their practices correctly fitted the business model of the company and they paid attention to Harley-Davidson Company values. Their drawback of using partner based solution for the web based systems could be easily solved by Harley-Davidson manager recommending some of the best partners that they prefer and that qualify their company profile.

Was Bombardier’s project a success? Reason?

Yes the implementation was successful since the ERP at Mirabel and St. Laurent plants were done in completion and with success. The process went smoother at St. Laurent. The second time system implementation had in place a strong management support, the goals were clear and the training of users was also better than the first round. The smoothness achieved at St. Laurent was due to the correction of the mistakes that were made before at Mirabel. The previously made mistakes were corrected in the next implementation of the systems.

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