ERP IMPLEMENTATION - WEAKNESSES

Issue & Consequences

Lack of stakeholder analysis
Potential scope creep due to requirements previously not
identified
System unable to address operational problems

Requirements

selection Package

Research on requirements for the package is unclear.

Requirements were not classified into mandatory, optional and
desirable.
Consequence:
Potential scope creep due to requirements previously not
identified
System unable to address operational problems
Gathering information about potential packages is done via limited/
unreliable source of information./ Other potential packages was
biasedly/ negligently evaluated.
Consequence:
Limited choices of packages to choose from and potentially choosing
a package that does not suit business process and operating
requirements from all stakeholders
Evaluation of package functionality was incomprehensive and
unclear
- Sean only evaluated functionality of package based on their userfriendliness and extent of customisability
Vendor characteristic not sufficiently evaluated: Vendor
characteristic only evaluated based on reputation of the vendors of
packages A and B
Consequence:
Technical Considerations
Selection of packages did not consider technical factors
Especially important because currently, their old system cannot
integrate with the system used by the finance department for

Recommendation
1. Under NIBCO case study, CFO parker recruited 8 other director level managers as well as
representatives from various functional areas to seek their overall opinion in requirements
needed for new ERP system
2. In Omega case study, they considered a comprehensive list of stakeholders which includes
shareholders, employees, the management as well as customers.
Thorough stakeholder analysis that includes people with technical interest, people with
manpower and materials as well as end users should be carried out.
Similar to NIBCO which had a a TIGER team including 3 business process teams, a technical
team, and change management team, company X should also have an acquisition team of
people from different departments to gather the requirements of various departments and
classify them as mandatory, optional and desirable. E.g. Senior Manager, Business Unit
Manager, End users, Sales/Marketing team

1. As suggested in the OMEGA case, PM should do more extensive research on the potential
packages using many different sources such as vendor literature, magazines, Internet and
research services such as Gartner Group.
2. Moreover, PM could learn from NIBCO case and sending representatives from various
functional areas participated in walkthroughs of specific modules.

1. NIBCO evaluated seven ERP packages in depth. The strengths and weaknesses of each
package functionality were considered and mapped into an evaluation matrix. Similarly, PM
can evaluate more aspects of functionality different packages such as:
Match of package with business-processes, functions and transactions supported
Fox Meyer were convinced to choose SAP software package only, instead from a selection of
vendor and software packages. They realised that SAP was not enough to handle 500,000
items a day from its orders, it is only able to handle a few thousand items a day.
Select Vendor based on a list of characteristics
FoxMeyer did not consider technological factors when choosing their ERP package. As a
result, the installation of their SAP together with another warehouse-automation system from
another vendor increased the complexity of their project
Package must fit with the current IT infrastructure and cover everything--hardware,
software, networks, telecoms, database, security, etc.

Delivery

Testing on Customisati

Lack of Marketplace Analysis

Failure to identify the major players providing IS packages in
the marketplace
Shortlisted to only two packages and did not consider other
Lack of intensive Cost Considerations
- Lack of information for proper cost evaluation such as
- cost per module
- initial costs
Excessive customization and configuration to look like the old
legacy system
Consequence
Unable to fully utilize the function and best practice processes
accompanied by the new system

Phase-by-phase approach:
NIBCO: The fear was that the company would just get to the point
where it would say enough is enough without executing the whole
plan. Team members had also observed that some of the companies
that had used a phased, "go-slow" approach were not among the most

In Omega case study, Omega held an information session and invited potential vendors to
attend and the benefits of the session are:
opportunity to gather more information on each of the vendors
better prices and solutions as each of the vendor know who they are
FoxMeyer
did not consider
competing
against cost factors when choosing their ERP package. They were
overoptimistic about deals being profitable and spent millions of dollars on hardware,
software and consultation without prior cost planning. As a result, the shortfalls
between the expected and actual profits were too overwhelming.
Under the NIBCO case study, the R/3 package was to be implemented in a vanilla form
with essentially no customization. The intent was not to try to reconfigure R/3 to look like the
old legacy systems. Rather, the company would adapt to the R/3 best practice processes.
This is especially important because ERP implementation does not only refer to a change in
software or database but also a process of reengineering and adopting of best business

PROJECT MANAGEMENT STRUCTURE

Strength/ weakness and example from case study
[Strength] Top management support with involvement of CEO
NIBCO: CEO Martin was the executive sponsor of the implementation
team
[Strength] Presence of a Business Process Reengineering Team
DCH Safety: BPR team that seek to radically re-engineer current processes
by challenging existing ways of doing things
NIBCO: Business review roles were taken on by a business leader that
could make high level business process redesign decisions based on their
expertise and experience
[Strength] The person who lead and facilitate the project
implementation teams discussion was experienced and objective
NIBCO: Because of his facilitation experience, Jim Davis was asked to
facilitate that meeting.
[Weakness] Lack of involvement of Project, Business and Procurement
managers
NIBCO: In total, only 7 out of 28 directors of the company is committed to
the project

Implication of strength
The CEO has the authority and will be able to allocate and provide resources (e.g. views,
manpower) needed by the project manager
Able to use strong negotiation skills to negotiate good deals and lower the cost Project will be
given great support and recognition in the company
Having a BPR team will enhance control of the processes, so that the implemented new
system will not be just an automation of old processes
Can adapt to best practice processes ( NIBCO implemented vanilla) With a BPR team,
there can be better integration of the existing practices of the company with the best practices
outside. Moreover, they can also ensure that these changes to be implemented remain suitable
for the company
There would be an objective person who had no particular interest or bias to help lead the
discussion. Moreover, with facilitation experience and domain knowledge, facilitators can
have a clear agenda and direction to achieve a meaningful knowledge sharing and interaction.
Managers:
1. The implemented ERP system may not include the
changes needed by the Business and Procurement
managers necessarily for improvement
2. Project Manager not fully committed to ERP project
Project manager unable to provide timely approval
to the IT consultants.
3. No sense of ownership for the project: they will not
actively uptake the ERP system and encourage the
whole company to adapt to it, resulting in future
resistance to the ERP system.

1. Procurement and Business

manager should be more involved
with the IT consultants Tie part
of their incentives with the success
(time, scope) of the ERP
implementation
2. Assign a new Project Supervisor
who dedicate full time commitment
to the implementation, rather than
having the Finance manager
commit 50% of his time.

[Weakness] Lack of Change Management Team to facilitate change

towards the implemented ERP system
NIBCO: Presence of change management team to facilitate
adaptation to the new ERP system. one of the things we kept hearing
over and over was that the change management was a killer, if we dont
get people to play the new instrument here, it could be a great coronetbut
its never gonna blow a note

Without the cooperation and willingness of

employees to adopt the change, it would be
useless even with a good ERP system put in
place the company will not know how to
use the system, thus affecting the future
operation of the business when the ERP
system is finally in place

1. Create a Change Management Team which

ensures that teams members and users
receive the training they need to use the
adopted ERP system understand the
change implications and how it impacts them
be part of the change
2. Constantly update and communicate with
all employees
3. Monitor each of the employees using a
change adoption curve

GO-LIVE APPROACH: BIG BANG VS PHASED APPROACH

Definition

Pros

Cons

Big Bang
Big bang is a one-and-done deal: the system goes live across all departments on a
predetermined date. Prior to deployment, management must determine any organizational
changes necessary to make the system viable, employees must receive adequate training
on the new system, data stewards must convert and import information from the old
system to the new system, and the technical staff must conduct trial runs to verify the
validity of the software.
Low Cost. Operating expenses are much lower than in a phase rollout, as the organization
need only incur the maintenance costs of a single system.
Faster Return on Investment (ROI). The changeover occurs site-wide for all users on a
given date, resulting in an immediate change to processes across affected departments.

Phased approach
In contrast, a phased rollout implements the new system in a series of steps. An
organization may deploy individual modules one at a time, starting with its core
processes, or it may introduce the new system to a particular business unit or site
before deploying the software to its other departments or locations.

High Risk. This is because the integrated nature of ERP systems means that a failure in
one part of the system can have knock-on effects elsewhere. The scope of a big bang
implementation can also mean that full end-to-end system testing is difficult to achieve,
and its only when the system goes live that all of the interdependencies are fully tested.
Disruption to Operations. The organization may experience a catch-up period in
which productivity temporarily decreases as users adapt to the new system.

Lack of Focus. Deployment occurs over an extended period, and staff must
concentrate on a single module or department at a time rather than on the system as a
whole.
High Cost. The organization must devote resources to maintaining the old system
and the new system as well as any temporary interfaces used to link the two systems.
Phased implementations typically take longer to fully complete; this generally means
more time from both the ERP vendor and the project team and therefore increased
costs. Temporary interfaces between the new system and legacy systems can also
increase the cost of a phased approach

Low Risk. Because theres no hard-and-fast deadline, the organization can make
adjustments as needed during the transition.
Steady Performance. The organization has more time to train employees, and
employees have more time to adjust to the new system.

Many factors need to be considered when deciding on a go-live strategy. For example:
Factor
Implementation cover a single site or multiple sites
Implementation cover single business or multiple
businesses
Integration between new system and legacy system during
the interim period

Other competing business activities that need to be taken

into account
Risk appetite (what level of risk is acceptable?)
Cost/ Budget available

Big Bang
Single site
Multiple sites with strong interdependencies between sites
Single business

Phased approach
Multiple sites, with little or no interdependencies between
sites
Multiple businesses => Make sense to phase the
implementation by trading company or business unit
Little issues since all modules are to be introduced at once
Potential issues: Need to create interfaces, user
documentation and Standard Operating Procedures (SOPs)
that cover how business processes operate in the interim
period
Factors such as regulatory compliance, acquisitions, new product introductions and other capital expenditure programs can
influence the required timescale for an ERP implementation.
inherently higher level of risk.
Lower risk
Low cost
High cost

Both approaches have their advantages and disadvantages. However its important to point out that an implementation strategy doesnt have to be limited to these two options.
Sometimes a big bang approach can be used to implement must have functionality within the core ERP modules, followed up with a phased implementation of nice to have

functionality and the implementation of non-core modules such as document management, business intelligence and maintenance management. All of the implementation
options should be explored in detail as part of an ERP strategy definition exercise.

Pros

Definition

SOFTWARE DEVELOPMENT APPROACHS: WATERFALL VS AGILE (PROTOTYPE)

Waterfall

Agile (Prototype)

Waterfall is a linear approach to software development. In this methodology,

the sequence of events is something like: Requirement Design Construction
Testing Delivery
In a true Waterfall development project, each of these represents a distinct

customers agree
on what
be delivered
early
in the
stageDevelopers
of softwareand
development,
and each
stagewill
generally
finishes
before
the
development lifecycle. This makes planning and designing more
straightforward.
Progress is more easily measured, as the full scope of the work is known

Agile is an iterative, team-based approach to development. Rather than creating tasks

and schedules, all time is time-boxed into phases called sprints. As work is
completed during each sprint, it is continuously reviewed and evaluated by the
customer, who may be considered the most critical member of the Agile team. As a
result,
ByAgile
involving
every
stepofofcustomer
the project,
there is a throughout
high degreetheof
reliesthe
on client
a veryinhigh
level
involvement
collaboration between the client and project team, providing more
opportunities for the team to truly understand the clients vision.
By delivering working software early and frequently using fixed-duration time
boxes, stakeholder engagement is increased by the motivation of seeing a working

Cons

Waterfall

Agile (Prototype)

One area which almost always falls short is the effectiveness

of requirements. Customers are sometimes intimidated by details, and
specific details, provided early in the project, are required with this
approach. In addition, customers are not always able to visualize an

Factor
Project size and complexity
Customer availability/ Willingness to be involved
Level of integration with external system
Customer tolerance to scope or cost changes
Time to market
Customer preference or requirement
Direction/ Vision of what the final product should be
Speed of change in the industry

The very high degree of customer involvement, while great for the project, may
present problems for some customers who simply may not have the time or
interest for this type of participation.
Agile works best when members of the development team are completely

Agile
Small, less complex
Available frequently throughout the project and willing to be
involved
Simple or not needed
Flexibility in budget and schedule is possible and welcome
Rapid deployment needed, can have limited feature set

Water Fall
Large or more complex
Customers cannot commit to extensive involvement

Numerous, unknown, complex

Budget or schedule is fixed and difficult to modify
Full featured application must be delivered within a
determined timeline
Customer has stated methodology requirement: generally as requested, assuming other factors do not strongly suggest otherwise
Unclear
Clear
Slow/ Steady changing standards
Rapid changing standards

NIBCOS BIG BANG INTEGRATION MANAGEMENT

Scope
Management

Quality
Management

Risk
Management

Detail
Timeline of events were pre-planned
Work breakdown structure.
The project was conducted in four large phases: Preparation, analysis, design, implementation. Project team was clear of their corresponding major
activities with respect to each large phases
Project Management Tools used:
In-house Tools: The IS team built a number of tools to help with process scripting as well as project management. For example, Project Office was a
NIBCO-developed tool for project management as project tracking that used an Access database
Off-the-shelf Tools: e.g MS Access
Scope failed to account for 3 things:
Technology infrastructure costs for the R/3 software
Team costs
Education of NIBCO Associates
Scope changed due to strategic changes
Decided to exclude operations outside North America from the Big Bang implementation
Wanted to consolidate their distribution centers
Strong adherence to Standards:
IBM consultants were assigned to project teams to provide technical knowledge and experiences from R/3 implementations at other companies that
could be used to help NIBCO avoid similar pitfalls.
IBM was their current hardware supplier
IBM never had a successful prior Big Bang implementation
Established ERP systems implemented (SAP) with no customisation
Big Bang approach: high risk as the project was very rushed for such a large scale => experts and top management roped in
Change Management: high risk of resistance from employees
Employed IBM as change management partners
Extended Team Members would be called on to help with documenting the gaps between the old and new business processes and helping with master
data loads and testing. After the cutover, many would serve in local expert roles for knowledge transfer
Integration problems: high risk of resistance from management. The integration had to work, because otherwise any one part of the organization could
claim that they were no better off, or even less well off, than before the project
The team was built with the awareness that they have to make decisions focused on the integration goals, which would result in killing some sacred
cows along the way
Business Review roles were filled by business leaders who could make the high-level business process redesign decisions based in their own
knowledge and experience, without having to ask for permission
Hindrance to Daily Operations: the company would be significantly harmed during the project because most other company initiatives would basically be
put on hold => Strict adherence to deadlines + encourage participation of employees in ERP implementation process

Implementation issues: some departments may face difficulties of different nature => formation of tactical teams for risky areas + each team has its share
of experts

HR
Management

Procurement
Management

Communicatio
n Management

Time
Management
Cost
Management

Careful selection of 70 strong team members

Personality profiling, including personal ability to lead, and adapt to, change and emotional fit
The remaining Business Review roles were filled with managers who had deep enough business knowledge to identifies issues as well as strong enough
organisational credibility to settle conflicts as they arose.
Technical skills
Consultants were hired in advance to meet gaps: Sufficient time to prepare beforehand
Staff training of team & end users: Ensure they are properly equipped for the project
Open office layout: Encourage bonding and promotes easy facilitation
Lead time & delivery time: Not expressedly stated but assumed to be properly managed
Installation time: Consolidated in advance: 17 smaller distribution centers to 4 large ones to handle the high technology installation and complexity
Transition time
Legacy system were fully operational till go-live data
Enabled operations to continue till cutover date
Within the team
Formal team-building exercises and discussions were conducted to sensitize the entire team to potential sources of resistance and the need for early
communication efforts.
Open office layout i.e no closed doors and no private offices
The entire project team (including directors) was housed in a single physical location called TIGER Den.
The Den had a large open space called the war room, concentration room and soft couches to facilitate brainstorming sessions, formal and informal
meetings
Between the team & NIBCO associates
Regular feedback & update sessions for all employees (TIGER talks at corporate headquarters) by Jim Davis and selected TIGER team members with
flexible timing
Most connected individuals serving as hubs for bidirectional feedback to the team and to those with whom they were connected in the workplace
Team members also conducted two or three rounds of on-site visits to each NIBCO plan and distribution center, thus allowing all associates to have an
opportunity for a physical face-to-face meeting with team members regularly.
Project tools: Customised in-house project management tools used: Project Office
Motivate employees: Remuneration incentives tied to deadlines
Conservative approach: Time was given for buffer purposes
Cost cutting measures:
Big Bang approach
Cutting loose consultants
Motivate employee: remuneration incentives tied to budget target
Wise spending:
Infrastructure improvement such as designing and building new client/server infrastructure as well as providing ABAP programming support for the
new system; invest in new technical capabilities required for the product bar-code scanning and labeling functions that were to be implemented as part
of the warehouse management changes

 TIGER Den: open concept office