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IJMPB
1,1 Project management: a case study
of a successful ERP
implementation
106
Fergal Carton, Frederic Adam and David Sammon
Business Information Systems, University College Cork, Cork, Ireland
Received 5 August 2007
Accepted 20 October 2007
Abstract
Purpose – The success rate of enterprise resource planning (ERP) implementations is not high in
view of the sums invested by organisations in these applications. It has often been indicated that a
combination of inadequate preparedness and inappropriate project management have been
responsible for the low-success rate of ERP implementations. The purpose of this paper is to
present a case study of a successful ERP implementation.
Design/methodology/approach – In this paper, the authors use a case study of a very successful
roll out of an ERP application in the Irish subsidiary of a UK multinational to investigate the validity
of one of the most commonly cited project management frameworks, the project management body of
knowledge (PMBOK), to ERP projects. Discussing each category of the framework in turn, the case
data to illustrate where the PMBOK framework is a good fit or needs refining for ERP projects is used.
Findings – It is found that, by and large, PMBOK, because it is a very broad framework, can shed
light on most of the key aspects of an ERP project. However, the specificities of this type of project
require a different emphasis on some of the factors, as discussed in the authors conclusions. The case
analysis also raised some interesting insights into how companies evaluate the success of such highly
complex change management initiatives.
Research limitations/implications – This research work will need to be extended to cover other
case studies of ERP implementation across other industries and organisational contexts; for example
in less tightly regulated industries and smaller organisations.
Practical implications – This discussion will be of great value to ERP project managers who are in
the early stages of a project and need to understand and anticipate the areas which will require specific
attention on their part, based on their knowledge of the specific circumstances within their
organisational context.
Originality/value – This paper presents an investigation into the project management strategy
adopted in the Pharma Inc. case and illustrates the mechanics of a successful ERP project
implementation, categorised using the PMBOK framework.
Keywords Manufacturing resource planning, Project management
Paper type Case study
1. Introduction
A considerable volume of research has been carried out on enterprise wide systems and
most notably on enterprise resource planning (ERP) systems. This research has
established that on the one hand, significant benefits can accrue to organisations
implementing these systems (Shang and Seddon, 2002) but on the other, many
International Journal of Managing implementations are not conclusively successful (Holland et al., 1999). There is
Projects in Business evidence that the degree to which organisations prepare themselves for their
Vol. 1 No. 1, 2008
pp. 106-124 implementation projects has a bearing on whether they encounter many problems
q Emerald Group Publishing Limited
1753-8378
during implementation and ultimately, whether they achieve any of the benefits they
DOI 10.1108/17538370810846441 sought (Sammon et al., 2004). It also appears that inadequate project management leads
to short-term solutions being applied to the problems that occur during the Project
implementation of ERP systems with substantial side effects when systems go live management
(Saint-Leger and Savall, 2001). Previous research has indicated that the scope and
complexity of ERP implementations are different from traditional analysis and design
projects (Davenport, 2000) suggesting specific project management strategies should
be developed to tackle the specific challenges of such projects. In particular, it is argued
that ERP projects are often associated with the widespread “re-engineering” of 107
business practices, whereas traditional projects have smaller organisational
“footprints” and are designed to match current practices. In this paper, we leverage
our investigations of a very successful ERP implementation in a multinational
pharmaceutical company (Pharma Inc.) to gain an insight into the project management
strategy adopted to manage what was a successful ERP implementation. To facilitate
the presentation of our findings from this case investigation we use the nine areas of
the project management body of knowledge (PMBOK) framework.
The remainder of this paper is organised as follows. The next section presents
the PMBOK framework, which has been put forward as a best practice vehicle to
understand project management in information systems (IS) projects (Project
Management Institute – PMI, 2000). In the second section, we present the case
study protocol we followed and the methods we applied to the case study of Pharma
Inc. In the third section, we review the findings of the case under the nine headings of
the PMBOK framework and, finally we propose conclusions towards excellent project
management practices for ERP projects.
The processes within each knowledge area interact with each other and with the
108 processes in other knowledge areas. Each process has an input for the process tools
and techniques to carry out the process, and an output from the process. While each
process presented within the knowledge areas appear as discrete elements with
well-defined interfaces, some interaction and overlap is expected in practice. The nine
areas are illustrated in Table I.
Project integration management Ensures that various elements of the project are
properly coordinated
Project scope management Includes all of the work required, and only the work
required, to complete the project successfully
Project time management Ensures timely completion of the project
Project cost management Ensures that the project is completed within the
approved budget
Project quality management Ensures that the project will satisfy the needs for
which it was undertaken
Project human resource management Makes the most effective use of people involved with
the project
Project communications management Ensures timely and appropriate generation,
collection, dissemination, storage, and ultimate
disposition of project information
Project risk management Is concerned with identifying, analysing, and
responding to project risk
Project procurement management Involves acquiring goods and services from outside
the performing organisation
Table I.
Nine areas of the PMBOK Source: PMI (2000)
Nevertheless, reported cases of ERP failure seem to indicate that certain, particularly Project
sensitive areas of traditional project management require greater emphasis than management
others. For example, the specification of requirements for ERP projects is often
non-existent or applied retrospectively because organisations are hoping to acquire
ready-made solutions that embody best practice that is directly applicable to them. In
these cases, the project begins with discussions with consultants already propounding
a particular software solution and technical architecture where other important aspects 109
are overlooked, for example, how the project should be managed. Based on calls from
previous researchers to derive better suited project management practices and better
approaches to ERP in general (Sauer, 2002; Swanson and Ramiller, 2004) and on
available evidence of the problems that have led to significant failure rates in the past
for such projects, there is a need to analyse the nine areas of the PMBOK and discuss
their relevance in the context of a successful ERP project implementation process in
order to fully understand how to apply the framework in the case of an ERP project.
According to the PMI, project management is the application of knowledge, skills,
tools, and techniques to project activities in order to meet or exceed stakeholder needs
and expectations from a project (PMI, 2000). However, there are competing demands
among scope, time, cost, and quality; differences in stakeholders needs and
expectations; and identified requirements (needs) and unidentified requirements
(expectations). As a result, it is critical to the success of a project and the ability to
address these competing demands that the organisation’s structure and approach to
the management of projects is a match to the objectives of the ERP implementation.
While an understanding of “vanilla” project management is beneficial, it is not
sufficient, due to the fact that projects and project management operate in an
environment broader than that of the project itself and the project management team
must understand this broader context. For example, managing the day-to-day
activities of the project is necessary for success, but not sufficient (PMI, 2000). In this
paper, we examine a case study of an ERP roll out in an American multinational
involved in the pharmaceutical sector. We also investigate the perceptions of a project
team responsible for the implementation of an ERP package as the project progress
through the stages of the project lifecycle. Using the nine areas of the PMBOK to
organise the case data we present an insight into what happened and into the evolution
of the project team members’ perceptions of the project management challenges.
3. Methodology
In this paper, we present a case study of Pharma Inc., where a successful ERP
implementation took place over a period of time between early-2003 and end-2004. We
followed the case study over this period, and as a benchmark project it has
considerable value in that it is perceived by all participants as being a notable success,
both for the implementing subsidiary and for the parent company. Concretely this
means that the system went live as expected, on time and within budget, and that the
project team were able to achieve a rapid ramp-up to full production volumes ahead of
time (seven weeks instead of the predicted nine weeks after go-live). This makes
Pharma Inc. an example of an extreme case in Patton’s (1990) classification of
purposeful sampling strategies and this justifies the choice of this case as a basis for
determination of best practice in ERP implementations.
IJMPB 3.1 The case study
1,1 The case involves a manufacturing subsidiary of a multinational pharmaceutical firm
implementing a single instance of specific technical skills (SAP) across a large number
of sites worldwide (refer to Table II for key information about the case). This
subsidiary is what is termed a “primary site” meaning that it produces batches of
active ingredients to be used in other “secondary” sites where the tabletting and
110 packaging of the drugs is performed.
One feature of this case study is that previous waves of the ERP implementation
had only been carried out at secondary sites. The manufacturing subsidiary studied
here was the first primary site to go live on the new SAP system, and this raised
additional challenges that were not anticipated. Project members from the
implementation team studied here were solicited by the core team post go-live to
assist with the SAP roll-out in further primary sites, based on the skills and know-how
gained in adapting the global template to their local (primary site) requirements.
114
Table V.
IJMPB
(December 2003)
on core competences
Level of impact of ERP
Level of impact
High Medium Low
Core competency/area of excellence P N P N P N
(September 2004)
on core competences
Level of impact of ERP
115
Table VI.
IJMPB metrics in general, was responsible for carrying out an extensive after action review
1,1 (AAR) of the entire project, which involved revisiting objectives 12 months after go
live to evaluate whether they had been achieved. A media rich presentation collating
the results of the AAR was published internally on CD and on the web. Indeed, this
same group plays a role of ongoing process improvement and its “mentors” are
uniquely placed to advise different parts of the business on how to get the best from the
116 ERP system. As she put it herself, the head of the operational excellence group will go
“investigating” how to get information from the ERP system, when addressing a
particular process inefficiency. It is the researchers’ conviction that it is this “trial and
error” approach to exploiting the vast richness of transactional data stored in the ERP
system, that will yield benefits in the years following implementation, rather than
bemoaning the lack of vanilla reports from the system and the construction of parallel
data warehouses to address specific functional reporting needs, so prevalent among
other less successful implementations. Indeed, this approach is evidence of the survival
of the “CAN DO” attitude, despite the perceived constraints of ERP!
to get across to employees outside the project, in an entertaining way, what the purpose
of the project was and why their participation was vital. In addition, it introduced the
project team to their future trainees, such that when time for training came around,
individual relationships were brought into play to encourage full attendance.
In Pharma Inc., the communication between stream leads was very good, but the
communication with the core team was very uneven, seemingly more dependent on
individuals’ willingness to communicate than on any pre-defined scheme. In fact, there
were even some “incidents” between members of the local team and members of
the core team when local staff were able to demonstrate that the understanding that
core team members had of the local processes was not sufficient. In any case, the
nomination of a well respected and experienced logistics director to the role of
implementation site leader ensured that the project team was given recognised status
and authority in the eyes of local employees, and a direct line of communication was
opened between the project team and the general manager of the plant. Crucially, the
political strength of the project leadership gave vital support and encouragement to
the project team in its relations with the implementation core team. At a critical point in
the implementation analysis phase, the site leader threatened to pull his entire team out
of the project unless the core team accorded sufficient respect to his stream leads. The
affirmation of such “clout” at a vital early point in the collaboration between stream
leads and core team, laid the cornerstone for what was to become a much better
working relationship, as acknowledged by both sides, and contributed certainly to the
success of the project.
Data cleansing became a huge issue for the project team, and a dedicated data
maintenance team of 17 full time equivalent’s ensured that data going into the new
system was clean, valid and in the right format.
Existing Systems
Knowledge
120 Data Knowledge
28%
17%
Knowledge of SAP
11% 0%
Other 32%
24%
Figure 1.
What skills are most
important in this ERP
project? (December 2003
vs September 2004) 14%
19%
migrating data, modifying existing systems and overhauling hardware and network
infrastructure. With the global roll-out of a corporate template the cost equation is a
little more complex with the local per user license fee probably being managed
through a global contract with the corporation. The costs of the core team are, in
addition sunk in the corporate project budget. On the other hand, the local site
manager of the project had to fund the local resource bill for the project:
secondment (and back-filling) of his stream leads for 12 months, the hiring of
additional resources for data cleansing and the hiring of SAP. In addition, the
infrastructural costs to set the team up were considerable. This does not include
training, travel and administrative costs.
In the case study, the project budget was externally decided, which did not prevent
some of the local teams to come in under their allocations. The organisation minimised
training costs by training “super-users” some of which came from the data
maintenance team, who were then used to train the rest of the local site workforce. An
extensive training programme was put in place to ensure that all staff were provided
with training, no matter what shift pattern they worked. It was perceived as vital for
the success of the project that training was undertaken by internal resources. Extra
care went into planning for this, with mobile modular space being rented and set up in
a corner of the car park to create a temporary dedicated “training centre”.
5. Conclusion
Our investigation into the project management strategy adopted in the Pharma Inc.
case under the nine headings of the PMBOK framework illustrates one vision of what
could be termed “best practice” in terms of ERP implementation. In particular, it shows
the importance of project governance and the need for a multi-level structure spanning
both the corporate and local levels. Indeed, these governance structures ensured that
the ERP project maintained focus in terms of direction, reduced the possibility of
delays and rework due to the fact that timely problem resolution could be carried out.
Overall, these structures supported timely decision making in an effort to minimise the
impact, or avoid the possibility, of risks on the project. It also shows the crucial
importance of the proper selection of team members and the need for a high profile
team leader even at the local level. Being able to call on specific local skills at different
points in the project, whether they were application focused or business focused, was a
strong factor in the success of the implementation. On a more technical basis, it
suggests that a dual cycle of exploration/negotiation leading to a stable corporate
template on the one hand and execution/roll-out on the other hand could greatly boost
the success rate of ERP projects. In relating the areas of ERP project management to
specific stages of the ERP development lifecycle, attention is drawn to specific areas
that need to be emphasised at different times. Project managers need to be persuaded
that any unclear area not resolved in the exploration cycle will need to be tackled in the
implementation stage or else there is a risk that it might get left behind and only
re-emerge post go-live with disastrous consequences. In relation to the creation of the
template of the ERP, it is certain that differences in expertise and cultures within MNCs
(e.g. primary vs secondary sites in our case study) cause many additional problems
which require substantial re-works and workarounds.
However, even in this very positive case, some aspects remain open to criticism.
In particular, the need for balance between attention to local specificities and the need
to standardise business processes and stay on schedule seems to be very difficult to
find. In a MNC, the corporate level is strong enough to impose its rules but the cost at
local level in terms of motivation lost and inefficiencies must be understood. Also, the
need to preserve learning in each roll-out so it can benefit to all sites, but also in the Project
following phases of the roll out is critical and was neglected in Pharma Inc. management
This research brings us closer to an ERP-specific project management for large
organisations. It also suggests a novel approach to using the perceived strengths of the
organisation as a barometer for the impact of such transformational systems, such as
ERP. Further, case studies are planned to assemble a complete set of best practice
recommendations for future ERP project managers. However, a potential weakness in 123
the current methodology is that the pharmaceutical sector is highly regulated; therefore
business functions are very familiar with the bureaucratic constraints imposed by
external bodies in terms of quality, safety, traceability and transactional integrity.
“90 per cent of the errors in batch manufacturing are around documentation” is how it
was described by one corporate manager. This puts the organisation at an advantage
when implementing a highly integrated suite of applications where new control
processes will perhaps find acceptance more quickly than in a less regulated
manufacturing environment. In fact, looking at a sample of such implementations in a
less regulated organisational environment, through the lens of the PMBOK framework,
would constitute a further step in validating the findings of this study.
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Corresponding author
David Sammon can be contacted at: dsammon@afis.ucc.ie