erp case study

erp case study

The Benefits of Implementing an ERP System: A Case Study

1. Introduction

– Conducting a SWOT analysis of ERP as a strategic tool – Exploring the competitive environment and how ERP has improved it – Discussing how ERP affects company supply chains and the possibility for further improvements. – Attempting to forecast the future for ERP.

Enterprise resource planning systems are enterprise-wide information systems designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing. An ERP system is an integrated computer-based application used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. An ERP system facilitates the flow of information between all business functions inside the boundaries of the organization and manages the connections to outside stakeholders. Global competition and continuous financial pressures from company stakeholders are driving business executives to find new ways to achieve greater efficiencies in their company operations. This white paper will look at how implementing a new ERP system or migrating to an SAP ERP system could be more beneficial to an organization in the long run compared to continuing to use existing systems or attempting to modify them. This paper will look at ERP as a strategic tool by:

2. Challenges Faced by the Company

The company, Super Cars, experienced hundreds of problems over the past years, prompting them to initiate the ERP system. Most of the problems stemmed from the outdated legacy systems in use at the time. These systems were not integrated into a coherent whole. The result was an unhealthy flow of information between the different departments. Data redundancy was a common occurrence as many pieces of information were stored in various places. More often than not, this led to inconsistencies in the stored data. What this ultimately resulted in was a failure to procure accurate, real-time information. Due to the lack of visibility of information, the management also had a hard time locating important data. This had a direct impact on the availability of this information and the company’s reporting. Also, by having the data centralized at one place, it makes the system more vulnerable and many problems arose for Super Cars. Any damage to the central server or system would lead to major information loss, sometimes irrecoverable. This was the time that the vendor of the legacy system’s company was under fire and Super Cars was afraid that there would be no support or minimal from them and future system updates would cease to be produced. So, this is when Super Cars began to look for an ERP package to solve many of these problems. Initially, many employees were reluctant to the idea of the ERP system being implemented. They were comfortable using the same systems that they had been using for years. “Why fix something if there is nothing wrong with it?” they would propose. This was a major challenge as staff cooperation and support is necessary for the successful implementation of the new system. Insufficient training was also a fear amongst the employees. They were worried that there would not be adequate training and soon they would be struggling to operate the new system. This too could have a negative impact on the system as data input and processing would not be efficient. This would all lead to one common problem – resistance to change. People are generally afraid of change and this was no different.

3. The Implementation Process

The training phase involves training the end users on how to utilize the new system. This is often done by super users or key individuals that are familiar with the system and can provide guidance to the new users. The age of the ERP system in terms of structure and complexity along with the number of modifications and amount of data will change the length of time to complete this process. A simple ERP system could take as little as six months to implement. A more complex system, a twenty-year-old company with a history of many acquisitions with a need to merge multiple systems into one, may take two to three years to fully implement.

The next step is the modification and customization of the software to meet the needs defined in the first two steps. This often involves complex coding to change the system to operate as desired. After the modification phase is complete, the system then moves into a testing phase to ensure the modified system operates as expected and is stable. The testing phase is done in a test environment and does not involve live data. It’s important that the testing team be adventurous and be willing to break the system exploring all possibilities of internal and external failings. If the testing is done well and the system passed, then it will be rolled into a live environment for the final training phase and then on to live data.

The second step is data cleansing and conversion. This step often takes the most time and resources to complete because it’s common that the data is old or not entered correctly in the current system. Data cleansing involves fixing old data and entering new data to meet specified standards. Data conversion is the process of moving the cleansed data into the new system. Usually, the data will need to be converted because the format of the data has changed. This occurs in a change of software and/or a change of versions with software.

The implementation process is almost always well structured following defined steps. The most common process consists of data collection, cleansing and conversion, modification and customization of the system, testing, and finally training and going live. During the data collection phase, a team of key individuals from throughout the organization is formed to determine what data needs to be moved into the new system. This step is absolutely critical to the success of the project because the team needs to define what data is needed and what data is not.

4. Results and Successes

Throughout the duration of phase two, the overall voltage produced by all of the solar panels combined was calculated. For a fair comparison between each group, only the voltage produced between 12:00-2:00 pm was used, as this was the period of the day when the maximum current was achieved. As a result, this data was further manipulated to represent the current produced between 12:00-2:00 by determining the equivalent resistor in that period of time using the equation P=IV. The results of each group were relatively inconsistent with the predicted values; however, it was clear that increasing the number of solar panels would, in turn, increase the amount of power output. Through evaluation, it was noticeable that some of the solar panels were receiving shade and therefore not performing to their full potential. This could be seen in the current/voltage graph, which illustrates the comparison of output between the new flexible panel in direct sunlight compared to the old panel positioned under shade. This has significant implications for the validity of the results, as the assumed values for PMP were based on all the solar panels performing to the same capacity. A positive from this result was the agreement between the current-voltage graphs for both the new and old panel, indicating the achieved results to be reliable for a comparison between the two types of solar panels.

5. Conclusion and Future Recommendations

The case provides several counterexamples to these scenarios. All planned changes or new processes were directly implemented into the ERP system. The company viewed the process as taking the procedures that were identified and finding a means of executing them in the system. In many cases, this required a modification of the software package. The company took this course of action when it felt it had a viable solution to a current problem that would result in efficiency and/or increased capability. One example was the decision to change a process in the MRP module concerning the generation of new product codes and the pegging logic for related items. As these changes were executed in the test environment and data was loaded and/or converted for the affected modules, employees were able to see how these changes would affect their work and what the results would be. Throughout this entire process was a focused commitment from top management. This was not an IT initiative, rather it was an overall corporate initiative with top management sponsorship. This type of commitment and the ability of top management to continually make decisions and emphasize their importance were key factors in the success of the project.

This case exemplifies the concern that many companies have regarding the reengineering of their business processes. It is widely recognized that a significant number of corporations that have engaged in BPR activities have not attained the results they hoped for. In fact, in some cases, the implementation of an ERP system has only automated an already flawed process.

After the successful implementation of an ERP system, the company now has a clear understanding of its existing business processes. The automation of many business processes enabled by the new system has also allowed the company to address inefficiencies in its processes. Moreover, the company can literally see a process on a flowchart, and this has identified a more logical sequence of steps. Whether it is forecasting sales or scheduling production, a clearer picture of how a current process is executed and identification of a better process are the type of results that are invaluable to a company. A third benefit is in the area of management. ERP software has provided the company with the means to generate reports that give insight into these processes. Utilizing these new tools of the ERP system, the company has been able to reallocate resources more effectively, identify areas for cost savings, and the above mentioned, make it easier to identify growth opportunities.