Visit an online magazine CIO.com and conduct a search on ERP. Choose an example of an ERP implementation and write a memo to your instructor describing the procedure. Make comments as to the areas which the company could have improved its implementation.
Below is the Nestlé’s ERP implementation process that I would like the company to adopt. Being the World’s leader in Food & Beverages, Nestle plans to engage the use of vast amounts of data and information systems available through coming up with informed decisions in order to maintain its competitive advantage.
Secondly, the company carried out feasibility study to research on the suitability of utilizing the proposed system. The company ensured there was the necessary technology to make perfect use of the ERP system. In addition, the company carried out economic feasibility to ensure the project was cost effective. Cost Benefit Analysis was used to carry out the economic analysis. Thirdly a legal feasibility was conducted to ensure the new system was according to the local regulations.
The third implementation process focused on the company management. The management had the responsibility of ensuring the people involved possessed the necessary qualifications. The selection team was very keen in ensuring that employees had knowledge on information systems with more than five years experience. On the other hand, leaders educated the staff on the changes to take place through various trainings. The employees changed from the old work culture and adapted the new technological skills and responsibilities. Moreover, the management carried out change management processes that ensured employees understood the change objectives, and identifying potential problems that prevented implementation of the planned strategies.
I kindly urge our company management to follow the same suite as Nestle while developing the ERP process in order to succeed in all the company business operations.
Areas that needed improvement
According to Wagner & Monk (2011), while developing an ERP, an organization should focus on 4 main functional operation areas. These are; marketing and sales, supply chain management, accounting and finance, and human resources. Nestle ERP implementation process focused little of marketing. The ERP system designed could have been more effective if the marketing team was more involved, since they are the core business process. On the other hand, Nestle management required an improvement on the processes used in recruiting new employees. According to CIO.com (2012), the company selected the experienced personnel but never looked at the creativity and innovation nature of an individual.
Numbers 1 and 2 (page 199)
Question 1: What specific needs do you think a small to midsized company has in selecting an ERP vendor? How do the needs differ from those of a large company?
While selecting an ERP vendor, small and midsized companies should consider some specific needs. To start with, these companies carry out small operations requiring them to select smaller ERP vendors with more specialization on the line of business the company falls under and the depth of the system. A small and midsized company usually selects an ERP vendor whose systems deal with high-volume processes in order to encourage more production at low cost. On the other hand, managers at small companies should clearly assess and analyze the detailed business requirements in order to come up with a potential ERP. Another special need for a small and midsized company to consider is the future position of a business. Many of these companies implement plans intended for many years ahead. This forces them to select ERP vendors whose systems are capable of adapting to future changes in technology. Proper forecast assists a company in withstanding those future changes that might lead to failure of any business operation (Wagner & Monk, 2011; p. 199).
As opposed to small and midsized companies, large companies have different ways of selecting their ERP vendors. Since most of these companies are established, they always seek big ERP systems that have a big impact at a specific time. For example, a mobile manufacturing company Nokia can come up with an ERP depending on the present lifestyle, and that fits the current generation. This system will last for a short period, but will make the company earn a lot of profits.
Question 2: If your ERP vendor is bought by another, what challenges might you face in terms of your ERP system?
When another company buys an ERP vendor from the original company many challenges come along in terms of implementing the ERP system. To start with, a company might make use the system for their own benefit, and downsize the original company that had bought the vendor. In so doing, the company ends up losing its identity leading to failure of their operations. In addition, the ERP vendor might be hacked making it impossible for the original company to make use of the operations controlled by the system. The company ends up incurring extra costs in implementing another ERP system, and also losing its competitive advantage. The company might also be disadvantaged because the present ERP system might not be as productive as the original one leading to migration of customers into other companies (Wagner & Monk, 2011; 199).
List the benefits of linking a manufacturer’s ERP system with customer’s ERP system.
According to Wagner & Monk linking the manufacturer’s ERP system with the customer’s ERP system has a lot of benefits as indicated below (2011; pp. 230-234):
The management at the company can easily keep a follow up from the manufacturer’s ERP system to the customer’s system and realize where there is a shortage of certain commodities and services.
Linking the two systems provides the manufacturer with efficient, simpler and easier way of following purchase orders through automatic generation from the customer website.
Customers can easily order for their products and services while at their houses through the manufacturer’s website.
Communication is made easier since the system can attend more than two customers at a go. In addition, customers are in a better position of giving out their enquiries through online means and get immediate response.
Moreover, linking the two systems reduces the cost of production since the manufacturer can carry out marketing processes directly through the internet at a reduced cost. This also creates time for undertaking other important activities in the company.
CIO.com. (2012). Nestlé's Enterprise Resource Planning (ERP) Odyssey. Retrieved from:
Wagner, B. J, & monk, E. F. (2011). Concepts in Enterprise Resource Planning (4th Ed.,
International ed.). Mason, Ohio: South-Western; p. 2