Discuss about the ERP Implementation for OilCo and ExplorerCo.
The enterprise resource planning system is considered as the digital infrastructure that consists of various devices that work simultaneously and collaboratively for achieving organizational objectives (Chatzoglou et al. 2016, p. 1245). The integration of ERP system within an organization is done by following various phases.
The report especially holds the various reflections of OilCo and ExplorerCo’s enterprise resource planning’s implementation phase. In addition to that, the evaluation of both the systems in terms of success criteria of the OilCo and ExplorerCo is available in the report. The report also suggests some processes that can be followed to avoid the issues. Parr and Shanks (2000, p. 290) stated that over budgeting and time was the main concern of the OilCo. Although after facing various issues, the project manager made the project successful.
Budget and Deadline: In terms of ERP 1, the project extended the proposed amount of budget and time. The project manager could not get the adequate information regarding the requirement of all the organizational processes (Ahmad & Cuenca 2013, p. 107). This issue needed to be resolved in the planning phase. This issue pushed the deadline of the project further. The project manager additionally forgot to calculate and present the information of the hidden cost of the project to the owners of the project (OilCo.) (Supramaniam, Abdullah & Ponnan 2014). During the implementation, this forced the project to demand additional cost for the implementation. The OilCo made a mistake in choosing the functionality of the system. The project manager forced the process to be relevant to the software functionalities instead of choosing the functionalities relevant to the processes (Ram, Wu & Tagg 2014, p. 667).
Decision Making: Parr and Shanks (2000, p. 290) opined in Table 4-4 that empowered decision makers are essential for the successful implementation. ExplorerCo took the advantage of experience of ERP 1 project but forgot to provide the powers to the project team members to take quick decisions.
It is quite clear that both the organization “OilCO” and “ExploreCo” has come differences as well as similarities in context with ERP implementation. If the companies were compared in terms of similarities, then both organization have adopted critical factors of success in order to achieve their goals and objective (Bernroider, Wong & Lai 2014, p. 357). The company does not modify the software much, and the changes that have gained are only in the field of business processes. The organizations change their processes of business in order to achieve integrated as well as automated system, for improving the service of the customers and for facilitating planned process of restructuring for the business of the organizations (Bintoro et al. 2015, p. 244). Now in terms of differences OilCO utilizes the development of a module which was totally specific to the industry of oil and the ERP implementation of the company is very much board whereas ExploreCO ERP implementation is driven by OilCO ‘s head office. It is analyzed that the OilCO’s project champion does not maintain proper continuity while the champion of the ExploreCo follows different approaches of hands-on (Ram, Wu & Tagg 2014, p. 667). Both the organization’s grading system differs a lot, and ExploreCO has a better quality of employees as compared to OilCO. ExploreCO is quite capable of meeting the deadlines, and they have a strong project management, which is considered as one of the significant points in the implementation of ERP system. The lower inventory system is hel0ful for both the organizations as it helps in lowering the different types of manual process and helps in improving the inventory system (Hwang & Park 2014).
The OilCO have an objective to maximize to have better sales forecasting, to have fully integrated as well as automated delivery as well as ordering system and for gaining different types of streamlined processes of business whereas ExploreCO have planned to implement the ERP system for having Go Live system within 11 months (Rajnoha et al. 2014, p. 167). The project of ExploreCO has been completed on time and within the estimated budget but the project of OilCO was significantly very much over budget and the time required is very much as compared to the estimation. OilCO has estimated the sales properly whereas ExploreCO has performed the cost analysis properly for implementing the ERP system. ExploreCO made different types of recommendations and provided techniques of leadership to the steering committee (Salimi, Dankbaar & Davidrajuh 2015, p. 8).
Yes, the project was successful. It is analyzed that ExploreCo has attached different levels of insignificant customization as well as informed date however in context with testing storage they are in the middle. The organization completed their entire work 2 weeks earlier than their due date. It is identified that ExploreCo utilizes basic through the entire project whereas OilCO uses basic only for arranging, improving and for setting up the project properly. Both the organization “OilCO” and “ExploreCO” has same CSF but ExploreCO utilizes a structure as well as procedure for achieving their goals and objectives (Alturkistani et al. 2014, p. 203). OilCO does not follow any proper structure or procedure for completing their project. It has been identified that both the companies have some additional as well as impressive characteristics and features in the CSF for arranging deliverable dates as well as for having negligible customizations (Matende & Ogao 2013, p. 525).
The projects were effective in light of the fact that they both experienced the correct execution handle and also the enunciation of critical success factors. Both OilCo and ExplorerCo contain similar critical success factor. However, those success factors differ in that ExploreCO imagined a process and framework with a particular objective for encouraging its achievement, a project supporter was required (Sadrzadehrafiei et al. 2013, p. 222). Each project team personnel were given illustrated compulsions. OilCo was not officially recognized and the personnel in the aspect altered additional minutes. There were no activity and framework was passed on. Within the instance of critical success factors between the both OilCo and ExplorerCo, the existence of variety could be found. Both the project (Project 1 and Project 2) accepted an approach of unimportant alteration and deliverable engagements. OilCO was forced to charge an oil industry-specific component. Irrelevant customization and expressed dates amid the testing stage of was present in the system implementation of ExploreCO (Hidayanto et al. 2013, p. 1777). It was produced to be not allowed to the consumers. Through guiding by this path, the organizations got weeks past their proposed deadline. OilCO management support was just fundamental in setup, arranging and upgrade. ExploreCO management support was fundamental throughout all the activities of the execution phase.
By observing the case studies of OilCO and ExploreCO we can learn several lessons that can be used by the other organizations in order to implement an ERP solutions in the organization. In implementing an ERP package, the companies considered some critical success factors which are the foundation of success of the implementation of ERP package. This includes strong leadership, strong change and project management, user participation, ease of interface customization of the ERP package and selecting the proper ERP package architecture. Furthermore, OilCO could have improved the whole project performance by the selection of the suitable system architecture (Parr & Shanks 2000, p. 290). This process could have helped them in eliminating the requirement of developing a new oil industry module in the ERP system that incurred an extra amount of investment.
As both the companies in the given case study implemented the ERP systems to improve the flow of business and other relevant information’s therefore, for the future projects the companies can think about implementing the ERP packages on the cloud. This will be helpful in improving the availability and accessibility to the information. Furthermore, the one of the most important factor in the success of the ERP implementation process is the change management; therefore, it is advised to manage the whole process sensitively. The reason behind this can be stated as due to the implementation of the newer information system in the organization will diminish as well as introduce newer responsibilities in the organization. In his kind of projects Change management plans must be conceived as an important part of the whole project in order to achieve the end goal to deliver workforce move to the newly implemented ERP framework and to identify the end-users and the trainer at the end of the implementation. An exhaustive training methodology ought to consider the location and culture of the industry and testing before going live and used by the end users. Neglecting the importance of a completely build training technique can have genuine ramifications on the accomplishment of a worldwide ERP execution.
Intensive training program is considered as the factor that makes deference between end user acknowledgement of the implemented system and end user concern about the system. In most of the cases, organizations regularly avoid the training programs in the interest of cost saving for the project. This cut down in the budget doing as such can be negative to the achievement of objectives of the ERP implementation project and send a negative message to employees of the organization. It is critical that clients/end users of the system comprehend both the “how” and “why” of the ERP solution.
Data migration process is another issue that must be considered before going live with the newly implemented system. In order to maintain the integrity between the previously collected data the data from the manual system must be migrated using proper strategy so that the migration process should not affect the business and other operations in the transition phase.
Implementation: At the time of the implementation phase, all the possible impacts of the project needs to be communicated to the entire stakeholders in order to keep all the information regarding the activities up to date. The project team must be stick to the pre-identified plan so that additional cost of the project can minimized. In terms of adoption and providing little ownership, end-users must be involved in the implementation phase.
Focusing on significant requirements: Proper documentation of the requirements is inevitable for concentrating on primary requirements. This allows the project manager to be more project centric and avoid any issues regarding the missing-functionality or requirement in the future.
Internal project management organization: A strong internal organization of the project management is capable of managing scope of the project adequately. Many consider this team as the key of successful project impanation. Through this, an organization can save a lot of time.
Conclusion:
From the above study, it can be concluded that the ERP implementation is not always prone to failure. However, many severe issues may have to be faced by the project manager in terms of implementing the system. The project manager must be relevant and skilled for carrying out all the activities of a implementation project successfully. ExplorerCo chose to implement a new system over the decision of upgrading the existing one. The collaboration of the systems got a huge impact from this decision. It is because, there may have some technical aspects in the existing system of ExplorerCo that could have created anomalies in system functions while communicating with the ERP of OilCo. Both the organization got positive outcome from the implementation. The biggest benefit was automated delivery and ordering process and less off-system payments for OilCo and ExplorerCo respectively. The project manager kept the challenges he/she faced during ERP 1 project and guided the ERP 2 project accordingly. This allowed the manager to implement the system within budget and time.
Reference List:
Ahmad, MM & Cuenca, RP 2013, ‘Critical success factors for ERP implementation in SMEs’, Robotics and Computer-Integrated Manufacturing, vol. 29, no. 3, pp.104-111.
Alturkistani, A, Shehab, E, Cranfield, C & Al-Ashaab, A, 2014. CHALLENGES OF DEPLOYING LEAN PRINCIPLES IN MANAGING ERP IMPLEMENTATION. G TEC H N O LO, p.203.
Bernroider, EW, Wong, CW & Lai, KH 2014, ‘From dynamic capabilities to ERP enabled business improvements: The mediating effect of the implementation project’, International Journal of Project Management, vol. 32, no. 2, pp.350-362.
Bintoro, BPK, Simatupang, TM, Putro US & Hermawan, P 2015, ‘Actors’ interaction in the ERP implementation literature’, Business Process Management Journal, vol. 21, no. 2, pp.222-249.
Chatzoglou, P, Fragidis, L, Chatzoudes, D & Symeonidis, S 2016, ‘Critical success factors for ERP implementation in SMEs’, In Computer Science and Information Systems (FedCSIS), 2016 Federated Conference on, pp. 1243-1252, IEEE.
Galy, E & Sauceda, MJ 2014, ‘Post-implementation practices of ERP systems and their relationship to financial performance’, Information & Management, vol. 51, no. 3, pp.310-319.
Hidayanto, AN, Hasibuan, MA, Handayani, PW & Sucahyo, YG 2013, ‘Framework for measuring ERP implementation readiness in small and medium enterprise (SME): a case study in software developer company’, Journal of computers, vol. 8, no. 7, pp.1777-1782.
Hwang, HJ & Park, YJ 2014, ‘Kazakhstan Perspectives on ERP System Implementation’, development, 8(4).
Matende, S & Ogao, P 2013, ‘Enterprise resource planning (ERP) system implementation: a case for user participation’, Procedia Technology, vol. 9, pp.518-526.
Parr, A & Shanks, G 2000, ‘A model of ERP project implementation’, Journal of information Technology, vol. 15, no. 4, pp.289-303.
Rajnoha, R, Kadarova, J, Sujova, A & Kadar G 2014, ‘Business information systems: research study and methodological proposals for ERP implementation process improvement’, Procedia-Social and Behavioral Sciences, vol. 109, pp.165-170.
Ram, J, Wu, ML & Tagg, R 2014, ‘Competitive advantage from ERP projects: Examining the role of key implementation drivers’, International Journal of Project Management, vol. 32, no. 4, pp.663-675.
Sadrzadehrafiei, S, Chofreh, AG, Hosseini, NK & Sulaiman, R 2013, ‘The Benefits of Enterprise Resource Planning (ERP) System Implementation in Dry Food Packaging Industry’, Procedia Technology, vol. 11, pp.220-226.
Salimi, F, Dankbaar, B & Davidrajuh, R 2015, ‘A Comprehensive Study on the Differences between MRP and ERP implementation’, Communications of the IIMA, vol. 6, no. 1, p.8.
Supramaniam, M, Abdullah, A & Ponnan, R 2014, ‘Cost Analysis on ERP System Implementation amongst Malaysian SMEs’, International Journal of Trade, Economics and Finance, vol. 5, no. 1, p.72.
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