Discuss about the Enterprise System in Practice.
Nike, the globally acknowledged brand for its sports shoe has recently undergone several changes within their business implementation. At the initial level the company has undergone changes through the implementation of ERP process. That led to the drastic downfall of the company. It was under this scenario, Nike realised their mistake and started taking up necessary actions in revising their ERP system.
ERP stands for Enterprise Resource Planning. ERP is the software dedicated for management purposes of the organization wherever it is installed (Ford & King 2015). Through the ERP software, the organization can integrate all the course of action within its organization. The line of integration includes planning of the company, development of the strategies, manufacturing of the products, marketing of the same to reach out to the global customer.
This report has been divided into three segments whereby the first segment tries to find out the problem faced by Nike, the need for OPM3 process and the way in which this OPM3 process may help Nike and any other organization from future disaster. The second part focuses on the role of PMO and the way in which this PMO can be implemented within the ERP procedure. The importance of teamwork and training in ERP procedure has also been shown here. The third and the final segment discusses on the rationale behind the outsource processing of ERP system by Nike and the recommendations which might help other organizations as well. The report ends with a synopsis of the entire findings.
According to the case study, it has been seen that the global brand Nike back in the year 1998 was having 27 order management system which were highly customised according to the company’s need. The company was facing problem in managing the 27 different systems and under this background that made them implement a single unit system of ERP. The demand forecasting and supply chain management has been introduced in the company. The main aim of the demand forecasting software is to analyze the possible future demand of the organization (Wisner, Tan & Leong 2014). The problem faced by Nike is that the software was unable to integrate and synchronize and led to wrong prediction. Due to a wrong prediction the shoes, which were least demanded were kept in stock whereas the ones, which were in high demand, ran out of stock.
OPM3 stands for Organizational Project Management Maturity Model. Through this model, the organization tries to predict the capability of any firms, business units or organization’s capability to implement certain system of management within their domain and the expected success that it may bring (Silva et al. 2015). Long back in 1998, many strategy makers throughout the world came together with the initiative to form a theory that can help in understanding the ways in which strategies within the organization works in enhancing the outcome of the same. The theory was first established and published in 2002. Through the theory the experts from global arena tried to unleash the real power of OPM3 model in interpreting the ways in which the strategies taken up by an organization can deliver successful product (Mohapatra & Choudhury 2016).
After the drastic fall in implementation process of ERP, Nike has sincerely tried to find out the loopholes within its system. It has been found that the organization did not have any proper pre-screening within its system through which it can identify its capability in becoming successful with that strategy (Mohapatra & Choudhury 2016). The project readiness framework of an organization tries to find out the existing condition, the existing skills of the employees and the employee base of the organization. It also focuses on the environment, relationship and the integrating procedure of the organization (Stadtler 2015). Usually within any organization, the success of implementation of any strategy depends on several factors. Initially, the organization needs to identify the factors like the external and the internal resources available within the organization that can lead to the sustainability of the system that is going to be implemented. This report, earlier the OPM3 model has been discussed and now the ways in which OPM3 might have helped Nike in their business is been seen.
Implementation of OPM3 model could have helped Nike in the following ways as shown below:
PMO stands for Project Management Office, is the department within an established organization, which has the duty to manage the workings of different projects taken up by the organization (Hill 2013). The duty of the project management office is to maintain the standard of the projects. It also has the duty to execute the project properly and provide guidance to the organization. In addition, the department of PMO has all the sources and documentations of the ERP system that can help the company to run successfully (Morris 2013).
In order to be successful n implementation of ERP, the department of the management organization usually appoints a project manager. The project manager should be flexible and quick in taking up all the decisions required for the success of the system (Kerzner 2013). The process of ERP is very complicated. The project managers are responsible for handling the entire network of ERP system whereby he needs to take care of his entire team as well as co-ordinate with the organization. The PMO department has various other roles, they are finding out the different information available within the market that can help and provide direction in which the project is going to run. Highlighting the methodology involved within a project is the primary duty of this department (Schwalbe 2015). On other hand, this department also tries to find out the ways in which the employees involved within the projects should be trained. The ERP is very complicated software that requires exhaustive training. Provision of training is not the end of any project. The PMO group also has the duty to look into the ways in which this training has benefitted the organization (Gido & Clements 2014). In addition, checking the progress of the employees through constant evaluation is mandatory role of PMO. Other than looking after the workings of the ERP system within the organization, the PMO has been bestowed with the duty of keeping a track on the workings of the competing industries through which the indigenous company can remain ahead of competition (Martinelli & Milosevic 2016). In case of Nike, the company had faced problem in their engineering system of the ERP. The software malfunctioned and as a result, the supply chain was corrupted. There has been lack of synchronization between the demand prediction and the supply chain of Nike that resulted in the mismatch and the tragedy of the company.
After the disastrous event of Nike, the company had been engaged in findings their flaws and then they got involved into blame game with the vendors who provided them. However, the company was fast enough to realise, rectify their mistakes, and implement the revised system. In this part of the report, the importance of training and teamwork has been shown here. As already stated the ERP process is too complicated hence, whenever Nike or any other company is implementing this system within their organization, they need to thoroughly need to build up a proper team who would be responsible for carrying out the operation (Gibson 2016). After formation of the team, there is need to train them according to the requirement of the company. Henceforth, these two concept have been discussed here.
The success of any organization depends on the coordination of the team. A team, which is well co-ordinated, gives better performance than a team who lacks in coordination. In case of ERP, there are several segments within the system. Hence, there is need to form different teams for different segments. There should be different segments within a team, the segments include Administrative committee, Steering committee, the sponsors, team leader and the team members (Venable 2013). But as all the segments are inter-related and the amalgamation of all these segments makes up the entire process hence, all the different teams should be in synchrony with one another. In order to make the process of ERP successful, the project management office should try to establish these few points within their team:
Effective Communication: Communication is an integral part of any organization. The teams must have a good communication skill amongst themselves. Since, ERP process involves integrating the entire system through software, therefore there is a need to use the software which can build up a good communication (Mohapatra & Choudhury 2016).
Information sharing: The players within the team should be able to share the information between the other members and his should be done efficiently so that no members lacks in information.
Reliability: The software used within the system of ERP should be able to work in highly efficient ways that provides reliable outcomes. If the any part of the entire ERP system does not work efficiently, it is going to entirely corrupt the system and lead to downfall of the organization (Totla, Mandot & Gaur 2016).
Flexibility: Any software that cannot be amended timely is useless for any organization. Hence, the selection of software within the ERP should be such that it can incorporate future changes that may come up during the course of operation (Alcivar & Abad 2016).
Problem solving techniques: The main objective of the teamwork is to collaborate amongst the team members and try to find out the techniques through which the existing problems can be solved.
Training is another important component for implementation of ERP. The complexity within the system makes it impossible to handle without a proper training and guidance. There is need for a separate group of people to handle the entire ERP system within the organization. They should be highly skilled n handling the computers and a pro in learning the workings of the software (Lu, Wayland & Kaan 2015). The training plan should incorporate few tips given as follows:
The case study suggests that Nike had opted for implementation of ERP by using the help of third party vendor. In other word, Nike has allowed outsourcing within their organization while implementing ERP. After its drawback at the initial stage, Nike blamed that the third party had not provide enough training to its employees and that led to the crash of the system. On other hand, the company blamed Nike for not abiding by the methodologies and guidelines provided by them. This blame game yields no result but had adverse effect on both the company. Even after this situation, it has been observed that the companies have outsourcing the ERP system (Reim 2015). The rationales behind such outsourcing are as follows:
Agility of the market: Through the process of outsourcing the company can get service at a lessened time.
Technical benefit: Since ERP system is very much dependent on IT segment, therefore through outsourcing it can hire the best possible vendor who masters in it and provides innovative, cutting-edge solutions (Roses 2013).
Multiple feedback: An organization also chooses to implement ERP provided by 3rd party vendor as it can give the organization a global view point to the business.
Economical efficiency: Outsourcing also reduces the running cost of implementation of the company and decreases the operational and maintenance cost.
Conclusion & Recommendation:
This project highlights few important points that should be considered for the betterment of any organization planning to implement ERP within their operational system. First and foremost, the loss of Nike has given the world a great example of what may happen in case of technical glitches and improper implementation of ERP. Nike, being globally renowned brand was able to cope up and sustain in the market after learning from their own flaws. Hence, through this report it has been learnt that there is need to access the company’s condition through any project readiness framework. This report talked about the ways in which the model of OPM3 could have helped the Nike in this respect. Along with it, the need for a PMO within the organization has been highlighted. Within the PMO, the importance of teamwork and proper training facility has been discussed. It has been observed that a good team with proper co-ordination can always yield better outcome and can resist the problems face by the organization, thereby guiding them towards the growth path. This report also highlights the benefits of using ERP from third party vendor through the process of outsourcing.
All these clearly points out the fact that there is need for ERP system within an organization with diverse range of work. Hence, it can be recommended that any company planning to implement this system for the first time must go through a prior screening procedure whereby the capability of the existing system should be accessed. If the existing system of the organization does not support the necessary conditions required for implementing ERP, the company must upgrade its system. The company should also focus on setting up a proper segment, which should be responsible for setting up, training and managing the team of experts. With proper care and pre-caution if any company sets up ERP and keeps on upgrading according to the external environment, then it is surely going to succeed.
References:
Alcivar, I & Abad, AG 2016, Design and evaluation of a gamified system for ERP training. Computers in Human Behavior.
Christoph Albrecht, J & Spang, K 2014, Linking the benefits of project management maturity to project complexity: Insights from a multiple case study. International Journal of Managing Projects in Business.
Christopher, M 2016, Logistics & supply chain management, Pearson UK.
Ford, JD & King, D 2015, A framework for examining adaptation readiness. Mitigation and Adaptation Strategies for Global Change.
Gibson, A 2016, Preventative measures in implementation strategy. Strategic Finanace.
Gido, J & Clements, J 2014, Successful project management, Nelson Education.
Hill, GM 2013, The complete project management office handbook, CRC Press.
Kerzner, H 2013, Project management: a systems approach to planning, scheduling, and controlling, John Wiley & Sons.
Lu, S, Wayland, R & Kaan, E 2015, Effects of production training and perception training on lexical tone perception–A behavioral and ERP study. Brain research.
Martinelli, RJ & Milosevic, DZ 2016, Project management toolbox: tools and techniques for the practicing project manager, John Wiley & Sons.
Mohapatra, S & Choudhury, A 2016, Readiness Framework for Business Process Re?engineering. Strategic Change.
Morris, P 2013, Reconstructing project management reprised: A knowledge perspective. Project Management Journal.
Nenni, ME, Arnone, V, Boccardelli, P & Napolitano, I 2014, How to increase the value of the project management maturity model as a business-oriented framework. International Journal of Engineering Business Management.
Reim, K 2015, Outsourcing Trends and Concerns.
Roses, LK 2013, Strategic partnership building in it offshore outsourcing: institutional elements for a banking ERP system licensing. JISTEM-Journal of Information Systems and Technology Management.
Schwalbe, K 2015, Information technology project management, Cengage Learning.
Silva, D, Tereso, A, Fernandes, G, Loureiro, I & Pinto, JÂ 2015, OPM3® Portugal Project–Information Systems and Technologies Organizations–Outcome Analysis. In New Contributions in Information Systems and Technologies, Springer International Publishing.
Stadtler, H 2015, Supply chain management: An overview. In Supply chain management and advanced planning, Springer Berlin Heidelberg.
Totla, K, Mandot, M & Gaur, S 2016, An Insight of Critical Success Factors for ERP Model.
Venable, LT 2013, Status of Enterprise Resource Planning Systems’ Cost, Schedule, and Management Actions Taken to Address Prior Recommendations.
Wisner, JD, Tan, KC & Leong, GK 2014, ‘Principles of supply chain management: A balanced approach’, Cengage Learning.
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