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QSO 300 Southern New Hampshire University ERP Implementation Discussion

QSO 300 Southern New Hampshire University ERP Implementation Discussion

Question Description

I will be needing my initial post and 2 replys done on classmates.

Many companies implement enterprise resource planning (ERP) systems but are disappointed by the results when they do not realize the return on investment (ROI) that was projected for the system.

Do some research and post an example of either a successful or failed ERP implementation at a major company. How did it (or did it not) standardize processes across the firm? Explain what the major causes were for the success or failure of the system.

If you have worked for a company that has an ERP system, you may choose to post about the effectiveness of that particular ERP system.

In response to your peers, identify additional causes for the success or failure of the system.

To complete this assignment, review the Discussion Rubric document.

1st classmate response needed

ERP Implementation

Jairzinho Hinds posted Feb 10, 2021 6:50 PM

Hello class,

The case I would be discussing today is Nike. I will begin this process by providing an explanation of the basic concepts of ERP and how it incorporates MRP. ERP or enterprise resource planning is software that includes MRP, material requirements planning, as well as other aspects of the business process used to centralize the entirety of its operation into one database. The ERP system is able to automate the business processes, share a common database and do all of this in real-time. It is effectively one large system that is responsible for the entirety of a company’s operation from supply chain to distribution, whereas MRP is essentially responsible for the materials needed. To obtain an effective ERP system, there needs to be an excellent MRP system in place, which leads us to the case with Nike. As Nike attempted to upgrade its existing system to a more modern ERP one in the year 2000, problems with their demand predicting software i2 would go on to cost the company $400 million in losses and 20% decline in share price (Kimberling, 2019). Arguments for why this occurred placed some of the blame on the software itself being introduced too quickly without adequate training, bugs in its design and failure to integrate smoothly with Nike’s existing system (Koch, 2004). By 2001, Nike had to switch to an SAP ERP system for its short to medium-term sneaker planning, as this technology was grounded more in orders and invoicing rather than the predictive algorithm of i2. A quote from AMR Research Vice President gives us a better insight into why this went wrong for Nike and what may prevent such an occurrence from ever happening again, “there’s been a change in the technology for demand planning, today companies are trying to do consensus planning rather than demand planning. That means moving away from the crystal ball and toward sharing information up and down the supply chain with customers, retailers, distributors and manufacturers” (Koch, 2004). The examples above have shown us that even for the largest of companies such as Nike, poor planning and migration of technologies can cost hundreds of millions of dollars. Equally as important, the true value to the supply chain can be credited to the quick, accurate and real-time sharing of information amongst individuals who are then able to alter supply based on trends and observable demands through this flow of information.

References

Kimberling, E., 2019. [online] Thirdstage-consulting.com. Available at: [Accessed 10 February 2021]

Koch, C., 2004. Nike Rebounds: How (and Why) Nike Recovered from Its Supply Chain Disaster. [online] CIO. Available at: [Accessed 10 February 2021].

2nd classmate response needed

MillerCoors

Rosemary Sladky posted Feb 10, 2021 8:15 PM

In December of 2014, MillerCoors hired HCL Technologies to implement their new ERP system. By March of 2017, MillerCoors sued HCL for $100 million stating that HCL did not delivery on it’s promises to deliver the project (Fruhlinger, 2020). This case is one of the most expensive lawsuits regarding ERP implementation failure and also resulted in a countersuit that HCL filed again MillerCoors. The key complaints in the initial lawsuit included allegations of failure to meet project deadlines, delivery of defective software, delivery of software that failed to meet performance requirements and industry standards, and failure to staff the project appropriately (Harris, 2018). In May of 2015, both parties, MillerCoors and HCL agreed to even reduce the scope of the project so that certain timelines could be met, which resulted in the first phase of the project going live one month behind schedule with over 50 known defects (Harris, 2018).

It would appear the major issue in the lawsuit was HCL failing to deliver services promised when the project was awarded to them by MillerCoors. Inadequate staffing was also a key contributor to the failure on implementation and most issues are attributed to process failures more than software issues. The result of the case has been described as oddly amicable, as both parties used the public attention to negotiate and resolve the dispute (Fruhlinger, 2020). This is extremely interesting to me as most companies would want to negotiate and resolve disputes as privately as possible to minimize any potential reputation risks.

References:

Fruhlinger, Josh. Waligum, Thomas and Sayer, Peter (20 March, 2020) 16 Famous ERP Disasters, dustups and disappointments. Retrieved from: https://www.cio.com/article/2429865/enterprise-resource-planning-10-famous-erp-disasters-dustups-and-disappointments.html

Harris, Marcus Stephen. (2018) Four Initial Lessons from MillerCoors v. HCL for avoiding an ERP software implementation Lawsuit. Retrieved from: https://softwarenegotiation.com/four-initial-lessons-millercoors-v-hcl-avoiding-erp-software-implementation-lawsuit/



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