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Keda Case Analysis

1. ERP projects are expensive and can be very risky. What industry and company factors were in
play that prompted Keda to embark on this initiative? (25%)
The company factors were that, the business performance was falling, similar tasks were being duplicated
as there was no proper communication or flow of information between the business functions or units which
also caused delays in decision making. Some of the Industry factors were that the Chinese government
was encouraging or rather forcing the industry to integrate IT in their business processing, there was a
problem of inventory management as they carry wide variety of unique products, the resources of the
company were not used to their optimal levels, wastages and machinery idle time were common, the
industry outgrew it former system i.e., MRP-II.

2. Culture plays an important role in this ERP initiative, especially since ERP projects originated in
western countries. What role did culture play in this case and how did that culture either help or
hinder this initiative? (20%)
In the Chinese culture the employees are quite resistant to change, causing a hindrance in the
implementation, but in general they also look up to higher authorities. As, the top management was fully
supporting, it made it easier to convince the employees and lower management to accept the new system,
as they would work according to the higher authoritys directions and orders. In addition the organizational
was a easy going and flexible one, open to recommendations and complaints, acting promptly to rectify the
error. This culture also helped in the successful implementation of the ERP system.
3. How did Zhu obtain C level management support for this initiative and why was such support
critical? (20%)

Dr. Fan Zhu made sure he got the Top managements support in action rather than verbal, by involving him

is all the crucial meetings, significant events and achievements, and included him in the decision making
process. The major problems and challenges that arose during deployment of the process were also
systematically reported to him. This was crucial, as gaining their support was the key to the success of the
ERP system.
4. In general what best practices did Keda management follow that are applicable to similar types
of businesses/IT initiatives across the global environment? (35%)
Best Practices

Keda Example

Commitment from Top

In Keda, the Chairman of the Board showed complete support by attending all the

management.

crucial meetings and be involved in the implementation process.

Involvement of the

The vital managers/heads were involved in Zhus IT team and they also

Management.

implemented a reward system to ensure their support.

Selecting the most

The ERP system vendors were invited in the company and briefed about the

appropriate vendor for the

requirements. They were critically analysed and the one who deliver the best match

ERP system.

was selected.

Correct timing of

They started the implementation phase in the season when the pressure on

implementation.

production was low.

Prompt replacement of

Some of the unsupportive staff, like the workshop manager, purchase manager,

unsupportive staff.

were replaced by promoting other employees.

1 Case: Keda's SAP Implementation - Page 8.


2 HBR Article: Putting the Enterprise Into the Enterprise System
Critical Success Factors of Enterprise Resource Planning Systems Implementation Success in China

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