Journal of Information Technology Case and Application

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Global Auto: The ERP Implementation Project

Asli Yagmur Akbulut, Ram Subramanian & Jaideep Motwani

To cite this article: Asli Yagmur Akbulut, Ram Subramanian & Jaideep Motwani (2006) Global
Auto: The ERP Implementation Project, Journal of Information Technology Case and Application
Research, 8:4, 47-60, DOI: 10.1080/15228053.2006.10856100

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 Implementing the Global Auto ERP Project

GLOBAL AUTO: THE ERP IMPLEMENTATION PROJECT

Asli Yagmur Akbulut
Grand Valley State University, Grand Rapids, MI 49504, USA
akbuluta@qvsu.edu

Ram Subramanian
Montclair State University, Montclair, NJ 07043, USA
subramanianr@mail.montclair.edu

Jaideep Motwani
Grand Valley State University, Grand Rapids, MI 49504, USA
motwanii@qvsu.edu

ABSTRACT

If successfilly implemented and managed, Enterprise Resource Planning (ERP) systems can
provide important beneJts to organizations. In this case study the implementation of an ERP
system at global automotive supplier company (Global Auto) is discussed in detail. Afer
successfully implementing the system at a major factory in the United States, Global Auto now
has to decide how to proceed with the implementation in a totally dzferent setting, the plant in
Mexico.

Key words: Enterprise Resource Planning Systems, ERP, success factors, implementation,
culture

INTRODUCTION
Jim Smith, the head of the Information Technology (IT) department at Global Auto's Kentucky
plant was both elated and apprehensive at the recent turn of events. His team's successful
implementation of the new ERP system at the Kentucky plant had caught the attention of the
corporate office. Just this morning, Mary McCarthy, the head of IT for the company and Jim's
boss, had called to congratulate him on his success. "Jim, we at corporate are proud of what your
team did over at the plant. Now, are you ready for this? We want you to be in charge of
implementing the same ERP software at our Guadalajara plant in Mexico. We want to go over
there immediately to set up and lead a team to get this going," said Mary. "Wow! This sure is a
great way to make the corporate office notice you," reflected Jim, a forty-two year old, lean and
high energy individual who had long wanted to reach beyond everyday technology issues and
move up the organizational ladder.
Jim's elation was, however, tempered by several concerns that he had as he set out to plan the
Mexico implementation. Should he use a phased implementation such as the one in Kentucky or
should he go full bore so that the project can be completed faster? Would cultural differences in
employees in Mexico hinder implementation? If so, what should he anticipate and prepare for?

JITCAR, Volume 8, Number 4,2006 47

 Implementing the Global Auto ERP Project
Jim realized that this great opportunity came with a number of challenges. He wondered what he
should do.

BACKGROUND ON ERP
Enterprise resource planning (ERP) systems are comprehensive, packaged software applications
that integrate key business processes and functi~nsacross departmental boundaries (Klaus et al.,
2000; Sankar et al., 2005). ERP systems overcome the limitations of fragmented and
incompatible legacy systems by providing access to enterprise-wide data in a real-time
environment (Markus et al., 2000; Sharma et al., 2002; Sumner, 2004). Rather than being stored
in separate places throughout the organization, all data relevant to the organization and particular
departments is stored in a centralized database.

ERP systems consist of a number of functional modules such as materials management,

production planning, sales and distribution, human resources, and financial accounting. In order
to serve the needs of a wide range of companies with different characteristics, ERP systems in
general, and these modules in particular, are built on the best practices, which represent the most
cost-effective and efficient ways of performing business processes (Markus and Tannis, 2000;
Sumner, 2004). Organizations might decide to implement all ERP modules, or might prefer the
implementation of selected ERP modules.

ERP systems are commercial packages that are purchased from software vendors rather than
developed in-house (Markus and Tannis, 2000). In 1999, the 5 biggest ERP vendors included
SAP, PeopleSoft, Oracle, Baan, and J.D. Edwards. These vendors accounted for 59 percent of the
worldwide ERP market. In 2004, the five biggest ERP vendors -SAP, Oracle (which bought
Peoples08 and J.D. Edwards), Sage Group, Microsoft's Business Solutions (MBS) Group, and
System Software Associates (SSA) Global (which bought Baan)- accounted for 72 percent of the
market revenues. SAP which is a German company was the market leader in 2004, with a 40
percent market share, followed by Oracle with a 22 percent market share. Meanwhile, Sage
Group and MBS Group owned 5 and 3 percents of the ERP market respectively, where SSA
Global claimed 2 percent of the market (AMR Research, 2005).

The implementation of an ERP system is a major undertaking that requires considerable

organizational resources (Akbulut and Motwani, 2005). An average ERP implementation takes
twenty-three months with a cost of $10.6 million for the implementation and another $2.1 million
for maintenance over a two-year period (Stein, 1999).

The success rate of ERP implementation projects has been disappointing and achieving a positive
return on investment (ROI) has proven to be extremely difficult (Donavan, 2001). In fact,
research has found that more than 90% of ERP projects have suffered time and cost overruns and
70% of the ERP projects have failed to provide the expected benefits (Al-Mashari and Zairi,
2000; Martin, 1998). Improper implementations of ERP projects have also resulted in
considerable financial consequences including bankruptcy for the companies implementing these
systems and lawsuits for the vendor and consulting companies. For example, Miller Industries a
manufacturer of towing and recovery equipment, reported a $3.5 million operating loss in the 4th-
quarter of 1999 due to the costs and inefficiencies of its ERP system, while WW Grainger Inc., a
JITCAR, Volume 8, Number 4, 2006 48
 Implementing the Global Auto ERP Project
distributor of maintenance, repair, and operating supplies and services, reported a $1 1 million
reduction in operating earnings from its faulty ERP implementation (Gilbert, 1999). FoxMeyer, a
highly success~lUS wholesale drug distribution company, claimed that the flawed ERP
implementation drove the company into a financial crisis, ultimately forcing the company into
bankruptcy. FoxMeyer representatives later sued the vendor as well as the consulting company
500 million dollars each for the faulty ERP implementation (Johnny, 1999).

On the other hand, despite these horror stories, if successfUlly implemented, ERP systems can
provide substantial benefits to organizations yielding a positive ROI. Typical benefits of ERP
systems commonly cited in the literature include, but are not limited to, inventory and lead time
reductions, improved on-time deliveries, reduced operating costs, enhanced customer
relationships (Hitt et al., 2002) and improved decision making. For example, Arizona Electric
Power Corporation, a company providing electricity, power and energy solutions, was able to
reduce its month-end closings from 38 to 9 days, decrease invoice processing time from 30 to 2.5
days, and reduce annual material and supply costs by $350,000 after the implementation of its
ERP system (Poston and Grabski, 2001). Aliant Inc., a $2 billion telecommunications company,
reported 8 million dollars projected annual savings in operating costs, as well as an ROI of 33
percent as a result of its ERP implementation (Fryer, 1999).

ERP systems affect all functional areas within a company, resulting in fundamental cultural and
structural changes (Al-Mashari et al., 2003; Brown & Vessey, 2003). In order to fully utilize the
benefits fiom an ERP system, most organizations choose to re-engineer their business processes.

GLOBAL AUTO BACKGROUND

Global Auto is a leading supplier in the automotive industry, which manufactures and sells wiring
harnesses and other electrical distribution systems. The company was founded in 1986 as a result
of a joint venture between two Japanese companies. The company currently operates 28 facilities;
and has annual sales around 700 million US dollars. The company is headquartered in Kentucky
and has manufacturing plants located in Kentucky, Ohio and Texas with additional manufacturing
facilities in Mexico. The company also has several warehouses located in Alabama, Kentucky,
Ohio, Texas and Ontario, Canada. Also there are technical support groups in Michigan and Ohio
that actively participate in research and design activities. The company employs more than 1,300
employees in the U.S and Canada, and over 7,500 employees in Mexico.

Global Auto's primary clientele consists of North American automobile manufacturers, including
Honda, Toyota, and Nissan. The company recognizes that the automotive industry is a dynamic
world filled with constant changes as new technology emerges. As such, the company is driven to
be the innovative supplier of choice and is committed to leading edge technology in all product
lines and business processes.

THE ERP PROJECT

Identification of the Business Need
When Global Auto started its operations, it adapted a legacy system that was designed and
developed by one of its parent companies. This system was designed to work well in a
JITCAR, Volume 8, Number 4,2006 49
 Implementing the Global Auto ERP Project
decentralized manufacturing environment. However, as Global Auto grew, it developed a
centralized supply chain. Since the original system was written and supported by the parent
company, Jim Smith and his co-workers were having difficulty in tailoring the system to support
the company's unique business needs. The programming language used for the legacy system was
not mainstream, and therefore, it was difficult to find and retain experts to support the system.
Jim remembered talking to his co-workers from different departments within the company. The
accounting department was also having problems because the general ledger application of the
legacy system was inadequate and not year 2000 compliant. When Jim contacted the parent
company to request an upgrade to the general ledger application; the answer was an "absolute
no." The parent company had already abandoned development of the system and refused to
consider an upgrade.

Mark O'Brien, the head of Manufacturing, was having difficulties in scheduling the
manufacturing lines. Mark was always complaining about not receiving accurate stock status
information and was blaming Purchasing for material shortages. He had also mentioned that
equipment problems such as maintenance delays were totally ruining his production schedule.

Mitch Kruska, the head of Sales and Marketing, had mentioned that Global Auto customers were
upset because of the delayed and incorrect deliveries. Their major customers were asking for
reduced prices and lead times. However, he didn't know how the company should respond to
these requests as he was not getting accurate information from manufacturing and accounting.

As a result of the fragmented applications much of the company data was redundant and
inconsistent, prohibiting top management from making timely and accurate decisions. Moreover,
the lack of responsiveness to customer needs was affecting profitability to a great extent.

Global Auto decided to move to a new integrated information system that would overcome the
limitations of the existing legacy systems. The company was strategically proactive to the
environment and the needs of their customers when deciding on implementing ERP. Competitors
within the industry had already started implementing ERP systems. The high level direction was
to move to a system that could support most elements of the enterprise, connect to ancillary
systems to support specific business functions, and was mainstream enough to have a greater pool
of resources to maintain and support it.

Package Selection
With the high level objectives loosely defined, the next step was to select the software package to
implement. Even though most of the ERP packages share common features, they also have
various differences. Failing to consider whether the package being evaluated will match the
overall business strategy and needs of the organization might result in failure. With this in mind,
Global Auto decided that the next step was to conduct a needs assessment to determine the
business needs more precisely and to match those needs to commercially available software
packages. In order to perform the needs assessment, top management formed a cross-functional
project initiation team. This team included senior personnel from the accounting, purchasing,
material control, production control, manufacturing, engineering, customer service, and
JITCAR, Volume 8, Number 4, 2006 50
 Implementing the Global Auto ERP Project
information systems areas. The team members from accounting and information systems were
assigned as co-project leaders. The senior vice president of material control, a member of the
company's executive committee, was added to this project team with the title of Executive
Sponsor. This person's function was to provide broad guidance, represent the interest of the
project team to other members of the executive committee, and to be the final authority in
decision making and resolving disputes.

To help the company move though the package selection process more quickly and effectively,
the project initiation team decided to partner with consultants from KPMG, which is among the
Big 5 audit and tax firms.KPMG was selected because the company specializes in helping
companies implement and integrate complex packaged solutions including ERP systems, offers
education and training, and consulting in business process re-engineering, project management,
and change management. KPMG has expertise in the implementation of ERP packages from a
variety of vendors including B U N , BPCS, Oracle, Peoplesoft, SAP, etc.

The business needs assessment was conducted primarily via interviews of the team members by
expert interviewers from KPMG. The findings were compiled, reviewed, and an official findings
document was prepared. This was then presented to the top management, and key members of
the project initiation team. The recommendations were to evaluate ERP packages that targeted
mid-size companies and to re-engineer key processes at the same time as the implementation. The
company decided to align business processes to ERP rather than modifying the ERP software to
reflect unique processes.

KPMG recommended three possible software packages whose capabilities matched the business
needs of the company. These packages were QAD of GEAC Software, BAAN of the BAAN
Company, and BPCS of System Software Associates. The project initiation team prepared a
request for proposals (RFP) and invited the three vendors to submit their proposals. After the
proposals were carefully revived, representatives from each vendor demonstrated their products.
The project initiation team decided to eliminate QAD due to the weaknesses in its manufacturing
module. The team members rigorously evaluated the other two systems on an additional
consideration -- availability of ancillary software to support unique business practices that were
not adequately covered by basic ERP systems. These included automated data collection and
manufacturing execution systems. The team created a gap analysis document which highlighted
the differences between system capabilities and business needs. It was determined either the
BPCS system or the BAAN system would be adequate to satisfy the business needs of the
company. They offered similar functionality and a good selection of partner products.

In the end, the company decided to implement BPCS. One of the determining factors was the
ability of BPCS to operate on the AS1400 platform. The AS1400 platform is the most widely
distributed multi-user platform in the world and would have a larger pool of qualified
programmers to support it. Another important factor the company considered was to become
positioned well to exploit continuous improvement opportunities in the future. In this respect,
BPCS is considered as a flexible ERP package that easily integrates with best-of-breed partner
applications to deliver e-commerce, business intelligence, customer relationship management and

JITCAR, Volume 8, Number 4, 2006 51

 Implementing the Global Auto ERP Project
supply chain solutions. Other factors were subtle differences in the operation of the BPCS
system over the BAAN system.

Implementation Strategy
After the ERP package selection was completed, a major decision awaiting the company was to
determine whether to follow a phased implementation strategy or to cutover to the new system all
at once following the "big bang" approach. After a careful evaluation of both approaches, the
project initiation team concluded that the big-bang approach would require the simultaneous
assignment of huge amount of resources to the implementation project and would be too risky.
Recognizing the need for a systematic, structured way of approaching the ERP implementation
process to create the required knowledge-base, the company decided to follow the phased
implementation approach.

The project co-leaders were tasked with developing the implementation plan. BPCS is like many
ERP systems in that it has a modular design. Therefore, the first step was to determine which
modules of the system would be implemented. The project team determined that the finance
function (Configurable Enterprise Financials including sub-modules for accounts payable,
accounts receivable, general ledger and fixed assets) would be the first to be converted to the new
system, giving users time to get used to the new system. Converting the operations function to the
ERP system would follow (Supply Chain Management including sub-modules for configurable
order management and out-bound logistics management, Manufacturing Data Management, Shop
Floor Control, Master Production Scheduling, Manufacturing Resource Management,
Distribution Resource Planning, Purchasing, Inventory Control, and various other implied support
modules).

The modules were selected in conjunction with the determination of which facilities would be
implemented first. The company determined that BPCS should be first installed in the main
components division plant in Kentucky. This plant was selected because of the unique business
needs of this plant compared to a wire harness division plant. This facility was different in that it
performed its own material control functions and directly shipped to the end customer. Wire
harness plants relied on centralized distribution facilities for the material control functions and
shipped finished goods to centralized customer service centers. The legacy system was designed
to support wire harness needs and was a poor fit for the components division plant.

Utilizing project scheduling and cost estimation tools, the project initiation team developed the
project schedule and budget. The team set forth an implementation timetable of nine months to
install and operationalize the financials module (Phase I). The project team worked with the
various vendors to develop the project budget. The initial project budget would include the cost of
the AS1400 system, the BPCS software, dcServ software (a data collection system that worked
with BPCS), a full education and training curriculum, and consulting services and would cost
around 1.9 million dollars. The team also estimated the Phase I1 costs that would be incurred
when expanding the system to the other facilities. The phase I1 budget was 4.93 million dollars to
expand BPCS to all facilities in North America.

Business Process Re-design, Installation and Data Conversion

JITCAR, Volume 8, Number 4, 2006 52
 Implementing the Global Auto ERP Project
Top management was totally committed to implementing ERP and was willing to devote
substantial amount of time and money for ensuring success. They believed that the project team
should be empowered to make the key decisions regarding the implementation. Therefore, they
charged the project team with the responsibility of identifying, examining and rethinking existing
processes and also gave them the authority to re-engineer or develop new business processes to
support organizational and ERP goals.

The project initiation team realized that it was necessary to work with consultants from an
organization with BPCS expertise to help them throughout the implementation process. They
submitted RFPs to several consulting f m s that provided BPCS consulting services. Ultimately,
they selected New Century Systems (NCS) located in Memphis, Tennessee. NCS specializes in e-
business solutions, ERP and business intelligence, government technology solutions and IT
staffing. NCS was chosen due to its experienced consultants in implementing BPCS, as well is its
physical proximity to the headquarters of the company.

At the time of implementation, the initial project team was modified to include three fulltime
consultants from NCS and more individuals from the company that were going to be directly
using or supervising those who would be using the software. The final project team consisted of
forty team members. They were divided into eight functional teams that focused on one aspect or
module for implementation. These teams met weekly during the implementation. The team
captains met collectively once per month.

The project team relied on its IT department to be the enabler and facilitator of the ERP
implementation process. They also took steps to ensure that users and all functional areas were
considered in the systems development process and that interfaces to existing systems were
properly undertaken. In highly intensive joint application design sessions the teams gathered and
structured user requirements. This is where the users of the system formally defined the current
business processes used in the company. By putting particular business processes under scrutiny
by objective observers; the company was able to identify the inefficiencies inherent in those
processes. The consultants then worked with the users to re-engineer the inefficient processes and
gather the new system requirements. The ERP system was then slightly tailored to support these
newly designed business processes. The company also utilized formal techniques and process
metrics for process measurement. Techniques and methods such as data flow diagrams, CASE
tools, and simulation were successfully used during process analysis and design.

Interface to existing systems was created at two levels and the IT department played a very active
role at both levels. First, an interface was created between the non-BPCS facilities and the BPCS
general ledger system. This was accomplished via a mechanism that is supplied with the BPCS
system for performing this type of integration. It is referred to as Batch Transaction Processing
(BTP). Bridge programs were written to extract the required data from the external system and
load it into pre-defined files within the BTP system. Once loaded, BPCS would then apply the
financial data to the general ledger system. The company required interfaces for three areas:
human resources payroll system, wire harness material control system, and the wire harness
accounts receivable system. All other financial transactions would originate within BPCS.

JITCAR, Volume 8, Number 4,2006 53

 Implementing the Global Auto ERP Project
The second level was the interfacing of the new data collection system dcServ into the BPCS
inventory and shop floor control modules. Since dcServ was selected because of the pre-existing
relationship with BPCS; this interface was purchased as a component of the data collection
system. The individual shop floor and inventory control transactions were defined and configured
during this phase.

In addition to these on-going interfaces, it was also necessary to convert data from existing
financial applications over to BPCS. In total there were about thirty files that required conversion
including item master, bills of material, customer master, vendor master, etc. There wasn't an
existing tool to accomplish this; so a consultant familiar with the BPCS file structures was hired
to write the programs necessary to convert this data.

It was during this time that the pilot environment was created. This was a fully functioning BPCS
environment that the users and consultants used to develop and test their processes. An additional
environment for technical testing was also created. The company worked very closely with the
ERP vendors and the consultants at this stage and provided them remote access to their systems.
When any problems were discovered, managers would meet to discuss the problem and contact
vendor consultants for fixes.

Preparing the Organization for the New System

Management was aware of the challenges involved, and was committed and ready for the change
process using a structured methodology. They established an open communication and
information sharing policy, and encouraged cross-functional teams to effectively manage the
change process. Credibility established with these small successes eventually paved the way for
larger-scale changes in the company and promoted a common culture across the organization in
favor of ERP implementation.

NCS offered a complete education curriculum for the BPCS software. Employees were willing to
allocate a large amount of their time to the project. They were aided by training sessions that were
available both day and night in the form of week-long workshops. Each major module of BPCS
was the focus of an individual workshop with the smaller or implied modules blended into the
education where appropriate. End user training was conducted and all the procedures were
verified. The final event of this phase was the conducting of the conference room pilot. This was
a two-week exercise in which the daily activity of the existing system was also performed in the
pilot system. This was an intense phase in which NCS provided additional resources to assist in
user monitoring and procedure verification. In addition to this education, several members of the
technical staff went to administration courses offered by various software vendors.

During the implementation phase the technical standards were also developed. The work
instructions were created. The company is a QS9000 certified organization, so all of the work
instructions were constructed using a standard format with 111 change control features. These
instructions were made available to the users in hard-copy as well as being added as a section on
the company's intranet page.

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 Implementing the Global Auto ERP Project
The company also encouraged everyone, at all levels, to speak out about the system and make
suggestions. Project team would regularly measure changed processes and articulate their value to
management and end-users. Communication technologies such as e-mail enabled effective
communication and teamwork. The open communication encouraged by management gave users
a sense of ownership of the system.

Post Implementation
After the system went live, Global Auto evaluated the success of the ERP implementation using a
set of success criteria addressing the following three dimensions:

Project success: Project success is achieved when the ERP project meets its time, budget, and
scope goals. The project team was able to get the ERP system up and running on time, within
budget and scope. Global Auto considered their ERP project as successful in this dimension.

Correspondence success: Correspondence success refers to the realization of the pre-determined

business benefits. Even though the management has not really got down to calculating the return
on investment (ROI) in financial terms, 6 months after the implementation of the ERP system, the
company started to observe significant business benefits. Management reported that as a result of
the ERP implementation they were able to remove a lot of non-value adding activities and
streamline the business processes. Previously, the accounts payable process required a staff of 5
people. After the implementation of the ERP system, this number was reduced to 3 people, in
spite of the fact that the company had grown and had more accounts payable activity. There were
similar efficiencies gained in other accounting areas. For example, the company observed a
reduction in working capital as well as a 30 percent reduction in financial closing time.

Moreover, using the old system the components plant was continuously in a state where 20
percent of the customer orders were past due. After the implementation, the company has less
than 1 percent of orders past due and also the customer lead time has been reduced by 60 percent.
As a result, interactions with the customers have been improved, resulting in increased sales
revenues. Before the implementation of the ERP system, the company required an average of 1.9
million dollars in raw material inventory to maintain daily operations. After the implementation,
the inventory levels were reduced to 1.3 million dollars. Finally, the company reported a cost
savings of roughly 10 percent. The long term projected cost savings was estimated between 20-25
percent.

Interaction success: The management realized that end-user satisfaction with the new system is a
key factor in order to achieve long term benefits. Therefore, 6 months after the implementation,
end-users in the company were asked about the usefulness and ease-of-use of the ERP system as
well as their level of satisfaction with the system. There was moderate agreement (average of 3
on a scale of 1-5) among users on the ease of use of the ERP system. Most users were generally
in agreement (average of 4 on a scale of 1-5) that the ERP system was useful and increased their
productivity and effectiveness. As far as user satisfaction is concerned, the end users were
generally positive (average 4 on a scale of 1-5) about the ERP system. It was also observed that
the users were more satisfied (average 4 on a scale of 1-5) with the accuracy and the ability of the

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 Implementing the Global Auto ERP Project
ERP system to provide up-to-date information and less satisfied (average 2 on a scale of 1-5) with
its user friendliness, ease of use and ability to provide reports that are needed.

THE CHALLENGE
As Jim Smith reflected on the events that led to the successll implementation of ERP at the
Kentucky plant, he realized that a lot of things had been well planned and prepared for prior to
the implementation. He and his team had learnt a lot from this project. However, given the time
pressure imposed on him by the corporate office, he wondered if he had the luxury of using the
same approach in Mexico? More specifically, he wondered if he should push for a "big bang"
approach (rather than a phased approach) given what he and his team had learnt from the
Kentucky plant experience. In addition, the Mexican plant employed a number of locals at the
operating and supervisory levels. How would cultural differences between Mexican and U.S.
cultures affect the implementation?

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18. Stein, T. (1999) "Making ERP Add up," Informationweek, 24 May 1999, accessed at
http:Nwww.informationweek.com/735/erp.htm, 13 April 2004.
19. Sumner, M. (2004) Enterprise Resource Planning, Pearson, Prentice Hall, Upper Saddle River, New Jersey.

20. Umble, E., Haft, R., and Umble, M. (2003) "Enterprise Resource Planning: Implementation Procedures and
Critical Success Factors," European Journal of Operational Research, Vol. 146, No. 2, pp. 241-257.

Asli Y a g m u r Akbulut, Ph.D. is an Assistant Professor of Management Information Systems at the

Seidman College of Business at Grand Valley State University. She received her Ph.D. and M.S. degrees in
Information Systems and Decision Sciences from Louisiana State University. She also holds an M.B.A.
degree. Her research interests include the application of Social Cognitive Theory in IS, human-computer
interaction, information sharing, digital government, and enterprise systems. Her work has appeared or is
forthcoming in Communications ofthe ACM, International Journal oflroduction Economics, International
Journal ofAutomotive Technology and Management, Journal of International Technology and Information
Management, and various international conferences.

R a m Subramanian, Ph.D. is Professor of Management in the School of Business at Montclair State

University. He teaches in the areas of strategic management and small business/entrepreneurship. His
articles have been published in journals such as Journal of Management, Journal of Business Research and
Management International Review, among others. His research explores the interface between the
organization and its external environment, more specifically in examining topics such as environmental
scanning, market orientation, and strategic alliances. He is active in case writing and his cases have been
presented at the North American Case Research Association (NACRA) meetings and also have been
published in Case Research Journal.

Jaideep Motwani, PbD. is a Professor and the Chair of the Management Department at Grand Valley
State University. He received his Ph.D. degree in Operations Management from University of North Texas.
His research interests include information technology management, enterprise systems, and quality
management. He has published in a variety of journals including IEEE Transactions on Engineering
Management, Operations Research, Omega, Journal of Operational Research Society, European Journal
of Operational Research, International Journal of Operations and Production Management, International
Journal of Production Research, and International Journal of Technology Management. Dr. Motwani also
serves as a consultant and trainer for a number of organizations in the areas of information technology
implementation, project management, and total quality management.

JITCAR, Volume 8, Number 4, 2006 57

 Implementing the Global Auto ERP Project

GLOBAL AUTO: THE ERP IMPLEMENTATION PROJECT

*** RESEARCH NOTE ***

Asli Yagmur Akbulut

Grand Valley State University, Grand Rapids, MI 49504, USA
akbuluta@qvsu.edu

Ram Subramanian
Montclair State University, Montclair, NJ 07043, USA

Jaideep Motwani
Grand Valley State University, Grand Rapids, MI 49504, USA
motwani@qvsu.edu

INTRODUCTION
There is a growing interest among companies of all sizes to implement ERP systems to overcome
the limitations of fragmented and incompatible legacy systems (Sharma et al. 2002; Robey et al.,
2002). If properly implemented, ERP systems can provide substantial benefits to organizations
through the improvement of information flows across departmental boundaries and integration of
business activities. However, ERP implementation projects also require considerable
organizational resources and reported results have been mixed (Koh et al., 2000). Despite the
substantial investments of time, money and other resources, ERP system implementations have a
reputation for providing meager results and causing considerable problems for organizations
(Motwani et al., 2002; Parr and Shanks, 2000).

In addition, the transfer of information systems like ERP, typically developed in industrialized
countries, to developing countries is often marred by problems of mismatch with local cultural,
economic and regulatory requirements (Molla and Loukis, 2005). For example, Martinsons (2004)
investigated the ERP implementations in China and concluded that there is a poor fit between ERP
systems and traditional Chinese management systems. Davison (2002) compared educational ERP
system implementation practices in North America and Hong Kong. Soh et al. (2000) discussed
the cultural misfits of ERP packages from a Singaporean perspective.

RESEARCH ISSUES
In this case study a successful ERP system implementation at an automotive supplier is discussed
in detail. The implementation project is divided into three phases including pre-implementation,

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 Implementing the Global Auto ERP Project
implementation and post-implementation. In the pre-implementation phase the identification of
the business need to move to an ERP system and the selection of the ERP package are explained.
The implementation phase focuses on the implementation strategy utilized by the company,
business process re-design, installation, and data conversion issues. The activities that were
undertaken to prepare the company for using the new system are also discussed here. The post-
implementation phase draws attention to the organizational benefits achieved as a result of the
implementation of the ERP system and how the organization measured the success of the
implementation project. Throughout the case study the factors that contributed to the success of
the ERP implementation are reported.

After a detailed discussion of the implementation of the ERP system in the U.S, the case then
focuses on how the system should be implemented in a totally different cultural setting, the plant
in Mexico. Moost of the existing studies in the literature that investigate the success factors for
ERP implementations focus on the projects that have been carried out in North America and
Western Europe (Davison, 2002). Therefore, there is a need of research to examine generic and
unique factors that affect ERP implementation success in culturally different contexts.

RESEARCH METHODOLOGY

This research is based on a single case study. Case data was collected primarily through
interviews, observations, and archival sources. Interviews were conducted with executives who
were familiar with the ERP implementation progress, including the IT managers and hnctional
area experts. Feasibility studies, reports, memos, minutes of meetings, proposals, and newspaper
articles that were available were reviewed and the contents analyzed. When all the evidence had
been reviewed, and after an initial case study narrative was documented, the factual portion of the
case study was reviewed by the major informants in the case study company. Such a review was
not only a minimal procedure for validating the data collected, but also a courtesy to those who
had cooperated with the research. Survey data was also collected from the case study company to
examine the perceptions of end-users of the ERP system (perceived usehlness and ease of use of
the system, and end-user satisfaction with the system. The questionnaires were sent to the
employees in two departments (accounting and human resources) within the case study company.

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 Implementing the Global Auto ERP Project

REFERENCES
1. Davison, R. (2002) "Cultural Complications of ERP," Communications of the ACM, Vol. 45, No. 7,
pp. 109-111.

2. Koh, C., and Soh, C., and Markus, M.L (2000) "A Process Theory Approach to Analyzing ERP
Implementation and Impacts: The Case Revel Asia," JITCA, Vo1.2, No. 1, pp. 4-23.

3. Martinsons, M. G. (2004) "ERP in China: One Package, Two Profiles," Communications of the ACM,
Vol. 47, NO. 7, pp. 65-68.

4. Molla, A. and Loukis, I. (2005). "Success and Failure of ERP Technology Transfer: A Framework for
Analyzing Congruence of Host and System Culture," Development Informatics Working Paper Series.

5. Motwani, J., Mirchandani, D., Madan, M., and Gunasekaran, A. (2002) "Successful Implementation of
ERP Projects: Evidence from Two Case Studies," International Journal of Production Economics,
Vol. 75, NO. 1-2, pp. 83-96.

6. Parr, A., and Shanks, G . (2000) "A model of ERP project implementation," Journal of Information
Technology, 15, pp. 289-303.

7. Robey, D., Ross, J., and Boudreau, M. (2002) "Learning to Implement Enterprise Systems: An
Exploratory Study of the Dialectics of Change," Journal of Management Information Systems, Vol. 19,
No. 1, pp. 17-46.

8. Soh, C., Kien, S. S., and Tay-Yap, J. (2000) "Enterprise Resource Planning: Cultural Fits and Misfits:
Is ERP a Universal Solution?" Communications of the ACM, Vol. 43, No. 4, pp. 47-5 1.

9. Sharma, R., Palvia, P., and Salam, A.F., (2002) "ERP Selection at Custom Fabrics," JITCA, Vol. 4,
No.2, pp. 45-59.

Note: A detailed teaching note is available directly from the publisher for the instructors adopting
this case.

JITCAR, Volume 8, Number 4, 2006 60