Class: ISM 6156

Term: Fall 2020

Professor: Denis Edwards

Assignment: Module #2 – ERP Implementation Case Study

Name: Anuar Khamzin

2.1 From the way CES had been operating with two separate divisions, there were
some business issues that CES encountered in ERP system implementation process.
As CES had grown bigger, its business process of EME and ECS division had
become too complex for data conversion to the ERP system implementation. This
issue should have been considered before the new ERP system was implemented by
adopting business process reengineering (BPR).

The lack of alignment of the ERP system and business processes is a major issue in
the implementation of an ERP system. Therefore, in order to reduce the risk
associated with failure to realign a new ERP system and business processes, most
organizations reengineer their process. To succeed in implementing a new ERP
system, the CES’s senior management team should have considered the needs of
reengineering its business. Rethinking and radical redesign of business processes
would have enabled a CES’ operational processes to be systematically aligned with
the new ERP and would have allowed CES to obtain improvement in its
performance.

2.2 CES also had significant issues within its organization that would potentially
increase the risk of failure in ERP implementation. First of all, the ERP selection
strategy was not developed effectively enough to select the suitable one for CES, the
management team seemed lost. The Epicor’s ERP was chosen by the CFO and

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 COO, who did not even bother to ask the IT manager, middle and line managers’
opinions as they are the ones who were actually engaged in changeovers. Four
different consultants hired by the CFO failed to perform their tasks in the
implementation process; such as training, problem and change management, and
data cleaning. CES should have evaluated what they need from the ERP system and
accordingly decided on the implementation approach – big bang versus phased roll
out. Although phased roll-out approach may be desirable, the big bang approach
can be the more suitable for small and medium enterprises (SMEs) as it needs less
cost and time for implementation.

Secondly, the CFO failed to communicate properly within organization. Project

communication is one of the topmost components for success of any enterprise-wide
application implementation, especially in SMEs, where mode and medium of
communication are not always well structured. The communication plan for the
ERP project should ideally be defined at a very initial stage, as how information will
flow into and out of the project, clearly outlining the responsibilities and channels.
In this case, the IT manager was not even aware of his responsibilities as the project
manager since he had not officially been informed by the CFO as well as not had
been given the authority to make decisions. In addition, there was no clear direction
in the project plan since it was not allowed to be developed without the CFO’s
authority. The IT manager and other teams basically had to work harder to meet the
desired completion date.

Thirdly, the organization did not have enough support from the senior management
team simply because of its budget and flexibility to meet the completion date. There
is also some evidence in the case showing unsupportiveness from the senior
management team such as resistance from the CFO releasing employees from their
regular duties to perform tasks related to EPR implementation. Furthermore, CES

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 chose to skip a project planning process to meet the desired “go live” date. One of
the key aspects is the recognition from the executive that ERP implementation
requires the use of the best and brightest employees for a considerable amount of
time. Therefore, the CES’s top management needed to help identify individuals
required to implement the change and organize them into an effective
multidisciplinary team.

Fourth, cost and timeline for the new ERP system were very limited. The senior
management team was rushing to implement the new ERP system due to the pressure
from external investors and bank(s) to improve the accuracy of financial reporting.
The desired “go live” date was set without considering the possibilities. The CFO
overlooked the cost budgeting recommendations from Epicor and other consultants.
He irrationally set the budget project equally to the ERP system cost $250,000. Even
though it was clear that there were additional resources needed in order to meet the
deadline, the CFO still wouldn’t provide more financial support. The key personnel
who supported the project ended up getting laid off due to limited budget. If CFO
and senior management team had developed a scope of implementation and strategy,
CES would have been able to control the cost and time more effectively.

Lastly, ECS users were not trained to create reports and had a little understanding of
the new ERP system. The ECS division also failed to provide sufficient training with
its users. It is stated in the case that the data used for training was not from ECS’
data. Instead it was from the vendor, which was not practicable. The users then
could not identify problems when using data tools or solve the actual problems. At
the end of the day, training barely became useful since most of users still did not
know how to use proper tools. The CFO and the IT manager should have developed
training strategies in advance and educated the end users. The strategies should also
have focused on features of the new ERP system software so it could utilized.

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