Case Study Analysis: Erp Implementation for Nibco

Unit 6 character reference Study NIBCOs Big slam dance An blackjack Implementation Professor Richard Yellen Student Vo Ngo Lan Phuong charge Ham 23 ID 217496 Professor Richard Yellen Student Vo Ngo Lan Phuong move Ham 23 ID 217496 Hanoi, 11/2012 CASE STUDY Table of content I. Overview3 II. NIBCOs execution of instrument of ERP solution3 III. Pros and Cons of BIG-BANG coming for ERP4 IV. ERP bewilder implementation lessons and recommendations6 List of Reference9 Case Study NIBCOs SAP Application Implementation I. OverviewThe case shows the implementation of SAP ERP solution in NIBCO, a manufacturer of pipe and fittings, a mid-size manufacturer with about 3,000 employees and revenue every(prenominal) over 460 million USD. The society has enforced successfully the full package of ERP solution, provided by SAP, the tether solution supplier nether the consultancy of Boston Consulting Group. NIBCO has gained the success by well(p) centering and jut out team up under standing, determination and experiences. The method of implementation of NIBCO for this ERP solution is running solely in one day, this brings the company to a quite risky side if something wrong happens.But the company has run the dodge successfully, with positive results. The implementation succeeds be get to of each(prenominal) the conceptionning, personnel office, management and the cooperation with application suppliers and consultants. NIBCO has over 3,000 employees and operates 10 plants, and 17 centers for distribution over US. The instructionbases and information systems argon non integrated therefore cannot communicate and collaborate in force(p)ly, which causes time and efforts wasting. Also, over the years of development, the melodic line subprogrames interpolate, the information data extend, the obsolete system cannot meet the demands of cross functional operations.With the consultants from BCG, NIBCO has developed a plan for implementation of natural ERP system, using master copy solution from a leading provider, SAP. The aim of NIBCO is to set up a new, large, integrated information system to replace the old system, connecting and integrating all the IS from factories, plants and distribution centers all over the country. With the initial wander duration estimated as over 3-5 years, the management and range team has implemented the whole system in only 18 months, and successfully. II. NIBCOs implementation of ERP solutionUsing the consultancy services from BCG, the information system of NIBCO was very faded and poor. The system do not support the provision of information for conductor timely, did not support do by of decision making, especially for functional departments as story, purchasing, selling, marketing and customer supports. Due to the lack of real time data manduction the management and manufacturing meets uncorrectableies to improve caliber and efficiencies. Over the years of operation, factories and departm ents produce implemented their own modules or application such as golf club entry, manufacturing, distribution and accounting.Because of the non-systematic application and implementation, in ramify factory and department, each user may claim their own softw be, different version, and separate database. Therefore it is difficult to integrate and cooperate among factories and distribution centers. To implement the new system, NIBCO has use professional consultancy services, purchase leading softw atomic number 18 application from whirligig vendor, and assigned big top managers to manage declare oneself team, system development, and IS stave for planning, and integrating, designing, installing the new system.Although the BCG obdurate that there is a need for a change in information system of NIBCO, the current system is poor and needed cut emancipate to grow the company and become to a greater extent than global. The BCGs suggestion for troika to five years implementation should be too long, somehow, this can cause more cost and efforts for NIBCO than actual need (Brown, 2012, p. 491). III. Pros and Cons of BIG-BANG access for ERP NIBCO used the approach called BIG-BANG for ERP implementation, or cutover aiming to put the whole information system to run in the same day, at all the factories and distribution centers, especially for common and discover modules.All the line of work units, most of employees result be abnormal by the new systems at the same time. In fact, the other approach can be doing a pilot implementation at a factory or distribution centers, or only implement for only a fewer popular units. But this way can cost more time, efforts and cannot psychometric test the capability of the whole system. Also, with the investment in consultancy and purchasing the leading solutions from top ERP vendors, the NIBCO aim to get the new system run for all the business unit, and the real time running can as well test the cognitive process of the new system, alike save cost and time for implementation.Running all at the same time can also help the testing of integration and cooperation among factories and distribution centers. The big-bang or cut over approach requires the good current-handed personnel, and also training for the new systems, working(a) processes and running, maintenance the new system. The productiveness was reported a reduction in the first month aft(prenominal) the new system running, but improves gradually in the later months. The accounting reports can be done in two or collar day, rather than two to three weeks when using the old systems.Also, with the new system, sharing and collaboration helps reduce inventory, as much as 25%, and also increase the fulfillment ratio from 80% to 95%, service quality has improved to 98%. tooth root http//www. nibco. com/ The BCG consultants noticed that the legacy environment and databases are out of control, which cause IS and IT staff too busy with fixing the issues more than focusing on developing supporting system for functional activities.The company used professional consultancy services from BCG but does not follow the suggestion from BGC, the cutover or big-bang approach was implemented because the management leading do not support multi years plan also the fund for the labor movement was 17 million USD, and leave behind take one after part of the companys members to involve in implementation for the hurtle. The shorter time the throw takes, the better and more effective it forget be. IV. ERP examine implementation lessons and recommendations 4. 1. Human resource for ERP projectProject was take by the CEO, as the project Champion, Rex Martin, who acted as the project leader and project champion. The top manager plays the reveal role to the ERP project, because this type of project will involve and affect all people and departments and units of company. With CEO in charge, the project will be supported by all the sin Presidents in decision making and raising the resources for the project. The CEO set up the executive director Leadership Team to act as the screening and monitoring committee, this team plays a call role in managing the project because it help to consecrate sure that all decisions are made at the highest level.The CIO, and also the Vice President, Scott Beutler was responsible for the ERP package, it means that the VP of IT and IS will be responsible for the functionalities of the software application, during process of project. The Information system managers, Gary Wilson, in concert with all the IS staff (about 30 people), will be involved in project, support the operations and implementation, development, maintenance. The CIO, IS leaders and IT staff will the support of top leaders will play divulge roles in estimation of ERP packages, testing, demonstration and operating the systems.The gravestone modules of ERP package for NIBCO, SAP R/3, includes finance, supply chain, material, warehouse management, production planning and management, sales and distribution. Also, the HR module was purchased but will be implemented later. The leaders have played key roles in running the project, for example, Beutler manage the business process Wilson for technology and software packages, and Davis for managing project activities. Because of the scale of project, and it potential effects, one quaternionth of the company directors have been appointed to the project management board.This shows the commitment of the managers and also provide enough human resource for project to make sure that it can cut time from 3-5 years to 18 months. The participant of leaders and managers will make the project decisions faster and it may be the key reason for shortening the duration of project. 4. 2. Working with solution vendor ERP project requires both software, hardware, networking partners to involve in implementation. NIBCO has selected IBM as third base party provider for the systems infrastructure, SAP as the software solution provider.For the experts and maneuver support, NIBCO and partners appoint six consultants for functional and business processes, who work regularly with the project team. Also, the maximum personnel can be raised to as many another(prenominal) as 50 consultants at high time. The other personnel are also provided for training, reporting, programming, adept assistance, intimacy management All the supports are officially stated in the contract with solution providers and partners. In fact, Wilson has an IS department and personnel number up to 30, also he had mainframe application, HP and IBM platforms.The NIBCO has quaternary legacy systems for order entry, manufacturing, distribution and accounting, but the problem is they are bought separately, with separate databases, which make integration difficult or very hard to implement. NIBCO has considered and evaluated 7 ERP packages in depth and in details. With the experts and business from functional departments involving in assessment process by testing the modules, from several vendors. They are also move to visit the previous or typical customers to get the feedbacks from real users.The key concern was the finance and supply chain management modules, using the shared database, and should be able to connecting and integrating all the modules together. 4. 3. Project management team The image of the project is decided for all the factories and distribution centers, the operation was stared on the same day for ten plants and all distribution center. This decision for scope was quite risky but saving time and cost for NIBCO. The project team was released sooner than planned, the productivity was down a little fight but improve gradually, the project cost was a little under budget.All these factors are because of good experience and collaboration in project management. The key to success may be the Tiger triad, which was led by Wilson and Beutler, who was working full time with ERP project. The Martin was added by CEO appointment to joint Beutler and Wilson as a third co-lead project. David with experience in total quality management could help project focus on change management and maintaining quality. 4. 4. learning inside specialist For ERP project, training and technology transfer is key to success.Core knowledge and skills need to be transferred to IS department and all the functional departments for operation and maintenance. Source http//www. sap. com/solutions/bp/enterprise-resource-planning/solutions-overview. epx Four director leaders and two business system analysis were selected for review roles, working with other leaders from sales and distributions. One ordinal or seven out of twenty eight directors of NIBCO have been selected for project as full time. These people must have good business knowledge to see the potential issues and settle conflicts. 4. 5. Project team assignmentThe project managers are assigne d for specialized teams, including sales and distribution, financial, material management, and production management. from each one team work together with experts from solution vendor. Business member will consider process, business functions, power users, business process analysis. IS and IT engineers will be responsible for technical sides, including infrastructure, programming, testing, installation and running. Each team has their supporting IBM consultants, with their technical knowledge to that they could make joint decisions, and also transfer the knowledge to NIBCO cell nucleus team at the same time.Consultants from solution vendor, SAP, also work together with the team. The final project cost was 17 million USD, and one third for infrastructure cost, including the solution software. One anther third for education, team work and the brave out one third for consulting (Brown, 2012, p. 501). 4. 6. Experience in change management The cutover approach or big-bang implementat ion of ERP package as NIBCO used requires a good change management in all business functions and department. Because business processes are changed, much or little depends on the nature of business, therefore all the related staff will be affected.Also, the application in wide range, all ten first factories and distribution centers will be affected same day, same time. The key to success of NIBCO implementation can be the careful planning and actions. The analysis and design, colloquy and management effectively, as well as the good coordination with consultants and vendors experts. The support and direction from top management to departments heads involving the implementation of ERP can also contribute to the success. Big bang implementation requires change management that was not key strength of IBM.Training was used widely to increase skills and knowledge of users, with 450 different business activities in 15 locations. Open communication by provision of information to project t eams, over 1,200 hours of training, over four months before going online or Go Live. The grace period was used for more scenario training, with more focus on business processes. After intensive, effective and serious training, the company could be ready to operate R/3 on its own without solution or partners expert working on site. List of Reference 1. Brown, 2012, Information Technology Management 7th Edition, prentice Hall