Categories
Management

ERP Implementation

Reasons

NIBCO was looking to replace an information system that was patched together through an uncoordinated and disheveled nature based on tactical needs presented by the business over the course of multiple years.  While the information system technically worked in the current configuration the system was becoming ever increasingly more complicated to sustain, enhance and accommodate the needs of the current business model.  NIBCO sought out a technical solution that would create the right environment to not only stymie the growing costs of maintaining a legacy system but also create a foundation to keep pace with technological advances and create opportunities for business growth.  The Enterprise Resource Planning (ERP) system provided that opportunity and also would lay the foundation for an integrated wing-to-wing solution that provided the basis for a new information technology solution but also an opportunity to continually improve the business processes as well (Magal and Word, 2011).

Pros/Cons

With the decision to implement the ERP solution there was still the analysis of implementation and which path, either big-bang or through iterations, best suited the needs of the company.  Through an iterative approach the risk would be reduced regarding the impact to the business and small and agile changes could be made while implementing each phase of the project.  This approach would reduce implementation risk but would increase the cost of the overall project due to the amount of time for implementation as well as the support costs of contractors, project team and leadership involvement.  Another inherent risk for the iterative process approach was the apprehension that the company would have the tenacity and endurance required to proceed through 100% completion of the entire ERP project.  The major benefit of the ERP solution is to have a wing-to-wing solution with each module or phase completely implemented and working.  The risk is that the company would draw a line in the sand and end the project early if not implemented at once.  With a big-bang approach the company would implement the entire solution at all of their locations with one go-live date in mind.  The benefit of this type of implementation is based on the fact that the entire solution will be in place and the strain of supporting one system in one sustainment effort is achieved once the new system goes live.  This is a major benefit especially in comparison to the iterative process in which both the new and legacy systems must be supported and maintained while the implementation team works on the new sites.  The level of effort may be strenuous throughout the process but the limited time the teams are engaged in support activities are mitigated once launch is achieved.  The big-bang approach also has inherent risk associated with launch so vast of a system all at once to everyone.  The risk includes failures in the new system or business processes due to unknown variables that could occur.  The amount of due diligence required for the big-bang approach is exponentially greater than the iterative process due in part to the fact that there are no trial runs outside of testing for the big bang approach.  Since there was not a time where both, legacy and new systems would run concurrently a soft opening approach did not fit into the plan.

Approach

The project was managed exceptionally well considering the complexity and level of effort required for implementation of such a large project through a big-bang approach.  The company’s efforts to retain talent was a step toward ensuring success but a better plan for re-integration of the ERP core functional employees back into the business could have been planned and communicated better.  As will any project it is known that it is a temporary endeavor but to maintain the strength of the team to the very end the team members need to know what area they will work in after the project completion (Monk and Wagner, 2009).  The stringent timeline was the only non-moveable parameter regarding the triple constraints of the project.  With the end state in sight the project team knew what they needed to accomplish and when it had to be finished.  This provided the strategic vision required to implement a successful ERP launch.

References

Magal, S. R., & Word, J. (2011). Integrated business processes with erp systems. RRD/Jefferson City: Wiley.

Monk, E., & Wagner, B. (2009). Concepts in enterprise resource planning. (3rd ed.). Boston, MA: Course Technology Cengage Learning.

Prencipe, A., Davies, A., & Hobday, M. (2007). The business of systems integration. Oxford University Press, USA.

Project Management Institute, P. M. (2008). A guide to the project management body of  knowledge. (4th ed.). Newtown Square: Project Management Inst.