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Discussion: Causes of the Problem experienced by ERP project

Discuss about the ERP Implementation at Leadtek Corporation.

Leadtek Corporation is a technical company that deals in computer components. It is located in Taiwan. The number of employees present in this company is over 2000 and it has got more than 100 customers that are industries. Their suppliers are spread across the entire country. In the year of 1980, they had used accounting software. Later on in the 1990s, they adopted the Oracle ERP software version 11i. This software met the functional requirement of the company and therefore it was chosen.

This report gives a detailed outline of the problems and the possible causes of such problems that Leadtek Corporation faced while implementing the ERP project. It also discusses about the way possible ways by which problem could have been mitigated or avoided. Later on the company decided to implement the Oracle software of ERP and version 12c. This report also provides recommendations regarding the procedure that can be followed this time by the Leadtek Corporation to make sure that the present implementation of ERP is successful and also the maintenance is done in a proper way. The choices that are available in the present world are discussed here.

This case study clearly tells us that the main reason behind the problem faced by the ERP project is the mindset of the employees working in Leadtek Corporation. There were issues from the initial stage of the implementation process of the ERP project (Chiu et al. 2014). There was no strong support from the top management of the company. They had lost their interest from the initial stage of the project implementation. There were steering meetings held that was for around 2 months. From the third month onwards the members attending the meetings were reducing. The members were losing interest at a fast pace. The meeting had stopped completely after the fourth month. The team members who were under the category of user were part time and they did not have much time to spend behind the new ERP system. They were busy with their own daily activities and targets.

The members did not understand the worth of the ERP system properly. They were constantly comparing the existing system with the new system (Hartmann 2012). They felt that the existing system was better than the proposed system. They were resistant towards the change. According to the Maverick behavior, the practices that were carried out by the employees would not be allowed by the deployment of ERP systems and this was one of the main reasons why the employees did not want the change to take place. They used to carry out informal processes like the supplier used to send the materials without any purchase orders. The managers of the department were benefitted but the top management did not like such practices in the company. Another cause behind the problem was there was change in power. The power that existed in one department would flow to another department by deploying the ERP system in the organization. Initially the bill passing work was under the responsibility of the accounts department. The ERP system would provide a three way matching report. According to the ERP system the responsibility of the bill passing procedure would go the procurement department. There was conflict in the entire company due to the power acquisition fight. These problems led to severe issues and even after the end of nine whole months the project could not be completed. The company had to face major loss and extra costs for the upgrade of hardware. They even had to purchase extra number of licenses. The employees did not understand that deploying an ERP system is not any cost it is an investment that will give a better future. There were problem regarding the change in the management. The overall project could not be managed properly that led to this chaotic situation (Hoch and Dulebohn 2013). There were lack of effective and efficient training that might have led to this chaotic situation and failure of the implementation of the ERP system.

Mitigation or Avoidance Strategies

The case study tells that the main cause behind the failure of the ERP implementation plan is the resistance of the people towards this plan. The employees of the Leadtek Corporation were not able to understand the importance behind the implementation of the ERP system. This problem could have been resolved by implementing a proper and well planned change management process (Zeng and Skibniewski 2013).  They should have hired an external team of specialists for carrying out this work (Sustainment 2014). Before implementation of the system the top management should have understood the objectives of the ERP implementation. If they would have understood the objectives clearly then they would not have lost any interest with time. The user members also were losing interest (Shao, Feng and Liu 2012). Everyone felt that it was a waste of money and time. The implementation process was not carried out proper because there was lack in the training of the users (Aslan, Stevenson and Hendry 2012). The company should have taken much time before starting their process of implementation and proper training should have been imparted to the employees before carrying out the process (Kwak et al. 2012). When the user members were losing their interest then they should have been explained that it is not any extra expense, it is an investment that will generate revenue and profit in the future (Leon 2014). They should have given change management training. Testing of the components should have been done (Tsai et al. 2012). The top management should have explained the way in which they would have tackled any change in the future due to this ERP implementation. Proper communication needs to be done in order to make the employees understand about the problem (Monk and Wagner 2012). A good management team would not have led to this issue (Hasibuan and Dantes 2012). When the departmental managers were thinking that they will not be able to carry on with the informal practices then they should have been shown the positive sides and the benefits which they would achieve by installing the ERP systems. Then another problem that the company has faced was the conflict of roles and powers. In this type of situation a strong top management team was required. They would have explained to the accounting department that why was the bill passing activity under the responsibility of the procurement department. The presence of all the critical success factors would not have led to the failure of the ERP system (Hanafizadeh 2012). The presence of all the critical success factors would not have led to the failure of the ERP system. A proper on-going support plan should have been made (Shaul and Tauber 2013).  The presence of all the critical success factors would not have led to the failure of the ERP system. Proper understanding of the ERP system and well trained employees would not have led to this type of issue.

Conclusion

Conclusion

This report concludes that the change management is the most important process that needs to be carried out in the Leadtek Corporation in order to successfully implement the ERP system. This report pointed out the likely causes behind the failure of the ERP system that was selected previously. It also gives recommendations regarding the steps that need to be carried out in order to successfully implement and maintain the Oracle ERP 12c.

The Leadtek Corporation has decided to implement the ERP software called Oracle version 12c. The initial step that can be taken by the company is to understand the goals and benefits of the software followed by planning and training. In order to plan the architect in an orderly way the top management should identify the goals of the software.

Change management: The implementation of ERP is beyond the hardware changes that take place. A proper planning needs to be done in order to tackle and manage any type of change that takes place. The employees will be resistant towards the change and this might lead to severe problem. This management will help to balance any types of conflicts between the technology and the staffs of the company.

Project management: Proper leadership needs to be present in order to carry out the implementation process in a successful manner. The need of the project has to be understood by the management team in order to implement the task in an effective way.

Business Processes Reengineering: The deployment of ERP system will bring about severe changes in the processes of the organization. Leadtek Corporation should customize the functions of ERP if they want to keep the old system as well as the new ERP system.

Training: This is the most essential step that is recommended. The users of this ERP system must be well trained. The employees of Leadtek should understand the working mechanism of the system along with its advantages. This will help to implement the Oracle version 12c successfully.


Communication: This plays a vital role in the success and failure of any ERP system. The benefits of the ERP system need to be communicated across the entire organization. The aim of this plan is to make the attitude of the employees positive. This will help the user expectation to match with ERP systems functionality. The success of the ERP implementation is possible only when there is success in the interaction, process, expectation as well as the correspondence success.

Recommendations

Network Planning: The requirement of the network needs to be determined by the management team in order to implement and install the Oracle version 12c in a successful manner.

Testing: Proper testing needs to be done in order to run the system properly. ERP system should be tested on a continuous basis. The project management team should follow the continuous improvement method in order to take full advantage of the functionalities of the ERP system.

Regular Updates: There must be regular updates in order to successfully maintain and run the ERP system.

Specialist Team: The existing employees of the company should be given proper training. Along with this Leadtek Corporation should hire a new team of specialists in order to balance any kind of lack that is there in the present internal environment of the company. This will help Leadtek to focus in their work and not waste much time behind the new process. The other employees can concentrate on their own work and participate less in the implementation plan. This will help the company to generate profit and revenue along with a successful ERP system.

Ongoing Support: Maintenance is an important part of any system. Proper maintenance is required in order to run the system successfully and effectively. The services need to be monitored properly. A partner for software implementation needs to be hired in order to maintain the system in a regular and proper way. Any type of change after implementing the ERP system needs to be customized and integrated in the existing system. The tools of ERP system also need maintenance. The manager of the project team must be responsible for keeping constant touch with the vendor to update the system and also to upgrade the system. Any patches needs to be installed properly. On addition of any function, the employees must be trained and given proper information about it.  It is important to update the training document in order to refer it in future and sync it with the processes.

References

Aslan, B., Stevenson, M. and Hendry, L.C., 2012. Enterprise resource planning systems: An assessment of applicability to make-to-order companies. Computers in Industry, 63(7), pp.692-705.

Chiu, Y.H., Claybaugh, C.C., Lea, B.R. and Yu, W.B., 2014. Enterprise resource planning.

Hanafizadeh, P., Gholami, R., Dadbin, S. and Standage, N., 2012. The core critical success factors in implementation of enterprise resource planning systems. Enterprise Information Systems and Advancing Business Solutions: Emerging Models: Emerging Models, p.86.

Hartmann, C., 2012. Enterprise Resource Planning.

Hasibuan, Z.A. and Dantes, G.R., 2012. Priority of key success factors (KSFS) on enterprise resource planning (ERP) system implementation life cycle. Journal of Enterprise Resource Planning Studies, 2012, p.1.

Hoch, J.E. and Dulebohn, J.H., 2013. Shared leadership in enterprise resource planning and human resource management system implementation. Human Resource Management Review, 23(1), pp.114-125.

Kwak, Y.H., Park, J., Chung, B.Y. and Ghosh, S., 2012. Understanding end-users’ acceptance of enterprise resource planning (ERP) system in project-based sectors. IEEE Transactions on Engineering Management, 59(2), pp.266-277.

Leon, A., 2014. Enterprise resource planning. McGraw-Hill Education.

Monk, E. and Wagner, B., 2012. Concepts in enterprise resource planning. Cengage Learning.

Shao, Z., Feng, Y. and Liu, L., 2012. The mediating effect of organizational culture and knowledge sharing on transformational leadership and Enterprise Resource Planning systems success: An empirical study in China. Computers in Human Behavior, 28(6), pp.2400-2413.

Shaul, L. and Tauber, D., 2013. Critical success factors in enterprise resource planning systems: Review of the last decade. ACM Computing Surveys (CSUR), 45(4), p.55.

Sustainment, A., 2014. Enterprise Resource Planning.

Tsai, W.H., Lee, P.L., Shen, Y.S. and Lin, H.L., 2012. A comprehensive study of the relationship between enterprise resource planning selection criteria and enterprise resource planning system success. Information & Management, 49(1), pp.36-46.

Zeng, Y. and Skibniewski, M.J., 2013. Risk assessment for enterprise resource planning (ERP) system implementations: a fault tree analysis approach. Enterprise Information Systems, 7(3), pp.332-353.              

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