ERP Implementation For Jackson Laboratory With Oracle 11i

Choosing Oracle 11i for Jackson Laboratory

Discuss about the ERP Implementation In Jackson Laboratory.

ERPs systems have become quite important in this globally competitive environment where organisations wants to cut the costs. With the help of these systems, organizations can implement the industry best practices and can collaborate their business departments. At the same time, these packages are expensive packages as they automate large number of non-value adding business processes. Due to the size and complexity of these projects, there is also considerable risk in these projects. However, if the company take the right approach and consider all the risk items and tries to mitigate them in advance, it can improve the changes of project success. There are various ways to implement the ERP system in the organization. The organizations can use the traditional approach of on premise implementation or they can use cloud based implementation. There are pros and cons of each of the approach. It is recommended that organization should analyse their internal and external environment before making the decision. Some organizations would want to use the cloud based system as it is simple (Chaushi, Chaushi & Dika, 2016, 12). Moreover, it is relatively easy to scale the cloud based ERP system. However, the two key risks associated with cloud based system are privacy risks and security risks. It is recommended that organizations must also analyse these risks before making any decision.

The organization chosen is Jackson Laboratory. It is a non-profit research based institution whose goal is to discover genomic solutions for diseases like Cancer, Alzheimer’s and Diabetes and empower the global community and improve the human health. It is founded in 1929 and based out of Bar Harbor, Maine. It also has pioneered the usage of Mice in healthcare industry to research the cure for various diseases and achieve a significant breakthrough in identifying the techniques to cure various deadly diseases. It decided to implement Oracle 11i ERP systems and its budget was 5 million USD and 1 year timeline.

ERP projects are quite complex project that requires change management, training to employees, changing business processes of the company to align with the ERP packages and also customizing the ERPs in case the company business process is not supported by the ERP and is very critical for the company (Narayanamurthy & Gurumurthy 2017, 555). In most of the cases, the change management with ERP us not easy to handle as the implementation of ERP bring fundamental and radical changes in the organization. The implementation of any ERP project needs time and investment. It is important that organizations should be able to use the resources at their disposal for the implementation of ERP (Conteh & Akhtar 2015, 12).

Phased Implementation Approach for Reduced Risk

Apart from it, there is no dearth of ERP projects that started with a huge zeal but gradually failed due to several reasons, sometimes the end users were not supportive, sometime the product itself is not suitable to the vendors, sometimes the organizations ignore the importance of having effective change management team, sometimes organizations pushed the timeline to see the output as soon as possible and ignore the testing and training needs.

In case of Jackson Laboratory, it is very lean in terms of staffing and when the critical employees have contributed in the implementation project, they do not have much bandwidth to do their day to day activities. Apart from it, there is only 1 person, CFO Wilbur who has prior experience of working in ERP projects. The other problem is that it had already purchased the license of oracle process Manufacturing (OPM) module that supports the business processes of manufacturing related to mixing of ingredients to produce the final product. However, company realizes that its requirement is quite unique and seven week mice and 8 week mice were treated as different product however it is not the case with the ERP system. As a result, integrating mouse development function in oracle is a complex task. Human resources also created problem as there is always resistance of change whenever company is taking such bigger step as employees are insecure about the job (Fryling, 2015).

Jackson laboratory has selected the Oracle 11i ERP system. Sap and oracle are the 2 largest ERP vendor that captures more than 60% of the ERP market. Oracle 11i  systems consists of several tracks like Finance, Manufacturing, Supply chain Planning, Customer relationship Management, Quote and order Management, Transportation and logistics management as well as Human resource (Ha & Ahn, 2014, 8). Oracle is a reputed organization in the market. One of the things that stand apart for Oracle is the after sales support. The company provides excellent support to its customers.

Each of these tracks further consists of the modules. For instance, Finance consists of Account payables, Account receivable, cash management, fixed assets, and general ledger. Supply chain consist of Demand forecasting, supply planning, procurement, iSupplier. Manufacturing consists of Inventory, discrete manufacturing, process manufacturing, Bills of material, quality management, work in process. Human resource consists of Payroll, benefit plans, talent management. Quote and order management consists of configurator, quote system, order management. CRM consists of depot repair, field services, warranty claims. Oracle 11i provides the integrated process flows that flows across the departments and thus automate the various business processes and also enhances collaboration due to the flow of the data (Oracle.com, 2018). For instance, consider the order to cash business processes that consist of the entire cycle from quote generation, order booking, order shipping, invoicing and receiving. Oracle supports all these functionalities and thus provide a unified view of the business process. For instance, once the quote is available, it can easily be converted to sales order. Once sales order is shipped, it can easily be invoiced by finance and thus there is no redundancy and manual entry. Also, at a given point of time, there is only 1 copy of data that is visible to all the departments and thus there is no confusion. Big organizations like General electric, cisco has implemented the Oracle ERP and achieved large benefits (Mann, et al. 2017, 148).

Challenges and Actions Taken for Successful Implementation

Jackson has prepared a list of its internal department and key functions and then evaluated the different ERPs available in the market and then try to align their offerings with its requirements. Once it has shortlisted the ERP vendors, it can request for quote and select the appropriate vendor. Some organisations also selects the ERP vendor by conducting the GAP analysis in the initial itself to avoid any surprises later (Vaidyanathan, & Fox 2017, 2). For instance, these organizations prepares a detailed list of their business processes and functionalities needed and then hires vendors like IBM, Accenture, Deloitte, KPMG that can conduct a Fit gap analysis. In this analysis, vendor will compare the requirement with ERP offerings and evaluate if it is supported, it is direct fit and it is not directly supported, it is gap that needs to be bridged either by changing business process or customizing the standard ERP packages (Altamony, Al-Salti, Gharaibeh & Elyas 2016, 691). This approach though expensive initially but do not bring surprises later on. For instance, if the Jackson would have used this strategy, it would have known in advanced that Oracle process manufacturing system will not support their mice processes and thus can evaluate the other vendors also.

Jackson laboratory has chosen to go live in a phased manner rather than big bang approach as this approach drastically reduces the risk associated with going live. It first phase consists of implementing production capacity, account receivables and some general ledger functions and went live in February/ After that, some other modules went live like account payables, fixed assets and the entire general ledger module. During the 2^nd phase, remaining modules like Human resource, process management, payroll, grant filing and labour distribution applications went live. This phased approach of the implementation help the organization to give the time to its end users to change gradually rather than in a single shot. As a result, users were much more comfortable with the systems and also confident after the 1^st phase go live and this is really needed for the success of the project (Tarhini, Ammar, & Tarhini 2015, 25).

Also, Jackson laboratory initially planned to go for the Vanilla implementation and leverage the out of box functionalities of oracle so that the project costs and duration can be minimized especially when it has very lean staff. However, it soon find out that oracle 11i process manufacturing module is not designed for their business requirement of mouse situations. As handling mice function is one of the most important requirement, it changed the implementation choice from vanilla to middle of the road and decided to make changes in the OPM product to make it work for their business processes.

CFO, Wilbur was the only person who has prior experience of ERP projects which makes him aware about the common issues in ERP implementation projects like cost overruns, project over delays, poor response by the end users and thus Jackson takes very good actions not only to facilitate the implementation but also to make it successful (CFO, 2018). For instance, time and material mode of the project execution was quite common for such ERP projects and this project has large timeline because the vendor do not have motivation for go live as they are getting the money for their resources (Ram, & Corkindale 2014, 152). On the other hand, in fixed price, vendors are motivated to complete the project as soon as possible and deploy the resources in other projects. Jackson decided to execute the project as fixed fee contract. Apart from this, it also purchased the surety bond from Gladwayne, which is a risk management consulting firm. This also gives the company cushion to protect itself from unforeseen events and also if their obligations are not met, they are liable to recover the losses from these bonds. These bonds were not quite common in IT industry as they are in construction industry.

Apart from it, Wilbur clearly knows that change management is an important pillar and thus training was given a special importance and a huge 450,000 USD million were spent to train 32 employees. This is an important step as there are examples of organizations like Hershey whose ERP implementation was a failure due to lack of training given to users (Chung, Ahmad, & Tang, 2015). In a large scale ERP implementation, training of employees can be a game changer. It is observed that the implementation projects where adequate training is provided are more successful as compared to the projects where adequate training is not provided.

Also, as Jackson is a not profit organisation, it has a lean staffing model. There are only 2,3 people at the top in each department and they are loaded with additional responsibilities of providing their inputs in this ERP implementation project which left a little time for them to do their regular job activities. This could have an impact on the timeline of the project (Ranjan, Jha & Pal 2017, 370). Jackson also has to deal with the internal human resources and it’s also realized that the oracle process manufacturing module is not capable of handling their requirement. Although it was a challenging task but it finally managed to integrate the mouse functions with the oracle 11i system. It also have included the buffer time in the implementation cycle so that there is no pressure of rushing even if there are some minor delays due to unforeseen challenges (Koch & Mitteregger 2016, 82).

Thus, most of the problems and challenges that could have become a major issue later on have already been taken care by the Jackson. This is a good sign for the organization and it shows the positive readiness of the organization about the change (Rajan & Baral 2015, 105).

Time and money are the 2 important metrics to check the success of project. Going by the standards of project management, this project was completed at almost the budgeted cost and as far as timeline is concerned, it took 6 months longer to complete. This project was very much successful considering the fact that it is an ERP project. ERP projects are generally mission critical and multi-year and multi million contracts and still there is no guarantee of success as there are large number of stakeholders, dependencies and complexities.

Nestle took 6 years to implement the ERP and it had to stop and restart its project due to some issues. The cost incurred was more than 300 million USD even there were top notch consultants like IBM were involved. Hershey ERP project was a failure because when it went live, users did not know how to use the new system and eventually, it did not able to book the orders and it was also a peak time. Fox Meyer went bankrupt in implementing ERP systems. There are numerous examples of failure and risks (Harwood 2017, 7).

Considering the above factors, the project was quite successful. Jackson has handled most of the expected things well in advance by making appropriate arrangements and also secure itself against losses by buying surety bonds form another company who is liable to pay the losses to the Jackson in case the obligations are not met by the implementation company. There were surprises like Oracle process manufacturing do not support the business requirements but that was also taken care by customizing the ERP package. However, organization was able to overcome these surprises. This was a positive sign for the organization and as a result they were able to manage the change of ERP implementation in an effective and efficient manner.

Conclusion

ERP projects are quite complex project. There are always multiple vendor involved and large number of stakeholders that delays the things. Vendors also tries to complicate the things sometimes. ERP vendors also during the time of selling their products promises much larger things their product is capable of doing but when it comes to implementation, their product falls short of expectations. Apart from these external challenges, there are numerous internal challenges. End users are comfortable in using the legacy systems and idea of implementing ERP makes them insecure about their job and also raises questions if they will be able to learn the new technology. ERP projects also put additional pressure on the existing people as they will be having some additional tasks apart from their day to day responsibilities. As a result, there is a general tendency among the end users to resist the change however if the management is supportive and strong, it can take its employees in confidence by providing them appropriate training, setting appropriate incentives and motivating them. As the CFO of Jackson, Wilbur has prior experience with ERP implementation project, he did a good preparation of handling most of the expected problems in ERP projects and also buying the bonds to safe itself against the inefficient of implementation vendor or the in capabilities of the product. All these efforts makes the project success despite numerous challenges and it is completed well within budget. It can set as benchmark for the other ERP projects where delays and cost overruns are considered normal.

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