The bottler in question is one of the largest independent bottlers under the Coca Cola Bottling Company. Its major operation is to fill up the syrup manufactures by Coca Cola into bottles and exit for distribution. The company always kept itself abreast with all new technologies in the bottling industry. It realized through its early successes that the canning and bottling technology is actually the bottom line for them and hence they always invested in and maintained the most advanced equipments in their plant. However, information technology had been something that they had ignored ever since the inception in 1935.
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As business grew and the company added new territories, the need for better ways of information management was seen. The company saw the separate IT department coming up and new computer systems were added in the different departments. The company never took care to ensure compatibility between the systems and the mismatch became more and more with the increase in the number of systems indicating a dire need of an integrated system to manage the business more efficiently and effectively.
The company’s focus had shifted from any further territorial growth but they could not shy away from the addition of new products. In addition to this, the company’s management also wanted a better system to manage their financial informations and provide data to aid in the decision making because currently, any custom report was sought from multiple sources and compiled manually.
Since the company needed a solution that would not only be compatible companywide but also facilitate the communication and other needs of the individual departments, ERP emerged to be the way forward. This decision was backed by extensive research done by employees to justify expenditures. Hence the exective committee steering this research aided by the IT department gave ERP a go ahead.
The new system was anticipated to be capable of the following
Handling company growth
Communicating between departments
Producing customizable and robust reports
SAP was shortlisted as the ERP vendor which offered a product with the following unique features to the bottling company:
Financial Module that could track profit, forecast sales and manage cash flows
Human Resources Module
Feature to feed compensation, benefits and labour information to the financial modules to generate accurate profit reports
Feature that automatically updated production scheduling, cost of goods and inventory to the income statement
The ERP Software was purchased and the go-ahead was given for its implementation. Inspite of the fact that the ERP software was capable of solving a majority of the company’s existing problems, there was work to do with respect to its implementation which by no standards is trivial. It is at this step that the company made the biggest mistake of not hiring independent ERP consultants it had hired in the recommendation and evaluation phase. They instead chose their own path for the implemnetaion effort which made it even more challenging.
The company had very limited staff in the IT department and most of its professional staff was young and inexperienced. Yet they chose to assign way too much time consuming implementation specific tasks to the staff who were not ERP experts. They did not even have the proper ERP implemnentation training. They were expected to do their regular job duties alongside of this extra work inspite of the fact that earlier the independent ERP consultants had recommended that such employees should be given extra help for their regular duties. The enormous workload of ERP implementation placed a great deal of strain on the employees involved in the project.
Another major issue that the company started facing on front of the human resources was communication, specially employee motivation. There were serious breakdowns in the communication channel. There was lack of management support resulting in high levels of attrition especially at senior levels. A majority of these were involuntary.
All the above factors rendered the ERP implementation off to a shaky start. Another major issue at hand was the selection of a proper ERP implemnetaion team b ecause only a selection of right employees would be able to overcome the communication barriers and other minor obstacles. However, to add to the company’s misery, the selection lead to further project and personnel issues. Not paying any heed to the consultants advice, the company did not chose the best candidates for the job with most people having worked for the company only for a couple of months asnd hence were unfamiliar to the intricacies of the manufacturing environment. The company adopted the sole selection criteria to be graduates in Management Information Systems which was not appropriate.
This was coupled with training issues as the candidates were barely trained even for their business as usual and were in no terms experts in the business practices of their department. Even if the more experienced employees were weaker on the academic qualification front, they would have been more suitable for the job. The company should have chosen the employees who were most familiar with the business practices they were reengineering.
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When a company selects the best and most knowledgeable employees for ERP implementation, it should be willing to do away with their normal contributions for a while instead of stretching them to a 90 hour work week and causing their burnout. A solution may be hiring temporary workers in their place or assigning additional responsibilities to the workforce not involved in ERP implementation. If the employees turned ERP consultants are given tedious tasks at inhuman pace, such a project is bound to fail.
Another reason for employee dissatisfaction was that the management’s expectation was ever increasing and they were not getting any appreciation for their extra efforts. There were no incentive plans upon achievement of project milestones. ERP team members needed to be pacified by such a scheme to get reinforcement for a job well done. The management should have focused on the communication process with the employees to smoothen the implementation effort.
A majority of project leaders could not see the importance of sharing certsin aspects of the ERP implementation across different modules and departments. Even the ones that did did not follow any standard format and the information shared was often inconsistent. The major issue here was that instead of revealing minor problems in implementation, information was shared only when the problem became insurmountable. They often put the blame on one another for the additional time and cost involved. Effective communication required constant effort from everyone in order to make this successful.
Employees behaved in this way as they were faced by lack of training and felt that the expectations were too high. They were not pacified. To ease them of this anxiety, a proper communication channel was required. Employees who are not readily involved in the project should have been updated with the progress of the implementation and sought for suggestions from them. Ineffective communication did cost significant time and money.
What could have been done better?
Through this ERP implementation failure, a lot of lessons can be learnt. This failure could have been avoided in the following ways:
For such a huge ERP implementation, the company should have taken care in doing needs assessment in terms of analyzing its employees. Also it should have asked the employees about their desire to get involved and should have worked on making their involvement actually satisfying. The expectations from those employees should have been reasonable and they should have been releieved from their full time duties till the time the project was going on. Part time employees should have been hired to retain their critical employees involved in ERP implementation by helping them in their work.
Recognition and Retention
The employees deserved incentive for going out of their way to implement ERP in the company. A reward policy should have rewarded employees on achieving critical project milestones. A sense of being valued would have gone a long way in employee satisfaction. This would have proved otherwise than employees sweating it out in the long and daunting ERp implementation without receiving any reward.
The company should have been more supportive of its employees during the ERP implementation. They should have worked towards rewarding and valuing the employees by welcoming their suggestions and understanding the issues they faced.
In light of all above elements, we can conclude that the company should have given importance to communication, employee involvement and proper planning for the ERP implementation. Consultants should have been hired to aid the employees and work closely with them. The employees in turn should have been relieved of their BaU. Without understanding how the system is implemented and how to maintain it, the system was useless to the company. Also employee training would have been worth the investment.
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