IndexIntroductionTask 1: Identifying Types of FailureArticle 1: The FoxMeyer Drug Failure: Was It an ERP Failure?Article 2: Examining the ERP Implementation Process starting from a failure case. Activity 2: Identification of critical failure factors. Article 1: The FoxMeyer Drug Failure: Was It an ERP Failure? Article 2: Examination of the ERP implementation process starting from a failure case. Task 3: Cross-case comparison Task 4: Recommendations Article 1: The FoxMeyer drug 'failure: was it an ERP failure? Article 2: Examination of the ERP implementation process from a failure case. Conclusion Introduction This task is basically a comparison between two newspaper articles to understand the procedures that were used in the implementation of new ERP systems in the two different companies discussed in the respective magazines. From the list provided, I chose “The FoxMeyer Drug Failure: Was It an ERP Failure?” by Judy E. Scott and “Examining the ERP Implementation Process from a Case of Failure” by Ada Wong, Harry Scarbrough, and Patrick Chau. The context of the new ERP system requirements in both is different. Times and geographic locations are also different. By choosing these two, I hope I have brought a shade of diversity. Per the assignment requirements, ten other journal articles are also cited, all discussing how ERP has failed in various companies in different countries. Surprisingly, most of them highlight human and managerial factors as reasons for IS failure rather than technical factors. For the analysis of critical factors I used both Tony Feghali and Imad J. Zbib, 2007 framework and Schmidt et al. (2001) framework. APA Sixth Edition format has been used to refer to these ten articles. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Task 1: Identifying Types of Failure Article 1: Drug Failure FoxMeyer: Was it an ERP failure? Interaction failure: These failures are fundamentally due to lack of user satisfaction. When users fail to use the designed system effectively and fail to meet their expectations, they tend to abandon the system. In this FoxMeyer case, workers feared losing their jobs to automation. The morale problem among the warehouse employees was evident on all sides. The first step towards closing three warehouses to automate a warehouse threatened them. Workers feared losing control over the warehouse and processes. They started damaging inventory, failing to fill orders, and making mistakes when the system had trouble handling a huge volume of transactions. There was a lack of internal expertise and experienced staff. FoxMeyer depended primarily on outside consultants to implement the R/3 system and integrate the ERP. The lack of training on the new systems created a breakdown in worker resistance and led to a high attrition rate. There was no initiative for knowledge transfer from the external consultants either from the senior management or from the warehouse workers. The external consultants were themselves inexperienced and new to the system. The interaction was at zero level between the newly implemented system and the warehouse workers. Process Error: The budget and estimating method used by FoxMeyer were not the best. Lack of management control over SAP R/3 implementation and warehouse automation. They tried to insert two interfaces completelydifferent. The plan to implement two different new systems, for the company's most important business systems, turned out to be a huge failure at the same time. Management overestimated R/3's capacity in 1994. The volume of transactions that SAP R/3 could handle was magnificently smaller than the volume of transactions handled by FoxMeyer's original mainframe system. They also fell behind in controlling the risk framework associated with heavy automation and project management. Even their budget estimate seems to be no longer safe ($65 million) because FoxMeyer presented itself as a cost leader, they should have kept the budget in such a way that they could maintain at least a small margin. The deadline they met was unrealistic, they had set 18 months to complete the entire implementation. The output initially set for the new system was subsequently changed to extremely high standards, which was not possible considering the implementation phase and other aspects of the business. SAP project capacity has also increased dramatically. These two clearly indicate the loose controls maintained by management over the project scope. Even the adaptation of a relatively new technology, when it was not very effective, increased the risks for the company. While adapting these new measures they failed to educate the users (sellers and workers). Correspondence Failure: This failure is more attributable to the management perspective. “It wasn't a failure of automation. This was not a failure of commercial software per se. it was a management failure." FoxMeyer's upper-level management was too emotional to be in business with the Delta III project. FoxMeyer CIO Robert Brown felt a high degree of personal responsibility, saying, "We're betting our company on this." The investment made in this project was too high for a company like FoxMeyer, especially when they started implementing changes on two vital systems of the company. The effort put forth by senior management was too high to be practical when lower level management showed zero percent of it. Changing project focus leads to high project costs. The case also states that there had been a warning from Woltz Consulting about scheduling the project's completion, but management still insisted on an 18-month schedule. They were also expected to save $40 million per year. This shows how unrealistic the planning goal was. The suppliers, Anderson Consulting and SAP, however, have not canceled the project, believing that abandoning the project would defame their prestige and lead to a decline in sales in the future. Delta III's profit was overstated by both senior management and suppliers. Article 2: Examining the ERP implementation process from a bankruptcy case. Failed interaction: The consultants hired for the ERP implementation and the mid-level and operational staff could not synchronize well due to the language barrier. Although the project manager was aware of this, he was not very helpful and thus wasted two months of implementation period. This shows the lack of motivation of the staff. The functionality needed for the new system was missing in many ways. They did not attempt to address the need to understand their current business process and the capability of the future ERP system. The staff members involved in the company therefore did not have essential experience as business analysts and therefore the business requirements were not addressed accurately. Staff leaving the company due to complexity is how they leavethe system. Process failure: Resources for the full implementation of the new system proved insufficient. The allocated budget was less than that required for the entire ERP adoption. The deadline was initially set at six months by top management, the project manager and the consultants. It was clearly inadequate. In addition to budget and time constraints, complexity has increased with the nature of new technology. The consultants did not know enough about the technology to set up the system, this led to many bugs in the system, which ultimately contributed to shelving the project. The project struggled with fewer human resources to cope with the increased load. Staff were unable to cope with the complexity and pressure. Some staff members have resigned due to high stress and workload. So the company had to hire new consultants and train them on this new ERP system. This once again resulted in more time and budget than planned. Failed Match: Senior-level and mid-level management focused more on the benefits of the new ERP system and ignored considering the disadvantages or setbacks that the company may face due to this new system . system. All levels of management maintained unrealistic expectations and failed to consider potential risks or the need to redesign business processes to accommodate the new ERP system. Even before the system was fully ready, the management went into operation assuming that they would be able to address the problems gradually, which turned out to be a bad decision. If these were the mistakes made by the management, the sellers also kept up with them. The suppliers did not carry out sufficient testing of the system before delivery to the company. Task 2: Identification of critical failure factors. Article 1: The FoxMeyer Drug Failure: Was It an ERP Failure? Introduction of new technologies (technological factor) The technologies used in the Delta III was a new technology at that time. According to the case, the sellers did not have enough time to carry out extensive testing before introducing the product to the market. FoxMeyer, unfortunately, was used as a prototype platform when it decided to implement two different new systems at the same time, for the company's most important business systems. It would have been better if they had at least waited for the technologies to prove successful on the market. Or, they could have tried implementing one technology after another to see how successful the first one was. Poor change management (PM-related factor) FoxMeyer's mainframe production was 420,000 customer orders per night. The new system could only fulfill 10,000 orders per night. Before putting the system into practice, they did not consider the actual requirements versus the system's capacity. During the initial phase of the implementation itself, an attempt was made to incorporate large-volume production without changing the business environment. Furthermore, due to the enormous costs associated with the new system, their goal of being a cost leader has changed dramatically. They did not try to manage change effectively. Insufficient staffing (PM-related factor) Lack of internal expertise was another key reason for project failure. FoxMeyer depended on outside consultants for ERP implementation and operational purposes. They did not train internal staff or hire professionals who had knowledge of systems similar to those of the company. Without adequate staff, the lack of commitment on the part of theexternal consultants was evident. Again the outside consultants were inexperienced, but FoxMeyer had to pay a high fee for inexperienced guidance. If they had experienced or trained staff for both systems, the process of integrating the new and old systems would have been simpler and more useful. Poor quality of IS planning (i.e. poor estimation, monitoring, planning) (managerial factor) Expectations at senior management level on Delta III were unrealistic from all perceptions, time approximation, production budget and project planning useful. Even after noticing the loss occurring at various stages, they believed that after a certain period of time they would break even and thereafter start earning profit. They could have reconsidered at least then. The consulting firm Woltz had given plenty of warning about the tight deadline, but FoxMeyer chose to stick to the 18-month plan and had to surrender to the unrealistic timeline. Article 2: Examine the ERP implementation process from a failure case. Lack of team skills ( Organizational Factors) Communication plays a vital role in any project/company. In fact this should be the first step in building a new project. It helps to build a team, exchange ideas and understand things in various perspectives. In this case, the consultants and staff failed at this very step. The level of communication between consultants and project team members was very low during the initial implementation phase. Consultants were hired from India, speaking fluent English but with a strong Indian accent that the staff could not understand. Because of this, they failed to understand the ERP concepts, functionality, and usage of the ERP system for day-to-day operations. Without understanding the basics of the new technology, staff could have experienced enormous pressure and vulnerability. The project manager who was aware of this situation did not take much action, resulting in wasting two months of the six-month run. This once again demonstrates the manager's lack of team skills. Inadequacy of the technical environment (technical factor). The quality of service provided by the consultants was poor. They had minimal expertise on the Hong Kong market requirements and the new ERP system. They failed to conduct a proper market study to understand that the business requirements are different from India. Instead of identifying the gap between the current business system and the potential functionality of the ERP system, they implemented the exact version of the Indian subsidiary. The need for business process engineering was not considered at all. The consultants hired also lacked experience as business analysts. They could not communicate their ideas about ERP concepts to the operations staff due to their strong linguistic accent. The suppliers of the new system did not carry out sufficient tests before introducing the system to the market. This also made the technical environment so unsuitable for the new IT system implementation. Unrealistic management expectations (cultural factor) The top management, being so optimistic, has snubbed the negative aspects and unwanted impacts that the ERP system can cause on the business. They ignored the need to conduct business process reengineering to accommodate the convolution of the new ERP system. All levels of management agreed to complete project implementation in six months with an initial budget of $1.3 million. Both proved insufficient for the completion of the project. The high turnover rate.