TQM

Prof. Vasudevan Murthy

Assignment 2 : Case Analysis

ERP IMPLEMENTATION FAILURE

ERP (Employee Resource Planning) :
It is business process management software that allows an organization to use a system of
integrated applications to manage the business and automate many back office functions related
to technology, services and human resources. It is a system to integrate all the departments of an
organization, record work, generating reports & track any deviations in the system.
Benefits of ERP:

Saves Cost & Time by avoiding redundancy in the system

Improves quality of the process
It enables high customer satisfaction
Forecasting sales, production & Procurement easily

Why SoftDrink Company went for implementing ERP?

It is been the current trend that most of the big companies went for ERP, though few

failed.
Consultants proposals were desirable
Aimed at moving from Stand alone systems to Integrated Systems
Looked for Customized reports.

Reasons for Failure:

Lack of Communication at each level.

Lack of Trust: No trust on consultants and wanted to go by their own.
Lack of skill: Inexperienced employees were forced to work on ERP resulted in poor
performances. And there was no adequate training provided by experts.Additional work

of ERP activities resulted in being a burden to the employees

Lack of End-user Cooperation: Employees were not fully involved in the process.
Employees were not recognized resulted in high employee turnover.Employees were not

motivated to perform.
Poor Managemenet Support: Management failed to recognize timeliness and resources
required. Management members spread their views openly stating that the ERP is failure ,
de-motivated employees Management refused to invest more funds for implementation
SathishKumar Kalaimani
14020848018

TQM
Prof. Vasudevan Murthy

Assignment 2 : Case Analysis

Suggestions for successful implementation:

Management should sponsor enough funds as it is important.

Manpower integration should be established before implementing system integration
Bringing in experts as consultants to
o Train the employees
o Measure the progression
o Refresher training to ensure thorough knowledge about the process
Consultants should not handover finished product to the employees rather train them
throughout the process of development.

Conclusion:
To conclude with, the major reason for this ERP failure is lack of communication
between the management and employees as well as between the management and the
consultants. Implementing ERP must be viewed as a new business process as well as
a mission, not just a software installation. All the employees must be involved, and
unconditionally and completely sell them on the concept of ERP for it to be a success.
A successful implementation means involving, supervising, recognizing, and
retaining those who have worked or will work closely with the system. Without a
team attitude and total backing by everyone involved, an ERP implementation will
end in less than an ideal situation.
Hence to have an ERP system successful in any organization the following points are
very critical. They are
Communication
Management Involvement
End-user Involvement
Periodic Audit
Corrective Action Plans
Thus concluding this review, that implementation of an ERP successfully requires TIME, COST
and QUALITY work from the Management as well as End-users.

SathishKumar Kalaimani
14020848018