A companys Enterprise Source Planning (ERP) system is similar to its central nervous system. If it's healthy, it provides the sensory source to management so they can understand what is happening with customers, suppliers, and employees. It can help management respond, by coordinating the companys resources to win customers, battle rivals, and reduce cost, just like muscles in a body. Business resource planning implementations are never easy. Actually, it's the exact carbon copy of corporate open center surgery. And often there's a financial strike if things don't go well. Yet, despite this critical role ERP systems play, most companies fail when in it involves implementing or upgrading their ERP system. (Eaves, 2009)
"The horror experiences of failed ERP tasks are now the products of legend. According to 1 recent record, more than 40% of ERP implementations fail to achieve even half the prepared business benefits. Some well known examples include Waste Management suing SAP for $500 million for a failed ERP execution, Hershey Foods' 19% drop in profits from a failed SAP execution at Halloween time a few years ago, the entire bankruptcy of FoxMeyer Drug, a $5 billion pharmaceutical distributor over the failed $100 million ERP execution" (Eaves, 2010), and, finally Symantec's ERP turmoil, though it didn't are unsuccessful completely, but it was the key cause for shedding many dedicated customers and lower-than-expected profits in the 3rd one fourth of 2007.
Adapt to improve is often difficult, and even more when a firm tries to perform two difficult jobs in parallel such as a change in organizational composition as well concerning adapt along the way the new company works. This is actually the case of Symantec that wanting to complete both responsibilities experienced a vicious circle. ("Achieving Operational Excellence", 2009)
Symantec's ERP turmoil will be our case study discussion and I will highlight at length the key issues and concepts in the chapter that are illustrated in cases like this research, find out the factors that were
responsible for Symantec's troubles in overhauling its ERP systems, display Symantec's adequacy in response to the condition, show the available choices that may be done differently to prevent the implementation problems that arose at Symantec, and display customer loyalty based on historical relationship and switching costs.
Key Issues and Concepts
Let's first know exactly what the ERP system is and disclose the opportunities that attract many organizations toward implementing their IT systems to an ERP system and display the challenges from the execution of such systems.
"An Enterprise Reference Planning (ERP) system is an integrated computer-based application used to manage internal and exterior resources, including tangible belongings, money, materials, and recruiting. Its purpose is to aid the stream of information between all business functions inside the limitations of the organization and manage the cable connections to outside stakeholders. Built over a centralized databases and normally employing a common computing platform, ERP systems consolidate all business businesses into a even and enterprise-wide system environment. " ("Enterprise source planning, " 2010)
Figure Enterprise Source Planning Systems
http://www. emanage. in/images/erp. jpg
Source: http://www. emanage. in/
Opportunities Associated with ERP Implementation
"ERP systems connect the required software for appropriate forecasting to be done. This enables inventory levels to be placed at maximum efficiency and the business to be more profitable.
Integration among different practical areas to ensure proper communication, production and efficiency.
Design engineering (how to best make the product).
Order monitoring, from popularity through fulfillment.
The revenue cycle, from invoice through cash receipt.
Tracking the three-way match between purchase requests, inventory receipts, and costing.
Managing inter-dependencies of sophisticated processes.
ERP systems centralize the data in one place. " ("Enterprise source planning, " 2010)
Challenges Connected with ERP Implementation
"Customization of the ERP software is limited.
Re-engineering of business functions to match the "industry standard" recommended by the ERP system may lead to a loss of competitive advantage.
ERP systems can be quite expensive.
ERPs are often viewed as too rigid and too difficult to adapt to the precise workflow and business procedure for some companies-this is cited as you of the main factors behind their failure.
Many of the included links need high precision in other applications to work well.
Once a system is established, transitioning costs are very high for any partner.
The blurring of company limitations can cause problems in accountability, lines of responsibility, and worker morale.
Resistance in posting sensitive inner information between departments can reduce the effectiveness of the software. " ("Enterprise tool planning, " 2010)
Symantec Task Oasis
Symantec Corporation began with good motives. Shortly after acquiring Veritas it commenced an ERP rollout that was designed to standardize and unify the Symantec and Veritas information systems. The goal was to create a single ERP system, within which all the company's extensive network of resellers, integrators, vendors, and customers could place purchases for over 250, 000 different products Symantec offered just as. That follows the essential concept of venture systems which derive from a collection of included software modules and a typical central data source. When new information is got into by one process, the information is made immediately available to other business techniques. (Laudon, 2010)
Although companies can rewrite some of the program in ERP systems, the program is unusually complicated and comprehensive customization may degrade system performance, diminishing the info and process integration. If companies want to experience the maximum advantages from enterprise software, they need to change just how they work to conform to the business procedures in the software. Although Symantec and Veritas experienced each used Oracle E-Business Suite 11d before the merger, both used highly customized editions of the systems that made integration a daunting task (Laudon, 2010).
An overhaul of the combined company's organization systems was needed to join jointly Symantec and Veritas's data from key business functions. Enterpyrise systems help large companies enforce standard routines and data so that everyone does indeed business the same way worldwide. Enterprise systems help organizations respond quickly to customer demands for information or products. However, the two companies bungled the execution of the venture system almost from the beginning. " ("Achieving Operational Excellence", 2009)
In my perspective, the pros from the implementation or up grade for an ERP system outweigh its disadvantages if done properly with a comprehensive plan stating the goals and the expected dangers associated with it, carried out a step-by-step without compounding the execution of the ERP system with the launch of multiple products, and without making way too many customizations that lead to inefficient system and make it lose its competitiveness. So I believe that Symantec did not have an effective plan that got into consideration all the possible hazards in despite of their knowledge to the risks associated with merging and updating two customized editions of an ERP system, they followed the update with the launch of other products which made the situation even more difficult.
The following image shows the organizational change management technique as it aligns with the ERP execution road map
http://www. sdn. sap. com/irj/scn/go/portal/prtroot/docs/webcontent/mimes/bpx/Business%20Process%20in%20Practice/OCM/ocm_roadmap. jpg
Source: www. sdn. sap. com
Responsible Factors for Symantec's Difficulties in Overhauling its ERP Systems
Management: Most of the issues were because of the company's shortsightedness in employing Project Oasis. The original reaction to the release of the new system was decidedly negative. Once customers come to a Symantec staff, they could spend up to 20 more minutes troubleshooting problems, and were often told that there is nothing that might be done. There was way too much change developing all at one time for typical customers to handle. Partners were unhappy with Symantec's sluggish response to numerous of the problems (Laudon, 2010).
Every project with such size should focus on an authentic, specific, and a detailed plan that contains all project activities and their sequences in development, approximated budget, associated dangers, estimated duration, as well as perhaps a list of personnel involved in the project implementation. The management's underestimate of the job size and the business enterprise processes involved is the most typical problem and fatal mistake that led many organizations to fail in its ERP execution, and led sometimes to the demise of others.
Despite all Symantec's programs and the engagement of several experts from its management aspect like its CIO who may have a long experience in ERP systems as he worked as a CIO for most ERP distributors like Oracle and PeopleSoft, the management made a fatal error in preparing its users and more than 60, 000 resellers, and distributors. The management didn't assign its customer to a proper training or allow people who will be in a direct connection with the new system on a daily basis and who are the main users of the system such as its workers and companions to get involved in such a huge change in the machine they used to focus on and connect to.
Organization: THE BUSINESS was unprepared to meet up with the increased demand for customer care following the rollout. Symantec neglected to organize the introduction of its new ERP system with the kick off of other products from different divisions within the business. The changes to the licensing system were not coordinated with the rest of the project. Customers were unhappy with changes to the stock-keeping unit product system (SKU system). Symantec acquired overlooked the needs of several customers while planning a technically sound but user-unfriendly ERP system (Laudon, 2010).
Technology: Both companies used highly customized variants of Oracle's E-Business Suite 11d prior to the merger. Users battled to process the massive amount information provided to them and were overwhelmed by the increased quantity of steps, all of them new, necessary to place purchases. Some smaller distributors and associates didn't revise their systems to handle the new SKUs and were not able to send purchase purchases electronically. After the rollout, licensing became a lot more problematic for Symantec's customers and companions, forcing them to hold back multiple weeks before getting their licenses ("Achieving Operational Excellence", 2009).
Information systems are now required to respond to a wide range of potential users (both within and outside of a business) with a diverse set of skills, functional expertise and IT competency. The days in which the IT or fund department exclusively specified and furnished information on behalf of customers have vanished. Whether users are knowledge staff or periodic users of your information system, they need access to a system on the self-service basis so that they can get information for themselves using the tools most appropriate with their role and potential. ("Cognos 8 product", 2006) So applying a new ERP system which will be utilized by most personnel in a company needs a proper and comprehensive training to all involved users at the right time rather than at the system rollout.
In my point of view, Symantec's management lacked an intensive evaluation on the project needs in conditions of training to its complete stakeholders such as vendors and customers, these were unprepared to meet the increased demand for customer care due to a new system execution which always result in an increase demand to customer care, plus they didn't pay enough attention to the difficulty and size of ERP implementations that was obvious of associated the update with changes to software licensing that had not been coordinated with the rest of Job Oasis, and starting the update of multiple programs at the same time with the introduction of the new system.
Was Symantec's response to the problem adequate?
From the turmoil of Job Oasis rose Job Nero. The company initiated this follow-up job to recapture the devotion of customers who were disenchanted by the changes as a result of Oasis. The task reached out to customers and set the issues with the info systems to boost response times and streamline operations (Laudon, 2010).
The company began by adding over 150 new customer associates to take care of the increased volume of calls, reducing hold out times and increasing customer satisfaction. Executives traveled the country to improve relationships with angered customers and associates. The company presented a master set of product releases readily available and standardized its communication methods between departments regarding new tasks and change management (Laudon, 2010).
Symantec used Online Promoter methodology to assess and increase customer devotion. The results determined specific criticisms and customer problems and considerably aided Symantec in correcting those problems. Task Nero helped the business weather the most detrimental of the crisis. However, the business does not release the results of its Online Promoter research to the general public so the extent to which it offers fixed its reputation is unclear ("Achieving Operational Excellence", 2009).
So I believe that Symantec definitely took many critical steps to save lots of its reputation and loyal customers around the globe, also I assume that the most significant steps beside introducing the programs in the above list are that "Symantec's executives traveled the united states in order to fulfill and improve relationships with angered customers and lovers, and that CEO Thompson regularly calls to check up on the grade of customer service ". (Laudon, 2010)
Solutions MIGHT HAVE Prevented Symantec Implementation Problems
Even the most careful planning and well-designed systems can easily go awry if customers cannot utilize the new system. Enterprise applications involve intricate pieces of software that are very expensive to get and implement. The full total execution cost of a huge system, including software, repository tools, consulting fees, workers costs, training, and perhaps hardware costs, might amount to four to five times the original purchase price for the software ("Achieving Operational Excellence", 2009).
Enterprise applications require not only deep-seated technical changes but also fundamental changes in the manner a small business operates. Business processes must be evolved to work with the program. Employees must recognize new job functions and responsibilities. Most implementation assignments fail or experience tremendous problems because professionals, professionals, and employees did not know how much organizational change was required ("Achieving Operational Excellence", 2009).
Specific Symantec issues that perhaps might have been avoided:
Communicate with employees better to counteract the negative attitude towards the job.
Communicate with customers and distributors better about the forthcoming changes.
Make sure all the systems which were changing were coordinated throughout the organization.
Not change as much systems all at exactly the same time. Even though stretching out the implementation out over a longer period may have cost more income, perhaps it could have prevented a few of the massive problems overall.
In my point of view, the most significant factor in Symantec's ERP turmoil was the lack of a thorough communication with employees and customers who are the main users of the new system which I believe that was a fatal error from the management aspect. Also other important factors were the lack of coordination among the different programs throughout the business and the change in many systems all at the same time. So I think if Symantec management paid enough attention to the facts and averted the factors listed above, they were heading to have a successful ERP implantation in conditions of cost, time, and customers' retention.
What about If You're the client?
Historical Relationship
"Measuring customer commitment is no transferring nice at Symantec. The executive control committee-which is chaired by Salem and includes division and team vice presidents, as well as CIO Thompson and Parrish-meets every fourteen days to review loyalty metrics and identify what each device manager is doing to improve their scores and efficiency. " (Walsh, 2008)
"Technology will be the engine that drives business, but business continues to be conducted by people. Understanding the needs, wishes and experience of the customer-whether see your face is an interior consumer, a reseller partner or a consumer-is critical to any company's success and progress. " (Walsh, 2008)
So predicated on a strong historical relationship, many of Symantec customers and lovers believe that Symantec always strived to attain a high level in customer devotion. This strong relationship between Symantec and its partners was the most critical factor that assisted Symantec to achieve retaining most of its customers and return back on track despite the turmoil and troubles confronted by many customers during Symantec's ERP task.
Switching Costs
Another critical factor that most customers usually consider is that IT applications expose switching costs which make it very costly to change distributors. Companies become dependent on owner to upgrade its product and maintain the installation. A lot of Symantec's companions and smaller vendors were reliant on Symantec as well as perhaps could not manage to switch vendors. That would signify they would have to switch all of their inner systems at great cost. ("Achieving Operational Excellence", 2009).
In my perspective, I will be reluctant to change vendors easily was a customer because based on historical interactions I believe Symantec is an outstanding corporation and always srtives to gratify customers and customer satidfaction at Symantec is the first goal for attaining success. Also I might consider another factor, if the issues seem temporary, I will hang on, if the problems seem to be insurmountable, I will desert the sinking ship.
Conclusion
"ERP systems will be the anxious system of any company, so doing an ERP execution is similar to brain surgery: and then be attempted if there is a really justification and not to soon be repeated. ERP execution projects often show up victim to some of the same problems of any large, intricate project. However, there are a few repeatable problems that good planning early in a task can work to avoid and that's just what Symantec lacked in its ERP execution. " (Eaves, 2009)
Even the most careful planning and well-designed systems can quickly be fallible if customers are unable to make use of the new system. Organization applications involve complicated pieces of software that are very expensive to acquire and implement. The total execution cost of a big system, including software, repository tools, talking to fees, employees costs, training, and perhaps hardware costs, might total four to five times the initial price for the software ("Achieving Operational Excellence", 2009).
If Symantec performed better in interacting with employees, customers, and distributers about the approaching changes, ensured all of the systems which were changing were coordinated throughout the organization, and did not change as many systems all at exactly the same time, it could averted the turmoil and issues it faced through the execution of its ERP job.
"Eliminating dilemma and improving the merchandise purchasing process wasn't enough. Symantec came to the realization that it needed to recapture the hearts and thoughts of its customers and partners. Task Nero, the follow-up to Oasis, proven several strategic aims to improve everything from Symantec's change-management steps to continuously measuring customer loyalty. " (Walsh, 2008)
Customers tend to be reluctant to switch vendors predicated on historical relationships. If the problems seem temporary, the clients will hang on. If the problems appear insurmountable, some customers will desert the sinking dispatch.
Companies who choose a total overhaul in their IT systems and begin an ERP implementation should study from the successes and failures of others and try to avoid known mistakes created by the other organizations through the ERP execution practice. A couple of time-proven solutions that can enhance the success of the ERP implementation and each company shoul d take a look at each one of these approaches and study them carefully to increase its success level.
