ERP failures and manual actions in Signal International

ERP failure story does not arise due to process collapse alone. Even people can account for its failure as seen in this article. Their wrong action will have a double effect on the impact of ERP. ERP failure story makes one to understand that the process cannot be taken for granted and it deserves lot of attention and merit. The companies are not learning the right lessons be it ERP failure story or ERP failure story of 1998. They will be a precedent of what should not be done in the future. This will help the companies to know the right path to be followed in ERP process.

Signal International

This ERP failure story explains how the different reactions and attitudes of personnel in a company could cause undue misery and damages while working on an ERP project. Differences of opinion do exist in a company but they have to be handled carefully in order to ensure that the differences neither reflect on the progress or the performance of the process.

About the company

Signal International is a reputed multinational corporation based in Australia. Their principle offices are located in Sydney Detroit and Zurich. All transactions are primarily routed from here to their branches located all over the world. Apart from that the company has few production plants in countries as far as India and China. In addition they undertake franchising services for a number of international brands and distribute them in the local markets with their expertise. The production plants manufacture and sell goods under the banner of "Signal International". When it comes to franchising of other brands each office acts independently without necessarily associating it with another local office in a different country.

Background of ERP problems

The company decided to implement ERP systems for all its offices. They hired the services of E-Systems for implementing an ERP software program called Global Lease. Their subsidiary company Tuukku was referred for consulting services. The troubles started off right from the Implementation process. The ERP software is specialized in providing services for companies that follows common practices in all its offices. However Signal international did not have such a system. In addition they have acquired few companies who have their own ways and means of working. This contradiction did lot of mishap in the organizational procedures. People in the respective offices did not use ERP properly and resorted to adopt their own style of working thereby making ERP's intervention meaningless and unproductive.

It was then decided to ensure operational efficiency and correct the inherent errors in ERP and acclimatize it to the organization within a period of 4 months. Training programs were arranged by hiring experts from the software major. However the trainers developed software in polish language because they were not used to Chinese or English.

When the installation process began the first process went undisturbed. The phase of installing proved to be trouble free and spic and span. The formatting of data set the next trouble. The data formats used by the company were totally unacceptable to the ERP software. This necessitated conversion to the format preferred by Global lease.

The next problem was with the business process. The personnel from the software company could not deal with the various demands of Signal International in using the software to suit the business process. They were undoubtedly experts in handling software but could not render any assistance as far as new business practices and changes to the existing ones were concerned. Finally the company had to wind up with the idea of ERP in order to avoid anymore losses and damages

How the mistakes could have been averted?

The first mistake lies in the choice of the software. The company could have very well gone for customized software than a readymade one as it had currently chosen. Customized software will be able to handle the variations of a big corporation like Signal International. If this was done in the first place most of the troubles could have been avoided.

Secondly the training programs should have emphasized more in using the software program productively rather than following their own practices. When the first mistake has been committed the only option to avoid a second mistake like what has happened is to introduce a radical and rapid change in the business process to suit with the working of the software. The company has no other choice after having chosen the wrong sector.

Thirdly the deadline given to make good the ERP systems are unrealistic. It is not possible to make .This point applies to the time given to implement ERP in the organization and the time given to do the data conversion process. Such deadlines add up to the confusions and affect the progress of the projects. The first task was required to be completed in 4 months which would otherwise take up a period of 20 months ideally. There was no specific time allotted for the second task which requires about 7-8 months.

The next problem lies with the language data formats and business procedures. Polish software would only add to the miseries if the persons employed in the company have no prior knowledge of Polish language. Instead this could have been avoided if the company hired a language translator well versed in technical and software aspects.

The data formatting could have been changed long back when the company had firmly resolved to go for ERP rather than rushing with it at the fag end of the project. This is followed by the controversy due to the inability of the trainers from the software major to handle doubts on changes in new and existing business practices. This should have been reduced to a considerable extent if the company had held consultations with the software people right from the day of inception. Even though that would not have solved the issue completely major changes could have been expected from both sides to make things better. Everything remains about ERP failure Story in 1998.

Related Articles

How the industry React to ERP?
How customers perceive ERP?
Making the right choice among the different ERP Packages
What are the allied functions of ERP?
What are the benefits of an ERP System?
The commercial modalities of ERP
Knowing the ERP Markets
Analyzing ERP failures in Hershey
Choosing the appropriate ERP Vendor
How the industry React to ERP?
Return on investments for ERP
ERP Accounting Software - Is It For My Business?
Business Analysts

Bookmark this Page Email this to your friend Add this page to del.icio.us