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Enterprise Resource Planning (ERP) Systems: Issues in Implementation

Enterprise Resource Planning (ERP) Systems Issues in Implementation

Mark West and Leigh Sparks

Introduction

Drucker (1962) described the supply chains of businesses as the one area where managerial results of great magnitude could be achieved. Companies have subsequently strived to meet this challenge and to obtain value from their supply chains. The retail sector is often a leader in this process, and there are many examples where retailers in managing specific market sectors, such as Tesco with food, Zara with fashion, have managed to shorten, improve and obtain much value from their supply chains. However, there are many other retailers who, through their own complexity or lack of capability, fail to move forward with the supply chain transformation process. Why can some retailers take such great strides and others continue to have problems in supply chain management? Perhaps it derives from the need to fuse together three elements:

  • an effective operational infrastructure (processes),
  • and a focused and expert workforce (people),
  • linked by creative and innovative business enablers (technology).

Recognizing the need to enhance supply chains is one thing. Implementing appropriate solutions to achieve results is another. This chapter describes and measures the change process undertaken by a retailer when it chose to replace its myriad of computer systems with an end-to-end Enterprise Resource Planning (ERP) system. The retailer in question remains anonymous, in order to focus attention on the issues involved. Some elements have also been adjusted to emphasize issues. Once it has been decided to implement a supply chain solution, what problems and setbacks can be expected and how might they be managed?

The chapter contains four sections. First, we consider ERP and the reasons retailers choose to implement such solutions. Second, we provide the main case study and the situation the retailer found itself in at initial ERP implementation. Third, an analysis of the revised second ERP implementation is presented. Finally some lessons are drawn.


ERP A Background

Enterprise systems have three properties (Mabert, Soni and Venkataramanan, 2001):

  • ERP systems are multifunctional in scope, tracking a range of activities such as financial results, procurement, sales, manufacturing and human resources.
  • They are integrated in nature, meaning that when data are entered into one of the functions, information in all related functions is also changed immediately.
  • They are modular in structure and usable in any combination of modules. A firm can implement all the modules or a subset of them, as well as connect to other support systems, including ‘bolt-ons’.

There are two main reasons that businesses abandoned their ‘legacy’ (data processing) systems in favour of the new ‘enterprise’ approach (Davenport, 1998). First, businesses wish to overcome the fragmentation of information stored throughout a variety of computer systems. Integration is seen as beneficial in this as in other aspects of supply chains. Second, the cost associated with the ongoing maintenance of multiple systems is high, and often represents an enormous drain on a company’s finances (for example, the holding of duplicate data sets in two or more systems, and additional computer hardware to cope with data processing of numerous computer applications). In addition a more pressing imperative for change during the late 1990s (and one that is relevant to this case study) was that of the ‘Year 2000’ compliance threat, where companies replaced their various different systems with one stable ‘Year 2000’ compliant ERP system (James and Wolf, 2000).

The caveat to the enterprise approach is that it requires businesses to recognize that existing processes, and subsequently employees’ roles, may need to be changed to fall in line with the ‘Industry Best Practice’ approach that the total ERP integrated concept promotes. The utilization of ‘Industry Best Practices’ and the exploitation of new technology as an enabler, make up a process of re-engineering or effectively ‘starting over’ by ‘re-creating a company, based upon current technology and what I know today’ (Hammer and Champy, 1994). The imposition of IT only upon existing systems and processes is a limited solution. Existing systems will have been based upon past rules of competition, strategies and competencies, which may no longer apply.

It is clear that an enterprise system imposes its own logic on a company strategy, culture and organization (Davenport, 1998). For example, the very benefits the enterprise system provides, such as universal information access and flatter, more flexible organization structures can paradoxically take control of the organization and move it away from the very thing that it was set up to be: to a command and control culture working through the adherence of standard practices and procedures. Enterprise solutions are organization-challenging. Businesses therefore should not underestimate the effect an ERP implementation can have on the way a business is managed and organized:

Going live with ERP means making the transition from a traditional organization to an integrated one and to a process-based mode of operation.

This transition was of unparalleled extent and complexity for all companies, but was often treated only as a software installation until disruption occurred to business processes after implementation.

An ERP system is a Trojan Horse. It will bring discipline, cross-functionality and change to your corporation whether you are ready for it or not.
(Hammer, quoted in Bassirian, 2000)

The importance of ERP and systems integration to the supply chain processes was highlighted by Holmes (1995), who stated that 66 per cent of the surveyed companies were actively engaged in this process to enable different functional units to work more effectively and efficiently together:

The leading edge companies have taken the individual pieces of the supply chain and made continuous improvement types of thing happen. Now they are approaching the next quantum step, which is, after achieving some success in fixing your transportation, your warehousing and so on, to plug it all together and make it work.

Christopher (1998) argues that the gap between the theory and reality of making this quantum leap is more difficult than it first seems. His views parallel those of Davenport and Hammer above, who have both voiced concerns over the complexity involved with making business transformation happen. This is a continued topic of development for the software houses that provided the initial ERP systems of the 1990s. Bywater (2001) stated that today’s emphasis for technology development is ‘Cross- Business Collaboration’, which promotes open systems and shared data as its mantra. Just as internal company IT integration was the focus for the 1990s, Web-based solutions are the extension to the enterprise estate for the coming years. Essentially the focus is ‘business network redesign’, involving the redesign of existing processes and linkages between different organizations. Redesign implies a step beyond simple transaction and inventory management between organizations, and moves into the realms of process linkage and knowledge leverage in the creation of new added value.

Supply chain management has been positioned as the integration and transformation of supply chain activities. The emphasis in supply chain management has switched from functional activity to interactivity across the supply chain and within organizations. The implementation of systems to allow this to happen is however not necessarily straightforward. As this initial introduction to ERP has suggested, the introduction of such systems has possibly profound repercussions for existing processes and people. Implementation has therefore to be carefully managed, and it has to be recognized by organizations that it can be threatening to current supply chain (and other) processes.


A Retail Case Study

Background

The case study described here is derived from events at an important established retailer. Some aspects have been adapted to raise specific issues, and the case is developed from the interpretation of events by the authors. It is presented so as to draw lessons from the experiences and to raise issues about implementation of enterprise systems. The case does not set out to suggest that this retailer ‘got it right or wrong’ but rather to point to the implications of decisions to change system approaches in retailing and retail supply. If anything the case recognizes (and sympathizes with) the problems retailers are confronted with in implementation of change.

During the mid-1990s, like so many other retailers, this retailer undertook a strategic review of all its information technology systems to judge their potential readiness for operation beyond ‘Year 2000’. With no guarantees for ensuring compliance, the findings of the review suggested the replacement of the current myriad of systems applications with an enterprise solution. In line with the thinking of Walters and Rands (1999), the existing EPOS system was the first to be replaced, while discussions continued with regard to using an enterprise solution to support the finance, merchandise, store operations and distribution functions of the business.

The organizational structure of the business at the time reflected a ‘functional’ or ‘silo’ format, where individual business leaders were encouraged to manage and operate their respective business units or departments as separate businesses. Distribution was one such business. This of course contrasts with the enterprise approach, which encourages businesses to operate centrally by cutting horizontally across these vertical silos and apportioning responsibility on an end-to-end basis.

By replacing a multitude of systems with one consolidated enterprise system, the retailer believed it could consolidate and streamline its current working practices through the adoption of ‘Industry Best Practices’. These would assist it to become more efficient and ultimately more responsive to its customers’ needs (with the right stock, right place, right time). Other commercial benefits targeted were the reduction of costs associated with running multiple system operating platforms, the eradication of manual keying processes for vendor purchase ordering, and the automation of stock replenishment between the retailer’s shops, its warehouses and vendors.

System Selection Process and Project Team Establishment

The approach to the system selection process centred upon a ‘single vendor’ supplier of ERP technology as opposed to a mixture of ‘best of breeds’ applications. This decision reflected the business’s desire to move away from the multiple applications it was currently running and the costs associated with them. A number of software providers were identified, and a team of key senior managers and directors, headed by the Information Technology Systems Director, initiated the selection process.

The selection team concluded that the system chosen met the criteria required by the business. These criteria are recognizable through several key distinguishable concepts (Bancroft, Seip and Sprengel, 1998):

  • One single database for all corporate data, without any redundancy.
  • Software functionality configurable to different customers’ needs.
  • Best practice and standardized business processes.
  • Online system with no batch interfaces.

The approach to the implementation took the form of a project team, jointly led by the retailer and its implementation partner in the form of an Executive Steering Group. Mabert et al (2001) note that a success factor for implementing ERP solutions is a cross-functional implementation team headed by a senior management leader fully dedicated to the ERP project and often colocated to improve communications. The project team was made up of operational experts representing the key business functions of information technology, merchandising, finance, distribution and shop floor operations. The need to actively involve individuals within this project team was paramount.

Business Process Review

The first task for the project team was to document the ‘as is’ business processes of the company. This follows the approach of Hammer and Champy (1994), who state that just as companies have organization charts, they also have process maps that give a picture of how work flows through the company. A process map also creates a vocabulary to help people discuss re-engineering.

The project team was organized into specialized subgroups representing the hierarchical ‘vertical’ management structure of the business rather than the ‘horizontal’ end-to-end business processes. For example the distribution group only focused on documenting the internal processes carried out within the distribution centre (DC) rather than the end-to-end process that would include demand creation (sales team) and vendor fulfilment (no team assigned). This approach seemed to maintain current separateness in the process.

The next step in the project should have been to revisit the ‘as is’ processes with the organizational heads to create ‘to be’ processes. Mabert et al (2001) define the importance of this by reference to a ‘play book’:

Teams should spend more time up front on defining in great detail exactly how the implementation should be carried out. This includes what modules and process options should be implemented and how the senior management priorities would be incorporated in the implementation process. Such a strategy allows the creation of a ‘play book’, which then becomes the implementation ‘bible’.

However, this exercise was not carried out. The Steering Group had instructed the project team to configure the ERP system to the existing business processes. The impact of this decision upon the project was grossly underestimated at the time, with management believing that changing a few system configurations would be better than changing the way the business operated. At this point both the ERP service provider and the consulting partners stressed the interdependency of the ERP system with ‘Industry Best Practices’, but were rebuked by a strong retailer management team that referred back to one of the prime unique selling points, namely that ERP ‘software functionality is configurable to different customers’ needs’. Marion (2000) says to ‘forget about vendor promises of easy customization and flexibility’ and lists ‘fine-tuning ERP packages to exactly match your business’ as hazard number three on his list of 12 hazards to be avoided when implementing an ERP solution (see Table 11.1 for all 12, which will be discussed later in this chapter).

Table 11.1: Marion’s 12 Obstacles to be Overcome when Implementing an ERP System: Initial Implementation
   

Start of initial implementation

Finish of initial implementation

1

Underestimating the importance of change management

Present

Present

2

Picking software before deciding on business process

Present

Present

3

Fine-tuning ERP packages to exactly your business

Present

Present

4

Under-budgeting for training.

Present

Present

5

Embracing a ‘Big Bang’ (whole company) approach.

Absent

Absent

6

Giving short shrift to vendor selection

Present

Absent

7

Keeping legacy systems alive

Present

Present

8

Fragmenting development by department or location

Absent

Present

9

Allowing apathy (or ‘not-my-job disinterest’) at the top

Present

Absent

10

Relying on your new ERP system for conventional management reports

Present

Present

11

Trusting ‘open systems’ promises from the ERP interfaces

Absent

Absent

12

Assuming ERP is a project with a finite timetable.

Present

Present

The reaction of the retailer to the potential of change illustrated the denial stage of the change process identified by Adams, Hayes and Hopson (1976) and described by Davies (1992): ‘people deny the situation and act as if nothing has changed’. This unwillingness to engage change became the mantra of the business. The organizational climate within the project team plummeted into ‘anger’ and ‘depression’ stages (Davies, 1992), as the team realized that the change imperative paradigm had collapsed. This in itself brought the project team into conflict with both the management of the company and the wider business community, as it was recognized nothing in the business would change. It became a case of ‘just getting the system in, warts and all’ as one senior retail executive stated at the time. In essence ERP was being used to update existing business practices, which were based on functional activities designed under very different circumstances.

The Project Implementation

While warnings went unheeded, the retailer did follow advice given concerning roll-out and the merit of ‘phased’ as opposed to ‘big bang’. An aggressive roll-out schedule was undertaken, however. As Marion (2000) states:

The typical ERP approach was to switch the entire company to the new system over a weekend. Doing everything at once looked like a faster approach than a phased roll out by product or geography. That was then, this is now. Today, only masochists take this approach.

Pre Implementation System Training

The training requirement for the business represented almost a thousand individuals, who needed to be trained not only on the pure ERP system functionality but on the new technologies (NT) of Windows and Web browsers. The under-estimation and subsequent under-budgeting of training needs was a continuing theme and determining factor for the implementation (see also Mabert et al, 2001 and Marion, 2000).

The investment in training was significant but still lower than the industry guidelines (10 per cent). The effectiveness of the training can be examined from both a training and a user perspective. The former concluded that the training programme was effective based upon the number, type of courses trained over the period and the cost involved. Interestingly an analysis of feedback sheets from each course suggested that the training courses tended to centre on the operation of NT, rather than drilling down into the bones of the ERP system. In essence the training courses were prescriptive in their nature, focusing on the operation of standard route paths and transaction types. In hindsight it is evident that this approach (while necessary due to the sheer number of employees requiring training), was to cause the organization problems in the post-implementation phase of the project, where employees grappled to understand how the whole ‘enterprise’ fitted together and consequently the importance of their job roles.

Grappling with Post Implementation

During post-implementation it was felt that the new system did not provide the level of management reporting that the legacy system had done in the past, and which was urgently needed to run the business effectively. This is another hazard identified by Marion (2000). The lack of reporting became the focus for the project. The system was increasingly customized to satisfactorily support the perceived business need. This customization of the core ERP code to support users’ reporting and to avoid changing processes, combined with a lack of understanding of how an ‘enterprise’ system works, created apathy and lack of interest among employees as they began to feel failed by the system and the company. Information was hard to access, resulting in shipments of new merchandise being delayed and vendors not being paid on time, all of which bred a culture of blame between warring factions or ‘silos’ such as buying, distribution and finance.

It was a case of each part of the business trying to address its own problems rather than collectively pulling together to solve the root cause of issues rather than the symptoms. For example the fact that merchandise was getting stuck at the distribution centre awaiting processing, because it did not appear on the purchase order, was a symptom. The cause of the problem was vendor/buying disciplines regarding supplying what was ordered. As a result the responsibilities placed upon individuals grew, as did the stress and strain to which they were subjected. The apathy and lack of interest spread from the employees to the top of the company, and the project lost executive sponsorship. Process owners complained that too many decisions had been taken without their involvement. What resulted was a melee of re-work and delays to the aggressive implementation plan.

A Time for Change

The retailer therefore undertook a strategic review of the implementation project. As a result a new steering group was formed. What followed was a voyage of discovery that unearthed the cold fact that as much as 40 per cent of the core ERP system had been customized. This meant that not only was it impossible for the retailer to accept system upgrades from its ERP supplier, but the majority of recorded ‘open’ issues centred upon this customized code. Over the next year occurred a period of uncertainty and change as the retailer battled to understand and then plan to put right the mistakes made during the initial implementation.

Despite this effort and the lessons learnt from benchmarking with other retailers, many of the 12 hazards to implementing an ERP system identified by Marion (2000) were encountered, and remained in effect due to the configuration of the existing system. Table 11.1 compares the beginning of the initial ERP implementation and the point at which it was finally recognized that no further progress could be made with the current version of the ERP system. At the start of initial implementation nine of the 12 hazards were present. Even some time later little had improved, and by the end of the initial implementation the situation, while changed, was not really much further forward.

The Way Forward

After much deliberation a further project was started to implement a newer version of ERP through the adoption of ‘Industry Best Practice’. The project commenced immediately with a set of meetings involving the business user community and aimed at formulating an ‘Operational Business Process Blue-Print’ to overlay against the ERP provider ’s industry standard templates. Subsequently, a further set of meetings was held to revisit, confirm and find solutions to processes that did not match the industry templates. This new adoption and approach is analysed below.

Second Revised Implementation Analysis of Effects

The initial implementation had clearly collapsed. The revised second implementation took notice of the reasons this collapse had occurred, and planned appropriately. The details of this revision can be assessed in a number of ways. Here, they are considered in terms of the effects on supply chain practice, enterprise approach hazards and in terms of organizational culture.

Evidence for the adoption of ‘Supply Chain Best Practices’

From functions to processes: The first evidence of the organization moving towards best practice was demonstrated by discussions surrounding the organization structure of the business. This represents the legal and trading framework under which the retailer trades. The first decision made was to reduce the existing company coding structure. This not only reflected the true nature of the businesses as legal entities but eradicated the need for the manual posting of account journals, as the ERP system performs this task automatically. Immediately, ‘a better way of doing work’ was identified. This provided an immediate message to the business that demonstrated the company’s commitment to the project. The business was being seen to change towards a more process- focused model.

Evidence of the retailer adopting changes to its organization chart were also observed, with new job descriptions being created. This is demonstrated clearly by the retailer’s move away from the existing departmental structure of the organization, which had one buyer assigned to one or multiple departments, to a buyer having overall responsibility for a particular product grouping or category. The scope and size of some of these groupings required the business to embrace a new role of ‘merchandiser’, to support the buyer. This reflects an industry approach that sees the need for generalists with broad-based management skills to assist and support product specialists.

The organization of the new structure and the processes and procedures needed to underpin it were extracted through the series of meetings that involved a cross-section of employees from all the core business disciplines. This demonstrated a dramatic contrast with the approach initially undertaken by the retailer (‘management knows best’).

From profits to performance: The retailer used traditional and conventional fiscal measurements such as profitability and gross margin. Therefore the mention of Key Performance Indicators (KPIs) as a method for judging the efficiency of the business had always been greeted with a certain amount of cynicism. However, what became evident from the second implementation meetings was a genuine interest in both these qualitative and quantitative measurement mechanisms. For example, one question was about the ‘meaning’ of the time and cost involved to process inbound stock from point of receipt at the distribution centre to delivery on the shop floor. While there were many answers to this question in the business, and some subjective comments deriving from negativity amongst the current organizational functions involved in the process, the most common answer centred on ‘what gets measured, gets managed’. It was also agreed that the effectiveness of the manager responsible for the process determined the quality and cost of the service. The introduction of the KPI principle and the interest stimulated from it during the initial meetings proliferated across the organization. By the second set of meetings a prepared audience wanted to embrace the methodology into the new business model.

From products to customers: The KPI debate continually evolved through stages of discussion which led to the importance of having the right product in the right place at the right time. Arguably, this could be construed as the first attempt to recognize the significance of customers to the business and the need to have the right goods on display, and not what happened to have been bought and stored in the warehouse. This point was emphasized by reference to the mountain of redundant and obsolete stock held by the retailer. The ERP provider gave a presentation on ‘Product lifecycle management’ and showed the assembled group how a proposed segmentation of the product base would work. The segmentation of supply chains is recognized by industry experts, who have encouraged vendors to co-manage or even manage and control their stock levels for a retailer’s business.

From inventory to information: The continued focus on inventory turned discussion to the use of information to manage the processes of product lifecycle, agility and leanness (Naylor, Naim and Berry, 1997; Mason- Jones, Naylor and Towill, 2000). Through sharing and using information effectively a fair amount of intermediate inventory could be eliminated. This is a realization that is just seeping through into the retail elements of the business. The benefits of such an approach were supported at one of the meetings by a buyer: ‘Effective use of information and replenishment has enabled me to grow my sales by 15 per cent and reduce my age stock position by 50 per cent over a period of three months.’

This is evidence, albeit limited, that the pre-existing ‘functional silos’ within the retailer, and particularly those of merchants and distribution, were being dismantled. In the process a joint approach to solving problems was being built. The advantages of using systems to forecast, plan and replenish stock over the traditional method of ‘gut feel’ will continue this development.

From transactions to relationships: The extension of this approach to using information up and down the supply chain was discussed in the meetings with a view to collaborating with vendors at a future date. This building of relationships with vendors is something that many retailers are very keen upon, particularly the sharing of information. Supporting interviews with industry benchmarks at this time reported:

A lot of suppliers came to us and said, ‘Very difficult to get hold of your buyers during the season, we don’t know what’s selling out. We come into the store and see you have sold out of a particular item. If only you had told us we could have supplied more or provided an alternative.

Now they know that we have the information but that it requires the buyer or merchandiser to trawl the data and then place an order with the vendor. Hence, you can imagine if the supplier had access to this information themselves, they would be able to do the replenishment or substitutions themselves.

Another retailer commented that it is time to take the sharing of information with vendors to another level:

For the last 10 years, US retailers such as Federated and Nordstrom who are clearly in competition with each other have used the same information sharing system called QRS. The system holds all the details of the vendor’s product catalogue and each retailer has their own access to the data for the purpose of down- loading it to place a purchase order. Product pricing will still be part of the initial buyer negotiations, but to all intents and purposes this is driven by volume discounts and hence the ability for vendors to be open about cost price.

So basically, what I’m suggesting is alliancing for purchasing. It is I believe something that has been developed by the supermarket chains in Europe and not something the high street retailers have yet followed. Hence an opportunity for department stores in the UK, as we all share basically the same vendor base and it is an opportunity to leapfrog forward and jointly reduce our administration costs.

All this being said, what defeats me is why other retailers don’t think they should be doing this and continue with ‘It sounds great; just let me know when it’s working.’

Evidence for the Adoption of an Enterprise Approach

This second implementation is clearly different from the initial implementation. Table 11.2 again uses Marion’s (2000) obstacles or hazards to ERP implementation. In this table the ‘finish’ line is the second implementation and the end of the first implementation is reported as ‘mid-term’. The table highlights the very different degree of avoidance of problems in the revised implementation. While not complete, in the main the implementation has avoided the obvious hazards. In essence an enterprise approach has been introduced.

Table 11.2: Marion’s Twelve Obstacles to be Overcome when Implementing an ERP System: Revised Implementation Start of Initial
 

Start of Initial Implementation

Mid-term (End of Initial Implementation

Finish (Second Revised Implementation

1 Underestimating the importance of change management

Present

Present

Absent

2 Picking software before deciding on business process

Present

Present

Absent

3. Fine tuning ERP packages to exactly your business

Present

Present

Absent

4 Under budgeting for training

Present

Present

Present

5. Embracing a ‘Big Bang’ (whole company) approach

Absent

Absent

Absent

6. Giving short shrift to vendor selection

Present

Absent

Absent

7. Keeping legacy systems alive

Present

Present

Present

8. Fragmenting development by department or location

Absent

Present

Absent

9. Allowing apathy (or ‘not-my-job disinterest’) at the top

Present

Absent

Absent

10. Relying on your new ERP system for conventional management reports

Present

Present

Absent

11. Trusting ‘Open Systems’ promises from the ERP interfaces

Absent

Absent

Absent

12. Assuming ERP is a project with a finite timetable

Present

Present

Absent

Evidence for a Change in the Cultural Paradigm

The physical evidence presented so far for the second implementation has suggested that the retailer is changing. However, there has been a suggestion that the communication surrounding the project was weak. It is this reliance on people buying into change that is now examined. Figures 11.1 and 11.2 summarize the culture when it was recognized that no further progress could be made with the initial implementation of the ERP system (Figure 11.1) and the culture to which the current change programme (second implementation) aspires (Figure 11.2). These figures underpin the discussion below.

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Figure 11.1: Culture at End of Initial Implementation

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Figure 11.2: Culture Aspired to by Retailer

Evidence of Dynamic Pattern Formation

The organization structure of any retailer on ERP implementation is subject to a major transformation, and with it a shift in the power base of the organization as job roles and responsibilities change. The emotions attached to changes of this nature manifested themselves in this retailer, with one executive saying, ‘Turkeys don’t vote for Christmas!’ Change can be extremely threatening.

As a result individuals within the organization aligned themselves with other like-minded folks and three predictable groups formed: those in favour, those against and those unsure. Hence, a political battle ensued. Resisters and change champions continued to win and influence both those who were unsure and each other with their respective views. It is this battleground Streatfield (2001) describes as a ‘Fitness Landscape’. It is important to have a strong person at the helm who will drive through the changes that are needed. It is the behaviour of this individual towards the opposing groups that will show what he or she will and will not tolerate, which in turn influences how change will be managed.

Strong management is needed to stem the flow of individuals regressing back to their comfort zone as the tasks of change become more difficult. It is this that caused the most alarm in the initial implementation. Line managers looked for excuses in case the implementation did not go well. Initially a focus was the lack of training and involvement of the business user community in the design process. Eventually top-line support was withdrawn. However, in the revised implementation these excuses could not be used, due to the process set-up. In essence the winner of the political battle determines the success of this revised implementation.

Evidence of self-organization and emergence: The emergence of three clear groups of opinion suggests that there is no evidence of an overall determinant for change. Instead informal networks developed from the meetings, where the stronger, more confident individuals who took control of these meetings to support or contest the vision grouped together and by so doing formed the ‘Fitness Landscape’. As a result the weaker, less confident individuals were easy prey for the strong, and were influenced and recruited to join each of the particular groups. In many cases it is so much easier to follow than to lead.

It was therefore important for the retailer to ensure that there was no misunderstanding of what the company was or was not proposing. The ‘Change Management Team’ undertook this clarification role, and as well as being responsible for communication maintained a ‘temperature check’ on the readiness of the organization to accept the proposed changes. The strength of company-wide communication improved, with very focused and structured meetings that were able to extract opinion. However, it must be said that this was predominately from the support areas of the business. The change barometer itself showed that the buying and selling departments have been less vocal and appeared to be more apprehensive about the proposed changes.

Evidence of the qualities of interaction or relating: ERP systems were described by Davenport (1998) as ‘imposing their own logic on an organization’s culture’. This was not something this retailer consciously accepted when the decision to purchase a system was made. However, what is evident from the case study is that the retailer and its employees have a clear opinion of what this system will or will not bring to the organization and themselves. It is therefore safe to assume that the traditional organizational culture of the company is under threat. This is evidenced by the quality of the conversations and rhetoric between the two main groups (those for and those against) within the company. As individuals communicate they go over the past, and by doing so they will either create themselves a new future in which they play a part, or dwell in the past and therefore see no future for themselves. Those conversations are what the company is, what it was, and what it is becoming.

The open debates at the meetings and the subsequent emergence of specific groups assisted the retailer to recognize that there is sometimes a subconscious undertone to the organization, which does not always work to the direction set by the company. Now visible, it is naive to think that these differences will all be overcome before the new business model is finally implemented. In many aspects it would not be a good thing if they were, as constructive criticism is positive. However, exposure of the differences was a step forward.

Evidence of anxiety: With the political battle came tension and anxiety across the organization structure as the various factions battled with each other to maintain or change the operating landscape of the company.

Through this process the business benefited from the creativity anxiety and tension bring. For example during the meetings, lively debate prompted by passion and commitment to the subject created imaginative solutions to difficult and often political issues. The level to which this is negative or positive to the individual is dependent on whether the person has control over the situation about which he or she is anxious. Again during the meetings some individuals could be seen to be physically ‘destroyed’ at the end of the sessions if they believed they had lost their battle. However if they felt they had been successful, despite their physical state they showed elation. This clear division was demonstrated further when an offer of drinks at a local hostelry was made by one of the champions for change. The invitation was needless to say only accepted by the change champions.

Evidence of conversation: The restlessness of the organization during this period has continued, with many stories demonstrating rivalry and conflict. For example, the issue of overstocks has been used by the change champions to demonstrate the inadequacies of the current myriad of systems in keeping accurate stock files. Rightly, the resisters counter with the argument that it is people who manage systems and just changing the system will not guarantee accuracy. The expression of opinions has been, and continues to be, critical to the change process being undertaken. Interestingly, as this example shows, there is not a significant difference between the views of the two main groups. It is argued that it is more a case of each wanting the same thing, but in its own way. One individual said, ‘It is not just a case of doing this for the company, but to protect our own future.’

Returning to Figures 11.1 and 11.2, we can again reiterate the progress that has been made. Figure 11.1 summarizes the cultural situation at the end of the initial implementation. The figure suggests that the retailer was subject to considerable cultural resistance and reaction. Figure 11.2 develops the position desired, and the aim of the revised second implementation. The contrast is considerable, but progress towards these ‘ideal’ objectives has been made. Similarly, Figure 11.3 depicts the balance between the three interdependent elements of processes, people and technology. It does this by showing the balance at the time the retailer initially implemented the ERP solution, the ‘ideal’ suggested by Conspectus (Bryant, 2002) and the position at the current stage of the second revised implementation.

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Figure 11.3: Past, Ideal and Present Project Balances

The ‘ideal’ scenario has equidistant dependent elements. This was not achieved in the first implementation. In initial implementation both the ‘People’ and ‘Process’ elements were overshadowed by the ‘Technology’. The project was technology rather than business driven. Conversely, ‘today’s’ example clearly demonstrates a closer comparison to the ideal.

The evidence presented here supports this. It demonstrates the commitment to change, both through the adoption of ‘Industry Best Practices’ and the manner in which the company has encouraged its employees to take part in this process. The retailer is now as far away from the ‘past’ as it was from the ‘ideal’ at the beginning. This is a considerable achievement.






Logistics and Retail Management
Logistics and Retail Management: Emerging Issues and New Challenges in the Retail Supply Chain
ISBN: 0749454075
EAN: 2147483647
Year: 2003
Pages: 119
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