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Implementation of an ERP System for NIBCO, Essay Example

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Essay

NIBCO is not the only company in the business world that has decided to change or upgrade its information systems. Many companies are doing this these days for a variety of different reasons. Either the companies do not like what they see with the current information systems or it is just time for an upgrade to something that will help them better their businesses. NIBCO has its own reasoning for implementing an ERP system, however. With some research, NIBCO found that its current system was holding the company back from economic growth, there was dissatisfaction with the functionality of the system the company had in place, and the IS employees were consistently working harder and longer in order to fix problems that should have never needed fixed in the first place. This is when NIBCO decided to change to an ERP system that would actually work, help them gain economically, and put its IS employees to rest for a little while. Just like any new implementation process, there were advantages and disadvantages to the approach.

Some of the advantages included cost, operational improvements, and reduction in inventory. According to Brown and Vessey (2000), “although consulting costs under the big bang approach were still expected to be high – about one-third of the project budget – they would be lower than the 1,000 days estimated for the three to five year phased approach” (p. 471). Here the company was able to determine what was best financially by looking at 2 plans. There were also going to be “multimillion dollar operational improvements and reductions in inventory costs; the ROI was based on a 6 percent forecast growth rate in NIBCO’s revenues” (Brown and Vessey, 2000, p. 471). These advantages helped the implementation process and the leaders were smart to look at these things before continuing. However, there were disadvantages as well. First, the company they went with, IBM, was not really on board for a big bang approach and this created challenges. They needed to be working with a company that believed in the process. In addition, there were a lot of business risks such as the integration really working, other parts of the company taking the back seat to this project, and a timely and efficient, finished project. These all could hurt the business in their own ways. However, the team worked together and project management was used effectively.

There were three leaders with different specializations for this project which is always a good thing. It is always best to have leaders who can give professional feedback on different aspects of a project. There were also multiple teams that dealt with different problems throughout the planning and implementing phases. This is always good as one person cannot be expected to do everything. NIBCO also took it about itself to bring in people from IBM to join these teams as well. This helped the strategy and the company because they had people working on specific aspects of the project from both sides (the current company and the new system employees). Additionally, they did team building exercises when needed most in order to help the team work together and do what was needed from them. Along with team building, there was an enormous amount of training for the staff in order to help things run more effectively and efficiently when needed the most. Finally, the company rewarded its employees for a job well done with bonus incentives. When employees know that they will be rewarded for their hard work, they are most likely always capable of working harder to meet goals and do things to the best of their abilities.

The best recommendations for a project such as this one would include better budgeting and attempting to lower costs as much as possible, complete understanding and ideal teamwork from the company chosen to work with (IBM, in this case), and most importantly, equipping the staff to not only succeed with this project, but still be able to maintain their professionalism to their other jobs within the company. At the end, the company realized that they went over budget a little bit more than they would have liked. With better budgeting, this wouldn’t have happened. Also, IBM was not extremely for a big bang approach. This could have hurt the company’s plans and goals if IBM hadn’t have latched on like it did. It is always important to hire a company to work with you that knows the importance of the project and the importance of the timing and they must be willing to put all other things aside in order to work with you. Finally, it is extremely important for the company to have its employees still doing their jobs no matter how big the new project is for the company. This eliminates risk factors that could hurt the company in the long run. Just because one project is successful doesn’t mean the rest of the work for the company can go unattended. It’s all about balance.

References

Brown, C. V., DeHayes, D. W., Hoffer, J. A., Martin, E. W., & Perkins, W. C. (2012). Managing information technology.  (7th ed.). Upper Saddle River, NJ: Prentice Hall.

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