The director of IMIS department took the lead in selecting ERP solution for the organisation. He nominated four ERP vendors that could potentially fit the needs of ElectCo. Starting from Feb 1997, an RFP was developed in-house and was sent to
vendors. Two vendors showed serious interest in contributing. The two vendors were given a chance to demonstrate their packages to ElectCo staff based on a show-me list prepared by end users. After the demonstration, a detailed question list from each department was sent to each vendor. It took ElectCo around one year to decide on the package until a letter of intent was sent to an ERP vendor. It took the company another seven months to develop an ERP contract. Upon signing the contract, ElectCo received a report showing rapid negative financial performance of that selected vendor. The decision was put on hold until the vendor proved better financial improvements.
During this gap, the computer systems manager who handled the ERP project resigned from ElectCo. Most of the IMIS members started to resign and the IMIS performance and attitude went down. The management decided to promote a young programmer analyst to handle the management of ERP and the computer systems department. As soon as he was put in charge, the newly appointed computer systems manager took the lead and invited a third ERP vendor to go through the same process used by the previous two vendors by submitting a proposal, conducting demo sessions and answering end user questions. In three months, ElectCo took the decision of selecting ERP vendor and instructed IMIS to start the process of to select the implementor partner.
5.3.1.1.2 Implementer Selection
The selection process went slowly during the third and the fourth quarters of 1999, as the company was busy with Y2K. Three consulting firms were considered during the implementer evaluation (one local and two from the top six leading consulting firms). The reason behind considering the local implementer was because the expected flexibility and potential support after the implementation was completed. An external consultant from the vendor side was assigned to support the implementation by conducting infrequent visits during the implementation. The appointed implementor agreed on the tough fixed price contractual clauses requested by ElectCo. The company implemented the latest ERP vendor release, which had just been released.
5.3.1.1.3 ElectCo Project Structure
Figure 5.4 explains the ERP project structure. The CEO is the sponsor, the COO is the chairman, the IMIS director is the vice chairman while the applications manager is the project manager. ElectCo PM in coordination with the Implementor PM developed an official document to explain implementation guidelines (Table 5.3). The project structure was designed to adopt ERP as a process oriented application in the existing departmental structure.
Table 5.3 ElectCo Implementation Guidelines No Description
1 ERP is a high priority project that will transform ElectCo from current legacy systems to the state-of-the-art system. ERP is a platform on which we can add more functionality, such as e- business.
2 No compromise for the target date. This tight schedule is full of critical and parallel tasks, which leave no room for anybody to delay his responsibilities.
3 The ERP project may transform the way we do business towards a more process-oriented organization. Thus, full cooperation between departments is a fundamental requirement. 4 Customization is extremely discouraged unless there is a fundamental need for it. (COO
approval is required for any customization). We should be flexible and cooperative to change our procedures rather than to customize.
5 Avoid using multiple systems (reduce the fragmentation) even if we have to do workaround solutions within the ERP framework.
6 60-70% success of the project depends upon the ElectCo. The whole staff is expected to extend their full support and cooperation to make this project successful.
The project manager was a computer systems manager from the IMIS department. Five team leaders were assigned to each main module (Figure 5.4). The main key
Executive Sponsor President & CEO Steering Committee COO. (Chairman) IT Executive (Vice Chairman) ElectCo PM Implementor PM Manufacturing Team Leader ERP Members IMIS Staffs Consultant Sys Admin. IMIS ElectCo Consultant Taskforce Projects Team Leader ERP Members IMIS Staffs Consultant Order Entry Team Leader ERP Members IMIS Staffs Consultant Finance Team Leader ERP Members IMIS Staffs Consultant HR Team Leader ERP Members IMIS Staffs Consultant
had between approximately two to three years of experience and they all held a university degree. Most of the implementation issues came through these channels and they are the coordinators with other areas and fully assigned to specific modules. For example, the material team leader was fully assigned to inventory management, shipping and the prime coordinator for purchasing because both purchasing and material fall under the responsibility of the material director. Each team leader is fully supported by an IT member and consultant. Other ERP members were identified to support each group.
Those three team leaders in those key areas in addition to the related IT members were responsible for most of the critical milestones. Two additional consultants were hired on a need basis (one consultant for manufacturing and distribution and the other for defence requirements). Several replacement decisions of ERP members were made due to internal movements of staff or due to attrition. Main examples were the change of the costing manager and a number of HR employees. In the case of HR, three members assumed the team leader responsibility, one after another.