...ERP Implementation During late 1996, the management of Hershey gave its approval to a project named Enterprise 21, which aimed at modernizing the hardware and software used by the company. The main goals of Enterprise 21 project were to upgrade and standardize the hardware, shift to client server environment from the existing mainframe based environment, move to TCP/IP network, etc. Hershey chose to replace the systems to solve Y2K problem rather than spending huge amounts on solving the date related problems. The new ERP software was expected to help Hershey reorganize its business processes. For this purpose, Hershey selected SAP AG’s R/3 Enterprise Resource Planning suite, along with companion software from two vendors - Manugistics and Siebel. Software from SAP included modules for finance, purchasing, materials management, warehousing, order processing, and billing. Manugistics would provide software for transport management, production, forecasting and scheduling. The software from Siebel was to support Hershey in managing customer relations and in tracking the effectiveness of the company's marketing through a pricing promotions module. IBM Global Services was chosen to integrate the software provided by the three different vendors. By January 1999, some of the modules like SAP financial, materials management, purchasing, and warehousing had been implemented. However, other modules like the critical order processing and billing systems modules from SAP...
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...in organizations leading to systems integration and eventually Enterprise Resource Planning (ERP). Learn about ERP systems and their evolution, components and architecture. Understand the benefits and drawbacks of implementing ERP systems and how they can help an organization improve its efficiency and worker productivity. Have an overview of the implementation process (e.g., the ERP life cycle, business process reengineering, project management, and change management). Understand the role of staff, vendors, consultants, and the organization in making the ERP implementation process successful. Comprehend the ethical, global and security challenges while implementing an ERP system, as well as get an overview of ERP vendors and industry trends. CHAPTER OUTLINE: I. II. III. IV. V. Opening Case: Hershey’s Enterprise 21 Project Preview a) Enterprise Systems in Organizations b) Information Silos and Systems Integration c) Enterprise Resource Planning (ERP) Systems Enterprise Resource Planning Systems a) What is an ERP? b) Evolution of ERP c) Business Process and ERP d) ERP System Components e) ERP Architecture f) e-Business and ERP g) Benefits and Limitations of ERP ERP Implementation a) Business Process Management b) ERP Life Cycle c) ERP Implementation Strategies d) Software and Vendor Selection e) Operations and Post-Implementation People and Organization a) Project Management b) Role of Consultants c) Change Management ...
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...ERP lmplementation Failure at Hershey FoodsCorporation Case study Reference 908-001-1 no This case written InduPerepu, was by under direction Vivek the of Gupta, lcFAl center Management for Research. intended be used thebasis lt is to as for class discussion rather thanto illustrate either effective ineffective or handlinq of a management situation.The was case compiled published from sources. @2008, ICFAI Center Management for (ICMR). Research Nopartof thispublication be copied, may stored, transmitted, reproduced or distributedanyformor medium in whatsoever without permission the of thecopyright owner. DlrtÍibuted by sch,UK and USA NoÍth AmcÍie RestoÍth. woÍld GE - thecase learninqffiffI;ïi" for ;ïl;:llï;:ï a ecchusa@ecch.com ;ïillll;:Íïiï; € êcch@ecch.com PÍinted in UK and UsA 908-001-1 ERP IMPLEMENTATION FAILURE AT HERSHEY FOODS CORPORATION "The Hersheydebacleis not an indictmentof ERPsper se, but it should caution any company that choosesto implementsuch a broad suite to make sure that systemwill function smoothly beforeenteringa peak salesperiod."l - Chain StoreAge, in 1999. "There is no doubt that 1999was a most dfficult and disappointingyear for Hershey Foods Corporation. llhile the year got off to a slow start due to excessiveretail inventories, we fully of expecteda strongfinish in the secondhalf of the yea.r.Instead, the implementation theJinal phase of the Corporation's enterprise-wide information systemcreatedproblems in the areas...
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...Organizational Change in Modern Corporations – Success Strategies and Failures Alphonso Varnado University of Saint Francis Abstract Drastic change can be hard for any organization. Even the most powerful leader must realize that it takes the cooperation of others to implement drastic change. This paper looks at effective strategies for drastic change in organizational culture and examines case studies where this has worked and where it has failed. Keywords: Organizational Culture, Change Management Organizational Change in Modern Corporations – Success Strategies and Failures What is Change Management anyway? “The management of change and development within a business or similar organization”. In other words, it is the systematic approach to dealing with change, both from the perspective of an organization and on the individual level. General Principles of Organizational Change Management It is the leader’s responsibility to manage change. Employees are only responsible for doing their best. Leaders must provide the necessary tools for employees to execute the change they desire. Change should not be enforced on the people (Kotter, 2008). Whenever people are forced to do things without engagement, there will be problems? Workshops can ease this burden and develop a collective understanding to the new polices approach, and its effect on their lives and work. Surveys are another way to minimize distrust amongst staff. The employee’s direct supervisors must facilitate...
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...Memo To: George Davis CIO From: IS Consultant Date: 11 December 2012 Subject: Hershey’s Enterprise 21 System Hershey Foods is one of the oldest chocolate manufacturers in the United States. Hershey was founded in 1894 by Milton S. Hershey. The company sells approximately 3,300 candy products including variations in size and shapes. The company has annual sales of $6 billion and is the largest producer of chocolate in North America. The candy business is seasonal and Christmas and Halloween account for 40% of annual sales. The company and brand are institutions of Americana and their wide variety of products are sold all over the world. The Hershey Company employs approximately 14,000 employees worldwide and relies on a multitude of suppliers and distributors to deliver their products. The business of selling chocolates and various confectionaries is a high volume-low profit margin undertaking with important seasonal deadlines. The company operates over a dozen manufacturing plants located domestically and internationally. Hershey had been trailing the industry standards with their information technology system. They needed to upgrade their technological resources to provide a more reliable and competitive advantage. According to Rick Benz Hershey vice-president of information systems, in 1996, Hershey initiated a plan to modernize its hardware and software to upgrade its service capabilities. The project dubbed Enterprise 21, was designed and initiated to be implemented...
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...systems. Businesses soon found that using these systems, they could streamline the management of many of these functions. Further, because these systems collected and managed a plethora of data, tools were also developed to aid in other things like forecasting orders. While these systems had the potential to save money, they also become notoriously known for being incredibly difficult to implement. Through research an analysis, I have determined that implementation of an enterprise system will benefit Wint. Transaction Processing Systems Transaction processing systems process data related to functions such as order processing, purchasing and accounting business functions. It also can be used to query data to display a variety of information such as the status of inventory and account balances. This system is especially important when dealing with large and complex orders. Because this data influences the direction of a business, reports that are error-free and quickly accessible are essential. (123Helpme.com, 2015) Implementation The strongest and most tangible benefit of implementing an enterprise system is an increase in revenue by reducing the total cost of ownership. Using a system wide solution also allows a company to use a single application, as opposed to the utilization of many different databases which often strain resources and can often contain duplicate data. (GreenBacon). Additionally, these system can...
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...Review for ERP/Systems Integration & Administration Lec. Dr. Abdullatif Ghallab ghallab@gmail.com أسئلة للمراجعة قبل امتحان نصف الفصل الدراسي الثاني – للعام الجامعي 5102-6102م اسم المقرر: تخطيط موارد المؤسسة/تكامل وإدارة النظم TYPES OF QUESTIONS A. END-OF-CHAPTER QUESTIONS B. ESSAY QUESTIONS C. DISCUSSION QUESTIONS D. CASE QUESTIONS E. TRUE & FALSE QUESTIONS F. MULTIPLE CHOICES QUESTIONS CH1 X X √ CH3 X X √ √ CH4 √ √ √ X X X X X X √ √ √ 1 CH2 X √ X √ √ Review for ERP/Systems Integration & Administration Lec. Dr. Abdullatif Ghallab ghallab@gmail.com CH01- INTRODUCTION TO ENTERPRISE SYSTEMS FOR MANAGEMENT A. DISCUSSION QUESTIONS 1. Refer to the Hershey case. What were the goals and details of the Enterprise 21 project? 1. 2. 3. 4. 5. 2. Establish a single supply chain across all divisions. Streamline all business processes by reengineering them across all functional areas. Increase the gross margin and maintain sales growth. Save $75 – 80 million through corporate restructuring and closing of older distribution sites. Fix their Y2K problem and replace existing mainframe environment. Refer to the Hershey case. What were some of the key problems that Hershey encountered when choosing, integrating and implementing their new ERP system? The implementation of the ERP for Hershey was beset with difficulties due to a number of failures: a. Project management issues...
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...Ans 1: Canada has the world's highest per capita membership in the credit union movement, with over 10 million members, or about one-third of the Canadian population. They should definitely improve their current banking systems which can prove to be a powerful competitive weapon that can be used to capture market share, improve customer service, reduce operating costs, and create new products and services. Management perspective: It is highly unproductive for managers to be spending time collecting, processing, or even locating data and information necessary for decision making. Instead, managers should be spending their time applying information and bringing to bear their knowledge and experience in solving problems. This is possible only if information is readily accessible as and when necessary and in a format that is readily applicable to the problem at hand so that managers can use the information to enhance the quality of decisions that they make. Organizational perspective (Employee, Customer/Client): Better Management Information Systems will ensure more efficiency. Thus, Employees as well as Customers will be elated by them. Upgraded Management Information System will lead to improved processes resulting in lesser errors, easy processing and time saving. Further, customers can be elated by improved CRM system. CRM system can be used to track and organize the current and prospective customers. Information about customers and customer interactions can be entered, stored...
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... Table of Contents I. Hershey Food Corporation o Background 3 o Implementing ERP 3 o Expected benefits 3-4 o What went wrong? 4 II. Denver Airport Baggage System o Background 4-5 o Expected benefits 5 o What went wrong? 5 III. United Kingdom Passport Agency o Background 6 o What went wrong? 6 IV. FBI’s Trilogy Terminated o Background 7 o What went wrong? 7-8 V. Reference 10 Hershey Food Corporation Background Milton Hershey founded Hershey Food Corporation in 1894. Hershey was famous for a lot of innovations and was credited for several chocolate variants like chocolate syrup, chocolate chips, Krackle Bar, ice cream toppings, hot fudge and a lot more. By 1895, Hershey Corporation was manufacturing more than 114 different varieties of chocolates. Their most popular products are Hershey’s kisses, Kit Kat, Reese’s Peanut butter cups and more. Their sales went up from US$334 million in 1969 to $4.94 billion in 2006. Most of their sales that was 40% of their profit came from sales on Valentines Day, Easter, Halloween, “back-to-school,” and Christmas. Implementing ERP ERP stands for Enterprise Resource Planning. It is a business management system that integrates all aspects of the business, including planning, manufacturing, sales, and marketing. Hershey wanted to implement this system...
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...Hershey Foods Inc By David F. Carr | Posted 2002-12-16 Was it a fluke? In September, Hershey Foods said it had completed an upgrade to mySAP.com—on schedule and below budget. It was a significant turnaround for a company that had become an example of how not to do a major software project. In 1999, Hershey stumbled while rushing to complete an enterprise systems overhaul, with a new SAP implementation at its core. Basic order management and fulfillment processes broke down, causing the company to fail to meet many retailers' orders. The immediate impact was about $150 million in lost sales for the year. The damage to sales and retailer confidence lingered into early 2000. Hershey is still reluctant to discuss what happened and what caused it; the company declined repeated requests for interviews from Baseline over the past year, and asked SAP and Accenture (which helped with the mySAP implementation) not to talk, either. But we gathered insight from insiders and former employees, and from some public statements Hershey has made about its supply-chain improvements. Here's a look at three things that went wrong at Hershey—and the subsequent lessons learned. #1: The Big Bang"> What Went Wrong #1: The Big Bang The overriding problem appears clear: Hershey was simply trying to do too much at once. In cosmology, the Big Bang theory tells us the universe sprang into being in an instant, wiping out everything that went before. In Hershey's case, it was the old logistics systems that...
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...covering it up. Both suits were later settled for undisclosed terms. Confirm died and AMR took a $109 million write-off. Snap-On Inc. PROJECT: Conversion to a new order-entry system from The Baan Co. WHAT HAPPENED? Despite three years of design and implementation, a new order-entry system installed in December 1997 costs the tools company $50 million in lost sales for the first half of 1998. Orders are delayed, inventory is miscounted. Snap-On’s operating costs soar 40%, mainly to cover costs of extra freight and temporary workers. Franchisees, frustrated because they can’t operate the new software, turn to Snap-On competitors. Company profits for the period sink 22% compared to 1997. FoxMeyer Corp. PROJECT: SAP ERP system WHAT HAPPENED? A bungled enterprise resource planning (ERP) installation in 1996 helped drive FoxMeyer into bankruptcy, the drug distributor claims in lawsuits still pending against SAP AG, SAP America Inc. and Andersen Consulting. FoxMeyer seeks a combined $1 billion in damages, but defendants deny doing anything wrong. Trials scheduled for next May. W. W. Grainger Inc. PROJECT: SAP ERP system WHAT HAPPENED? Grainger spent at least $9 million on SAP software and services in 1998 and last year, but the ERP system overcounted warehouse inventory and had routine crashes. During the worst six...
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...understanding of how ERP systems can improve the effectiveness of information systems in organizations. 2. Understand the business benefits of enterprise resource planning (ERP) systems. 3. Understand the history and evolution of ERP. CHAPTER OUTLINE 1. A Foundation for Understanding Enterprise Resource Planning Systems a. The Emergence of Enterprise Resource Planning Systems 1. What is ERP? 2. The Evolution of ERP 3. The Integrated Systems Approach b. Business Benefits of ERP c. ERP Modules d. ERP Design Alternatives e. The Business Case for ERP 1. Cost-Benefit Analysis for ERP 2. Can ERP Provide a Competitive Advantage? f. The Challenge of Implementing an ERP System g. Summary ANSWERS TO END-OF-CHAPTER QUESTIONS Questions for Discussion: 1. Use on-line library databases to identify articles in trade publications which provide case studies of ERP implementations. These articles may provide some insight into each of these questions. a. How widespread is the use of ERP across certain industries? b. What are the benefits reported from implementing ERP? c. What are its limitations? 2. Research and learn about the implementation of ERP. Use trade publications and on-line library databases (e.g. ABI Inform, ProQuest, First Search, Wilson Select Plus, available through your library) to conduct a search for articles. a. Find a success story of ERP implementation. What factors contributed to the success of this implementation? b. Find a story...
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...to Failure ERP Success Stories Conclusion References Introduction What is Enterprise Resource Planning (ERP)? “Enterprise Resource Planning” is a term originally coined in 1990 by The Gartner Group to describe the next generation of MRP II software. The purpose was to integrate all facets of the business enterprise under one suite of software applications. The definition of ERP would be broadened to include almost any type of large integrated software package.[i][1] Webopedia provides a generalized definition of ERP as “a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing.”[ii][2][iii] Some of the more well-known ERP software developers include SAP, Oracle, and PeopleSoft. This paper will look at both successful and unsuccessful ERP implementations and what contributed to their success or failure. Many lessons have been learned by failed ERP projects, as evidenced by the volume of information available. Many of the failures occurred in 1999, in an attempt to manage Y2K issues, which may suggest that the companies had pressing needs which forced the implementation. Apparently, late adopters are benefiting from the mistakes of their predecessors since the most current research describes successful implementations. What constitutes an ERP implementation failure? There are degrees of failure with ERP projects. The most obvious failure is never actually implementing the ERP system. But...
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...the company, making any recommendation for change extremely daunting. Coupled with the fact that most people are change averse, no one wanted to run over the legacy systems Cisco already had in place so they just tried to continue to Band-Aid the issues with system replacements. Managers were not eager to take on this project Although it was clear by 1993 that there was a significant misalignment between the capability of the legacy UNIX-based system and the business demand based on growth, no one within the company had led an effort to replace the old system. One reason was likely due to the lack of direction for such a project, as the CIO had originally instructed each business unit to select their own application and timing of implementation. This type of decentralized decision-making was unfamiliar at Cisco, a company who thrived on standardization and centralization. As such, no one manager of a business unit was eager to be the first to go to the board for approval to invest a large amount of time and money to replace the legacy system with an application for...
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...Topic: The Role of Information Technology in Small Business Success Case Study: SME ERP System Sourcing Strategies. Research Question: Are ERP’s necessary for today’s small business to succeed. Annotated References: Sledgianowski, D., Tafti, H.A. M., & Kierstead, J. (2008). SME ERP system sourcing strategies: a case study: Industrial Management + Data Systems, 108(4) 421. doi: 10.1108/02635570810868317. Using Case studies of Small Medium Enterprises, this paper identifies ERP sourcing strategies that are available to them. In preparation, this case study utilizes several sources of input were made use of, including informal conversations, emails, interviews etc. The practices by SME’s compared to what they should be are also examined and compared. Deb Sledginaowski is a well-known writer in the business sector with 9 articles in the USMAI library catalogue. Mr. Tafti is also a prolific writer in information technology with as much as 7 journals in one research database while Kierstead, Jim does not appear to have previous articles written by him, his ability to team up with seasoned and respected writers Kyvik, O., Legar-Jamio, C., Tarabishy, A. (2009). The use of Information technology and innovation in entrepreneurial small frims. Council for Small Business (ICSB). World Conference Proceedings. This study explores the relationship of the entrepreneur’s ability and the use of information technology. The study also proposes the existence of the digital mindset...
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