CASE STUDY #3 : NEW TECHNOLOGY DISASTER - WHO OR WHAT IS RESPONSIBLE?

Failed information technology implementations have created serious financial problems for a number of corporation. Hershey Food Corporation, for example, issued a major profits warning because of massive distribution problems following the flawed implementation of an Enterprise Resource Planning (ERP) System. This resulted in many stores lacking Hershey products before Halloween and Christmas. Whirpool Corporation had problems due to a problematic ERP implementations. Problem with an ERP implementation at the pharmaceutical distributor FoxMeyer caused the company to announce a $500 million lawsuit against SAP and Andersen Consulting (now Accenture). British organizations, include the BBC and Newcastle University, also experienced major ERP implementation problems.

Adapted from : Gordon, J.R. (2002) Organizational Behavior. A Diagnostic Approach. 7th ed. Pearson. Upper Saddie River, New Jersey.



QUESTION 1

Describe three (3) effects of ERP failure based on the case study above.

i)   Can created serious financial problems toward the corporation
ii)  Many stores are lacking of the product of the corporation due to ERP failure which means that it can disturbed the flows of an organization.
iii)  Lawsuit occurs between vendor and user of ERP


QUESTION 2

Describe four (4) factors that organization should assess in choosing ERP vendor.

i)  Flexible- an ERP system should be flexible and quick in order to respond to the changing needs of an enterprise.

ii)  Modular and open- an ERP system has to have open system architecture, meaning that any module can be interfaced with or detached whenever required without affecting the other modules. The system should support multiple hardware platforms for organizations that have a heterogeneous collection of systems. It must also support third- party add-on components.

iii) Comprehensive- an ERP system should be able to support a variety of organizational functions and must be suitable for a wide range of business organizations.

iv) Beyond the company- an ERP system must not be confined to organizational boundaries but rather support online connectivity to business partners or customers.