Sinceit was established 30 years ago, has been on a mission toset up local companies in over 30 countries so that they can servethe needs of their clients in the respective local markets. Whilethis strategy has enabled the company to grow tremendously over theyears, it brought along a management challenge to the enterprise.Owing to its activities, became decentralized.Decentralization meant that the company lacked standard practices.Each subsidiary company operated on their own with no sharing ofservices among the businesses that were operating under .This together with increased competition made the management of thefirm feel the need to come up with urgent steps that will make itpossible for the company to operate as a single entity so that theycan leverage their position in the face of global competition.
EnterpriseResource Planning (ERP) was a necessary information system solutionto address the organization`s issues because it provided themuch-needed support in information sharing and similar businessoperations. The technological platform was heralded to ease andenhance work processes within the company. The company`s majordepartments of finance, a human resource as well as supply managementwere operating as separate entities for each local company, and therewas a need for services in these departments to be made centralized.The role of the ERP system was mainly to solve the problem ofintegration with SAP.
on realizing that they lacked the technical as well as resources tosee their ambitious plan to successful implementation enlisted theservices of IBM and Accenture, who are well-known experts in the areaof data migration and integration. Seeking expert opinion beforeimplementation of any project is usually an important managementstrategy which can increase the chances of success significantly.Experts work from an experienced angle this can help a company thatis implementing a particular strategy to avoid some pitfalls thatcould otherwise delay the project. The project was successful because did not rush to have it performed within a short period. Thecompany took one year to lay out the plan with an implementationstrategy before committing all resources to the course.
Theroll out was also designed to target one department at a time. Itbegan with the procurement department and since becoming a singleentity serving the needs of all the subsidiary companies across theglobe, has saved resources a great deal. Following thesuccessful integration of the procurement department into the ERP, then moved to create a system of centralized services.Hungary was selected as a pilot center for this step ofimplementation and later implemented the SAP software along with thenew procurement process in Germany which accounts for 20 percent ofits market share.
Theimplementation was planned in such a way that there were no more thantwo rollouts at any given time. The risk was minimized by adopting anincremental implementation approach coupled with testing at differentstages. To ensure that the program does not meet resistance in itssubsidiary companies, should seek first to educate and raiseawareness among its employees in the subsidiary companies about theprogram before rolling it out. Most of the time, people will resist aprogram that is new and unfamiliar to them.
Thenew ERP system has helped overcome a challenge in managementthat was due to the decentralized operations of the varioussubsidiary companies that operate under it. The system has made itpossible for services to be shared through a centralized technicalplatform. The integration of the different departments that wereworking independently has made it possible for to makesignificant savings and eliminate redundancy in its operations. Thecentralized system has also leveraged the position of in theface of global competition.