Assignment- Case study
Word Limit: 3000 words (+/- 10% excluding introduction and references)
Overview
The purpose of this assessment item is to identify causes of ERP implementation failure at Waste Management Company and provide possible solutions which can be used for future implementations.
Background to the Case Study
Be aware that the case outline below is brief. This has been done on purpose to challenge you to research and investigate the case as thoroughly as possible in order to mount and justify your argument. You should find the web useful in this regard. However, you are also required to investigate and use other sources including academic literature.
The Case
A Houston-based Waste Management Company (WMC) signed a purchase agreement for a new revenue management system (ERP) in October 2005 with a well-known ERP vendor SAP AG. In 2006, WMC filed a case against the ERP vendor SAP for a complete failure of a $100 million ERP software implementation. It also alleged that SAP executives participated in a fraudulent sales scheme by describing the Waste and Recycling version of its ERP application as "tested, working solution" and this product would be delivered within 18 months from the purchase date. However, SAP fired back, claiming that Waste Management violated its contractual agreement with SAP by "failing to timely and accurately define its business requirements" and not providing "sufficient, knowledgeable, decision-empowered users and managers" to work on the project.
WMC claimed it suffered significant damages, including more than US$100 million it spent on the project, as well as more than $350 million for benefits it would have gained if the software had worked as intended. In the end, SAP made a one-time cash payment to Waste Management under the confidential settlement's terms.
In general ERP vendors provide basic software that can be modified to suit existing business processes "OR" modify their own business processes to suit the proposed system. Claims made by WMC indicate that they were expecting SAP to deliver already developed product without realising that it was a prototype. As we are not clear about the facts, it can be assumed that SAP was planning to develop a customised solution to meet WMC's needs, but failed to deliver a customised solution within 18 months, due to lack of support and information about current business practices at WMC.Your Task
You have been asked to prepare a report identifying the causes of failure and recommendations to adopt a new ERP system.
You need to thoroughly research, mount and justify proposed solutions for successful implementation of an ERP system. Your report should include discussion and arguments with suitable evidence about the following:
a) Major causes of ERP implementation failure
b) Use of prototype in ERP selection process, benefits and challenges with converting prototype into a working system.
c) Detail the importance of Introducing an ERP that requires changing business processes to match the system functionality, or
d) Customize the software to match the business processes.
In justifying your argument you need to take into consideration the problems experienced by Waste Management Company. Successful arguments can be made both ways.
Your task is simply this: to present a persuasive and argumentative piece of writing in report form. The report should be directed at senior managers with a limited understanding of technology and ERP systems. The report should contain information pertaining to the risks and benefits of your selected option, from which you are expected to draw and justify your own conclusion.