Case Critique: ERP Implementation Gone Terribly Wrong The Case of Natural Springs

            It is important to analyze that why companies want to adopt an ERP system. These systems are implemented so that companies can achieve some fine and efficient working in their processes. But the real thing is to understand that what kind of system is needed and how it should be implemented to mark the long-term success. The organizations fail to successfully implement ERP system, because they don’t do proper review of their business and relevant requirements of the ERP system. If an organization does not know that what its requirements are to implement an ERP system, then it is less likely that they will get any success. Moreover, every stakeholder should be on the same page so that ERP system is adopted without any issues (Wieder, Booth, Matolcsy, & Ossimitz, 2006). This is what the case with Natural Springs was that first they did not understand their requirements. Moreover, the CEO, CFO and COO were not on the same page, which was extremely important because if top management is not on the same page, and then it has a bad effect overall.

            The CFO of the company suggested that they should adopt an ERP system so that processes can be improved. There were several reasons to say that why Natural Springs needed an ERP system. The first reason was manual records. The company was keeping its factory as well as office records on manual method. And it is a fact that when records are maintained manually, they are more likely to produce delays as well as errors. Secondly, the current communication method between the factory and office was not a swift one. So, they needed an ERP system, which can allow them to efficiently communicate between office and the factory. Moreover, the benefit of the ERP system is that it helps in streamlining the internal controls. The company was looking to get an IPO, and for this purpose they have to deliver financial reports with accuracy, and it can only be achieved through a proper ERP system. So, these were some of the justifications for Natural Springs to implement ERP system for their bottled still water business (Krotov, Boukhonine, & Ives, 2011)

            Keeping the above facts in view, it looks quite good that Natural Springs was on the right track as they were able to identify the needs for an ERP system. Once the company has identified its needs, then it can plan out its requirements to implement the ERP system. The things were on the track and a proper tested Sun Systems was chosen to implement in the office and factory. But still, everything went terribly wrong, and Natural Springs was failed to adopt a comprehensive ERP system for better managed business processes and internal controls. CFO was the one who gave suggestion for the ERP system implementation, so the outcome was worrisome for him. They identified everything quite well, and everything was looking good until ERP was implemented, then what went wrong. One of the reasons was unwillingness of COO to cooperate in the whole process, which failed the whole attempt for the company (Krotov, Boukhonine, & Ives, 2011)

            It is important to understand from the research data that what challenges can be there, when ERP system is being implemented for the first time ever. The first major challenge is the selection process. It means that company needs to identify that where they want to implement ERP system, and what strategy will be followed. Natural Springs looked good in this first phase. Then second challenge for a company is deal with some technical issues. The ERP system needs to be operated by experts so that they can deal with all the technicalities of the system. The third major challenge that a company can face is issues with quality of data. If data record was maintained manually, then it would have lots of errors, which would make it difficult to transfer data to the ERP system. The fourth major issue for a company is to change its business’s overall strategy to align with new ERP system. This is something was lacked by Natural Springs that were not able to change their business dynamics to adjust with the ERP system. The last but not the least challenge in ERP implementation is mind shift. If employees as well as stakeholders are not able to shift their minds to this new change, then things will remain difficult, as it proved in this case that COO could not accept this system by changing his mind (Osintsev, 2016)

            After looking at some of the key facts from market research and reviewing the case of Natural Springs, it can be said that when proper planning is not done to align ERP system with the organization, then things will always remain gloomy. Natural Springs could not understand that what their actual need was and how they can keep all stakeholders involved in implementing the ERP system. But Natural Springs totally failed in doing so, and things went out of control in the end, which resulted in the failure of their ERP system. This case is a lesson for other companies to ensure that everyone involved in the process is ready to shift his mind and play positive part in implementing the new ERP system.

References

Krotov, V., Boukhonine, S., & Ives, B. (2011). ERP Implementation Gone Terribly Wrong: The Case of Natural Springs. Communications of the Association for Information Systems, 28(18), 277-282.

Osintsev, A. (2016). The 5 Biggest Challenges When Implementing ERP for the First Time. Retrieved July 30, 2018, from https://www3.technologyevaluation.com/research/article/the-5-biggest-challenges-when-implementing-erp-for-the-first-time.html

Wieder, B., Booth, P., Matolcsy, Z. P., & Ossimitz, M. L. (2006). The impact of ERP systems on firm and business process performance. Journal of Enterprise Information Management, 1, 13-29.