Keda's sap implementation case

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Case study: “Keda’s SAP Implementation”

Case Summary

Recently, enterprise resource planning (ERP) systems have experienced a surge in demand; however, many of the implementation projects have resulted in failure. Keda, a large-scale machinery manufacturer based in China, successfully arrayed its ERP solution. The company successfully implemented the SAP project at a time when about 80 percent of ERP projects were failing in China. Before the deployment, the firm significantly erred in material management due to unclear product cost, hence making costing difficult (Fung et al. 6). As a result, Keda could not tell how much loss or profit was made during products sale or parts of the production or products contributing to the same. Despite the ERP project’s success, the Company’s vice general manager, Zhu, wanted to evaluate the project to determine whether it was properly implemented or otherwise as well as discover the unexpected benefits that the company had realized (Fung et al. 9). The Keda’s SAP Implementation case study provides insights into the practices and factors that led to the success of the company in China.

Case Sections

Although ERP is expensive and risky, Keda mainly decided to embark on an ERP implementation project to increase business performance. Disengaged business units frequently duplicated similar processing tasks causing redundancy and higher production costs (Fung et al. 5). Moreover, the initial silos-based model employed in the company only allowed for the minimal flow of information among departments; hence, the ERP project was meant to facilitate holistic, timely, and well-informed business decisions. The major processes of implementing an off-the-shelf ERP system included classifying the primary requirements of the system, selecting an ERP vendor, review procedure, deploying and testing the system, training users, and system rollout. The success of ERP projects relies heavily on effective leadership. In this regard, Keda managers employed in the best leadership practices when implementing SAP. For instance, Zhu ensured all senior executives inclusive of the director involved in holistic decision-making during the negotiation, selection, and presentation process (Fung et al.7). Besides, the top management across several departments was actively involved in amassing the project team and demonstrated tolerance during the production delay caused by ERP rollout. Additionally, leaders punished employees who failed to prioritize on the ERP project.

Keda underwent different major challenges at each phase of implementing its ERP project. First, global functions of ERP received great importance. Second, difficulty managing data, replacing employees and managers management interfered with the company’s implementation process significantly. Hence, department managers were unable to oversee and manage the system design and business process (Fung et al. 9). The project remained successful amidst these challenges as each system module of ERP was allocated an owner in charge of operational and workflow details. The particular strategies adopted by Keda in its ERP project apply to all ERP implementations.

Culture is pivotal to the successful implementation of any project, and so is the case for ERP implementation, especially given that ERP is a concept that traces its origin from the Western cultural setting (Fung et al. 10). Keda’s culture greatly contributed to the success of the project. First, the company perceives all employees as highly-valued assets, a culture that made all the workers highly motivated during the implementation process. Second, the firm threatened to replace all staff who failed to comply with ERP principles forcefully, an act that depicts China’s cultural practice that all workers are expected to align themselves with the organization strategy, which leads to minimal resistance during the process (Fung et al. 10). Third, decentralized decision-making incorporated during vendor selection promoted a type of culture that made employees acquire a sense of ownership. Therefore, employees were motivated and embraced changes brought about by ERP process.

Reflection

After reading this case, I have learnt that information technology (IT) is crucial in increasing business performance and a firm’s competitiveness. It is important for businesses to implement ERP to increase accuracy and efficiency in its operations. Second, I have learnt that organization culture that supports and motivates employees is imperative during change implementation. Employees are not likely to resist change when they feel valued and appreciated.

Work Cited

Fung, T., Y. Fang, H. Wang, and D. Neufeld. "Keda’s SAP implementation." Richard Ivey School of Business, 9B11001, 2011, 1-14.