NIBCO ERP SYSTEM

IT - Enterprise System for Management

IT - Enterprise System for Management

Section A: Case Study

Introduction

In middle sized company like NIBCO, where the importance of manual labour is important the implementation and management of Enterprise Resource Planning is a very crucial task. Prior to the year 1995, the then implemented information exchange system in the company was outmoded and inefficient with respect to the company's increasing market sales. The management team of the company conducted a survey and concluded that a vital step has to be taken to reform the present supply chain information system. This was a necessary step to be taken to ensure efficient integration among all the plants of the company. The most important consideration in the implementation of SAP R/3 was the selection of a reliable implementation partner. There were two names that the selection committee was considering; IBM and Cap Gemini. Cap Gemini was renowned for its best management solution programs, but the team voted for IBM. The main reason for considering IBM as the implementation partner was the company's already association with IBM.

The management team recommended changing the entire ERP system in a single go. In 1996, it was decided that the current system is going to be converted to SAP R/3. The estimated budget proposed for this up gradation was $17 million. The senior management officials supported to follow the Big Bang approach rather than step by step change, in order to cut off the budget. In 1997, 10 plants of the company adopted SAP R/3 following the Big Bang approach. The implementation included all the modules except HR. the decision of selecting SAP as ERP was based on a comparative analysis among the gigantic ERP vendors in the market. Statics reports showed that SAP had the best record in Payback period. SAP R/3 ERP systems became active in December 1997.

Processes That Contributed To Final Outcomes Positively

The first and the foremost thing that made the implementation of SAP R/3 a success was the dedication and devotion of the entire team. The selection of competent and skilled persons was the most important initial step. The filtration process of personnel was very thorough and was carried out with extraordinary care.

The HR module was not included in the implementation at first. After the successful implementation of SAP R/3 through the Big Bang approach, the HR module was soon upgraded to SAP R/3.

The implementation of ERP system through Bing Bang way was a very critical decision to make. The conflict among the company consultants made it more challenging. The decision making committee proposed the implementation of SAP R/3 through Big Bang approach to integrate the Information System. The concern of consultants to adopt the slow approach seemed to be valid in the beginning when the productivity of the company got affected. When the company started getting adjusted to the idea, the implementation and the approach started serving it well. The Y2K problem was a very bothering issue for companies that were using traditional methods of ...