Bis Case Study

Chapter 8 / effort Business Systems ? 259 REAL WORLD CASE 2 Agilent Technologies and Russ Berrie Ch completelyenges of Implementing ERP Systems Co. (www. russberrie. com) was taking another crack at replacing its legacy line of credit systems. The Oakland, New Jerseybased distributor of toys and gifts ? nalized plans to roll out J. D. Edwards & Co. s OneWorld Xe suite of enterprise resource planning (ERP), customer kin management, and ? nancial applications. The multimillion-dollar project was scheduled to be d cardinal in phases over the succeeding(a) 18 months.Russ Berrie CIO Michael Saunders give tongue to that the telephoner, which had sales of $225 million during the ? rst nine months of 2001, hoped the OneWorld System would attend to it reach $1 billion in annual tax in the coming years. Within the next 12 months, he said, Russ Berrie planned to buzz off installing the applications one department at a time, starting with a stand-alone implementation in purchasing. Were not going stupendous bang, Saunders said. Were mitigating implementation risks by taking a phased-in approach. The company had case to be cautious. Three years before, a Y2K-related migration from its homegrown distribution, ? nancial, and customer dish systems to packaged ERP applications experienced major system failures. Saunders said the problems were severe bountiful for Russ Berrie to take many of the new applications off-line and return to their old systems. Saunders wouldnt identify the softw ar vendors that were involved in the failed implementation, but sources said that weary AGs applications were part of the 1999 project.A spokesman at SAP take? rmed that Russ Berrie was one of its customers, but he declined to offer further details because of pending judicial proceeding between the two companies. Joshua Greenbaum of Enterprise Applications Consulting said it appe atomic number 18d that Russ Berrie bit off more(prenominal) than they could chew on the 1999 project . Companywide rollouts are especially risky for midsize businesses like Russ Berrie, Greenbaum said. T he good news is that Agilent Technologies Inc. (www. agilent. com) says its enterprise resource planning applications are stable.The bad news is they got that way only after a bouldery ERP migration project that cost the company $105 million in revenue and $70 million in pro? ts. In mid-August 2002, the multinational communications and life sciences company, formerly a part of HewlettPackard Co. , said problems with the ERP components in oracles e-Business Suite 11e software product froze production for the equivalent of a week, confidential information to the massive losses. The Oracle system handles about half of the companys worldwide production of test, measurement, and monitoring products and almost all of its ? ancial operations, as advantageously as functions such as order handling and shipping. Agilent was in the form of migrating as many as 2,200 legacy applications t hat it inherited from HP to Oracle. As part of the switchover, approximately 6,000 orders in the internally developed legacy systems had to be converted to an Oracle-friendly format, an Agilent spokeswoman said from company headquarters in Palo Alto, California. She said the con? guration process had problems requiring correction.In a statement last week, Agilent President and CEO Ned Barnholt said the disruptions to the business after implementing the ERP system were more extensive than we expected. An Agilent spokeswoman said the publishing wasnt the quality of the Oracle application, but rather the very knotty nature of the enterprise resource planning implementation. For its part, Oracle Corp. said its working closely with Agilent. At Oracle, we are fully committed to all of our customers for the long haul and support them in any way necessary, the company said in a statement. We have a strong blood with Agilent, and both companies believe the implementation is stable. Agi lent also had a takeaway lesson Enterprise resource planning implementations are a lot more than software packages, the company said in a statement. They are a constitutional transformation of a companys business processes. People, processes, policies, the companys culture are all factors that should be taken into consideration when implementing a major enterprise system. According to one analyst, ERP disasters are often caused by the user company itself.Joshua Greenbaum, an analyst at Enterprise Applications Consulting, said 99 percent of such rollout ? ascoes are caused by managements softness to spec out their own requirements and the implementers inability to implement those specs. Russ Berrie and Co. aft(prenominal) a three-year saga that included a $10. 3 million ? nancial hit from the failed inductive reasoning of packaged applications, teddy bear maker Russ Berrie and Case Study Questions 1. What are the main reasons companies experience failures in implementing ERP sy stems? 2.What are several key things companies should do to avoid ERP systems failures? Explain the reasons for your proposals. 3. Why do you think ERP systems in special(a) are often cited as examples of failures in IT systems development, implementation, or management? arising Adapted from Marc Songini, ERP Effort Sinks Agilent Revenue, Computerworld, August 26, 2002, pp. 1, 12 and Marc Songini, Teddy Bear ecclesiastic Prepares for Second Attempt at ERP Rollout, Computerworld, February 4, 2002, p. 16. Reprinted with permission from Computerworld.