What is Information and Information System?

Write an essay on “Business Information System”.

Information comes out as a result of selection, analysis and presentation of a data. It can be defined as a structured form of data or knowledge. Information systems are used for supporting people in taking actions in the real work through such provisions of information. The action could be anything from an increase in the workforce efficiency or consolidating the company resources to establish better control. ERP is a system that is used for making planning and management of resources more efficient, productive and profitable. Thus, a large number of companies consider implementation of ERP systems to gain competitive advantage in the market by integrating all their processes through ERP implementation. ERP systems can help organizations in several ways including improvement in operational efficiencies, effective and efficient resource utilization, increasing customer satisfaction, enables more accurate sales forecasting, and so on. However, ERP systems can actually become major failures if the implementation is not managed properly. In the current study the case of a big bottler company has been explored to understand what could be the likely causes of failure if the implementation is not handled properly in an ERP project.

ERP system failures are mostly a result of faulty implementation of the system. There could be several types of failure that can occur such as interaction failure, process failure, or correspondence failure each of which are explained in this section with the examples below.

Interaction failure occurs when users are unable to use a system properly or sufficiently. This type of failure was seen in the case of Whirlpool when it implemented an ERP system. The implementation project involved integration between the supply chain management solution and SAP based involving and shipping modules. SCM module was not ready to go to the stage of go live yet the company launched its implemented solution. Because of this, the employees were unable to make the best use of the system as it was not even ready at the time it went live. Measures of interaction could be through assessment of the user satisfaction or user attitude towards the project outcome. The system may be be used heavily by the users after development but that does not guarantee satisfaction in them. Heavy usage may only be the result of pushing from the top management. In the case of Bottler project, the users were pushed to using the new system but they were not satisfied with the development outcome as they were not very familiar with the system as they were not provided with sufficient training which caused difficulties in adoption.

Benefits and Risks of ERP System Implementation

Process failure is experienced when a project could not be completed in the given time or the given budget. As was the case with the Bottler company project that had the ERP implementation project completed but not on time because of the delays that were caused by a variety of reasons. Process failure can have either of the two outcomes from inability to produce a workable solution and production of a system after spending too much time and budget such that the benefits are negated. At this level, the project can be considered as underperforming. In the case of Bottler project, the company overshot the budget as well as took much more time than was initially planned due to several reasons such as lack of experience in the staff involved in implementation and lack of sufficient level of commitment from the top management. Thus, it indicated the process failure.

Correspondence failure occurs when the objectives of a project could not be met such a the information system is unable to deliver the features required or unable to attain the goals and fulfil the requirements of the project. In the case of Whirlpool, an integration was required to be done between the customer relationship management system of the company and the distribution module that had provisions for handling, filling  and shipping orders. The software that was developed was not able to fulfil the objectives of integrated after it was developed. In the case of a process failure, there can be instances when users are not ready to accept accessing the system that is being developed. In the case of the bottler project of ERP implementation, the employees of the company were not willing to accept the burden of implementation because of which their regular work was also affected and they had to work double shifts. Many employees left the company as a result and thus, it can be said as a correspondence failure

There can be different factors that may contribute to the failure of an ERP project. A triple-S framework is usually used for identifying factors of failure from the understanding of the spheres of influence from the study of the outcome of a project. There can be 10 key issues that can cause influence as is identified in this model. These include process driven issues like business planning, project planning, and project management, context driven issues like corporate culture, corporate management, users, and politics, and content driven issues like information technology, business process, and professional knowledge sources (Yeo, 2002).

Types of ERP System Failure: Interaction, Process, and Correspondence Failure

Some process driven issues that an organization can face causing failure of an ERP project include underestimation of timelines, weak requirement definitions, inadequate risk analysis, incorrect assumptions, and unclear vision. Context driven issues could include lack of user involvement in planning , top down management style of execution, poor internal communication, absence of the project champion, and reactive dealing with problems. Content driven issues could be estimation of complexity or scope, incomplete specifications, inappropriate software choice, deign specification changes, and high degree of customization (Kaur & Aggrawal, 2013).

 The current  project had an ERP implementation failure and from the case, several of these factors could be identified as the communication failure, inappropriate way of team selection, lack of consultant guidance because of unacceptance, and unreasonable demand for work from the employees of the company (Mukherjee, 2008)., 

The project faced a communication channel failure as because of the huge burden caused on the staff with the new ERP implementation project, the communication channels started to break down. The management was not providing enough support to keep things aligned and encourage the staff to cooperate and coordinate with each other for achieving results. Managers who were at higher levels started to resign as they did not believe that they could handle the project with success.

The team selection was not appropriate as the people who were selected in the teams for ERP implementation was only the freshers with MIS as the study background and very little experience of IT implementation projects. The selection could have been appropriate for regular project that was not so complicated as an ERP implementation but on the current project of ERP implementation in the bottler company, the lack of experience resulted into challenges for the staff as they were unable to bring results (Bardach, Real, & Bardach, 2015).

The company did not take guidance from the IT consultant nor did it have a project champion assigned to manage project and provide guidance to the staff for smoother implementation of ERP system.  The recommendations that were given by the consultants were ignored as the company decided to handle the project on its own (HPE, 2017).

The employees were given additional work that was required for the implementation of the ERP system but at the same time they were not relieved of their regular duties and as a result their work load increased. However, they were not provided any relief from the additional work nor were they offered any incentives for the additional efforts they were to put. The expectation from the employees to work both on the new system implementation requirements and the other routine work was not reasonable and feasible. This resulted into decline in the morale of the people and many employees got frustrated and left the company before the project could be completed (Dorsey, 2005).

Factors Contributing to ERP System Failure

The types of failures could also be defined on the basis of how projects are managed and executed. A failure could be technological, managerial, or cultural. Each of these types of failure are explained in the section below.

IN the rapidly developing IT environments, changes are experienced very regularly. In this environment, the managers need to be able to fast adapt to the needs of market and projects to be able to produce results. managerial failures occur when the management is unable to handle the project well. Managerial failure is caused by inability of the management to communicate effectively on a project. They may not be able to delegate the responsibilities effectively and bring performance in the people. In such a situation, the managers of an organization would not be able to achieve desired results (O.Longenecker, J.Neubert, & S.Finka, 2007).

Various causes that can lead to a managerial failure include ineffective communication, poor working relationships, job mismatch with skills, lack of clarity in direction, failure to adapt, breakdown of delegations, lack of personal integrity, lack of cooperation, inability to lead and motivate others, poor planning through reactive approach, failure to monitor progress and performance, failure to remove performance barriers, ego or attitude problems, failure to select right people, lack of proper use of critical resources. Most of these factors were visible in the case of the ERP implementation of the project as explained below:

Ineffective communication skills: Managers working on the project were taking more of reactive approach to implementation issues and were unable to properly communicate the expectations of the management from the people. This caused uncertainty on the project and the people were stressed and many got frustrated that lead to an increase in the employee turnover at the time of the project execution.

Poor working relationships: Managers were unable to build strong relationships with others in the teams nor were they unable to keep the juniors motivated to build strong relationships between them which resulted into conflicts and reduction in the morale of the project team (Pries-Heje & Dittrich, 2009).

Job-Skill mismatch: The project team was not selected on the basis of the experience or skills they had and thus, there was a mismatch between the job responsibilities and the skills that the team of freshers working on the implementation project carried. Because of this, the team was unable to work in its sown and needed close guidance from a senior which was not provided and thus, the project only got dragged with many people leaving in between and others getting frustrated (County of Bedford, 2017).

Triple-S Framework for Identifying Failure Factors

Lack of Clear Direction: As the consultant was not involved, no one had an actual experience of ERP implementation and thus, there was a lack of direction and clarity of what was required to be done on the project. Because of this lack of direction, the teams were confused and had low morale because of inability to work effectively. Most times, they were unable to understand why they were doing something and how that would get results. In the times of issues occurring,  a reactive approach was taken to solve only the visible issue. Lack of direction also affected planning which was not proper and there was overloading of work on the employees of the organization and they were unable to handle the work (Singh & Vikram, 2013).

Failure to break old habits: The company managers had the philosophy of “do it yourself” because of which the company chose own path for implementation and instead of hiring external consultant decided to handle implementation work all on their own. However, this caused difficulties as the company lacked the staff that had right skills and experiences needed for ERP implementation project to be completed effectively.

Unable to develop cooperation: The teams were managing themselves as the company had not allotted any project owner or champion who could guide and keep the teams motivated to work together. Mangers were more pushing and only demanded work completion every day. There was no cooperation developed within teams working on the ERP implementation project. This resulted into poor collective performance of the team which was unable to deliver desired results.

Poor planning: The project was not properly planned because of which the unrealistic timelines were set and the resources did not match with the responsibilities and task requirements of the project. This lead to a loss of productivity and efficiency in the teams causing increase in stress  in the teams resulting into high turnover.

Failure to remove performance roadblocks: Lack of motivation to work on project as well as handle own responsibility could be overcome by provision of temporary help for regular work or through addition of incentives. However, no such steps were taken to release the tension in people and thus, there was a lot of resistance in the people which affected their performance negatively (Verner, Sampson, & Cerpa, 2008).

Failure to select good people: People were not selected based on their skills or experiences but the team had most of freshers who had no experience of working on IS implementation project. They were not selected carefully but only casually based on their availability to get involved on the proejct. Because of the lack of experience of the team, the ceiling of the performance was very low and the people only worked without taking care of productivity or efficiency (Dubrovski, 2005).

Types of Failure Based on How Projects are Managed: Technological, Managerial, and Cultural

Misuse of Critical resources: Human resource is a critical resource to a company. The company used them for managing the new project requirements as well as continue to do their regular jobs without paying any thing extra or extending any additional help. Thus, the resources were severely exploited as they were burdened with the work loads that were unrealistic (Longenecker, Newbert, & Fink, 2010).

Technological failures occur when the organization is unable to produce the desired output because of the use of an inappropriate technology that is incapable of achieving the business or functional objectives of the organization planning the project. Technical failures are mainly caused by four factors that include technical design factors, socio-cultural factors, human factors, and organizational system factors (Manion & Evan, 2015).

Technical design factors: Design is an important factor of consideration as it can affect the process of implementation and can cause barriers to implementation if the designing process is not effectively handled. If the design objectives of the ERP project are not met then the project can be a completed failure. Designing involves designing or adaptation of the company processes to the processes defined in the ERP software so that least customization is needed and more of standard featured could  be retained. However, the Bottler company was unable to adapt its processes to the ERP software and instead made changes in the software to make it adapt to their existing systems and processes (Ibrahim, Ayazi, Nasrmalek, & Nakhat, 2013).

Socio-cultural factors: There can be several social and cultural factors that can affect the implementation of projects. The social context affect the ecosystem of the organization which consists of various types of stakeholders that the company has including developers, vendors, consultants, project teams, and users. The project needs to have consideration for all these actors on the project. With sharing of patterned assumptions that are agreeable to all so that right rules and values can be enforced on the people. If the social context and organization culture factors are taken into consideration while planning and managing projects, it can result into a chaos and eventual failure. In the case of the Bottler company, the culture of the company was not taken into consideration while taking decision to implement ERP project which caused difficulties as the teams were not able to collaborate effectively and there were report failures (Poti, Bhattacharyya, & Kamalanabhan, 2011).

Human factors: Human factors like skills , knowledge, needs, and capacities were not taken into consideration on the Bottler project and without matching the people with responsibilities against their skills, the work was assigned, They were overburdened and given work beyond their reasonable capacities which resulted into the reduction of the morale of the team. Also, they were not provide with additional help or perks for the increase in work which affected their productivity and reduced motivation.  

Managerial Failure: Causes and Examples

Organizational system factors: The organization had a way to perform its operations including projects but the organization needed to match its systems with the ERP by being flexible to adapt to the new processes and functions. However, the company failed to do that and tried adapting the ERP system to their processing needs which cause overloading of work and the project took much more time to take off than was allotted (Zaglago, Apulu, Chapman, & Shah, 2013).

Cultural failure occurs when cultural differences play a major role in causing a project failure. Individuals and managers who work on a big implementation project could be from  different cultural backgrounds and thus, would have different attitudes and behaviours. This can cause conflicts thereby disrupting the communication channels and processes (Bulander & Dietel, 2013). To be able to work well in a multicultural project environment, a project manager is needed to be aware of the cultural differences and also how to manage them through the practice of flexible leadership that caters to the needs of all the people from different cultures. People from different countries can have different cultural values and thus, have to be managed in different ways. Hofstede model can be used for understanding these differences based on the ethnicities of the people working in the organization (Amponsah, 2012).

Solution 1: Consultant Involvement

As ERP project is a large scale work that needs high level of expertise in planning and implementation. IN such a case, an expert like an IS or ERP consultant would be required to guide the team into the process of implementation so that it can be handled with success. However, in the case of the bottle ERP implementation project, the top management decided to rely on their own experience of implementation projects and rely on the internal teams for implementation. They did not take inputs from the consultants and thus, faced many difficulties in executing project. Employment of a consultant for the project would have made it easier for the company as they would get a better understanding of the implementation process and could have taken right decision to bring success to the project. The consultant could have helped in building an effective plan and making most efficient use of the resources (Mukoya, 2009).

Solution 2: Project Champion to Guide and Train

The team could have been made more aligned with designation of a project champion as the head of the project and allotment of the team based on their skills and experiences of managing similar projects in the past. With team selected based on their skills and experiences, the company could have ensured that the staff had the right skills to be able to execute the project effectively. The project head could have helped the team in difficult times when they were confused on how to proceed with the project work. Such a person would act as a leader and would guide the team into implementation to get maximum results.

Conclusions

This report was prepared to understand what causes failure of IS projects such as implementation of ERP systems. A case study of the Bottler company was taken as the base for exploring various types of failures and causes of failure that could be faced in an ERP implementation projects. Based on the analysis of the factors that caused failure of the project, recommendations were made on solutions that could have helped in prevention of the project failure. Different types of failures that were explored in the report included technological failures, cultural failures, managerial failures, interaction failure, process failure, and correspondence failure. The report also identified various factors that could cause failure in an ERP implementation project including process drive, context driven, and content driven factors. Key factors that had caused failure of the ERP project of Bottler in case were identified as failure of communication channels, overburdening of the human resource on work, lack of guidance from the consultant and the project head, and inappropriate team selection. Based on the analysis of these failure factors and their impacts on the project, two solutions were recommended for the organization that could have been used for preventing the ERP project failure. These included involvement of consultant for planning and guidance throughout the project and formation of a team with a project champion as the guide for the project team and selection of people with right skills. From this study, it can be concluded that most times, a project failure can be avoided if the factors of failure and properly considered and taken care of.

References

Amponsah, R. (2012). The Real Project Failure Factors and the Effect of Culture on Project Management in Ghana. Accra, Ghana: Ghana Institute of Management and Public Administration (Gimpa).

Bardach, S. H., Real, K., & Bardach, D. R. (2015). Perspectives of healthcare practitioners: An exploration of interprofessional communication using electronic medical records. Journal of Interprofessional Care , 300-306.

Bulander, R., & Dietel, M. (2013). The consideration of organizational, human and corporate cultural factors in the implementation of business process management projects: Social factors to prevent failure of BPM projects. IEEE Xplore, 1-4.

County of Bedford. (2017). REQUEST FOR PROPOSAL FOR ERP Software and Implementation Services. County of Bedford.

Dorsey, P. (2005). Top 10 Reasons Why Systems Projects Fail. Dulcian, Inc. .

Dubrovski, D. (2005). Management Mistakes as Causes of Corporate Crises: Countries in Transition. Managing Global Transitions, 333-354.

HPE. (2017). Managing Complex Projects. HP ENterprise.

Ibrahim, R., Ayazi, E., Nasrmalek, S., & Nakhat, S. (2013). An Investigation of Critical Failure Factors In Information Technology Projects. IOSR Journal of Business and Management (IOSR-JBM), 87-92.

Kaur, B. P., & Aggrawal, H. (2013). CRITICAL FAILURE FACTORS IN INFORMATION SYTSEM : AN EXPLORATORY REVIEW. Journal of Global Research in Computer Science, 76-82.

Longenecker, C., Newbert, M., & Fink, L. (2010). Manegerial Failure in Rapidly Changing Organizations. Wileys.

Manion, M., & Evan, W. M. (2015). causes of technological failure. International Journal of Risk Assessment and Management, 1-4.

Mukherjee, I. (2008). Understanding Information System Failures from the Complexity Perspective . Journal of Social Sciences , 308-319.

Mukoya, E. A. (2009). Information system failure causes – An investigation in Kenyan Organizations. University of Nairobi.

O.Longenecker, C., J.Neubert, M., & S.Finka, L. (2007). Causes and consequences of managerial failure in rapidly changing organizations. Business Horizons, 145-155.

Poti, S., Bhattacharyya, S., & Kamalanabhan, T. (2011). Social and Cultural Challenges in ERP Implementation:A Comparative Study Across Countries and Cultures. International Journal of Information Systems and Social Change, 44-67.

Pries-Heje, L., & Dittrich, Y. (2009). ERP implementation as design: Looking at participatory design for means to facilitate knowledge integration. Scandinavian Journal of Information Systems, 27-58.

Singh, U., & Vikram, N. (2013). A Study of the Factors Affecting Design and Choice of ERP Systems in Indian Organizations. International Journal of Scientific & Engineering Research, 2580.

Verner, J. M., Sampson, J., & Cerpa, N. (2008). What factors lead to software project failure? Conference: Research Challenges in Information Science. RCIS .

Yeo, K. (2002). Critical failure factors in information system projects. International Journal of Project Management, 241-246.

Zaglago, L., Apulu, I., Chapman, C., & Shah, H. (2013). The Impact of Culture in Enterprise Resource Planning System Implementation. Proceedings of the World Congress on Engineering (pp. 3-6). WCE