Selection Process Analysis

The selection process analysis can be divided into the following subsections:

5.2.2.4.1 Smooth and Cost Effective

The selection process was completed in timely manner with a very low cost. This can be inferred from the following:

1. The supervisory consultant started before the end of the second month of the GM employment.

2. The selection report was completed within two and a half months from the date of starting the consulting assignment and within four and a half months of the official joining date of the GM.

3. Although there was a small gap between contract signing and the implementation starting date, which was related to an external financial difficulties faced by DiversCo, which had nothing to do with the steps of the selection process by itself.

It can be inferred from the GM‟s attitude towards ERP implementation that he believes dedicated effort should be put towards execution much more than the

selection. Moreover, the expected value from implementation execution focus outweighs the attempts at obtaining perfect functionality comparisons between ERP products.

The supervisory consultant states:

“The major factor that allows completing the selection process in a timely manner is that I was instructed clearly by the GM not to exaggerate the comparison in product functionalities. It gave me more people focus by which I could better identified real obstacles that hinders implementation from succeed and suggest developmental plans to resolve them”

The general manager believes that the comparison between ERP products in terms of the functionalities should not dominate the selection process for two reasons. First, more coordination will be required from key end users, especially when they cannot dedicate enough time to do a comprehensive functionality comparison between the ERP products. Second, people tend to resist change and they are normally afraid to make clear recommendations on certain products, so they will always prefer somebody else to make the ERP decision. The GM offered the following description:

“From my experience, I see management invest a lot in terms of both resources and time in the selection process much more than what they do in the implementation and post implementation. Therefore, I took a position that we need to complete the selection process in a timely manner and save our budget and energy for implementation and post implementation challenges”

5.2.2.4.2 Product Selection Mistakes

ERP was first suggested in DiversCo through the recommendation by management consultants who reviewed and assessed the organisational systems, procedures and organisational structure before the GM took the lead on the ERP journey. The GM developed a strategic plan based on the input received from the management consulting process. The proposed strategic plan stated clearly that DiversCo was a diversified organisation that aims to gradually spin off its business into independent business units responsible for its growth, financing and profitability.

The ERP selection process started under the light of the strategic plan developed by the GM before the supervisory consultant took the lead in nominating and recommending the best ERP vendor who fits the strategic direction of DiversCo.

Figure 5.3 explains the link between forming the corporate strategy and ERP selection.

From the point of forming and finalising that strategy, GM communicated the strategy in a clear manner to internal and external stakeholders which focuses on two simple facts:

1. DiversCo will undergo a transformation plan from one establishment owned by one owner to a multiple limited liability companies managed by a holding company.

2. DiversCo will remain a diversified company.

The execution of the overall strategy can be seen as successful. The VIAGRA project mission was achieved, as five business units were successfully changed to limited liability companies. The COMMUNICATION project initiative also succeeded as the manual memorandum circulations dramatically decreased and e-mail became the predominant communication tool. The transformation process was being done in parallel with the ERP implementation.

Inappropriate Selection for Contracting Needs

The cost incurred in implementing ERP in contracting exceeded its original budget. Contracting managers suffered heavily in order to generate meaningful reports from ERP to facilitate timely decision-making. Only a few years after going-live, through

Figure 5.3 Impact of Strategic Plan (SP) on ERP Selection - DiversCo Case

Management Consulting SP formed ERP Selection Communicate Approve SP

intensive effort from the IS team, were proper financial reports prepared through tools outside ERP.

The legitimate question to be asked is why were such ERP product complexity and limitations not discovered or raised during the demo sessions?

The stake-holders being involved in the selection process were: 1. The general manager.

2. Supervisory consultant.

3. Pre-sales and sales consultant from the ERP vendor side. 4. Contracting accountant.

5. Finance manager. 6. Functional managers.

The contracting accountant pointed out that he noticed at an early stage that contracting requirements were not clearly addressed in the system, but he was not aware of the full consequences or repercussions of this observation. Furthermore, the pre-sales consultant responded to the requirement gaps and shortages with answers like "that will be addressed elsewhere in the systems" or "we can provide solution for this particular case". The construction accountant explained:

"I have noticed that the selected ERP product lacks meeting standard construction requirements but I could not convince my management. Consultants always confirm that the system can meet all requirements until we realised at very late stage of the implementation that it was not true"

The finance manager who used to be the electro-mechanic contracting senior accountant points out that he felt that management was pushing to implement the ERP system regardless of the requirements shortages. The senior accountant stated:

"Although we have been requested to provide our feedback on the product functionalities, pre-sales consultants provides rosy pictures about what they can do to bridge the gap. Furthermore, the supervisory consultant and the general manager stood by their side at least most of the time"

It can be seen that, during the selection process, DiversCo identified itself as a diversified organisation without a priority preference for contracting. Management

underestimated the effect of those limitations for the advantage of implementing a single product from all business units.

After DiversCo shifted its focus to contracting business, however, the effect of requirements shortages from ERP product expanded and the problem was exposed, as it was clearly found that the selected product and its configuration is too complex for contracting. This complexity resulted from the nature of the contracting business, as being solely a project base by nature. This mistake is connected also to the effect of not maintaining consistency between corporate strategy and ERP plans which will be discussed in the strategy section.

5.2.2.5 ERP Vendor & Implementor(s) Issues