In previous years, Geneva Pharmaceuticals' information systems were unable to operate effectively with each other. This caused data entry errors, higher costs and 'dirty data'. In an effort to eradicate these problems and improve efficiency of business processes, the company implemented the SAP R/3 Enterprise Resource Planning (ERP) system provided a comprehensive set of integrated, cross-functional business processes. What was particularly important to Geneva was to have an integrated system whereby data entered is instantaneously updated across all business units, subsequently improving operational efficiency and preparing the company for technological innovation. Choosing to introduce this holistic package was an important decision for the company to take which would potentially yield significant benefits both in terms of revenues and market position. Many key decisions had to be made during the three phase project, some of which had a significant impact on the success of the project, as discussed below.
Phase I
Phase I focused on improving the supply side processes, transferring them from a manual system to the automated ERP system. This was necessary because previous processes were both manual and labour intensive, i.e. time consuming and costly. Such change could only be beneficial since overall efficiency would be improved. To ensure success, Whitman-Hart, a consultancy firm with relevant experience, were hired during this phase to assist in the implementation of the new system. Although their assistance was considered crucial, since Geneva had no internal relevant experience with this type of system, these technical specialists had little or no knowledge of the pharmaceutical industry. This led to various design problems forming. So much so, that after 4 months of the 6 month Accelerated SAP implementation cycle, appropriate progress had not been made. It should have been ensured well in advance that the consultants involved had sufficient knowledge of Geneva's business requirements. This lack of planning is a serious error which both we and Geneva can learn from.
Obviously, Geneva had to act quickly to rectify the situation. The decision was taken to appoint Randy Weldon, an experienced project manager, as CIO. The introduction of Weldon and his new project team was a pivotal decision which not only got the project up and running again, but undoubtedly contributed to its overall success. As well as this, Anna Bourgeois, with over 3 years relevant experience, was hired to lead Geneva’s internal IS team. This was another decision which proved to be highly successful within the next project phase. Ensuring that a project has the best individuals working on it is crucial for success. Geneva were lucky that changes in personnel took place early enough to salvage the project.
Overall, Phase I was not conducted in an efficient manner. The initial work in this phase was rushed, and thus did not allow the design team sufficient time to customise the software. There was a lack of communication between parties involved, and a lot of time was wasted. Communication in any line of business is always essential for success, an important point highlighted by the case. On the plus side, Geneva benefited from encountering problems at an early stage, effectively improving its approach in the next two phases. The team analysed problems and dealt with them accordingly, showing us that every problem has a solution.
Phase II
The objective of the second phase was to amend the demand side processes, subsequently improving sales and operations planning. Again, an important change to processes which would improve efficiency and reduce costs, two major benefits of an ERP system. However, this phase did prove to be far more complex than the first, due to Geneva’s advanced sales and service procedures.
Fortunately, this phase was far better structured and managed than the first, with Anna Bourgeois being assigned project manager. Perhaps the issues encountered during stage one were beneficial to the success of the project, since a more effective tactics were employed thereafter. Previous consultants Whitman-Hart were replaced with Arthur Andersen and Oliver White to assist with the final two phases. This change in personnel was a key decision at an important time during the design phase. Expectations for each consultancy firm were made clear from the outset, which allowed more effective collaboration and meant that there was a clear understanding of objectives between all involved.
As mentioned, Phase II was structured more appropriately than phase I, with three clear stages being defined - the first of which being conceptual design. This stage consisted of collaboration by a number of relevant groups, most importantly Geneva employees, who would be the main users of the application. This highlights an effective approach, since those consulted sufficiently aided in the design configuration of the new system. Through an exhaustive process, many problems were identified in current procedures, and several new and useful ideas were generated. These ideas were developed into prototypes which were tested by employees and then further refined by Oliver White, before formal implementation. Using Geneva employees was obviously a good decision, since potential problems were subsequently eradicated, as well as new creative ideas being formed.
In the final stage, labelled ‘change management’, functional managers and ‘super users’ of current company systems helped Oliver White train users of the new system. The training team took the decision to seek help from those within the company as they felt that the users of the new system would benefit from being mentored by a familiar face. The judgement to include employee interaction at every stage in Phase II proved to be one of the key successes of the entire R/3 implementation. It solved cultural issues and helped define employee roles, which the company felt would lead to greater productivity, and uncovered the need for customer education programs, which would ultimately lead to a greater number of sales. Such decisions on the grand scale of things would significantly contribute to improving Geneva's position within the global market place.
Phase III
The purpose of the final phase of the project was to integrate both supply and demand side processes. The key point during this phase concerned the design team discovering that the SOP (Sales and Operation Planning) module supplied by the new package was not intelligent enough to generate the necessary production plan. Although, the future decision made by the project team to combine the R/3 SOP with an APO (Advanced Purchase Optimizer) module, which was not previously available, provided the optimal solution to Geneva’s complex requirements - clearly an excellent decision made by the team.
Conclusion
It is obvious that during the implementation of a major project, set-backs often occur. However, from reviewing the Geneva case, we learn that such problems can be overcome through good management and better planning. Emphasised also is the significance which people have on the outcome of a project. With Geneva, human failures disrupted the project significantly during the initial stages. Although, through the subsequent appointment of more suitably experienced individuals, the importance of having the right project team was highlighted.
This assignment was prepared in collaboration with Robbie Innes.
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