The ability of an organization to manage its functions is dependent on the available information and the type of control used. FoxMeyer has diversified functions which emanate from the fact that it is a juggernaut in the distribution of drugs within the United States. Moreover, the corporation has two main operating units which are the FoxMeyer Corporation and the Ben Franklin retail stores. Other subsidiaries of this company include Ben Franklin Transportation Inc., FoxMeyer realty, and FoxMeyer software, just to mention a few. As such, there is maybe a challenge because of the numerous amounts of data available regarding the daily millions of orders.
Challenges may occur in streamlining the operations, coordination of the operations among others. In essence, it is imperative to use an automated system that can effectively manage all the functions of the organization. This will enable the transfer of information and as such, reduce the redundancy that may be associated with the manual and traditional methods. An ERP system is one of the most effective tools that can be used to manage such functions of the organization. In essence, the use of a proper ERP system is going to save the organization about $400 million annually.
The first stakeholder is the ICT Company. The main role of this organization is to ensure that there is a smooth implementation of the ERP system.Secondly, FoxMeyer, being the company requiring the system, is the second stakeholder. The system is used to streamline the operations of the organization and as such, the requirements of the board of directors, the timeframe required and other types of stipulations will be used as a guiding light to the project. Environmental management and other government agencies act as the regulatory bodies and prevent a breach of the laws that govern the use of the ERP systems. Finally, there needs to be an experienced vendor dealing with the sale of the ERP systems.
PROJECT END STATE AND SCOPE
Required End state
With the implementation of the system, the first criteria for success will be the reduction in the operating costs. The system is likely to reduce the operational cost of the organization by about $ 40 million on an annual basis. Moreover, the system will reduce the customers’ inventory carrying costs. This will enable these customers to meet their customers need at the minimal inventory costs.
The system will enable FoxMeyer to sell the commodities directly to the dispensers. This will reduce the costs incurred in the storage of these commodities and on top of that, reduce the costs incurred in transportation. As a matter of fact, the customers will be able to order the drugs directly by means of phone or mail. A reduction in the time required to place an order and the time for delivery, therefore, results into efficiency in service delivery
In order to ensure that there is proper implementation, the project team needs to analyze the workforce skills. Considering that this is a new system, there may be a shortage of skills, there may be no skills available, or the level of skills available may need improvement. Implementing the system with the current workforce is likely to lead to chaos and redundancy. Moreover, it may lead to processing. In essence, skill analysis ensures that the company has an inventory on the skills available and the skills that need upgrading. It will enable the implementation of a training program in order to ensure that training covers the whole system requirements.
Secondly, there needs to be an impact analysis. Based on the type of ERP systems available, this will provide a benchmark from where we can determine the impacts of the upgrade on the whole organization. Moreover, we need to consider the types of operations that the company is involved in. In essence, an impact analysis is conducted in order to determine the change that is likely to occur after the implementation stage.
Moreover, there needs to be documentation of the business processes that are going to be affected by the system. This will be used for future reference to determine how the whole system has affected the human and technological interaction. In essence, it will determine the change in the output of the system. Nevertheless, this should be accompanied by the job description of the various posts altered.
The communication strategy. Communication strategies used within the project will go a long way in ensuring that there are proper project planning and the preparation of progress reports. These reports will determine the rate of progress of the project and in essence, determine the input required to arrive at the final project goals. Moreover, the communication plan will determine the coordination within the teams, the delegation processes among others.
Program specification. The system that is going to be used has to be compatible with the requirements of the organization. As such, there needs a proper analysis of the systems available.Analysis of these systems enables the project team to establish the system whose usage will lead to maximization of the benefits. Moreover, it will determine the ease of implementation
A change in the skill analysis and requirements may be imperative during the project process. Based on the types of systems available and the variability of skills, testing and validating a system may lead to a change in skill requirements. This may lead to a change in the skill demands. As such, the skill requirements of the labor force will only be determined after the careful selection of the system. This does not present a significant effect on the time allocated for training but may have an effect on the training costs. Nevertheless, both the vendor and the trainers will consider the system specifications during implementation. The trainer will have to understand the system if the training is to be effective.
On the other hand, the change in the system may be as a result of unavailability in the market, a shortage of the capital for purchasing among other factors. Considering that we require a system that is fully compatible with the requirements of the organization, it may be important to consider the likelihood of this ideal system. These shortcomings may lead to a complete change in the project schedule and an increase in the costs to be incurred. The systems supplier, in this case, has to consider the best alternative solution. Identifying the best alternative solution will ensure that there is a contingency plan in case the first system is not available.
- Both the first choice system as well as the second choice ERP system cannot miss from the vendors.
- The current labor force is sufficient for the organizational requirements.
- The systems that are to be purchased complies with all state laws and requirements.
- The ICT Company has a sufficient number of competent ICT experts.
There are a number of economic, financial, technical and regulatory restrictions that need to be considered during the implementation stage some of the limitations are:
- Lack of technical know-how regarding how the system can be successfully implemented.
- The risk of delay in project implementation’
- Unforeseen costs may result in the burgeoning of the budgeted costs. This may result in inventories and cash disbursement. If the money available is not enough, the project may face a significant drawback.
- Unavailability of trainers with proper knowledge in the technology.
- Very long, strict and strenuous law processes regarding the implementation of the system
- To begin with, there is risk associated with the technicality of the system. As such, there is a risk of higher capital requirements and proper testing and analysis. Because the system is new to the market, the implementation should only be done after there are numerous trials to safeguard against failure.
- The risk associated with the size of the organization. Unlike small organizations where system failure is not likely to lead to humongous losses, FoxMeyer will incur tremendous losses if the system fails. As such, implementing the system to only portions of the organization may provide a smokescreen to the capabilities of the system.
- There is a risk of the technical expertise of the team. There is a risk associated with the competence of the team. Proper skill analysis and training should be conducted throughout the whole implementation process.
The project needs to consider the input of both the workers and the management structure. It is important to consider an end to end communication between the workers and the management in order to ensure that there is motivation within the team. Furthermore, this will prevent undermining the rights of these workers. This two-way communication, nevertheless, will need to be effectively developed across all the departments.
|Initial scope statement||3 weeks|
|Project plan development||2 weeks|
|Gathering of the requirements||8 weeks|
|Prioritization of the requirements||3 weeks|
|Specification of the system requirements||8 weeks|
|Evaluation of the ERP systems||12 weeks|
|Shortlisting of the most preferred systems||3 weeks|
|Selecting the best software based on requirements||2 weeks|
|Pre-launching of the ERP in order to check compatibility||16 weeks|
|Finalizing the selection||2 weeks|
|Expert’s invitation to train the employees as per the skill analysis.||12 weeks|
|Checking the system through monitoring||periodic|
|Periodic improvements||Depend on the systems|
The five milestones have been indicated in the schedule above.
THE PROJECT BUDGET
The cost of the project is dependent on the system requirements but the total cost is about $ 65 million.
The project manager:
- Planning of the project activities
- Monitoring the project progress
- Coordinating project activities
- System technical requirements
- Determining system implementation strategies
- Specifying system requirements
- Funding for the project.
- Organizing training programs for the employees.