1. ERP project are expensive and risky.

Why did Keda embark on

a ERP implementation project?

Business Challenges:

 Disconnected business units often duplicated identical processing

tasks resulting in the redundancy and heightened costs

 Very little information flowed between departments affecting the

efficiency of the managers

 Logical and strategic decision making was replaced by decision by

hunch indicating the inability of KEDA to manage global competition

 Conflict of interest among departments while designing and

implementing the ERP

 Ensuring the participation of departmental managers by designing an

incentive and penalty system for the employees

Operational Challenges:

 Messy material management, unclear cost structure and margins

clearly reflect how irregular KEDA was in operations

 Inventory management was very poor owing to low volumes and

high customization in diverse product line

 Production lines were under-utilized (around 24.6%) as compared to

90% for Japanese competitors. Hence, low efficiency before ERP
implementation

 Suspension of production and delays soon after cutover during ERP

implementation

 Some redundant activities were made compulsory to comply with the

ERP system

2. What are the major process of implementing an off-the-shelf ERP system?

3. Leadership plays a pivotal role in the success of ERP project. Which

“leadership best practices” did the Keda managers engage in?
 Following “leadership best practices” were observed in successful SAP
implementation in Keda:

 Strategic Planning: Goal was set and a five year computerisation plan was
prepared. All activities were aligned to the long-term goal instead of doing
projects on short term needs.

 Involvement of top management: Chairman of the board himself was present

in five review meetings, blueprint design briefing and the project lunch
ceremony. It reflects involvement of leaders by action and not only by words.

 Team Formation: For successful implementation of the project a diversified

team comprised Key users, consultants and IT officers was made. Top dogs of
various departments were selected for representation, this not only reflected a
competent team but also shows seriousness of the top management.

 Reward and Recognition: Reward system was designed for project team
members to encourage them to work beyond office hours. On the other hand,
those who were not supportive to the project were punished.

 Assigning accountability to User department: During planning of the module,

user departments were given right to design as per their process, so that
during execution design is not questioned.

 Exploiting organisation culture: Management exploited regional culture of

replacing people who didn’t fall in line with the changes,

4. What are the main challenges faced by Keda in each stage of

its ERP project? What factors contributed to the project success in the face
of these challenges?

 Adjustment and redesign of org structure and processes to accommodate the

ERP system
 Selection of ERP vendor

 Temporary resource for project implementation and motivation of people

 Preparing the data model and data preparation.

 Lacked internal IT expertise and decided to go for external ERP

implementation

 Disagreements between module owners and consultants.

 Phase-wise implementation or big bang implementation. Managing the

operational difficulties during the implementation due to redesign of processes

 Power resistance and imposition of culture

5. Are the particular strategies adopted by Keda project generally applicable

to all ERP implementation?

6. Culture plays an important role in any project implementation. How

were Keda’s cultural characteristics leveraged in bringing about a project
success.