ERP failures and manual actions in Signal International

ERP failure story does not arise due to process collapse alone. Even people can
account for its failure as seen in this article. Their wrong action will have a double
effect on the impact of ERP.

ERP failure story makes one to understand that the process cannot be taken for
granted and it deserves lot of attention and merit. The companies are not learning
the right lessons be it ERP failure story or ERP failure story of 1998. They will be a
precedent of what should not be done in the future. This will help the companies to
know the right path to be followed in ERP process.

Signal International

This ERP failure story explains how the different reactions and attitudes of
personnel in a company could cause undue misery and damages while working on
an ERP project. Differences of opinion do exist in a company but they have to be
handled carefully in order to ensure that the differences neither reflect on the
progress or the performance of the process.

About the company

Signal International is a reputed multinational corporation based in Australia. Their

principle offices are located in Sydney Detroit and Zurich. All transactions are
primarily routed from here to their branches located all over the world. Apart from
that the company has few production plants in countries as far as India and China.
In addition they undertake franchising services for a number of international brands
and distribute them in the local markets with their expertise. The production plants
manufacture and sell goods under the banner of "Signal International". When it
comes to franchising of other brands each office acts independently without
necessarily associating it with another local office in a different country.

Background of ERP problems

The company decided to implement ERP systems for all its offices. They hired the
services of E-Systems for implementing an ERP software program called Global
Lease. Their subsidiary company Tuukku was referred for consulting services. The
troubles started off right from the Implementation process. The ERP software is
specialized in providing services for companies that follows common practices in all
its offices. However Signal international did not have such a system. In addition
they have acquired few companies who have their own ways and means of working.
This contradiction did lot of mishap in the organizational procedures. People in the
respective offices did not use ERP properly and resorted to adopt their own style of
working thereby making ERP's intervention meaningless and unproductive.
It was then decided to ensure operational efficiency and correct the inherent errors
in ERP and acclimatize it to the organization within a period of 4 months. Training
programs were arranged by hiring experts from the software major. However the
trainers developed software in polish language because they were not used to
Chinese or English.

When the installation process began the first process went undisturbed. The phase
of installing proved to be trouble free and spic and span. The formatting of data set
the next trouble. The data formats used by the company were totally unacceptable
to the ERP software. This necessitated conversion to the format preferred by Global
lease.

The next problem was with the business process. The personnel from the software
company could not deal with the various demands of Signal International in using
the software to suit the business process. They were undoubtedly experts in
handling software but could not render any assistance as far as new business
practices and changes to the existing ones were concerned. Finally the company
had to wind up with the idea of ERP in order to avoid anymore losses and damages

How the mistakes could have been averted?

The first mistake lies in the choice of the software. The company could have very
well gone for customized software than a readymade one as it had currently
chosen. Customized software will be able to handle the variations of a big
corporation like Signal International. If this was done in the first place most of the
troubles could have been avoided.

Secondly the training programs should have emphasized more in using the software
program productively rather than following their own practices. When the first
mistake has been committed the only option to avoid a second mistake like what
has happened is to introduce a radical and rapid change in the business process to
suit with the working of the software. The company has no other choice after having
chosen the wrong sector.

Thirdly the deadline given to make good the ERP systems are unrealistic. It is not
possible to make .This point applies to the time given to implement ERP in the
organization and the time given to do the data conversion process. Such deadlines
add up to the confusions and affect the progress of the projects. The first task was
required to be completed in 4 months which would otherwise take up a period of 20
months ideally. There was no specific time allotted for the second task which
requires about 7-8 months.

The next problem lies with the language data formats and business procedures.
Polish software would only add to the miseries if the persons employed in the
company have no prior knowledge of Polish language. Instead this could have been
avoided if the company hired a language translator well versed in technical and
software aspects.

The data formatting could have been changed long back when the company had
firmly resolved to go for ERP rather than rushing with it at the fag end of the
project. This is followed by the controversy due to the inability of the trainers from
the software major to handle doubts on changes in new and existing business
practices. This should have been reduced to a considerable extent if the company
had held consultations with the software people right from the day of inception.
Even though that would not have solved the issue completely major changes could
have been expected from both sides to make things better. Everything remains
about ERP failure Story in 1998.