Vodafone: A Giant Global ERP Implementation
Enterprise resource planning (ERP) implementation is one of the critical success factors in global organizations. ERP refers to a business systems management software that enables an organization to utilize integrated applications to effectively manage or coordinate activities related to human resource planning, data management, back office process automation, and technology services. ERP enables an organization to manage data from different business activities and from different divisions of the business. This paper examines the case of Voafone and its implementation of enterprise resource planning in its business operations.
The problem discussed in the case relates to lack of integration of activities among subsidiaries spread in different parts of the world. Vodafone, a multinational company, had subsidiaries in different parts of the world, each functioning as a single entity. The main challenge the company was facing involved integrating these different entities to function as a single unit. Functioning as a single entity would enable the company gain advantages through centralized operations and data sharing. There are inherent drawbacks when a company global company operates with a high level of decentralization like that in Vodafone. The main drawback is that the company is unable to leverage on a common supplier, hence meaning that it cannot be able to receive good quantity discounts.
There are a number of people, organization, and technology factors contributing to the problem. People factors relate to the employees working in the organization. Lack of qualified staff to handle such a complex problem meant that the company had to outsource help from outside which was more expensive. The other people factor contributing to the problem relates to the high number of employees (86,000) who came from different social backgrounds. The organizational factors contributing to the problem is that Vodafone was highly decentralized in its operations. Each subsidiary acted as an independent entity by targeting a particular group of consumers who share a similar culture. The technological factors related to the case involve lack of a common platform that would integrate the operations of all the subsidiaries into single operations, and in the process promoting data sharing across the entire organization.
An ERP system was necessary for Vodafone’s global business transformation. The main reason why an ERP system was necessary is that it could be able to integrate multiple facets of Vodafone’s operations. An ERP system is capable of integrating various aspects of the business such as sales & marketing, development, product planning, and manufacturing into a single user interface, application or database. The ERP software is suitable for larger organizations that are seeking to integrate their various processes into a single unit or operation (Seo, 2013). One of the main goals of ERP is to improve the operational efficiency of a large organization by decreasing costs and streamlining business processes. ERP enables departments or in this case subsidiaries with diverse operations to communicate and share information through a single platform. As such, ERP improves the cooperation or interaction between subsidiaries and departments, benefiting the entire organization.
Another important role that an ERP software could play in the organization relates to standardization of business processes and information to match the best practices in the industry. ERP software is also able to streamline the flow of data between the various business functions by harmonizing the transaction system (Seo, 2013). ERP software is critical in transforming businesses in that it increases the level of interoperability between operations in ways that it is difficult to achieve through deployment of stand-alone systems in subsidiaries and departments. This enables an organization to build centralize operations such as administrative operations, data processing, and others. Another reason why an ERP system was required involves its ability to adapt easily to new demands in the environment. It is easy for an organization using an ERP to upgrade its system to match the demands in the environment.
A number of people, organization, and technology issues had to be addressed by the Vodafone project team to ensure the transformation would be successful. There was need to ensure that those involved in the transformation process had the right skills and knowledge to conduct a smooth transition. Another people issue involved cooperation from members of each local company. The developers assessed the level of cooperation through observing the number representatives from the various companies who attended the project launch. If there were no representatives, this meant the local company was not interested in the project and thus the need to focus attention to such. Another people issue involve the cooperation between IT consultants and local IT vendors. Vodafone project team ensured that they developed cordial relationships with the local IT vendors in order to improve communication and success of the project.
The Vodafone project team had to address some organization issues such as availability of resources, both human and material, in the implementation of the ERP software. Another organizational issue that had to be addressed involves the organizational culture or the “local trends.” It is important for system developers to take into consideration the organizational culture while implementing the system. One of the technology issues to be addressed involves the risk of failure. In order to address this, the project team implemented the ERP system through a series of rollouts, each at a time a followed by thorough testing. In the final part, the project team ensured they utilized what they had learnt to make improvements and modifications to the new system in order to make it better.
In conclusion, the new ERP system will be of great benefit to Vodafone. The new system will increase business efficiency, help in standardization of business operations, improve interoperability, and make it easy to upgrade the system as per the demands of the business environment. The integrated applications enable businesses to incorporate all operations in one database, thus making operations relating to manufacturing, marketing, product planning and development easier to manage.
Seo, G. (2013). Challenges in implementing enterprise resource planning (ERP) system in large organizations: similarities and differences between corporate and university environment. Working Paper CISL, Composite Information Systems Laboratory. Retrieved from: http://ic3.mit.edu/ResearchSamples/2013-07.pdf