Evaluation of Project Scope
Discuss about the Project Management for Hershey ERP Implementation.
ERP implementation by Hershey was a huge project that was implemented in year 1996-1999. The project was considerably complex as the entire project was to be implemented in 30months instead of 48 months. The project failed incurring a huge loss to the company. The major reason being the impropriate project management and lack of involving the accurate project management tools in implementation of the project. A successful implementation of a project involves organizing and supervising all the major steps involved in a project, especially the testing phase. A series of project management incompetency has led to the failure of the project leading to a loss of orders worth $100 million. According to Curko, Stepanic and Varga (2012), the project management team is responsible for planning and supervising a project till its successful completion. Proper planning holds a very important place in project management life cycle. Improper scope evaluation further leads to failure of the projects, similar to the ERP implementation failure of Hershey. ERP or Enterprise resource planning system integrates all the vital operations of an organization. Hershey wanted to implement the ERP system in order to integrate their business process and supply chain. The order processing was supposed to be automatic with the integration of ERP (Leon 2014). However, an improper planning and execution of the project in a constricted time led to the failure of the same. The report discusses the different project management issues associated with the ERP implementation by Hershey. According to Ram and Corkindale (2014), project manager is an integral part of any project and successful implementation of the same largely depends on the project manager. The report identifies the role of the project manager in the ERP implementation project and identifies a potential challenge to the successful completion of the project.
The main aim of this project was to implement enterprise resource planning system, as efficient IT systems were necessary in supporting their logistics and the supply chain. The company aimed at reorganizing their business processes in with the enterprise resource planning system. The company aimed at shifting to the new system by April 1999. The new system was supposed to manage the business of the busiest period, the Halloween and the Christmas. Enterprise resource planning system helps an organization in gaining a competitive advantage by saving organizational resources and responding to the changing business environment. The objectives of the ERP implementation project are as follows (Sankar 2012, p. 114)-
- To integrate all the business process running within Hershey with the help of enterprise resource planning system.
- To shift to the new system before the peak business season so that the busiest business season can be handled by the new the system.
- To use a big bang approach in order to complete the project in a scheduled time.
- To complete the project in a constricted schedule so that the new system can be launched in July 1999.
Amended Scope
The scope of the project was to integrate all the business operation of Hershey in a single platform by building a customized enterprise resource planning system for the company. The main objective of identifying the scope of Hershey project was to implement an integrated system that will manage the supply chain. The Enterprise resource planning system project was an upgrade to the patchwork of the legacy IT system associated with the organization (Kerzner and Kerzner 2017).
Project Constraints and Assumptions
The major constraints associated with ERP implementation project are as follows-
- The project needed completion in a constricted time period of 30 months
- Big Bang approach was the only option to implement the project in a much lesser time.
Furthermore, it was assumed that the project is possible to be completed within 30 months and the new system would be able to handle all the business workflows in the busiest time of year.
The scope identified for the project was not appropriately fit from the management perspective. This is because the project schedule was unrealistic and infeasible as well. According to Ghosh (2012), an improper scope evaluation resulted in failure of the project as the project skipped a number of phases of project lifecycle including the testing phase. The big bang approach for this project included simultaneous implementation of the different modules of the enterprise resource planning system that is to be implemented in Hershey. Therefore, it is essential to make some changes in the scope of the project in order to ensure that the project is successfully implemented if it is repeated.
The Project associated with ERP implementation in Hershey failed due to a number of reasons, one of the major reasons being improper scope evaluation of the project and less time for completion of a project. If the project is to be repeated, it is essential to dedicate a feasible completion time for the project. One of the wrong decisions taken by the authorities of this project was to release the enterprise resource planning software in the busiest time period of the business. If the project is to be repeated, it is essential to allocate a considerable amount of time for testing the software (Dwivedi et al. 2015, p. 150). Furthermore, it is not appropriate to use a Big Bang approach in project implementation.
The ERP system to be implemented is capable of handling the growth of the company by increasing the communication process within the organization. In order to implement the project successfully, proper infrastructure support and development of a feasible project plan is required (Ziemba and Oblak 2013, p. 15). The project if repeated is expected to go live in 4 years after successful implementation of testing phase and bug fixation. The recommendations for an amended project scope are as follows-
- The project requirements are to be identified at the beginning of the project, which includes setting a feasible schedule for the project (Schniederjans and Yadav 2013, p.373). The modules of the project will be tested before the integration in order to fix the bugs if any.
- A proper communication plan will be developed at the beginning of the project that will be used for communication among the team members and will help in ensuring that the project is being implemented according to the plan.
- The project aims at creating an enterprise resource planning software that would be capable of managing all the vital operations of the organization.
The Role of Client and Project Manager
The project manager plays an integral part in successful completion of any project. The project manager plans and supervises a project so that it is implemented successfully. The project manager is responsible for governance of a project that contributes to the successful completion of the same. According to Hernández, Amado-Salvatierra and Hilera (2012) client satisfaction is one of the major aspects of project success and deals with the understanding, defining and managing the clients’ requirements. Direct communication between the project manager and the client is essential for understanding the requirements of the project. Therefore, it can be said that the project manager and the client of the project plays an important role in any project.
According to Schniederjans, D. and Yadav, (2013) having a proper communication between the project manager and client is essential for identifying the drawbacks and loopholes of project implementation. One of the major reasons of project failure in Hershey was that the project manager could not communicate properly the requirements of the project to the organization; one of the major requirements was adequate time for project implementation. One of the major reasons of project failure in Hershey is implementation of the project in a much constricted time.
In ERP implementation project of Hershey, the project manager were involved in planning the project so that it can be implemented in a construction schedule. However, it was the responsibility of the project manager to govern and track the project progress. Improper project management was a major reason of failure of the ERP implementation project.
The client here is Hershey who wanted to implement the complete ERP system before their busiest business period. According to AlQashami and Heba (2015), the role of the project manger and the client is crucial for any project. The project manager of Hershey ERP implementation project was responsible for successful initiation, planning, designing and execution of the project (Amid et al. 2012, p.228). However, the project managers are generally responsible for monitoring and controlling the projects as well. However, in this case, the project lacked proper supervision, which was another major reason for the project failure.
According to the different project management methodologies, there is a very significant role of the project manager in delivery of the project. According to Tomanek and Juricek (2015), the project manager ensures that a completed project is delivered to the client; however, in this case, the ERP system that was implemented was delivered without undergoing the proper testing phase for the project. This had a great impact on the delivery of the project as the project failed to perform according to the plan. In one of the project management methodologies such as PRINCE2, the project manager has an important role in interfacing between the project and the business area of the project (Ghosh et al. 2012). This role of the project manager is important for communicating and encouraging the need of delivering a completed project. Project manager is further responsible for development of the contingency plans and managing the project risks. However, in case of ERP implementation by Hershey, there were no proper contingency plans and risk management process as the project was to be implemented in a lesser time. Many stages of the project implementation were eliminated in this project implementation including the risk assessment and testing phases leading to the failure of the project.
According to Mitra and Mishra, (2016), the project failure could have been avoided if the project manager applied appropriate planning and control strategies for a project. The role of the project manager and the client vary in different projects. In certain projects that follow waterfall approach of project management, the project manager is responsible for planning the entire project before its implementation. However, in certain other types of projects, that follow a different project management approach, the project manager may not be responsible for planning the entire project and the client is responsible for identifying the project requirements. Therefore, it can be said that the project manager and the client of a project has a very significant role in determining the success of the project.
The ERP implementation project of Hershey followed a Big Bang approach of project management in order to complete the project in a constricted time. It was the client’s decision to roll out three systems concurrently using a big bang implementation approach of the project (Yesil and Dodurka 2013). This had led to the elimination of the testing phase of the project since all the modules were developed simultaneously. This approach of project management was a decision that was made by the project team members due to the project time as specified by the client. However, irrespective of the approach chosen, there was a high chance of project failure as the complex ERP system was tried to be implemented in an unreasonably short time. Furthermore, it was unreasonable for the management team of Hershey to expect that the new ERP system would be able to handle the peak demand. Had the system been implemented in low business period, the company could have avoided such a huge loss. The big bang approach of project implementation only ensured the development of different modules of the Enterprise Resource Planning system. According to Khanna and Arneja (2012), a proper project management approach ensures that all the modules of the project are properly tested in order to stimulate the realistic operating scenarios.
According to Dey, Clegg and Cheffi (2013), the scenario could have been completely different if proper project management approach was chosen. In development of complex software, the agile project management methodology is much useful. There are a number of benefits of using agile approach in project management such as, increase in transparency with predictable cost and schedule of the project. In agile project methodology, all the modules of a particular project is not implemented simultaneously, rather, each module is implemented part by part so that the project team has enough time to test and eliminate any bugs present in the system. The agile project methodology further provides an option of project improvement in the implementation phase of the project. One of the major advantages of agile project methodology is that it focuses of regressive testing phase in order to unveil the bugs present in the project under development. If an agile approach was chosen for this project, the error in the system would have been unveiled in the implementation phase itself and the company Hershey would not have suffered such a huge amount of loss.
The agile project management methodology is a widely used methodology for different software projects as it helps in delivering a quality product (Stare 2014, p.297). This in turn reduces the risks of project failure as the visibility of the project progress is quite clear. Furthermore, there is a considerable increase in project control in agile methodology due to different project management tools and software in project implementation such as Jira (Špundak 2014, p. 943). Lack of proper project control and undefined scope added to the cause of project failure in Hershey. Poor management of expectations added to the already faulty project scope and project scheduling, which could have been avoided if the project followed an agile approach of project management. According to Amini and Sadat Safavi (2013), every software projects carry some sort of risks, which was true for this project as well. However, these risks could have been mitigated if instead of big bang approach, agile methodology is used, which incorporates proper risk assessment of the project in the initiation phase of the project. The problems, the Big Bang ERP implementation led to the project in terms of order fulfillment, processing and shipping could have been avoided if an agile approach of project management was chosen. The big bang approach of project management was inappropriately chosen for such a complex project associated with the implementation of enterprise resource planning system (Kerzner 2017).
According to Serrador and Pinto (2015), agile project management methodology makes use of the short development cycle called sprint to focus on the continuous development and improvement of a product. Agile methodology offers changing environments that can be embrace at any stage of product development giving the company a competitive advantage (Dybå, Dingsøyr and Moe 2014, p. 287). Furthermore, in agile methodology, a product is delivered with a higher frequency resulting in a delivery of a final working product. Therefore, use of different project management approach, such as agile would have a completely different impact on the project delivery.
The challenges faced by the project team in implementation of the Hershey project are as follows-
- According to Nour and Mouakket (2013), the project was implemented in a very limited time and therefore, time constraint is a major challenge of the project. The project failed as it could not be completed within the April 1999, as it was supposed to be. The project was delayed and could only be completed in July 1999 that too by skipping certain important phases of the project management life cycle.
- According to Ziemba and Oblak (2013) one of the major challenges that the project faced was the lack of understanding the importance of project governance in project implementation. Since the roll out of the project appeared to be smooth, the team members overlooked the penetrating problems in the system (Heagney 2016).
- Scheduling problem associated with the project was another major challenge faced by the project team. Along with this, there were issues with the resource estimation (Aloini, Dulmin and Mininno 2012, p. 190).
Therefore, it is clear that the major challenge that was faced by the project team was lack of time for properly implementing the project.
One of the major challenges that the project team members faced was time. The time allocated for the project was very less and it was practically impossible to implement such a complex project within that time. This resulted in release of the ERP application without undergoing the system testing of the software. This led a negative impact on the organization as the system failed to perform in the busiest days of business.
According to Powell et al. (2013), the automated ERP system failed to process the customers’ requests. Therefore, it can be said that the time constraint in the project has affected the quality of the project to a great extent. Successful implementation of a project implies delivery of a completed project of superior quality.
In ERP implementation project of Hershey, the project team failed to deliver a quality work as a result of which the client that is the company had to suffer the most (Schwalbe 2015). The project planning phase should properly identify and estimate the actual time required to produce a deliverable.
With the aim of releasing the project before their busiest business period, the project team skipped many intermediate project phases thus resulting in failure of the same. As an impact, the company suffered a huge reputational risk along with the decrease in share price of the company.
Recommendations
The ERP implementation project although failed, the organization was quick enough to rectify their mistakes and the improvised ERP system was launched in the year 2002. The project although was sufficiently delayed, the team was successful in delivering the finished product, a proper ERP system for the organization. However, if the project is to be repeated, there are certain factors that are needed to be considered before implementation of the ERP system. The new enterprise resource planning system is to be developed in order to automate all the business processes running within the organization including order placement and delivery. The project can be implemented using a waterfall or an agile approach of project management. If the agile approach of project management is considered, the basic step includes planning the different project releases (Schwalbe 2015). Since this particular project is complex, it is better to implement the project part by part. Prior to each release, proper testing of the software is needed to be performed in order to identify the bugs or errors present in the software. If any such bug is detected, the rework should be done immediately prior to the next release. The recommendations for overcoming the challenges associated with the project are as follows-
- The chosen project management approach should accommodate the required changes in any stage of project management.
- A proper communication channel should be maintained throughout the project life cycle in order to facilitate frequent reporting of the project progress to the project executives. The project manager in presence of a proper communication channel will be able to provide frequent updates to the project stakeholders during any shortfalls or similar other situations that demand rectification.
- The project must be implemented in a feasible schedule as complex projects need adequate time for implementation and testing.
Conclusion
Therefore, from the above discussion it can be concluded that, proper assessment of the project scope is essential for successful completion of the same. The report takes an account of the ERP implementation project of Hershey that failed due to a number of causes, the major one being the implementation of the project within a very constricted time period. The role of project manager is a very crucial in successful implementation of the project. The project client plays a very important role as well in identifying the requirements of the project. One of the major problems associated with the chosen project was the timeline in which the project was implemented. For a complex project like ERP implementation, it is essential to allocate adequate time for proper development of the modules. The report recommends certain methods that are needed to be followed by the organization if the project is to be repeated.
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