Challenges faced by Hershey’s
Hersey’s Food Corporation is an American company and is one of the largest chocolate manufacturers in the world. Apart from the chocolates, the company also manufactures baked products such as cookies. Milton S. Hersey as a subsidiary to the Lancaster Caramel Company founded Hersey’s in 1894 (Hersheys.com 2018). Hersey’s chocolate is famous throughout the Unites States mainly due to the wide network of distribution channels in the market. The company has three mega distribution centres that uses modern technologies and labour management system. Not only in US, are Hersey’s chocolate sold in over 60 countries (Hersheys.com 2018). The assignment analyses the problems or opportunities that are faced by Hersey’s while upgrading the technologies used in the company.
Hersey’s had managed to complete an update to the SAP/R3 enterprise software that was done below the project budget. The company had considered as a big achievement as it had been running under loss of sales due to the problems that occurred with the implementation of the new ERP system. The possible opportunities that Hersey’s could have gained includes establishing a single company-wide supply chain, streamline the business process, encourage the new supply chain efficiencies so that gross margin can be improved. These were set as the main goals for the organisation so that it can establish its compatibility in the market.
However, as stated by Laudon and Laudon (2015) complexities also arise with the application of the ERP system. One such complexity is that integrating the software with the Manugistics software along with the Sibel software can be challenging. This is because experienced consultants find it difficult to understand the situation at hand, which can be a huge drawback for the implementation of the software at the workplace. At the same time, the IT department of Hersey’s had opted to undertake the direct cut over strategy so that a phase in approach of the peak sales season can be taken into account.
Apart from this, the work of the systems caused extra headache for the employees as they were trained properly. The data entry adopted by the new ERP was difficult and therefore the problem that Hersey’s faced before the adoption of the technologies still existed in the organisation. The orders of the customers were missed and it is because of this Hersey’s missed out in gaining a competitive advantage in the market particularly during the Halloween season in which the company was expected to gain the maximum amount of profit. The capacity in the workplace was low and the requirement was not recorded in the SAP system, which caused miscommunication between the logistics and the IT department.
Opportunities for Hershey’s with the upgraded technologies
Kerzner and Kerzner (2017) is of the opinion that in order to implement new technologies in the market, it is important to keep in mind the resources and capabilities of an organisation. At the same time support from the employees and the management is also needed for the incorporation of new technologies so that changes can be made with the consent of every people in the organisation. However, in the case of Hersey’s one of the other problems that was faced by the company was the lack of support from the top-level management while trying to implement the new SAP software in the organisation.
Hersey’s management adopted a hand-off approach by distancing themselves from the decision-making process that may have provided the company with technologies for improving the business. There were also recommendations made by the managers that highlighted the fact that major supplements can be implemented while trying to incorporate the SAP software in the organisation. Hence, it can be said that more than the opportunities, Hersey’s were faced with difficulties while trying to implement the SAP software. The difficulties presented itself in the form of incompetence of the employees as well as the lack of support that is provided by the managers in trying to gain suitable technology for the organisation. At the same time, it can be said that complexity of the ERP is another factor that can be considered as a challenge for the organisation.
As stated by Pinto and Garvey (2016) in order to understand a particular object, product, service or organisation, it is necessary to understand the nature of the entity. In the case of technologies, understanding the nature of the entity is important as it provides employees and technicians with an opportunity to learn the capabilities it possess and the manner in which it can be used for business purpose. The nature of the entity is more significant particularly in the case of implementing a new technology or updating it. In the case of Hersey’s the company need to analyse the nature of the enterprise system that it aims to update so that maximum benefit provided by it can be gained. At the same time, the limitations of the technology can be brought to light for which necessary changes need to take place.
One of the natures of the implementation of SAP in Hersey’s is the structure of the software. As analysed by Subramaniam et al. (2015) the structure of an organisation or software plays a vital role in identifying the business and its success. In the case of the implementation of SAP, the structure of the technology can be used to learn the characteristics it possesses. It has been seen that fundamental characteristic or commands are defined automatically in the SAP software. This can help Hersey’s to refrain from providing input of the functions that are most commonly used. Hence, time can be saved in this process as writing the commands not every time needs to occur.
Nature of SAP software and its potential value to Hershey’s
The predefined characteristics make it easy for technicians to categorise the field catalogue and provide an opportunity to add more commands as per the convenience of the users. As observed by Chang (2017) important data about a product or an employee can be stored in the software and the application of either of these data can be made while trying to get information about the concerned subject. At the same time, another nature of SAP is that it is customer defined. This means that people using the software can develop own commands and gain the ability to save the commands as per convenience. Any operating concerns can be defined that can influence the functioning of the business.
Walther et al. (2018) is of the opinion that user defined commands can be used to ensure that the users find sufficient time to analyse the commands before placing it. This can be considered as an important nature of SAP as any errors committed during the use of the software can be re-written. Errors may generally occur during the data entry process, as it is an important as well as time-consuming process for an organisation. In the case of Hersey’s the primary aim is to improve the software so that assistance with the data entry can be made. Hence, it can be said that implementation of SAP can help in arranging data in a proper order for the benefit of the company.
Alomari et al. (2018) observed that value is defined by the application of Sap, which culminates, to the fact that external and internal application of the software can be considered as one of the most important prospects. In the case of Hersey’s specific field related to the implementation of the software and its use can be considered as a factor that may define its success in the business. Deviation in the nature of the business may bring about problems in a way that the business of Hersey’s may have to undergo significant changes (White 2016). Keeping this in mind the limitations or challenges that Hersey’s may face while implementing SAP can be taken into consideration.
As stated by Bi, Da and Wang (2014) implementation of a new technology may create complications in the business, as companies may not be fully aware of the use of the system. As seen from the case study of Hersey’s the company had difficulty in implementing the new ERP system in the company mainly because of the lack of knowledge of the employees. With the advancement in technologies, it is necessary that every employee be well prepared about the use of technology so that they can be effective in the business.
Limitations faced by Hershey’s with the SAP software
Hence, it is necessary that the application of SAP system is made keeping in mind the capabilities of the company. Hersey’s also need to take into consideration the cost of implementing the product in the market. It has been seen from the case study that the company had implemented the software by going below its budget allocation. This signifies the importance of the system but at the same time signifies the cost of the system as it is not covered within the expenses made by the company. Therefore, it can be said that cost limitation can be considered as a major limitation that Hersey’s can face.
Another limitation that Hersey’s can face is the fact that the software is not user friendly. Giachetti (2016) stated that designing SAP software is complex and as a result, the use of the software becomes a challenge for the employees. It is to be noted that the internet applications of the software are not effective and does not support operations in every browser that is installed in the system. Hence, Hersey’s may have to spend a significant amount of its budget in trying to configure the existing systems to support the SAP software.
Appelbaum et al. (2017) is of the opinion that SAP is mainly used for the development of backend of the business needs. Hence, it cannot be used in managing activities that require front desk analysis. Another limitation that may be faced by Hersey while trying to implement the software is that the response time of the application is slow. As pointed out by Panetto et al. (2016) is of the opinion that in a fast-paced world, response time of the systems also provides an advantage for the development of a competitive force. Hence, it is necessary that the software used response on time so that employees can work with it in an effective manner.
One of the analysis that can be made from the case study as well as the analysis of the limitations is that the severity of the challenges of implementing SAP is high. Therefore, assumption can be made that considering such situation about the lack of support from the mangers. As stated by Laudon and Laudon (2016) managers are an important stakeholder of a company and the decisions taken by the managers need to be spontaneous after a proper analysis of the market. This can be the case of the managers of Hersey’s as being aware of the limitations that can be faced by the company compelled their decision to go back on implementing the process.
Conclusion
One of the consistent changes that occur in a business is the ability to find a replacement product of the current system that is being used (Weichhart et al. 2016). In the case of IT software, this can be considered as a regular occurrence as an updated technology can provide companies with an advantage in the business. Hence, replacement of Sap technology has been developed that can bring about complete change in the application of technologies in the companies. The requirement of Hersey’s is to implement software that can help the company to increase its sales rather than analyse the records of the companies. In this regard, the application of sales CRM is necessary for the increase of sales in the company.
Despite this Romero and Vernadat (2016) stated that implementation of SAP can bring about benefit within a company. In the case of Hersey’s, the company may be able to improve its technical prowess and ensure that the cost implemented for the designing of the software be worthy. Therefore, the success that may be adopted by Hersey’s upon the implementation of SAP can be taken into consideration.
As stated by Braglia and Frosolini (2014) technology usually provides benefits organisations with success as it helps in achieving its goals and objectives. Despite the limitations that it may bring about, the implementation of modern and complex technologies such as the ERP system can provide organisations with a competitive advantage in the market. Hence, the success that Hersey’s may achieve while implementing the new SAP system can be analysed. One of the successes that can be gained is the fact that time can be saved with the implementation of the SAP.
It has been seen from the case study that the reason for updating the existing ERP system of Hersey’s is the fact that it needs to build a strong competence in the market. Internal strength of the company along with analysis of the financial structure as well as the organisational structure can be done with the implementation of a new ERP system. Hence, updating the system to the SAP can bring about significant change for Hersey’s and provide the company with an ability to arrange its financial capabilities in the business. This can be considered as a huge benefit for the company and Hersey’s can implement SAP for maintaining its business in a proper manner.
At the same time, development of the software takes less time as compared to other software such as Java. This can provide an advantage for Hersey’s as the company can implement the software quickly without having to spent an enormous amount of thinking about the choice of strategy. Jacobs, Chase and Lummus (2014) are of the opinion that the application of SAP can be advantageous, as the software does not have to be developed from the onset. This provides employees as well as coders with an advantage as more time can be spent in areas that require development. These include developing the organisation as well as the maintaining its financial prospect.
At the same time, the software is flexible which denotes that companies can make its own rule about its use. As observed by Lorenzo Ochoa et al. (2017) changing the rules of the application of software can help less talented employees to use the software in a proper manner. This can provide an advantage to companies as basic training about the use of software only need to be provided. In the case of Hersey’s it has been seen that the company lacks the capability of employees that are technically sound. Therefore, use of the software by following the basic rule and implementing self knowledge can help Hersey’s to refrain from providing training as well as cut down the cost of training the employees.
Thereby, this can be considered as another success that Hersey’s may get while implementing SAP in the organisation. This is because with the cost of training being saved, the company can implement the cost in trying to build other areas that require attention as well as development. Galliers and Leidner (2014) are of the opinion that the features of SAP allow business to manage any type of financial transactions. At the same time, the supply chain and the life cycle of a product can be taken into consideration while trying to analyse the features that provide business with opportunity to succeed.
SAP can analyse the data provided from any source and this can help Hersey’s to develop its competence in the business. Collaborative decision making activities can be taken into consideration and managers can use it to identify opportunities for improvement in the business. Therefore, it can be said that with the implementation of such strategies Hersey’s can benefit and gain success while using SAP in an effective manner.
The analysis provides a comprehensive detail about the limitations as well as the success that Hersey’s may have while implementing SAP in the business. It can be argued that predictability of the technologies cannot be made as it may have fluctuating influence on the business. However, the fact that it provides business with an opportunity to improve, may compel managers to take decisions regarding its application. In the case of Hersey’s given the condition of the work, it is imperative that the company upgrade the system to SAP so that it can attain its objective in remaining the best chocolate selling company in the US.
Reference
Alomari, I.A., Amir, A.M., Aziz, K.A. and Auzair, S.M., 2018. Effect of Enterprise Resource Planning Systems and Forms of Management Control on Firm’s Competitive Advantage. Asian Journal of Accounting and Governance, 9.
Appelbaum, D., Kogan, A., Vasarhelyi, M. and Yan, Z., 2017. Impact of business analytics and enterprise systems on managerial accounting. International Journal of Accounting Information Systems, 25, pp.29-44.
Bi, Z., Da Xu, L. and Wang, C., 2014. Internet of things for enterprise systems of modern manufacturing. IEEE Transactions on industrial informatics, 10(2), pp.1537-1546.
Braglia, M. and Frosolini, M., 2014. An integrated approach to implement project management information systems within the extended enterprise. International Journal of Project Management, 32(1), pp.18-29.
Chang, J.Y., 2017. Mutual monitoring of resources in an enterprise systems program. Project Management Journal, 48(1), pp.100-115.
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
Giachetti, R.E., 2016. Design of enterprise systems: Theory, architecture, and methods. CRC Press.
Hersheys.com. 2018. EU Redirect. [online] Available at: https://www.hersheys.com/en_us/home.html [Accessed 27 Sep. 2018].
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
Laudon, K.C. and Laudon, J.P., 2015. Management information systems (Vol. 8). Prentice Hall.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education.
Lorenzo Ochoa, O., Claes, B., Koryak, O. and Diaz, A., 2017. Integration through orchestration: The interplay between enterprise systems and inventory management capabilities. Journal of Enterprise Information Management, 30(4), pp.555-582.
Panetto, H., Zdravkovic, M., Jardim-Goncalves, R., Romero, D., Cecil, J. and Mezgár, I., 2016. New perspectives for the future interoperable enterprise systems. Computers in Industry, 79, pp.47-63.
Pinto, C.A. and Garvey, P.R., 2016. Advanced risk analysis in engineering enterprise systems. CRC Press.
Romero, D. and Vernadat, F., 2016. Enterprise information systems state of the art: Past, present and future trends. Computers in Industry, 79, pp.3-13.
Subramaniam, N., Wahyuni, D., Cooper, B.J., Leung, P. and Wines, G., 2015. Integration of carbon risks and opportunities in enterprise risk management systems: evidence from Australian firms. Journal of Cleaner Production, 96, pp.407-417.
Walther, S., Sedera, D., Urbach, N., Eymann, T., Otto, B. and Sarker, S., 2018. Should We Stay, or Should We Go? Analyzing Continuance of Cloud Enterprise Systems. Journal of Information Technology Theory and Application (JITTA), 19(2), pp.57-88.
Weichhart, G., Molina, A., Chen, D., Whitman, L.E. and Vernadat, F., 2016. Challenges and current developments for sensing, smart and sustainable enterprise systems. Computers in Industry, 79, pp.34-46.
White, B.E., 2016. Enterprise opportunity and risk. In Enterprise Systems Engineering (pp. 176-195). CRC Press.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
