Business Process Investigation

(1) From an organizational viewpoint, why was the implementation considered a failure?

Lumber Liquidators is considered to be the largest retailer in hardwood flooring supplies. ERP software, SAP was implemented at their firm to speed up a few processes but soon, it was considered a failure as their Net income fell almost 45%, which accounted to a $12-$14 millions.

Low productivity is said to be the major reason for the decline in their net income. This was due to the lack of knowledge of the software. The employees of the organization had a hard time adjusting to SAP, which was newly introduced to them. SAP is more structured when compared with the software system that was previously used at their firm. The company didn’t anticipate that the employees would find it hard to have a transition from the previous system to the current one, and so, they didn’t spend enough time and effort preparing its employees for the changes associated with ERP implementation. Inadequate training, a part of Change Management wasn’t handled properly and that has cost the company a lot. Few software products like Microsoft Office could be understood easily, and sometimes they are self-explanatory. But when it comes to SAP or other products, they need to undergo some training as there’s a change from one ERP software to another. In fact, it is not only a software product, but an integrated application suite used by the company at almost all the time during their projects. According to the company, for a while, they were unable to process or track or accept or fulfil orders as it used to before, because of lack of productivity. Adding to it, the company also had to pay more wages as the employees were required to work for longer hours than usual. On the whole, one could say that the company had rather hit a big bump in its journey.

(2) Based on the article, any additional research, and your personal insights, identify and describe the 3 major reasons the implementation was a failure.

Lack of training provided to its employees, leading to their abysmal performances is the major reason for the failure. With more than 50% occupancy in the present day market, SAP is one of the major players in the ERP industry. The architecture of the previous system used by Lumber Liquidators did not allow implementing SAP in phases, which led to changing the internal requirements of the project. This makes System Integrator slowing down the implementation which in turn affected the total system design and implementation and added more complexity to the overall system.

Another reason why the implementation failed was there wasn’t much user acceptance. Users i.e. the employees’ acceptance wasn’t at the required level when SAP was introduced. Change Management is considered to be one of the hardest parts of any project, and any change in an organisation needs to be handled keeping that in mind. As much as change is required in a company (when necessary), people aren’t usually ready