1)     In your own words rewrite the analysts section.

2)     In your own words rewrite the description of the Case Study.

3)     Do you agree with the group recommendation, or would you recommend a slightly different recommendation? Explain.

4)     How do you use information technology?

Describe some ways that you personally use information technologies differently than you did just a few years ago.

Concise summary of Case Study

Case Study I-6: HH Gregg: Deciding on a New Information Technology Platform. The Case Study is a look at a CIO needing to make a strategic decision on replacing a major system used by the organization. The CIO has several options available, each with different benefits, weaknesses, costs, and risks associated. The need for change is due to planned growth and is compounded by the legacy system support being discontinued by HP.

Executive Briefing

An aging system used to process orders, inventory, and manage the warehouse has been used for over 20 years. In order to support growth to become a national competitor in the market, it is necessary to implement a new ERP system. In the past the legacy system served its purpose, but the fast-approaching deadline of ending support from HP has informed the decision that the time to implement an enterprise-wide solution that will streamline processes and bring about cost-savings via new efficiencies has come.

There are many choices to decide between in the ERP space. The previous CIO had directed teams to narrow down the field and found two vendors, Delphi and Sentra. Going with Delphi would be subscribing whole-heartedly to the new system and migrating our existing data and re-training our employees in the Delphi mold in order to use the new system. Sentra offers COTS implementation with our own IT department providing customization. The retraining of employees would be less impactful since our business processes would be adapted to the system so that there is more familiarity for everyone using the system.

. We approximate that the cost to purchase and implement Delphi to be $15 -$20M and licensing fees would likely run in the $1 to $2M range annually. Sentra is estimated to cost less at $10-$12M, which makes sense since our own IT department would be handling customizing the software. At this time these estimated do not include testing. Additionally, the Delphi system would be with more support throughout the lifetime of the system.  The timelines of the Delphi and Sentra solutions are similar, ranging from 18 – 24 months.

Analysis

Personally, I would not be comfortable discussing upgrading ERP without at least having a meeting with the larger players in the arena. Specifically, Oracle and SAP would be at the top of the list to see what they offer to companies of this size – keeping a mind for the growth expected and not to limit ourselves. If Oracle, SAP, etc., are not offering what we think we are looking for, then it would be a perfect use of time and manpower to sit with Delphi and Sentra again so that they can go over in detail what had been discussed with the previous CIO. I also think it pertinent to look to other vendors for the first time to see if any other insights can be gleaned from their analysis before making a final decision. The idea of rewriting the current platform into UNIX does not solve the issues of expansion and support that the new ERP implementations will.

Recommendations and next steps

The first recommendation I have is that the ideas of keeping the legacy system in play, by using middleware, be dropped in order to focus on the vendor-supplied solutions. In order to design and implement solutions, such as ERP, and grow into the future, middleware and/or “in-house” solutions do not seem like a good option. As stated on page 175, “There was no way the software emulation could support a company with the number of transactions as Gregg’s has in 2006” (Brown et al., 2012). The database information will need to be transferred to a new database system that can be supported by the new vendor to allow expansion and flexibility. Middleware or other “in-house” solutions do not provide support or efficiencies needed to grow as forecasted.

I would also recommend that the CIO take a page from the notebook of Case Study III-5, NIBCO’s ‘Big Bang’: An SAP Implementation. The project leaders really took ownership of the SAP implementation and effectively communicated their plans before and throughout the project to each team and individual within the company. The need for a total over-haul is similar in both case studies, but I think the way Nibco “grabbed the bull by the horns” rather than allowing the consultants to dictate what Nibco needed and effectively brought about a cross-functional strategic planning process sets an important precedent and raised the chance for success.

Next steps would be to sit down with two or more vendors to find out more information before deciding which vendor to go with. The culture and input of other C-level executives, directors, and managers needs to be taken into account before such a drastic change.  Additionally, it is imperative to build ownership, sponsors, and champions at the C-level and below. There is no point in spending in the tens of millions of dollars if, from a sponsorship perspective, the ERP is dead in the water before it is functional. Communication is going to need to be a focus as well as change management. Change is not something which comes naturally - particularly to an organization of 3000 employees who have done things the same way for 20+ years. Although the deadline of support for the legacy system is coming, that does not mean that the system stops functioning, business can continue in the meantime while more analysis is done to answer many of the questions that are still hanging in the air. Most IT projects fail due to improper planning, no need to add to that statistic.

Reference

Brown, C. V., DeHayes, D. W., Hoffer, J. A., Martin, E. W., & Perkins, W. C. (2012). Managing information technology (7th ed.). Upper Saddle River, NJ: Prentice Hall/Pearson.