Essay on ERP IMPLEMENTATION

Submitted By amiramakazhanova
Words: 2997
Pages: 12

Business Strategy and Background Leo Madeiras is a cabinetry supply supplier established in 1943 and is the largest in its field in Brazil. With over 70 stores, the company started with one store in Sao Paulo in a street where cabinetry was the main activity and today the stores are located in 18 out of the 26 states in Brazil. Part of the chain is owned by the company’s owner and another part is owned by partners, that are franchisees, in different states than the headquarters of the company. The whole company has over 2,000 employees divided into stores, warehouses and headquarters.
The expansion started in the late 80’s and in 1994 the legacy system was implanted, a MS-DOS based software that could help the company with the sales, inventory and orders. For an expanding company, such as Leo Madeiras, the system is a very important part of the process of acquiring new partners, opening new stores and creating support departments for the business.
Technological Strategy With the legacy system, the new franchisees were added to the network but with limited connection preventing them to have access to information, order system and since it wasn’t an ERP system, the decision process with the marketing department was too slow because the process was completely done out of the system.
The servers in the company started being replaced for servers with greater capacity and newer models before the ERP was chosen to support the new system. Some other improvements in the IT department were happening such as a new email server and newer versions of Office installed.
Besides the network difficulties, other limitations of the legacy system started to be more visible to decision makers as the need for information began to increase with the time and the number of stores opening. Some of the important changes started with a new warehouse management system that would allow the shipments to be more accurate and in time because the suppliers were selling some products with the bar code but the legacy system didn’t have that possibility, leaving all the control for inventory and shipment in the hands of the employees and subject to error.
Proposed ERP Solution
Because of all these reasons, the company realized that it was time for a change of IS, since the vision of the company includes an ambitious expansion plan in a short-term. Many stores opened and a few new partners were added to the chain every year and a proper robust ERP system would allow the company to reach its goals and keep the quality and reliability of the information high.
In the legacy system, the human resources had a system, the logistic department had another and the company operated in a different one. Besides that, the information was not available for instant retrieval; and a database was created to fulfill the need but with a weekly delay period for updates. With the ERP system most of those issues would be solved just by operating in the same environment, which would allow up to date information available.

Key Drivers for Innovation Whenever a company is faced with choosing a new ERP system, it must consider how that system will contribute to the company’s core values. A system that does not contribute to the company’s key values for operation is not worth the time and effort that will be put into its implementation. However, it is often the case that a new system will enrich the company’s ability to increase the value of its operations. Examples of value drivers for an organization are: financial performance, successful marketing implementation and ability to provide customers with adequate service. Value drivers can be internal and external. Internal value drivers occur within an organization, while external drivers involve a firm’s relationship with the external environment. In the case of Leo Madeiras there were both internal and external values that supported the implementation of a new system. For one, a new ERP system would provide…