BISY2005 Enterprise Resource Planning: Case Of Walmart And Unilever Companies Case Study Assessment 2 Answer

Answer :

CASE STUDY REPORT 

CHOSEN COMPANIES: WALMART AND UNILEVER

Executive Summary

The analysis of the report sheds light on the significance of the Enterprise Resource Planning (ERP) system with the critical discussion of the Walmart and Unilever companies. The principle of the ERP system shows that it is implemented majorly to increase the effectiveness of the business function by the organizations. Walmart has used the internal cloud network, data cafe' in the database system, KMS (Knowledge Management System), GDMS(Global Donation Management System) system in their business since 2007. The engagement of the employees and the involvement of top-level management is the major success factor of the successful ERP implementation of the company. The findings demonstrate that ERP systems play a key role in making the SCM system strong and powerful in Unilever. Besides, the analysis throws light that effective communication and employee engagement are advantageous for implementing ERP systems within the Unilever. 

1. Introduction 

The report aims to develop an analysis of the significance and scope of the Enterprise Resource Planning (ERP)system. The chosen cases are Walmart and Unilever.  Walmart is the largest multinational retailing company in the United States (Walmart, 2020). The net revenue of this company is 52,396.4 crores. Unilever is one of the largest fast British-Dutch consumer goods companies in the United Kingdom (Unilever, 2020 C). The net revenue of this company is $44.3 billion These two companies have adopted two different ERP systems within the organization. Unilever has implemented MySAP's Advanced Planner and Optimizer (APO) to work with their different systems. Walmart has implemented an internal cloud network, data cafe' in the database system, KMS (Knowledge Management System), GDMS (Global Donation Management System). Therefore, the purpose of this report is to develop a critical analysis of the ERP systems of these two companies. The analysis is made on the scope of the ERP systems applied by organizations, the challenges of implementing, and how organizations managed it. Further, it focuses on the understanding of enterprise system development life cycle and strategic success factors in enterprise resource planning, design, and implementation.  

2. Analysis

2.1. Principles and issues associated with Enterprise system

As mentioned by Berente et al., (2019), an enterprise system can be defined as a software system that is majorly used to satisfy the needs of the organization and enable the organization to integrate among the business operations. In the modern business world, enterprise systems are used to track and control complex business operations and, in this way, generate decision making processes easier. The principles of the Enterprise system are as follows: 

• The Enterprise system identifies the most relevant stakeholder in the business. An enterprise consists of multiple stakeholders; therefore, this system indicates the most relevant stakeholders by considering their particular interest.
• This system emphasizes the ultimate effectiveness of the organizations by considering the strategic objectives of the enterprise. 
• In order to adopt the enterprise transformation process, this system uses a holistic approach.

The issues that are associated with the enterprise system are discussed below:

• In order to implement the Enterprise system in an organization, it is needed to have inadequate flexibility of time and resources, otherwise, the ERP system would not be implemented properly. 
• Another major issue of the ERP system is its high maintenance cost. This system needs regular maintenance to work properly. That is why organizations have to invest huge amounts for the maintenance of ERP only. 
• Along with this, another major issue which is related to the ERP system is the vetting vendors. Organizations need not implement ERP software without properly vetting vendors. It is needed to analyze the functionality of the ERP system in the business operation, otherwise, this system will not work properly.   

2.2. Analysis of ERP of Walmart 

Walmart is one of the largest American multinational retail corporations (Walmart, 2020). In order to maintain the business function of its 11,496 store locations around the world, the company is highly dependent on technology. Since 2007, Walmart has been using SAP technology to maintain its back-office business operations (Walmart, 2020). Apart from this, 'data cafe' in the database system, KMS, GDMS, and other enterprise systems are used by the company to manage their business functions significantly (Garcia and Red, 2020). Below, the analysis of the ERP system has been presented in details: 

Scope of the ERP system of Walmart 

As per the view of Berente et al., (2019), an ERP system is a customizable application that allows the end-users to maintain the coordination of business functions and ensures the smooth running of the business activities. In the case of Walmart, they have adopted different ERP software also for separate business operations. ERP systems of some of the major business operations of Walmart are steed below.  The supply chain is one of the crucial business departments where technology is massively adopted by organizations in modern business. It has been observed that Walmart uses an internal cloud network system as its supply chain initiative (Garcia and Red, 2020). This system is effective to manage the information of inventory and stocks in Walmart’s warehouses. On the contrary, HRM is another major business operation besides the supply chain. Therefore, considering the importance, Walmart uses different ERP for different functions of HRM. For example, a knowledge management system is used in Walmart to analyze which areas of the organization need human resources (Garcia and Red, 2020). In its procurement management, Walmart has adopted automated production to combine the pressure of their suppliers and workers. 

Challenges that are associated with the implementation of an enterprise system in Walmart and its impact and how the company managed that 

Through the implementation of the ERP system, Walmart has grabbed a number of business opportunities and competitive advantage in the global retail industry. However, challenges are also associated with the implementation of the ERP system in Walmart and it has impacted the organization negatively. As mentioned by Nassar et al., (2017), in order to implement the ERP system in an organization, it is necessary to invest huge amounts of time. That is why it can be mentioned that it was a challenge for Walmart to implement ERP step by step in their warehouses and all store locations. On the other hand, Soja and Soja (2016) have argued that employees need adequate training to be compatible with the process of ERP system, they will not be familiar with the ERP software and it will delay the business process as well. Walmart also faced implementation challenges of ERP which reduced the wages of Walmart workers due to the training and development of the employees. 

Although challenges exist in the implementation of ERP in Walmart, still the company has managed the challenges significantly. In order to manage the challenges of ERP, Walmart need not to include end-users of all the departments in their decision-making process. In this way, the company can combat the huge time of the implementation process of ERP. On the contrary, through proper budgeting of the technical staff, it would be possible to reduce the wages of implementation of ERP software and wages of training programs of the employees as well.   

Understanding of enterprise system development life cycle from selection acquisition implementation and maintenance

From the view of Grenci and Hull (2020), the enterprise system development life cycle can be described as the iterative and dynamic process in order to change the business process of the organization. Therefore, it is used to incorporate the business functions with the adopted new ERP system of organizations. There are five stages in the enterprise system development life cycle. The selection stage is based on the planning and analysis of the needed ERP system of Walmart through the help of the business expert of the company. Therefore, the project manager has recruited in this stage to plan the new ERP system. The acquisition stage is designing the business architecture of the SAP ERP system to develop the business plan. In the business planning of Walmart, the company has majorly concentrated in three areas such as the efficiency of supply chain management, dealing directly with the manufacturers, and leveraging the buying power of the company (Purchase Control, 2020).  In the implementation, important data of Walmart has been imported into the new ERP system. Along with this, in the testing stage, the new ERP system has been analyzed accurately in order to find out issues. In this case, the data cafe tools of the database management system have been used by Walmart. In the maintenance, the adopted new software needs to be maintained on a regular basis for the smooth running of the business functions of Walmart.   

Figure 1: Stages of enterprise system development life cycle

(Source: Created by author)

Strategic success factors in enterprise resource planning, design, and implementation

In order to discuss the strategic success factor of enterprise resource planning, design, and implementation, it can be mentioned that Walmart concentrated on three major areas. According to the view of Kulkarni et al., (2017), top-level management commitment of the organizations can be proved as the major success factor of ERP planning of the organization. Therefore, the management of Walmart needs to be involved in ERP software planning from the first stage. Along with this, supporting this success factor, Islami et al., (2019) have mentioned the engagement of employees in the business process. It has been observed that CEO LEE Scott was involved in the ERP planning of Walmart from the first stage (Walmart, 2020). Therefore, it has helped Walmart to design the SAP ERP system of the company properly. On the other hand, Altamony et al., (2016) have argued that change management plays a vital role in deploying the ERP system properly in the organization. Therefore, it can be mentioned that it is one of the major success factors of the implementation of the ERP system in Walmart as the company has adopted strategies to compatible the employees with the ERP system. Further, training and the developmental program have been arranged by Walmart on regular basis to provide training to the employees on the usage of the ERP system.  

2.3. Analysis of ERP by Unilever 

Unilever is one of the largest consumer goods companies in the United Kingdom and therefore, the company has implemented the MySAP APO (Advanced Planner and Optimizer) system in 2010 (Bcone, 2020). The scope of the company using this ERP system is described as follows: 

Scope of system 

• The MySAP APO helps the organization to manage its supply chain process in a dynamic environment (Unilever, 2020d). 
• The MySAP APO has benefited the Unilever Company for strengthening the supply chain management (SCM) within Asia, South Asia, Australia, Japan in order to provide excellent customer service to the consumers (Bcone, 2020).
• This SAO software has also made the company tremendously privileged in delivering the necessary and available products to the consumers globally with effective supply chain management (SCM)

 Challenges associated with implementing an enterprise system and its impact and how the company managed that  

MySAP APO software has benefited the company tremendously. In spite of it, the company has experienced some challenges while implementing this ERP system. Apart from this, these challenges have created an adverse impact on the company and in this respect, the Unilever Company has taken certain measures for overcoming these challenges.

Ineffective communication with IT sectors:  The report of News (2020) shows that the company has not maintained proper communication with the Information Technology (IT) sectors. As a result, the company has not provided all the key data for implementing this new software within the enterprise. Due to a lack of relevant data, the staff become oblivious to the necessity of this ERP system and take enough time to use it. Therefore, the CEO of this Unilever Company, Alan Jope has enhanced the Business Planning Control System (BPCS) is an ERP solution in order to gain proper information regarding the MySAP APO software. 

Acquisition of a number of SAP solutions: According to Angolia and Pagliari (2018), SAP software is a beneficial factor for the workplaces in order to accomplish all the operational activities with convenience. But the Unilever company has possessed a number of SAP solutions within the company, respectively SAP Business Suite, SAP SCM. SAP HANA and so on (Unilever, 2020e). Therefore, when the company has taken the initiative to introduce a new software named MySAP APO, the company lacks amplified participation from the employees, and computer experts. As a result, the employees are not clearly defined regarding the importance of implementing the SAP APO software that culminates in making delay to be utilized. Therefore, the Human Resource Manager, Alice Taylor has summoned conferences with the employees and selected the diligent and delegate employees for using the MySAP APO ERP system. 

Understanding of enterprise system development life cycle from selection acquisition implementation and maintenance 

As mentioned by Hardyanto et al., (2017), System Development Life Cycle is considered as a beneficial framework for involving a new system within certain phases correlating planning, designing, implementing, and maintaining. The Unilever Company has also utilized these phrases in order to implement the MySAP APO software. 

Planning: The report of News (2020) shows that Unilever wanted to combine the BPCS ERP system with the capabilities of an effective SAP software solution. In this respect, the management team has selected to use MySAP APO sap software. This SAP software ensures that it receives an uninterrupted atmosphere that smoothens the functions of the supply chain process. In this respect, the company decides to design this software.  

Designing: At this stage, the Research and Development (R&D) team has taken the initiative to appoint the key executives in order to train the employees or users regarding the designing process of the MySAP APO software. 

Implementing: At this stage, the Human Resource Management (HRM) team has taken the initiative to train the users and employees in order to make them conscious of utilizing the MySAP APO ERP software in order to enhance the productivity and organizational growth of the company.  

Maintaining: After the implementation phase, the Unilever company has taken the initiative to maintain this SAP software with appropriateness. In this respect, the Business Planning and Control System (BPCS) of this company has maintained and recorded all the data of this SAP software.   

Strategic success factors in enterprise resource planning, design, and implementation. 

Strategic success factors are preferably noted as essential factors to mark the growth of the company. The strategic success factors of Unilever Company are discussed as follows:

Employee engagement: According to Kang and Sung (2017), employee engagement increases the productivity and business growth of the business organization. Being the largest consumer goods company, Unilever tends to augment the employee engagement for accomplishing the goals with an effectiveness that culminate in providing a suitable service to the consumers. It has been found that Unilever Company has attained more than 1,55,000 employees in 2019 (Unilever, 2020c). Therefore, this unpredictable employee engagement is termed as a success factor for the company to use the MySAP APO software.

Effective communication: According to Kaak (2017), communication is a strong weapon to create a positive workplace culture among employees. Unilever's company has taken the initiative to commence an employee proposal program where all the employees are welcomed to interpret their individual thoughts and communicate with the management of this company (Unilever, 2020b). Through this effective communication, the Unilever company clears the concept of designing and implementing the MySAP APO software to the employees and they become more knowledgeable. 

Training and Education: According to Mulder et al., (2018), employees are highly required to attain proper training and education from the company. The Training and Development (T&D) team of this company has taken a strong determination to train the employees or users with audio-visual training and computer-based training process (Unilever, 2020a). As a result, the users are notified, skilled, and knowledgeable regarding the designing process and accurate utilization of the MySAP APO software. These success factors have helped Unilever Company to make the employees competent and compatible with accustoming themselves with this new MySAP APO software. 

3. Conclusion 

The analysis of the enterprise resource planning system provides an insight into knowledge regarding the contribution of the software. It has been ascertained from the evaluation that the ERP system is beneficial for making the operational department effective. In this respect, Supply Chain Management (SCM) is noted as a remarkable and advantageous department due to the implementation of the ERP systems within both of the companies. In order to implement the ERP systems, the challenges are broadly identified and the adverse impact of these challenges is also noted with scrutinization. Moreover, the companies take necessary measurements for coping up with these challenges. The analysis has also found that active utilization of different phases of the enterprise system development cycle is needed to be demonstrated while introducing new ERP software within the enterprise. Moreover, the strategic success factors respectively, communication, employee engagement, are highly remarkable for enhancing the business growth with proper implementation and maintenance of the enterprise resource planning software within the organization.