Reference no: EM132522439

MITS6004 Enterprise Resource Planning - Victorian Institute of Technology

Assignment

Opening Case
Of Men and Mice: An ERP Case Study

Source: Based on the article by Katz, D. (2001). Of Men and Mice: An ERP Case Study, CFO.com, March 21.

Jackson Laboratory is a non-profit, independent, world-renowned genetic research institute founded in 1929. Located in Bar Harbor, Maine, it had a budget of $80 million and 1,200 employees, including 32 in IT. Jackson Laboratory decided to install an ERP system with a $5 million budget and a one-year time frame. Despite the installation challenges, the project's actual cost was close to the budget and took only about six months longer than expected.
Jackson Lab's major installation challenge was the integration of its unique mouse- development functions into Oracle's ERP system. One of the problems faced by Jackson stemmed from an internal HR issue (i.e., the risk that the action or inaction of the software provider would hinder the implementation). Jackson Lab coped with these challenges by modifying the ERP system to accommodate its business process, placing special emphasis on training, seeking a fixed-fee contract with Oracle, and purchasing a surety bond to reduce project risk. The surety bond was issued by an entity on behalf of a second party, guaranteeing that the second party would fulfil an obligation or series of obligations to a third party.

In the event that the obligations are not met, the third party would recover its losses via the bond. Every year about $3 billion worth of surety bonds are generated by construction projects compared with a mere $8 million for IT (mostly for governmental contracts); however, there is insufficient commonality and standardization in the IT industry on the bonds. A surety bond works well only for a fixed-fee contract because it provides the benchmarks needed to frame a bond price. Jackson Lab selected an integrated ERP suite from Oracle rather than a best-of-breed option. The Oracle applications suite included modules for process manufacturing, accounting, e-procurement, and HR, among others. Their biggest challenge was modification of the Oracle Process Manufacturing (OPM) module to accommodate the lab's unique business processes of raising and distributing mice. The OPM module was designed for companies that mix ingredients together to produce such products as bread or beer, not for a lab environment.
The implementation team chose a phased-implementation approach instead of a big bang approach. The first phase initially went live in February, including the management of production capacity, accounts receivable, some general-ledger functions, and the purchasing of manufacturing material; in April, they launched other modules including accounting for research grants, the rest of general-ledger functions, accounts payable, and fixed assets.
For the second phase, which began in June, the remaining modules including process management, human resources, payroll, labor distribution, and a grant filing application were installed. Jackson faced personnel problems during ERP installation when the best and brightest employees were involved in the implementation process, leaving them shorthanded to do the everyday work. In addition, Jackson's IT staff lacked experience with ERP, only one person had some experience in installing an ERP.

Further cost overruns resulted from training, an especially big-cost item. The time- and-materials basis contract would have increased the risk of overtime and going over budget because vendors and consultants have an interest in quoting low and seeing the work grow as the project proceeds. There is a natural competitiveness between the buyer and the ERP vendor.

The vendor benefits by placing a "veil of complexity" over their work; the buyer wants to get the system up and running with the least amount of work and customization. The service-level agreements generally tend to be very complex because a much clearer definition of roles and responsibilities between client and service provider is needed. From a consultant's and vendor's perspective, a high (>25 percent) contingency is quite reasonable depending on the nature of the work, whereas this is too much from the buyer's perspective.

Objectives(s):

This assessment item relates to the unit learning outcomes as in the unit descriptor. This assessment is designed to improve student collaborative skills in a team environment and to give students experience in constructing a range of documents as deliverables for different stages of the Enterprise Resource Planning using a simulated industry case study.

Major Study Assignment

In this assignment student will work in small groups to develop components of the phased implementation approach discussed in lectures. Student groups should be no more than four. Each group needs to complete the group participation form attached to the end of this document. Assignments will not be graded unless a group participation form is completed.

Carefully read the associated case study above and from this Assignment you are to prepare the following documents.

1. System Description
2. Scope of the System
3. Executive Overview
Project Identifiers
Project Summary
4. Software Requirement Specification
Functional Requirements
Non-Functional Requirements
5. ERP Selection & Implementation
ERP Selection
Vendor Satisfaction
Deployment Options
Implementation Approach
6. System Description
Analysis and Design
Methodologies
Prototype
Acquisition & Development
Hardware and Software
Customization
Configuration
7. Feasibility Analysis
8. Issue, Risk & Change Management
Open risks
Open change requests

9. ERP implementation costs
Project costs
Project duration
Success & Failure 10.Conclusion

The above list of documents is not necessarily in any order. The chronological order we cover these topics in lectures is not meant to dictate the order in which you collate these into one coherent document for your assignment.

Your report must include a Title page with the title of the Assignment and the name and ID numbers of all group members. A contents page showing page numbers and titles of all major sections of the report. All figures included must have captions and Figure numbers and be referenced within the document. Captions for figures placed below the figure, captions for tables placed above the table. Include a footer with the page number. Your report should use 1.5 spacing with a 12 point Times New Roman font. Include references where appropriate. Citation of sources is mandatory and must be in the Harward style.

Only one submission is made per group. The group should select a member to submit the assignment by the due date and time. All members of the group will receive the same grade unless special arrangement is made due to group conflicts. Any conflict should be resolved by the group, but failing that, please contact your lecture who will then resolve any issues which may involve specific assignment of work tasks, or removal of group members.

Attachment:- Enterprise Resource Planning.rar