1. GM Locomotive says the problem wasn't with the ERP Software. Then what did cause the major failure of the ERP system? Explain.
ERP stands for Enterprise Resource Planning. It is a single computer system that attempts to integrate all the functions and departments across a company. This allows the system to have an overall view of the entire company, enabling all the different departments to align their particular needs with that of the goals of the company (Computerworld, 2005).
There were many reasons for the failure of GM Locomotive's ERP system. Firstly, the software did not reflect the complexity of the distribution process. That is, the locomotive unit's "software wasn't configured well enough to match internal business processes" (Computerworld, 2002, p. 12). The SAP R/3 Software, also adopted by Farmland Industries and Colgate-Palmolive (O'Brien, 2004, p. 195 & 368) performs quite well in the right circumstances. The problem noticed is that there was either (or both) insufficient time and input spent on modifying the technology to suit the direct requirements of the locomotive unit, or there was a lack of expertise when modifying the software to fully integrate all the components required by GM.
GM, like many other companies, underestimated the complexity of planning and development needed to prepare for the new system. It appears that GM introduced the ERP system and expected the results to be immediate without considering the changes required. Through implementing the system to take over many operations at once, GM were doomed.
The conversion process was also rapid and it appears that the expectations of the software were unrealistic. Further to the expectations, top management's view was that they were anticipating results in an unrealistic time-frame. According to a Meta Group Study it takes an average 31 months to see any benefits of the...