FoxMayer Case

Author

Institution

One of the key actions taken by the management of FoxMeyer was poorly selecting the software for its needs. The SAP R /3 software was not flexible with the requirements of the company since it was initially designed for manufacturing companies and not wholesalers that were engaged in handling vast number of transactions. The management failed in the selection of the software since the R /3 software was only capable of handling 10,000 transactions in a day while the legacy system could handle 420,000 transactions in a day (Vaman, 2007). Therefore, choosing to implement the R /3 software was a management failure. The management of FoxMeyer did not have contingency planning on how it could deal with changes experienced in the business operations. For instance, a chief customer of the company became declared bankrupt shortly after the company launched SAP (Scott, n.d). The management also failed to involve end users; there was a communication gap since the management used a top-down approach in planning the project.

Besides, the management failed to have sufficient testing of the SAP R /3 before its implementation. The management rushed in implementing the project, which implies that some modules testing was skipped. The R /3 system did not have proper testing so as to determine any shortcomings in handling a vast number of transactions; there was insufficient time in debugging the system in order to determine its functionality with the company’s needs. In addition, the management had poor support for the SAP R /3 system. Originally, the management were extremely committed and supportive to the project; however, after the commencement of the project implementation, the management became reluctant in acknowledging the problems associated with the project; the management failed in recognizing the resources and timelines needed in the implementation of the SAP R /3 project.

The managers of FoxMeyer missed various key opportunities that could have led to the success of the company in selecting and implementation of an IT-project. The managers of the company failed to have a successful software selection. The managers should have engaged different technical specialists in understanding how different software functions through comparing the needs of the company and the various pros and cons of different software. Rather than considering the advice of a single software consultant, the managers should have involved different consultants in order to know, which software would be beneficial to the company (McKeen & Smith, 2007). On the same note, the managers missed to have testing of the software that they implemented; software testing could be helpful in making the managers make up their mind on which software could match the company’s needs.

The managers also missed an opportunity of developing a contingency plan. The managers should have developed a contingency plan of how to ensure survival in case the system failed. This could have helped in saving the company when the system did not work. Besides, the managers of the company missed the opportunity of engaging all the stakeholders, which could have involved customers of the company and end users. The involvement of all stakeholders could have assisted in analyzing the various opinions of stakeholders in the initial stages of the project (Robinson & Kalakota, 2000). In addition, the managers of the company missed an opportunity of monitoring the project thoroughly. A close monitoring of the project could have helped the managers detect related costs and benefits of the project at an early stage (Brown et al, 2012).

References

Brown, V.C, Dehayes, W.D., Hoffer, A.J., Martin, E.W. & Perkins, C.W. (2012). Managing Information Technology (7th Edition). New York: Prentice Hall.

McKeen, J.D & Smith, H.A. (2007, June). “Delivering IT Functions: A decision Framework.” Communications of the Association for Information Systems. Vol. 19 (35).

Robinson, M., & Kalakota, R. (2000). E-business 2.0: Roadmap for success. Boston, MA: Addison-Wesley.

Scott, E.J. (n.d). The FoxMeyer Drug’s Bankruptcy: Was it a Failure of ERP? The university of Texas at Austin.

Vaman, J. N. (2007). ERP in practice: ERP strategies for steering organizational competence and competitive advantage. New Delhi: Tata McGraw-Hill Pub. Co.