Case Study: Opening Case Of Men and Mice: An ERP Case Study
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.
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.
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.
- An argument to persuade management that an ERP is required,
- Feasibility analysis,
- Issues that may arise due to incomplete elicitation of requirements and misalignment between the business processes and organisational strategy
- Risks associated with BPR and ERP customisation
- Current business processes
- Proposed changes to the business processes
- The reason for organisational change,
- Alignment of an ERP with the organisation's goals.
- Benefits and limitations of ERPs in the context of this organisation, and
- The organisational commitment, especially from management, for this organisation.