MITS5502 Enterprise Systems

Nestle is one of food and beverages company which operates virtually all over the planet. The company is headquartered in VEVEY, Switzerland. The company is estimated to have had revenues of over 80 billion dollars by the end of 2018. Also, the company is estimated to have over two hundred thousand employees in over eighty countries in around five hundred facilities across the world. The company is best known for its coffee, milk, and chocolate products. The company also sells other items but most of which fit local cultures and markets (Dieringer, 2019, p. 4). In 2004 the company reported failed Enterprise Resource Planning implementation project. This has been caused by both non-technical and technical operations

Traditionally Nestle Company organized in a series of brands where each was operating independently. This resulted in heavy decentralization within the company as they tried to fit their brands within various cultures and geographical areas. However, the company later worked on making the company what the company CEO at that time referred to as ‘One Nestle’; at this time it was when they introduced ERP as a unifying factor but to no avail. Some of the non-operation issues which caused ERP failure were; first, the key or the important stakeholders’ team did not have any staff during the planning and implementation phases. Second, there were a lot of employees resistant to changes; workers at that time were hesitant to re-designed business processes.

Third, the company adopted a rushing mechanism to make Nestle one which in turn resulted in a lack of integration of various modules properly with the ERP.  This even resulted in division among the top executive members which crippled the whole process of ERP implementation. Forth there was too much pressure both within the company and outside without proper preparations which resulted in the loss of the bigger picture. Fifth, there was a lack of proper definition of business requirements and a good project timeline which was supposed to be around company needs.

Also, there was a lack of communication between various functional divisions and the project team. Lastly, Nestle Company was seeking to bring in a new strategy to an already established and successful setting. In this case, the ERP system was seeking to re-engineer and re-fine organization work processes which in turn increased the risk of failure of the ERP (Yu, 2017, p. 45).

One of the technical challenges which resulted to ERP failure at Nestle was that the company never had enough technical resources such as server to fully run the ERP system. Second is that the company never had technical human power who were to deploy all the ERP system modules and continue with the process of induction to other employees.  Third, the company lacked what was at that time known as a wrap-up. Usually, software projects involve moving lots of parts. This means that the business or any company needs not navigate alone in the process of ERP implementation. It is required the company team with ERP specialists like Datix who are more experienced in providing ERP implementations, cloud hosting, and integrations. The company lacked this technical element (Stapleton, 2017, p. 21).  

References

Dieringer, 2019. ERP implementation at Nestle, s.l.: Cisco Press.

Stapleton, G. &. R., 2017. Change management underpins a successful ERP implementation at Marathon Oil. Journal of organizational excellence, 3(2), pp. 15-22.

Yu, 2017. Causes influencing the effectiveness of the post‐implementation ERP system. Industrial Management & Data Systems., 2(3), pp. 12-78.

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