Nike case study on ERP Implementation
The present Nike case study analysis addresses the following questions:
1. How could Organizational Project Management (OPM3) have helped to identify the problems with implementing the demand planning system?
2. What were the three primary reasons Nike was successful with the on-going ERP implementation?
3. Why was a phased rollout the correct decision for Nike?
The OPM3 is known as Organization Project Management Maturity Model. Considering the given Nike case study, it can be stated that many organizations are also introduced in business when any invention is going to be introduced in any business organization and it is its first stage that is the awareness . Some parts of the company of the world are shown interest in new technology while others are facing difficulties to implement such types of models in the organization. In the on-going development procedure representatives' feedback can be utilized for a future version of this model.
OPM3 was developed for the need for a project management standard that prevents to fulfil the organization's demand . The participants from all over the world have been involved in developing these standards based on proper market research and surveys.
Some principle of this research include the following points provided in the Nike case study -
- The models that are existed in project management maturity were verified. This study reflects the gap between the structure of the existing model and the contents that means the requirements in organizational project management .
- In the case of an incremental process of treatment of organizational maturity, this was absolutely true in terms of best capabilities and practices.
The OPM3 knowledge foundation stated Organizational Project Management as the ‘Systematic management of programs, projects, and portfolio that is aligning with the achievement of strategic goals'. The simplified meaning of this statement is that the programs, projects, and portfolios are interrelated and the relationship of them needs to be taking in way of holistic to meet the goal of an organization successfully. In this Nike case study, the OPM3 is applied to Nike to detect the problems at implementing the demand planning system in the production sector.
Figure 1: Element of OPM3 Model
Globally it is known as the best practice standards of developing and accessing portfolio management, project management, and program management. The OPM3 method has the capability to assists the organization in assessing organizational skill set to implement an ERP system effectively . The major problem is with implementing the ERP system is that identify the problem related to the only understanding of users. But OPM3 has the ability to help in Nike’s implementation team by making them understand about the competency and implementation techniques of an ERP system successfully.
Although Nike chooses the demand planning system for implementing it for the first time instead of other old techniques, there are several problems were found related to the software, new techniques, system response time, and the data. In this situation as portrayed in the Nike case study, the OPM3 definitely helps Nike to detect the gap related to the skills of the employee in the organization. At first, these gaps need to be filled to implement this methodology.
OPM3 helps Nike to classify and bring the appropriate projects that are used in the advancement of the old strategy. After that using this strategy Nike can check the operation process across the organization. Then select only the projects which can provide a good business result. As Nike planned to implement new systems they faced many problems regarding information technology skills. So they didn't choose the right project that can solve the problems with the new implementation model that is a demand planning system.
OPM3 also helps the organization by selecting the right projects that are aligned with the strategy of the organization. So that the organization gets better business benefit from this projects. OPM3 will guide Nike when to stay in the old strategy and when to change the procedure of the development strategy. This is fully based on the projects associated with the organization. Some kinds of projects are comfortable with the old strategy of the organization. And some kinds of projects will comfortable with the updated strategy of the organization that can take benefit of the organization. To take the right decision regarding the project the OPK3 helps Nike a lot. Another problem is that at the time of implementation of projects when Nike Supposed to implement the new system they don't consider and acknowledge that the single instant ERP system and implementation plan of the supply chain is different. Thus we can say that the OPM3 will always help Nike to notify the problems at the time of implementation of a new system regarding the production strategy and techniques. OPM3 also provides the guide to Nike for improving the performance that can be a problem in the future. The problem may be arises due to the lack of skills of the employee at the time of the project development process. So the skills and performance need to be developed that guidance isalso provided by OPM3. According to system testing, it was not planned enough to find the issues. OPM3 has the ability to help in performance to improve it because that is very poor quality and it can cause the failure ness of the current project. That causes loss of the organization in the business process.
Thus we can say that in this way Organizational Project Management helps Nike to identify the problems at the time of implementation of the demand planning system.
Nike takes the decision to purchase and implement the single-instance ERP system that consists of supply-chain and the management of customer relationships was anticipated for reducing the cycle of manufacturing from nine-month to six months . This goal is achieved only through better training. Thus Nike's ERP implementation approach was taken the time in its ERP rollout for six years throughout the world that allows the employees to get proper training regarding the technology so it is become very easy to understand the new system properly. After completion of proper training, they are able to solve any problem regarding the ERP implementation and they are also able to minimize any potential loss in revenue of the company .
Behind the success of Nike in ERP implementation, the three primary reasons are there that includes the outcome of the implementation process of the demand planning system, rollout strategy of it that was started in the region of Canada and the extension of it with the Europe and United States, Middle East, and Africa in the year of 2002 to the Asia Pacific and the region of Latin America in the year of 2006. It also includes the supporting nature of employees that was another significant process. This was because the employee understood the ERP implementation process properly that helps the employee one side to secure their job and another side to make their life simple.
The readings used to prepare this Nike case study signifies that the overall plan of business was very complex but all the techniques of the system were explained properly. So these processes were well understood by the company. Thus it is very much easy for Nike to implement this strategy in the project. After that, it was also become very easy to make changes in the demand planning system, and they are continuing the implementation process. At the time of the implementation process, Nike displayed patience. When it is facing mistakes, try to learn from the past, and if they find any risk that will arise seems to be the same mistake as the first ten they take necessary steps immediately to solve the problem and improve it. The whole process occurs very fast.
The representatives of the customer service are provided training of 140 to 180 hours to buy the Nike. At the time of training, the users are locked in such a way that they must need to be completed the proper training course. Then after only they are able to understand everything properly about the organization, so they can use the system effectively.
Nike decided about the approach of the phased rollout for a period of six years with the help of the OPM3 model. It has an effective implementation of ERP systems. At the time of implementation of the demand planning system the company learned and comes up with a report that consists of the problem faced by them and their solution that is needed to improve the ERP implementation . A phased rollout is known as the migration method of software and hardware that involves the progressed implementation of a new technique. The changeover occurs in different ways and it takes too much time in the case of a phased rollout system. This allows the organization to adopt the technology slowly by opposing the speedy adoption. Nike takes the right decision about the phased roll out because they have the chance to learn from their past mistakes at the time of implementation of the demand planning system. Previously they were well known for the complexity faced at the time of implementation of ERP in the project and it took six years of time for proper training. With the help of this situation discussed in the Nike case study analysis, they improved their business strategy and can able to set the goals at the time of implementation of any system. The implementation of any system needs proper training. Without proper training, the employees cannot able to perform the proper task. Along with that, it is not possible to operate the system efficiently, if there are any mistakes happen then the employee can’t able to identify the mistake and also can’t able to solve the problem. Thus the Phased rollout is the correct decision of Nike.
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