Nike Case Study Implementation Of ERP System
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?
This assessment is based on the implementation of the ERP system at Nike considering the information provided in the Nike case study. Nike is a leading footwear American brand that has expanded a business globally. The company was founded by Bill Bowerman and Phil Knight in 1964 in Oregon (Referred to the Case Study). In the year 1998, the company decided to launch a single ERP system to control the total chain of supply and operational sectors of the organization. Accordingly, they framed a six years plan which created a necessity of having a Demand Planning System which initially created a lot of problems when it is applied by the organization for their operational activities. This article will provide a detailed assessment of how the problems relating to ERP application had been identified by Nike using Organizational Project Management (OPM3).
2.0. Identification of the problems faced by Nike in implementing
Demand Planning System by the help of OPMO3 Organizational Project management can be defined as systematic unification and coordination of all processes, structure, network, and operation for improving the performance of the current operation of the organization . OPMO3 is the model by which organizational management is done .
Nike, in the year 1998 found that the system of customized management was not being able to manage their systematic dealings efficiently. So they decided to have a single ERP system along with other operational management systems. While planning for the framing of the system the company opted for the Demand Planning System which seemed to be a logical decision as the number of users is relatively small for ERP System implementation. But while implementing the Demand Planning system proved difficult to handle and created several problems such as delayed response time, data-related issues, etc. Nike lacks that training process which provides them a small number of efficient users of that system. Thus with the help of OPMO3, the organization has recognized those aspects which were creating the problem. After recognizing the areas of the problem the next step of the organization is to explore the possible effective options that can solve the problem effectively. Nike also followed this process and be able to overcome the situation with strategic and implementation efficiency. OPM3 enabled Nike to
frame a roadmap that would act as a guide plan for the organization. In the case of Nike, this assessment led them to recognize the gaps provided by the Demand Planning System and also enable them to implement the new ERP method in such a way that it is adapted efficiently and gradually without hampering the business functioning.
3.0. Reasons behind the successful implementation of an ERP system by
The three reasons which lead to the successful implementation of the ERP system of Nike are as follows:
The first and foremost reason is time. Nike observes the problem areas patiently throughout the year. They invested a longer period to implement an accurate system. From 1998 to 2000 the company continuously tried to find a way out of the problem. Their continuous effort and time investment have given them the solution which not only proves effective but permanent. Nike had given most times to study from the problems of the DPS. It also recognizes and learns from its own mistake or fault in perception. Learning from mistakes had enabled the company to develop and improve themselves which made their organizational operation strong . Thus, it can be seen that proper identification of the problematic aspects is not enough until it was realized and studied.
The company recognizes a lack of training of the customer care representatives of their organization. Thus, the company decided to train its employees. Nike had planned and implemented a strong training campaign all over the globe. They started the campaign from Canada and then gradually spread it through Asia Pacific Region, Latin American Region, Middle East, Europe, Africa, etc. As referred to the Nike case study, they trained near about 6300 users in their first campaign. Thus, the company recognizes the significance of the training process especially in respect of operating with new systems or devices. The training not only helps them to be able to handle the process properly . But it also provides them the opportunity to nurture their inner incompetency.
The third and last reason is that Nike had implemented the method of BPR or Business Process Reengineering to recognize the performance-based goals of the project they were working on. BPR is a method of recreation of a core system to lower down production costs . This process involves five-step namely mapping the present business circumstances, analyze it to recognize the problem areas or gaps, explore developing options, designing a well-planned map for future implementation, and finally implement the plan only after having full assurance and confidence over it.
4.0. The phased rollout – effective decision by Nike
Phased Rollout is hardware or a migration method of software that deals with the application of a new process in business. This method can be done by two processes. It can either be carried out by introducing a fresh new process to a business segment or location or implementing just a portion or section of an existing system . Analysing the readings of Nike case study, it can be stated that this method enables the customer as well as the employees who handle it within an organization to adapt and use the new system efficiently gradually. The application of this method proved effective for Nike because they had gathered experience from their past mistake and learned from the consequences they faced by the implementation of the demand planning system. Secondly, they know that the ERP system is very complex to set up as well as in usage. So they decided to set this new system step by step over six years which enable them to learn and adapt each of the aspects related to the system operation. To execute this decision the phased rollout system is the most effective way. In this way, they overcome the solution without hampering business development. Moreover, this way not only helps to improve the efficiency of the application of the system but also helps them to achieve their organizational goals.
5.0. ERP Implementation Plan
Project team - To construct an ERP system first Nike needs an efficient team which comprises of all those members required to fulfill all the aspects of the system. The members include
1) The project leader or manager
2) Application Analyst
3) Application Developer and
4) Testing Engineer
5) Account manager
Create an implementation plan
There are two steps to this step
- First, an implementation plan needs to be framed and the team is to be informed about it
- Secondly, a secondary plan must be framed so that Nike can execute this project without hampering the other aspects of organizational operation .
The total implementation cost needs to be estimated and decided and accordingly, the budget needs to be prepared.
The next step is the first step of execution where Data Analysts set up the initial data framework .
Training of the User Base
The company needs to conduct a training program for those who will use it in future Planning for execution
The planning contains how the work can be executed efficiently and within the time frame.
Evaluation of the implementation
The report of the implementation must be documented.
This report is based on the Nike case study analysis and assessment of the company in its experience of implementing an ERP system to business functioning. Nike being the leading company of the U.S. had also faced serious issues in its initial stages of business. After it had decided to set up An ERP system the organization had faced lots of obstacles to achieve this objective. This article lays down a detailed discussion of how the company identified the gaps from their initial set up and overcome it. It also illustrates the ways Nike had achieved its desired goal by implementing a phased rollout method. To conclude it can be said that this report can help study as an example of overcoming organizational challenges.
7.0. What are the recommendations to the present scenario of Nike case
- All the initial planning must be documented, copies of which must be given to each of the members of the team.
- An alternative plan needs to be framed in the system set up for back up purpose. that can provide a backup process if the system fails to function with the default design.
- The team for the project must be chosen carefully considering all the aspects of the project .
- Testing of the system is very crucial for such implementation. This step must be given enough time with efficient engineers who can observe the system minutely and accordingly incorporate features.
- Training is the most important aspect which needs to be conducted in four phases
- To the designer of the system
- To the engineer who will test the system
- To the customer care representative who will handle the system regularly
- To the user through an online training program.
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