Ikiya Sdn Bhd is manufacturer of furniture and household appliances. In line with its growing business, there

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Ikiya Sdn Bhd is manufacturer of furniture and household appliances. In line with its growing business, there has been an increase on the company's information needs. The existing systems, which were independently maintained by each division were unable to support such requests. Therefore, Erma, Head of Information Technology (IT) division who was given full authority by top management, perceived that the project as highly technical. As the CEO states, "Let the technical team handle such project as long as it is within our budget and time frame".

Erma then initiated the project by identifying seven team members which consisted of three IT officers and four representatives from other major divisions. Although most of the division representative were Management Information System graduates, they were relatively new and were not fully understand the manufacturing environment and their respective division's operation. Meanwhile, the senior division staff were not included as they did not have IT related background.

After a quick review, Erma decided to embark on Synergy ERP solution to integrate inventory, production, order processing, financial, accounting and costing functions. The project team also appointed an independent consultant, Comet Consulting to facilitate the project implementation. It was the first time for Comet Consulting to handle ERP Project for furniture and household appliances manufacturer. Moreover, three out of four consultants were foreigners who had just migrated to Malaysia hence creating communication barriers with the staff in various divisions during the system review stage.

Only Erma and selected division representatives work closely with an independent consultant. In most cases, Erma made her own decisions and sometimes ignored concerns raised by the consultants and other team members. Moreover, consultants did not conduct business process analysis to align Synergy ERP functionalities with Ikiya's business requirement. Rushing for the project deadline, Erma made most of the decisions when there was any misalignment found. Moreover, most of the division representatives did not fully understand the implications on business operation. Where possible, the misalignment identified was resolved by modifying the existing business processes without first consulting staffs in affected divisions. Erma believed that this would help firm to reduce the cost and time to customise the ERP system.

Within six months, all the staff involved had been assigned highly time consuming and highly technical task on the ERP project despite lack of experience in handling ERP related project. At the same time, the appointed staffs also had to deal with their daily jobs. Top management simply stayed silent when this issue was raised by the staff involved. Even so, no incentive and relief were provided to ease their burden. During the implementation stage, the consultant team suggested phased approach in view of number of module to be implemented. Erma, however disagreed with the consultant team recommendation and insisted on Big Bang approach. Erma had set the implementation date which was several weeks before the festive season. The consultant team also conducted a short training session only for those staff affected by the new system. Very brief training, material and user documentation provided by the consultant team were found to be unhelpful by the end user. Consequently, the users were afraid of not acquiring sufficient knowledge and skills to use, maintain and support ERP system due to limited exposure on the new system.

During its implementation, several divisions suffer serious problem in managing their daily operating. Only then the project team realised that many parts of the system modules did not really fit with the current business processes particularly on the cost calculation and reporting requirement of various divisions. Due to numerous errors, the production also had to be temporarily shut down which affects the fulfilment of customers' order for festive season. In another respect, managers and staff in many divisions voiced out their dissatisfaction over the system and refused to adopt the new ERP system.

Required:

a) Define Enterprise Resource Planning (ERP) systems.

b) Describe FOUR characteristics of Enterprise Resources Planning (ERP) system that may improve Ikiya's current information systems, if properly implemented.