This case study on NIBCO’s SAP ERP system implementation covers these topics:
- Reasons for NIBCO’s implementation of SAP ERP system
- The characteristics of NIBCO’s Big Bang approach
- Pros and Cons of the Big Bang approach (Advantages / Disadvantages)
- Analysis and recommendation of the management of the implementation
NIBCO implemented its SAP ERP system in 1997 in order to improve business performance. ERP refers to a set of software functionalities specifically made to address the needs of business in an integrated manner. In this integrated manner, the functions of ERP support business activities through improved system performance and better IT support for operations and decision-making.
Reasons for ERP Implementation at NIBCO
The main reason for NIBCO’s SAP ERP system implementation was to improve its overall organizational performance through better IT support. Better IT support would lead to improved IT-based competitiveness. The company’s old systems were not properly integrated. Different departments had different systems, many of which had similar and redundant functions, which meant waste of resources. Through SAP ERP system implementation, NIBCO was expecting reduced redundancy and improved process efficiency through integration.
NIBCO’s The Big Bang Implementation Approach
The approach was called “Big Bang” because it involved complete or full implementation in all of the firm’s facilities at the same time. In some firms, the SAP ERP system is implemented using a staggered or gradual approach, one department at a time. NIBCO’s Big Bang approach required implementing the SAP ERP system throughout the company at the same time.
Pros / Advantages of NIBCO’s ERP Implementation Approach
The main pros/advantages of the Big Bang approach include the shortened duration of the project. A short duration required less time-based resources, such as employees needed to man the project. Thus, the company was able to reduce project management and implementation costs of the SAP ERP system.
The pros/benefits of the Big Bang approach also include the reduced disruption on the business. Any IT implementation can disrupt business operations. Because the Big Bang approach in NIBCO’s SAP ERP system was shorter in duration, it created less disruption.
Cons / Disadvantages of NIBCO’s ERP Implementation Approach
The cons/disadvantages of the Big Bang approach include the greater risk and its potential effects. In the staggered/gradual approach, there is smaller risk because the implementation is only partial in a given timeframe. In the Big Bang approach for SAP ERP system, the risk is much bigger for NIBCO because the entire system is implemented throughout the firm right away.
The cons/disadvantages of the Big Bang approach also include the requirement for a more experienced project management team. It also requires more intensive technical support for users during and immediately after implementation. The Big Bang approach has a larger organization-wide coverage throughout NIBCO, thereby imposing greater pressure for management and technical support for the SAP ERP system.
Analysis and Recommendation on How the Project was Managed
NIBCO’s SAP ERP system was implemented using a project management team under the Tiger Triad leadership. This Tiger Triad was composed of personnel acting as co-leads. Wilson was responsible for the technology aspect, Beutler was responsible for business coordination and Davis was responsible for change management. The project management approach was comprehensive enough. The management structure was partially centralized because of these three co-leads, but they were effectively coordinated to ensure that the project moved on as one. Thus, this approach of using co-leads in the management structure would be recommended for this Big Bang approach to SAP ERP system implementation.
Brown, C., & Vessey, I. (2001). NIBCO’s “Big Bang”: An SAP Implementation. Communications of AIS, 5.