From Sparkling Idea to Bottled Disaster: How Cultural Clashes and Poor Planning Derailed a Russian Startup’s ERP Implementation

 

            Judging by the title the text will be about a company that faced a negative outcome after implementing an Enterprise Resource Plan (EPR). The most likely scenario is a situation where a company strives to improve its performance, by implementing an Enterprise Resource Plan (EPR), but it fails terribly to get its intended outcome which also affects its normal operations.

The title without any doubt signals a negative case study. The choice of words captures the eyes of a reader and tunes his or her mind to expect negative scenario. The words Terribly Wrong gives the perception that the company involved under went serious negative situation.

Background / Context

            The case study takes place in Russia where a British Entrepreneur and a CEO visits Russia on a vocation. However, due to the poor state of the bottle water on the ship he sees an opportunity to start a bottled still water company after his encounter with a landlord who owned a land with spring water. He began the factory at St Petersburg and also had an office at Krovogda.

The main characters of the case study are the chief executive officer (CEO), the land owner (landlord), the chief operating officer (COO), the chief financial officer (CFO), and the chief marketing officer (CMO). Each of the character has a unique responsibility that works towards the attainment of the company’s goals.

The characters involved are of different nationalities. The chief executive officer (CEO) is a British national who visited Russia on vacation before starting the company. The chief operating officer (COO) is Brazilian born Russian émigré. The chief financial officer (CFO) is a Russian who has lived and worked in America and Canada. The chief marketing officer is a British national.

Russian Brazilians - Wikipedia

Teething Pains

            The major challenges that the factory faced included the slow unreliable banking system, unavailable telecommunication systems in St Petersburg, slow unreliable provisional cities like Krovogda, ineffective postal system, poor road infrastructure, organised and unorganised crime, repressive and confiscatory tax regime, and the wide spread corruption. These challenges were similar to other start up firms operating in the emerging free markets of the former Soviet Union.

EPR Project

The chief financial officer (CFO) believed that the ERP system would benefit the company through variety of ways. First the electronic system would aid in reaching and processing business transaction, the system would streamline communication between the head office and the factory in Krovogda, the system would strengthen the internal control, and the system was essential element of the IPO strategy and would help in lowering administrative overhead.

Energy Project Resources, Inc. (EPR) | LinkedIn

 

Factory EPR Implementation

            Things at the factory began to go wrong after the chief financial officer goes for a vacation in California. He thought after implementation things would flow smoothly. However, after he went to California he could not be reached due to the high charges on telephone and the internet was unavailable. When he returned he found accounting systems in a disaster, the employees failed to follow data protocol. There was no invoice information and hence could not verify accounting receivables. There was also the technical and functional inadequacy.

Epilogue

            The epilogue reveals that the rivalry in the work settings could affect the performance of the company. According to the epilogue the chief operating officer (COO) was responsible for the failure of the EPR system. Since he was in charge of the Krovogda office, he felt the chief financial officer was out to replace him and that forced him to instruct the clerk and the IT manager not to synchronize data.