The Early challenges that Natural Springs faced
Read the article (available in the library) “Krotov et al (2011) "ERP Implementation
Gone Terribly Wrong: The Case of Natural Springs". Ask Dr Judy there if you can’t find
it! Communications of the Association for Information Systems: Vol. 28, Article 18.”
a) Give short definitions/descriptions for the specialized words in the article (5 marks)
1. Provincial cities
2. Subsidiary
3. Infrastructure
4. Loath
5. Arbitrate
6. Compromised
7. Disarray
b) Answer the questions for each section (1 mark each) (its one mark only don’t write a
lot)
Teething Pains
What were some of the early challenges that Natural Springs faced?
Were these challenges similar or different to other firms operating in the
emerging free markets of the former Soviet Union?
ERP Project
Why did the CFO believe an ERP system would benefit the company?
c) Discuss the lessons of this case. (170 words) (5 marks)
Why did the ERP implementation fail? Answer in terms of:
o Package Selection
o Critical Success Factors
What can we learn from this scenario?
Solution
Give short definitions/descriptions for the specialized words in the article (5
marks).
Provincial cities; are other cities or towns in other provinces apart from the capital city, for
example, Krivogda a city that is far away from St. Petersburg.
Subsidiary; it is a company that is partly or entirely owned by another company referred to as a
parent company or holding company. The parent company controls the subsidiary company as it
owns more than 50% of the voting stock of the subsidiary.
Infrastructure; are the basic equipment and structures such as roads, bridges, communication
facilities that are needed for a country or a particular region to function properly.
Loath; it is a situation whereby someone feels unwilling or reluctant to do something especially,
one which is contrary to one's way of thinking.
Arbitrate; to settle a dispute or an argument between two people or groups after hearing the
opinions and ideas of the two.
Compromised; it is a way of reaching agreement in which each person or group gives up or
drops something they wanted in order to end an argument or dispute.
Disarray; a situation where there is no order o confusion. A state of disorganization or
untidiness of a place (Krotov, Boukhonine & Ives, 2011).
b) Answer the questions for each section (1 mark each)
1. What were some of the early challenges that Natural Springs faced?
ASSIGNMENT
Unreliable and slow banking system in Russia.
Poor communication facilitates which were unreliable in all provincial cities.
Poor road infrastructures.
Organized crime and corruption.
Repressive and confiscatory tax practices (Krotov, Boukhonine & Ives, 2011).
2. Were these challenges similar or different to other firms operating in the emerging
free markets of the former Soviet Union?
The challenges were similar to those faced by other firms operating in the emerging free market
of the former Soviet Union. The external challenges faced by other firms also affect the company
such as repressive tax systems, poor infrastructures among others in the country.
3. Why did the CFO believe an ERP system would benefit the company?
CFO felt that the ERP system could be of benefit to the company as he had used the
system before joining the Natural Springs where he helped implement a sun system which
worked very well at that company. CFO felt that the company should upgrade as the company
kept its business transactions record manually, which is prone to errors and delays and therefore,
could be improved by electronic systems for recording business transactions. Furthermore, the
ERP system will help to streamline communication and improve customer services between the
ASSIGNMENT
head office in St. Petersburg and the factory premises in Krivogda (Krotov, Boukhonine & Ives,
2011).
C) Discuss the lessons of this case.
i. Why did the ERP implementation fail?
One of the key factors that made the ERP system implementation fail in the company was
the improper package selection, the package selected could not work well with the Russian
Accounting Standards and human resource management requirement.
The system lacked support from the executive staff members especially COO who made
it sure that the system implementation failed by ordering the clerk and IT manager not to
synchronize data with the St. Petersburg office and also ordered them to keep quiet about it.
ii. What can we learn from this scenario?
The main lesson we can learn from the case is that we should learn to involve every
stakeholder in a firm in the decision-making process and the implementation stages of any
crucial project in the enterprise. Furthermore, conscious efforts should be made to avoid making
choices that are not accommodated by the rule of a nation or by a firm in transition as most of the
times are prone to fail
ASSIGNMENT
Reference
Krotov, V., Boukhonine, S., & Ives, B. (2011). ERP implementation gone terribly wrong: the
case of natural springs. Communications of the Association for Information
Systems, 28(18), 277-282.
Akkermans, H., & van Helden, K. (2002). Vicious and virtuous cycles in ERP implementation: a
case study of interrelations between critical success factors. European Journal of
Information Systems.
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