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Case Study 3

Nestlé USA implemented an ERP system to standardize business processes, systems, and structures across its autonomous divisions. The project achieved its objectives of cost savings through group buying power and improved data sharing. However, the initial implementation failed due to employee resistance to new processes. The problems stemmed from excluding affected employees from the stakeholder team. While the ERP provided benefits like integration and cost reductions, limitations included complex data conversion, consolidation challenges, and high initial costs from retraining and disruptions.

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368 views

Case Study 3

Nestlé USA implemented an ERP system to standardize business processes, systems, and structures across its autonomous divisions. The project achieved its objectives of cost savings through group buying power and improved data sharing. However, the initial implementation failed due to employee resistance to new processes. The problems stemmed from excluding affected employees from the stakeholder team. While the ERP provided benefits like integration and cost reductions, limitations included complex data conversion, consolidation challenges, and high initial costs from retraining and disruptions.

Uploaded by

Mythes Jica
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CASE STUDY 3

SECTION C (1:00 - 2:00 PM MWF)


Members:
Ablir, Roselle
Amorin, Clint Joy
Esturas, Erica
Navaja, Marjorie

1. Discuss the objective of ERP implementation at Nestlé USA. Did they achieve these
objectives?
The project’s main goal was to use common business processes, systems, and organizational
structures across the autonomous divisions within the United States. These common systems
across Nestlé USA would create savings through group buying power and facilitate data sharing
between the subsidiaries. Yes, Nestlé achieved its objectives. After the implementation of the
ERP system, Nestlé achieved a significant return on investment (ROI).This also allowed the
company to reduce inventory and redistribution expenses. However, in order to obtain these
results they had to restart the implementation process from scratch after facing employee
resistance tothe new business process.

2. Refer to the Nestlé case in this chapter. What problems were faced by Jeri Dunn, CIO, and
what do you think would be the right systems architecture for Nestlé?
Jeri Dunn, CIO of Nestlé USA, joined with executives in charge of finance, supply chain,
distribution, and purchasing to form a key stakeholder’s team for implementing the SAP. The
stakeholder team, however, did not include any members from the groups that would be directly
affected by the new business process. This caused a rebellion in the ranks and the employees
resisted.

3. Discuss the benefits and limitations of ERP implementation at Nestlé USA.


Benefits :
• Integration of customers, suppliers, and partners
• Improvement of customer and business partner satisfaction
• Reduction of administrative costs
• Raised productivity
• Lowered IT operations and systems maintenance costs
Limitations:
• The data conversion and transformation from the old to new system was an extremely tedious
and complex process.
• Consolidation of IT hardware, software and people resources was cumbersome and difficult to
attain.
• Retraining of IT staff and personnel to the new ERP system caused resistance and reduced
productivity over a period of time.

Business Limitations:
• The change of business roles and department boundaries created upheaval and resistance to the
new system.
• Retraining of all employees with the new system became costly and time consuming.
• Nestlé incurred high initial costs of purchasing software, consultant costs and disrupting
the work flow of its employees.

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