FoxMayer Case

One of the key actions taken by the management of FoxMeyer was poorly
selecting the software for its needs. The SAP R /3 software was not
flexible with the requirements of the company since it was initially
designed for manufacturing companies and not wholesalers that were
engaged in handling vast number of transactions. The management failed
in the selection of the software since the R /3 software was only
capable of handling 10,000 transactions in a day while the legacy system
could handle 420,000 transactions in a day (Vaman, 2007). Therefore,
choosing to implement the R /3 software was a management failure. The
management of FoxMeyer did not have contingency planning on how it could
deal with changes experienced in the business operations. For instance,
a chief customer of the company became declared bankrupt shortly after
the company launched SAP (Scott, n.d). The management also failed to
involve end users there was a communication gap since the management
used a top-down approach in planning the project.
Besides, the management failed to have sufficient testing of the SAP R
/3 before its implementation. The management rushed in implementing the
project, which implies that some modules testing was skipped. The R /3
system did not have proper testing so as to determine any shortcomings
in handling a vast number of transactions there was insufficient time
in debugging the system in order to determine its functionality with the
company’s needs. In addition, the management had poor support for the
SAP R /3 system. Originally, the management were extremely committed and
supportive to the project however, after the commencement of the
project implementation, the management became reluctant in acknowledging
the problems associated with the project the management failed in
recognizing the resources and timelines needed in the implementation of
the SAP R /3 project.
The managers of FoxMeyer missed various key opportunities that could
have led to the success of the company in selecting and implementation
of an IT-project. The managers of the company failed to have a
successful software selection. The managers should have engaged
different technical specialists in understanding how different software
functions through comparing the needs of the company and the various
pros and cons of different software. Rather than considering the advice
of a single software consultant, the managers should have involved
different consultants in order to know, which software would be
beneficial to the company (McKeen & Smith, 2007). On the same note, the
managers missed to have testing of the software that they implemented
software testing could be helpful in making the managers make up their
mind on which software could match the company’s needs.
The managers also missed an opportunity of developing a contingency
plan. The managers should have developed a contingency plan of how to
ensure survival in case the system failed. This could have helped in
saving the company when the system did not work. Besides, the managers
of the company missed the opportunity of engaging all the stakeholders,
which could have involved customers of the company and end users. The
involvement of all stakeholders could have assisted in analyzing the
various opinions of stakeholders in the initial stages of the project
(Robinson & Kalakota, 2000). In addition, the managers of the company
missed an opportunity of monitoring the project thoroughly. A close
monitoring of the project could have helped the managers detect related
costs and benefits of the project at an early stage (Brown et al, 2012).
Brown, V.C, Dehayes, W.D., Hoffer, A.J., Martin, E.W. & Perkins, C.W.
(2012). Managing Information Technology (7th Edition). New York:
Prentice Hall.
McKeen, J.D & Smith, H.A. (2007, June). “Delivering IT Functions: A
decision Framework.” Communications of the Association for Information
Systems. Vol. 19 (35).
Robinson, M., & Kalakota, R. (2000). E-business 2.0: Roadmap for
success. Boston, MA: Addison-Wesley.
Scott, E.J. (n.d). The FoxMeyer Drug’s Bankruptcy: Was it a Failure of
ERP? The university of Texas at Austin.
Vaman, J. N. (2007). ERP in practice: ERP strategies for steering
organizational competence and competitive advantage. New Delhi: Tata
McGraw-Hill Pub. Co.

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