Paper 21
Introduction
SAP is a project that is intended to control profit growth which is necessary to maintain it high and elevate shareholder value Nestle put to paper a $200 million contract with SAP and added $80 million for consulting as well as maintenance to install an ERP system for its organizations (Marchewka, pp. 320-322). The SAP system is destined to be applied in centralizing a conglomerate with is composed of several companies. However a move by the company arose much to be desired, considering that the ERP system will be beneficial for years to come, worry was on how the SAP was being implemented (Worthen, May 15, 2002). The implementation is filled with blockages and is too costly.
Coming to the implementation of the SAP, the innovation of the project begins with invention then goes to development and testing, headed to a new product advancement that basically is innovation then to business advancement or extension then ended with what is known as ‘harvesting’. In implementation, there are varied problems that are faced as have been shown in the Nestle case. With the acquisition of a new product the form of distribution, global expansion, realization of synergies and consequently harvesting would lead to the desired benefits as desired.
Nestle was not quite successful, the reason was that the new product s could not make it to the market in the correct time. This was so noted in the LC-1 in comparison to the Danone’s Actimel. The concept that behind it was quite good but the decentralization business method, considering that each market had its own strategies and consideration; it was not useful in sustaining the product in the markets. Nestle could have done it better considering the Danone case which was composed of one organization focused on a single product. Considering that Nestle on the other hand were being managed in several other product businesses concurrently and since the project had to compete internally and externally with other existing products, it never acquired much attention for it to be successful (Gelinas & Dull, Feb 27, 2009). The Nestle Growth hence just needs to be managed and invested in smaller enterprises external to Nestle with new products that will do much to implement and advance the new products until the business is big enough to be combined into a massive internationally-based Nestle marketing and sales system. Therefore space will be kept for testing, implementation and growth external to Nestle and make use of the small enterprises to acquire success which is a let down by Nestle.
In terms of finance, it has to be in accordance with the strategy of the company. The finance should be used to acquire the objectives of the business (Daum, 2007). SAP has the objective of upholding the company while it is changing form a product market to a business solution base with keen consideration in the size of the business in the market, which will give the clients single products as well as a stage that is able to combine several services in a more dynamic manner. This will make the clients to be much better in upholding innovation, considering IT and may do much to limit the cost of ownership. And for the purpose of being involved in the strategy as well as upholding the transformation in business Nestle should have to transform its organization of finance. Adaptation has to be strife in the manner operation is done.
It is in the financial organization that Nestle has to have the local CFO to uphold operationalization of the objective of the company which consequently means that CFO has to transform. It basically means a move away from transactional procedure to consider in a keener manner the task of the partner. This is supposed to be upheld through sharing the service framework so as to let lose some resources so as to improve the support of the business. There should be no relaxation in this.
Nestle in the management of the SAP project has to have different mind sets and be in constant challenge and control of innovation. It has to have a bearing in creative destruction, for instance while terminating recording the company ought to come up with measures it could turn from people acquiring relevant information that will be much useful in assisting them make better choices to bringing the information that is required (Nestle, 2008). The management of SAP should in no way put the finances and management stability in jeopardy. Nestle should hence focus in the finances as well as growth and competitiveness.
The lesson learnt that SAP was not software but an IT project was very correct. This is so because as the project transformed the manner in which people worked. Consequently, the project went through a number of years and involved a lot of millions than anticipated. The staff however did not go down well with the changes of the business practices that were occurring. For instance, the staff was not willing to adapt to the new supply chain facilities.
SAP is meant to impact implication on an enterprise as well as the working style of the organization. The SAP is supposed to break up a certain context so as to transform it and keep it in the desired form. Not unless the organization is able to manage the implication, the new business will not be in a good position to adapt effectively and used efficiently. The change management is desire to integrate the system implementation with the transformation process. The change process involves the whole organization change, technological change and social change (Galoppin & Caems). The change process of management is keen on the impacts that the transformations have on the managers and staff- different demands in formulating other requirements for competiveness and skills.
SAP is a change management approach that offers varied facilities and manner to acquire the success aspects like; common orientation which is meant to increase transparency of the program and objectives and aligns the managers and staff with the goals of the change process. There is also conviction which controls successful transformation with the help of a better vision of the coming states and beneficial so as to let go of the current state. In terms of ability, it is able to acquire an understanding of the transformation of the new procedures, reviewed tasks and the skills required to manage new business competently (SAP, 2012). Uniform perception is acquired with the help of SAP considering that it manages efficiency of change procedure through aligning the project enterprise doings and interaction to the staff of the company. With the change process, beneficial outcome is acquired through ensuring that the staff is in a good position to visualize experience and accept good transformation procedure in the timeliest manner. Looking at the long term implications, the changes bring about beneficial reinforcement characterized by a new mindset and conduct.
The application of SAP as a change management tool makes it possible to combine strategy transformation advancement procedure and business procedure re making the projects and consequently limiting the costs for productivity, risk reaction and network.
Bibliography
Daum, J. H. (2007). Innovation management and the role of finance: status, challenges, and vision.
Galoppin, L., & Caems, S. (n.d.). Managing Organizational Change during SAP Implementations. Boston: Galileo press.
Gelinas, U. J., & Dull, R. B. (Feb 27, 2009). Accounting Information Systems. Connecticut: Cengage Learning.
Marchewka. ERP and Change Management at Nestlé. Pp. 320-322.
Nestle. (2008). THE FOREMOST NUTRITION, HEALTH, AND WELLNESS COMPANY ENHANCE SAP ERP TO ENSURE TRACEABILITY AND SPEED TIME TO MARKET. SAP.
SAP. (2012). CHANGE MANAGEMENT. SAP EDUCATION.
Worthen, B. (May 15, 2002). Nestlé’s ERP Odyssey. CIO.
