MANAGEMENT INTEGRATION AND IMPLEMENTATION
Question and info below.
- What were the main causes of the difficulties with the project at Aux Bons Soins?
- What were the key elements that led to the success of the project at Aux Bons Soins?
In Module 4 SLP, we return our focus from the specifics of information technologies and the formulation of ideal strategies to the wider world of real corporate behavior. Our emphasis now shifts to the actual implementation of information technologies and the sociotechnical dynamics that implementation not infrequently founders upon. No technical solution—however brilliantly designed or competently backstopped or elegantly integrated with other corporate plans—is any better than its implementation at the lowest levels of the system to which it is addressed. All too frequently, plans and solutions are developed in a vacuum apart from the context within which they are to be deployed and used. It is hard to overestimate the quantity of corporate resources that have been squandered on poor IT implementations over the years—to say that it would exceed the GNP of many third world countries would probably not be an exaggeration. Implementation is by no means an all-or-nothing proposition; even though the full measure of system changes may not be as successful as desired, there can often be positive local results, particularly if the implementation process is oriented toward learning as well as doing, or even more so, doing unto others. The one sure way to implementation failure is to assume that all knowledge resides in IT management—or even in management generally. Success is inevitably based on user involvement in varying degrees, generally more rather than less.
All modules in the course draw on everything that you have learned in the program; however, this module most specifically draws on your courses in computer-human interaction, systems development, and project management as well as on your general introductory courses. Implementation is a drawn-out process requiring effective collaboration among many different kinds of specialists and generalists, extended over time and across space, and requiring explicit attention to both the social and technical systems of the organizational units affected. Above all, implementation must be sensitive to feedback, resilient enough to deal with changing circumstances, personnel, and goals, and focused much more on the users than on the technologists. Effective implementation always embraces the fundamental sociotechnical criterion of “incompletion”—that is, the idea that no change process is ever “finished” as such, but that change is an ever-flowing river in which one set of adjustments is merely the prelude to another set. Sociotechnical life in organizations is a soap opera, not a novel. There is never a “happily ever after,” just an ever-evolving and constantly reconfiguring cast of players and problems. Sometimes things get better; sometimes they get worse—but they will always be different.
Videos of Interest… Something to Think About…
Andrew McAfee discusses an array of revolutionary technologies that are replacing routine jobs with machines that can speak, understand, translate, and hear. McAfee believes that this kind of innovation will lead to creating new jobs that involve more than enhancing creativity. He refers to this cycle of innovation as “The New Machine Age.” Think in terms how technology-driven changes could impact the ERP implementation for Aux Bons Soins’ case study below.
TED Ideas Worth Spreading. (2012, September). Andrew McAfee: Are droids taking our jobs? Retrieved from
For the last assignment, we will be introducing a new case, the real-world story of an ERP implementation for Aux Bons Soins. This case details the rather frustrating experiences that the company encountered in trying to implement an integrated management system after an acquisition and merger, and the range of circumstances that affected the process. Not every implementation is this sticky, but in varying ways most partake of greater or lesser parts of this experience. Please note that there is nothing particularly pathological about the experience described here, despite the frustrations experienced. There are no great villains, but neither are there any great heroes; implementation seldom turns up either. This may seem a rather inconclusive note on which to conclude both this course and your IT management program, but it is how things are. For better or worse, this is what real IT management is all about—the good, the bad, the ugly, and above all the reasonably acceptable. Over the next decades, the profession is likely to evolve far beyond any ways that can be reasonably forecast today; after all, 20 years ago there was not any such thing as the Internet, and today’s information environment was ranked science fiction. You are entering the profession at a most exciting and dynamic time; always remember how much you do not know, but also remember that you do know how to learn.
Please read the following parts of the case:
Bernier, C., Roy, V., & Brunelle, E. (2006)
An ERP Story: Background (A).
International Journal of Case Studies in Management. 4(1):March.
Bernier, C., Roy, V., & Brunelle, E. (2006)
An ERP Story: Troubles Ahead (C).
International Journal of Case Studies in Management. 4(1):March.
Bernier, C., Roy, V., & Brunelle, E. (2006)
An ERP Story: Epilogue (D).
International Journal of Case Studies in Management. 4(1):March.
Use information from the course background readings as well as any good quality resource you can find. Please cite all sources and provide a reference list (use APA format) at the end of your paper.
Your answer to the following will be assessed:
What were the main causes of the difficulties with the project at Aux Bons Soins?
What were the key elements that led to the success of the project at Aux Bons Soins?
©HEC Montréal 2010
All rights reserved for all countries. Any translation or alteration in any form whatsoever is prohibited.
The International Journal of Case Studies in Management is published on-line (www.hec.ca/revuedecas/en), ISSN 1911-2599.
This case is intended to be used as the framework for an educational discussion and does not imply any judgement on the
administrative situation presented. Deposited under the number 9 65 2010 009 with the HEC Montréal Centre for Case Studies,
3000, chemin de la Côte-Sainte-Catherine, Montréal (Québec) Canada H3T 2A7.
Volume 4
Issue 1
March 2006
An ERP Story:1 Background (A)2, 3
Case prepared by Professors Carmen BERNIER
4
and Vital ROY,
5
as well as
Éric BRUNELLE
6
Business Context
In 1950, when the general insurance company Aux Bons Soins (ABS) was in its early days, it
offered a full range of general insurance products for individuals residing in the province of
Quebec. Over the years, Canada has seen a consolidation of its general insurance industry. Three
years ago, ABS acquired the insurance company General Maritime Protection, serving Eastern
Canada. Last year, ABS seized an opportunity to conquer Western Canada’s market by acquiring
Western General Insurance in Calgary. These acquisitions positioned ABS as a major pan-
Canadian insurer. To date, these three companies have continued to function autonomously.
Six months ago, management at ABS announced that it was bringing these three original
companies under a single legal entity to form ABS Canada. Jean Roberge was appointed Vice-
President of Information Technologies Management and was mandated to develop a strategic IT
plan. During the annual strategic planning meeting of the management committee, held recently
in Calgary, all of the committee members were pleased to see that the company and its two
subsidiaries were in a good position to plan an aggressive strategy for sales growth. This is the
context in which Jean Roberge recently presented a three-year strategic plan for the development
of information systems and
technologies.
The plan, developed by a team of internal collaborators from the three original companies with
the support of consultants, was officially presented and approved at the annual
management
meeting held in Calgary in March 2009. The main recommendation of the plan is to provide ABS
Canada with an integrated management system and processes that could be shared by the three
constituent entities for financial management, human resource management as well as sales and
1 This case was produced with the support of the Programme de parrainage professoral CGI and the Fonds de développement
pédagogique HEC. The authors would like to thank the evaluators for their valuable comments.
2 Translation from French of “Histoire d’ERP : le contexte (A),” case deposited under number 9 65 2006 005.
3 This project was made possible thanks to funding from the CGI Professorship.
4 Carmen Bernier is an Associate Professor and Director of the Department of Information Technologies at HEC Montréal.
5 Vital Roy is an Associate Professor in the Department of Information Technologies at HEC Montréal.
6 We wish to thank Jean-François Jutras for his collaboration in the writing and layout of the text.
An ERP Story: Background (A)
Copyright © HEC Montréal 2
marketing management. In particular, the team of experts that worked on the IT plan recommend
the acquisition of the ABC software package – specifically, the modules for finance and
accounting, human resources and sales.
Current Systems and Processes
Since the reorganization of the three original companies under the new company ABS Canada,
each company has continued to operate with its own information processes and systems.
Gradually, the controllers and vice-presidents of finance of each entity began to consider how
they could consolidate the accounting aspects and financial statements of ABS Canada. Similarly,
the vice-presidents of human resources met several times to begin harmonizing human
resource
management policies and practices. Currently, a great deal of manual work is required to extract
information from the systems of the various companies and to prepare consolidated management
reports that provide an accurate picture of the financial and human resources of the new ABS
entity. As for sales and marketing, efforts to consolidate data have proved very difficult due to
the diversity and quantity of information available in the respective systems of the three original
companies.
The development of a strategic IT plan led to an analysis of the current situation and a discussion
of the desired situation for the new ABS Canada entity. In terms of information systems, the
following observations were made:
Element Current problem Desired situation
Applications Incompatible in terms of
functionality and architecture: no
possibility of data exchange
between systems;
Redundant applications and non-
optimal maintenance of various
systems based on different
technologies.
Identical functionalities for all
ABS components and integrated
applications that enable data
exchange;
Simplification of system
maintenance and architecture in
order to group original IT
functions into a single IT function
and achieve better management
of costs, expertise and use of IT
potential.
Data The definition of data differs
according to the original company (for
example, the customer identification
data retained is not the same in all of
the systems).
Consistent and accessible in real
time.
Interfaces Differ according to the application and
the original company.
Similar for all applications,
facilitating employee mobility.
An ERP Story: Background (A)
Copyright © HEC Montréal 3
In terms of business processes, the following observations were made:
Element Current problem Desired situation
Accounting
and financial
processes
Processes are specific to the
operations of the three original
companies.
Harmonization of accounting and
financial
processes:
standardized end-of-period
processing;
accelerated processing cycles by
eliminating duplication and
manual verification;
consolidation of the three
companies into one in accordance
with provincial and Canadian
regulatory requirements;
reports for tactical and strategic
financial management rather than
purely operational.
Human
resource
management
processes
Processes are specific to the
operations of the three original
companies. Moreover, the two
acquired companies’ processes are
inefficient due to their obsolescence
and strictly operational style. The
strategic vision of HR management
as a company asset is not part of the
current processes, which make little
use of IT potential.
Harmonization of HR management
processes:
redefining the human resources
management approach of the new
ABS entity;
adding activities such as skill
management, skill development
and mobility;
improving process efficiency.
Sales and
marketing
management
processes
Processes are specific to the
operations of the three original
companies and correspond to a local
vision of the market.
Harmonization of HR management
processes involving:
creating an integrated marketing
vision for the new ABS entity;
improving process efficiency by
increased use of Web potential.
The Decision to Launch the IMSP Project
In the conclusion to his presentation of the IT strategic plan to the management committee, Jean
Roberge stressed the unique potential of an integrated management system for the development
of ABS Canada. He pointed out that managers at all levels as well as senior management could
track in real time the financial and marketing progress of the growth plan for the entire company,
from both a cost and profit perspective. Moreover, this system enables proactive decision-making
An ERP Story: Background (A)
Copyright © HEC Montréal 4
that takes into account the company’s global financial picture as well as its human resource
potential, which are key to the success of any service-oriented company.
Therefore, decision-makers can and must concentrate on the more lucrative activities or those
that are the most important strategically in terms of short- and medium-term growth. Lastly, a
shared management system for marketing initiatives and financial and human resources will
enable the implementation of a more efficient mode of operation by promoting better use of
expertise throughout the company. The forecasted financial benefits of the project are reduced
operating costs in the order of 10%, which could be achieved at the end of the second year
following implementation of the new system. The total cost of the project is evaluated at
$50 million spread out over the duration of the project, estimated at 24 months. A vanilla
implementation strategy is planned, which means minimum changes to the software package (if
possible, no changes at all) and standardization of the processes of the new ABS entity, based on
the processes inspired by best practices and proposed by ABC. Moreover, the system would be
delivered in three phases: 12 months for the finance, accounting and auditing module; 18 months
for the human resource module; and 24 months for the sales and distribution module.
On the basis of these advantages and this vision of IT aligned with business objectives, the
management committee that met in Calgary unanimously approved the recommendation to
launch the Integrated Management System and Processes (IMSP) project.
Back in Montréal, Jean Roberge is very pleased with the support of the management committee.
From his perspective, the potential of an integrated software package will pave the way for the
true integration of the information systems and technologies at ABS Canada. This will make it
easier for him to re-engineer the main management systems (finance/accounting, human
resources, marketing) of the three companies, while preserving specific applications that give the
company a clear competitive edge. In fact, interfaces can be developed between ABC’s modules
and the company’s legacy systems that the company wishes to preserve. Moreover, this
technological renewal includes a systematic review of various disparate, and sometimes obsolete,
processes, in favour of better business practices. This exercise should lead to real progress in the
company’s practices, both in terms of its business practices and skills. This will help ABS to
maximize its IT potential so that it can do business throughout Canada and North America.
With the adoption of a new integrated software package, Jean Roberge is aware that the IT
function he is managing is profoundly changing his role, from the development of applications to
the flexible and rapid delivery of technological software solutions. The IT professionals at ABS
are concerned about the change in direction of the IT department. Jean Roberge believes that
these changes in the nature of the IT function will present several new challenges. Already hard
at work in his new functions, he knows that he cannot manage the ERP project single-handedly
despite its importance for the company. He must quickly find a project leader who has the skills
and experience to lead such an important project.
The Search for a Project Manager
Jean Roberge understands the enormous importance of ABS Canada’s first major IT project. Its
success is crucial in order to establish his credibility as a manager and in his new IT function.
An ERP Story: Background (A)
Copyright © HEC Montréal 5
Selecting a project leader is therefore extremely important. For Mr. Roberge, the ideal candidate
for this position should master the ABC software package and have excellent knowledge of the
systems being replaced and their functionalities. This candidate should also be able to exercise
his or her authority over the project team and have enough experience managing large-scale
projects to stay within the budgets and schedules set out by management.
Aware that the company does not have all the skills needed to take up the challenges that lie
ahead, Mr. Roberge has asked François Caron, from the firm GTI, a preferred supplier of ABS
for 10 years, to meet with him. Mr. Caron is a seasoned consultant who has been the technical
expert, analyst and project leader on several development and implementation projects of
financial and insurance systems over the last 20 years. He is currently the vice-president of
business development at GTI and has been in charge of the ABS Canada account for six years.
He regularly meets with the IT manager of ABS to discuss the company’s changing needs as well
as IT trends in the insurance industry. He asks Luc Martin, an expert in the delivery of ABC
solutions, to join him for the meeting with Jean Roberge.
The following afternoon, Jean Roberge presents the new IT direction of ABS Canada to François
Caron and Luc Martin. He discusses in more detail the urgent need to find a suitable project
leader for this major IMSP project. Jean Roberge believes that the IT function should assume
ownership of the project, since the proper technical functioning of this complex software package
will ensure its success. Moreover, he expects that the software package will be implemented
within the set timeframe and budget. With regard to employee adaptation to the new system, he is
confident that an effective and well-targeted training plan will allow employees to quickly
understand the system and resume their productivity.
This is not the first time the company is introducing a new information system. Employees expect to
have to change the way they do their work since the three companies are being merged into one.
However, the main change will be a new software package that users will have to learn.
In terms of project management, Jean Roberge stresses the fact that management expects
compliance with the set budget and schedule. He hopes that the project leader will prioritize the
quality of the product and effective management of its development. Since the project team
should, in his opinion, be comprised primarily of IT specialists, a homogeneous team like this
will require a project leader with extensive technical knowledge. Moreover, if the project is to
stay on schedule, Jean Roberge considers it crucial that the project leader exercise firm authority
in order to quickly resolve any conflict between the parties involved in the project. Lastly,
Mr. Roberge plans to lend strong support to this project as he has always done for other IT
projects, well aware that proper follow-up and a lot of technical support will be needed to ensure
the project’s success.
He asks François Caron to recommend three qualified candidates for the management of the
IMSP project.
The next day, François Caron and Luc Martin meet to discuss their meeting with Jean Roberge.
They discuss his expectations and examine the following points:
An ERP Story: Background (A)
Copyright © HEC Montréal 6
Questions:
1. What are the project’s main characteristics and challenges identified by Jean Roberge?
2. In your opinion, does the project have other characteristics or challenges that Jean Roberge
did not identify that should also be taken into account?
2010-06-14
© HEC Montréal 2010
All rights reserved for all countries. Any translation or alteration in any form whatsoever is prohibited.
The International Journal of Case Studies in Management is published on-line (www.hec.ca/revuedecas/en), ISSN 1911-2599.
This case is intended to be used as the framework for an educational discussion and does not imply any judgement on the
administrative situation presented. Deposited under the number 9 65 2010 012 with the HEC Montréal Centre for Case Studies,
3000, chemin de la Côte-Sainte-Catherine, Montréal (Québec) Canada H3T 2A7.
Volume 4
Issue 1
March 2006
An ERP Story:1 Epilogue (D)2, 3
Case prepared by Professors Carmen BERNIER
4
and Vital ROY,
5
as well as
Éric BRUNELLE
6
Epilogue
Over the next few days, the current project leader is replaced by André Gagné, a candidate who
has studied accounting and has a master’s degree in information systems, in addition to solid
experience in the insurance industry. He has also managed several systems development projects
involving integration of information technologies and business process review.
The project leader’s main concern is to restore the project’s credibility and win the confidence of
the project’s team members as well as of the users and management. He reorganizes the project
team into multidisciplinary teams in charge of formulating solutions for each of the problems
identified by the project, while respecting the established project plan, budgets and calendars as
well as the constraints of the company. Each of these teams includes technical and management
experts as well as experts from each of the business units involved. Once this reorganization is
underway, André Gagné organizes an orientation meeting, followed by an evening cocktail hour
for all of the members of the project and the users involved.
A few weeks after the arrival of the new project manager, there is still apprehension about the
changes to come among the staff of the various business units affected by the project. The most
serious rumours are about the number of layoffs that will result from the implementation of the
new software package, the process review and the reorganization of tasks. André Gagné requests
and obtains the budgets needed to offer future users intensive information sessions on the
potential and features of ABC. He also gives users a more active role in the project: they are
made responsible for reviewing their business processes. As for ABS’s technical experts and the
1 This case was produced with the support of the Programme de parrainage professoral CGI and the Fonds de développement
pédagogique HEC. The authors would like to thank the evaluators for their valuable comments.
2 Translation from French of “Histoire d’ERP : épilogue (D),” case deposited under number 9 65 2006 008.
3 This project was made possible thanks to funding from the CGI Professorship.
4 Carmen Bernier is an Associate Professor and Director of the Department of Information Technologies at HEC Montréal.
5 Vital Roy is an Associate Professor in the Department of Information Technologies at HEC Montréal.
6 We wish to thank Jean-François Jutras for his collaboration in the writing and layout of the text.
An ERP Story: Troubles Ahead (C)
Copyright © HEC Montréal 2
ABC supplier, their responsibilities evolve into the role of consultants who propose configuration
options that meet the needs of users.
Twelve months later, André Gagné and his team go live with the new information system at ABS
Canada. The project team and management at ABS are now confident that the new information
system will be used and will represent a major evolution in the company’s business practices.
While most of the team members are exhausted due to long hours spent on implementing the
project, they are all eager to move on to new challenges.
For the consultant, the time has come to carry out the project post mortem. François Caron
reviews the performance evaluation document that his client Jean Roberge has just submitted.
The second project leader has successfully met the challenge and exceeded the client’s
expectations. He is now getting ready to complete his report that will summarize the main points
of the project and the lessons learned.
Question:
Jean Roberge and François Caron wish to document the key elements that led to the success of
the ABS project. They ask you to prepare a synthesis report of these factors.
2010-06-14
© HEC Montréal 2010
All rights reserved for all countries. Any translation or alteration in any form whatsoever is prohibited.
The International Journal of Case Studies in Management is published on-line (www.hec.ca/revuedecas/en), ISSN 1911-2599.
This case is intended to be used as the framework for an educational discussion and does not imply any judgement on the
administrative situation presented. Deposited under the number 9 65 2010 011 with the HEC Montréal Centre for Case Studies,
3000, chemin de la Côte-Sainte-Catherine, Montréal (Québec) Canada H3T 2A7.
Volume 4
Issue 1
March 2006
An ERP Story:
1 Troubles Ahead (C)2, 3
Case prepared by Professors Carmen BERNIER
4
and Vital ROY,
5
as well as
Éric BRUNELLE
6
Troubles Ahead
After choosing the candidate with the most experience with the ABC software package, the
Integrated Management System and Processes (IMSP) project at ABS Canada is launched.
Within weeks, however, unexpected difficulties gradually begin to arise. The project manager’s
first action is to establish an action plan with the IT department based on specific deliverables.
But this plan immediately creates controversy because several members from functional
departments, particularly finance and accounting, feel excluded from the outset. As a
representative from the finance department explains:
I know that this project is very important for the company, but I am convinced that ABS will lose out
in the end if we insist on delivering a product that doesn’t address our main problem, which is finding
better ways of working.
Later on, the project manager bluntly informs users that their business processes will soon be
turned upside down to allow the company to adapt to the system. A representative of the users
involved in the project has this complaint:
The only thing that matters to him is that we respect delivery times. He doesn’t take into account
personal considerations. Regardless of whether or not the needs of users are being met optimally, the
project manager insists on focusing on the technical implementation of ABC.
Several of the managers responsible for functions affected by the project feel that the project
manager is focusing his efforts on ensuring that the tasks of the project plan are executed as
quickly as possible, without showing any real concern for business processes. Moreover, team
1
This case was produced with the support of the Programme de parrainage professoral CGI and the Fonds de développement
pédagogique HEC. The authors would like to thank the evaluators for their valuable comments.
2
Translation from French of “Histoire d’ERP : difficultés à l’horizon (C),” case deposited under number 9 65 2006 007.
3
This project was made possible thanks to funding from the CGI Professorship.
4
Carmen Bernier is an Associate Professor and Director of the Department of Information Technologies at HEC Montréal.
5
Vital Roy is an Associate Professor in the Department of Information Technologies at HEC Montréal.
6
We wish to thank Jean-François Jutras for his collaboration in the writing and layout of the text.
An ERP Story: Troubles Ahead (C)
Copyright © HEC Montréal 2
members do not appreciate the project management style. “I’m discouraged and I feel paralyzed
in my work because I am constantly writing progress reports,” explains one member of the team.
After three months, the managers responsible for the functions affected by the project confirm
that the project manager has gotten swept up in political games that have prompted him to favour
ABS’s IT group.
These managers are beginning to think that ABC may be the wrong choice since it does not meet
their needs and the credibility of the IT department is being put to the test, including
Mr. Roberge. Despite this, the ABC experts have reiterated their message to function managers
and management that the many R/3 configuration options in addition to changes in the
company’s processes can have a significant impact on the evolution of business practices and
efficiency at ABS. A confrontation between the user groups and the IT function seems inevitable.
Mr. Roberge knows full well that this situation is jeopardizing the project. He also thinks that the
current project leader is not effectively managing the various dimensions of the project. Faced
with this situation, he is feeling a great deal of pressure from management at ABS. He decides to
take the weekend to evaluate the situation and decide on the future of the project.
Questions
1. Offer your own analysis of the situation to Mr. Roberge to help him pinpoint the main causes
of the difficulties of the project.
2. What should Mr. Roberge do now? Propose two possible solutions and present their
respective advantages and disadvantages.
2010-06-14