Nike chose to implement i2’s demand forecasting and supply chain management software ($40 million) along with CRM and ERP from SAP ($360 million).The demand planning system and supply chain management software was implemented first. The problems began with the factory orders, and then the glitch moved through the product delivery system. The result, Nike ended up with shortage of high demand models and an overstock of unpopular shoe models. The excess inventory was discounted drastically and distributed through Nike’s outlet stores. The impact, in June 2001, Nike announced that it expected its earnings for the quarter to fall by one-third. The case study highlights that Nike did not properly assess if it is ready to manage and integrate the ERP implementation projects.
- Do you think Nike should have considered an organisational project readiness framework such as OPM3 (organizational project management maturity model) to assess its readiness to manage and integrate projects for its ERP implementation?Justify your choice.
- Using OPM3 or alternative assessment frameworks that you may choose, discuss how could such framework have helped to identify the problems with Nike’s demand planning system?
Report Section 2– Project Management, Training, Teamwork (approx. 700 words) 15
Nike’s ERP implementation case study highlights one of the significant ERP failures as well as an exemplary case of learning from the mistakes. Nike applied the lessons learned and the further ongoing ERP implementation was successful. Since Nike adopted a phased implementation after its failure, this allowed for project planning, business and operation analysis including gap analysis, Business Process Reengineering (BPR) and business requirement mapping, project teaming, proper data conversion, and end user training to be carried out more smoothly.
ERP implementation of such a large scale like Nike’s requires effective project management across a lot of staff from several departments, both internal and external to the business.
- What role could have the Project Management Office (PMO) played in the final success of the ERP implementation project at Nike?
- Discuss the role of training and teamwork for the eventual success of the Nike ERP implementation project.
- What are the key rationales for a business to outsource ERP implementation?
Based on Nike’s case study findings, what are the guidelines that you can recommend for other businesses should they plan to outsource ERP implementation?
- evaluate the emergence of ERP systems and their current and likely future impact
- demonstrate an understanding of key issues relating to ERP systems
- demonstrate an ability to apply the knowledge gained to the evaluation of case studies presenting business problems
- demonstrate an understanding of the key components and structure of the SAP ERP system and more detailed knowledge of the core functionality of selected modules
- reflect critically on the practical SAP work in the context of the theoretical and applied knowledge about ERP systems.