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ERP Failure at Piliva
ERP Failure at Piliva
ERP Failure at Piliva
Analysis
With 85 years of experience and more than 380 patents, PLIVA Croatia d.o.o.,
based in Zagreb, is the pride of the Croatian pharmaceutical industry. But the
companys business model is changing from discovery and development of
niche pharmaceutical products to production and distribution of generics.
Parent company PLIVA d.d. picked the mySAP Customer Relationship
Management (mySAP CRM) solution to increase the effectiveness of its sales
force 1,000 strong, operating in more than 30 countries in serving this
new sector.
As part of its change in business focus, PLIVA revamped its organizational
structure around four product portfolios and reorganized the sales force with
responsibilities across multiple product lines. PLIVA also increased the
number of sales reps and promoted products. But the companys best-ofbreed customer relationship management (CRM) system couldnt keep pace.
Pliva needed to standardise their business processes to help enhance their
productivity and flexibility and maximise the efficiency of the business
processes across the entire enterprise. They also wanted to implement new
business and growth strategies to grow their business worldwide. Updating
and integrating their business processes with an enterprise system would
enable Pliva to take on more business and grow in new directions. Pliva
found that implementing SAP will help them standardize their business and
prepare for acquiring other companies, thus enabling them to expand their
business.
Increase productivity
Improve business process efficiency
Increase revenues
scale for growth and economic recovery
PLIVA decided to solve this problem using the experience of other companies
from all over the world. The management team was well aware that there
was no point in trying to find their own solution: It was better to purchase a
packaged business solution from an internationally renowned and
experienced software vendor.
PLIVA wanted user-friendly software that would integrate all areas and levels
of their business, and research on the world's software market indicated that
the most suitable solution would be SAP R/3. SAP R/3 would improve the
efficiency of their business by giving them the functionality to enter the
information only once and have it available everywhere (Vuksic & Spremic,
2005). This gives PLIVA:
A unique database
More efficient management
The ability to make business decisions in real-time
An integrated solution that connects all business areas.
Once the decision to implement SAP R/3 had been made, PLIVA appointed a
team to manage the SAPLI project (short for SAP and PLIVA). The team
included experts from PLIVA, Intelligroup Inc. USA, SAP AG and SAP Hrvatska.
The process of preparations and employees training and education lasted 4
months in 2 shifts, which included 700 employees (average training period of
7 days per employee). The transfer of operations to the new system (in the
second phase of implementation) lasted 12 days, as the problem of shifting
from the old coded system (taking over old data) needed to be resolved.
During the transfer to the new system, operations were halted for 10 days,
while inventory and a detailed financial harmonization were conducted. In
addition to resistance to change particularly emphasized with warehouse
employees), the most significant problems in the system implementation
were in the weak experience and quality of consultants who bid in the public
tender, the lack of time and the specificity of the pharmaceutical industry
(strictly regulated quality of raw materials, the obligation of non-stop
production).
Answer1)
Success Reasons: