CASE TEMPLATE

Course : ASG1-ISYS6536-Enterprise Systems

Case Study : Nestle’s ERP Implementation
Group Number :
NO Student ID Student Name
1 2301925476 Vidiawan Lorentius
2 2301950282 Aldino Eka Susandyoga

This template will help you to describe the real case situation, understand the real problem and
document the problem analysis in properly order, and also make a recommendation based on the
case.
Case Situation Analysis
Understand about the big picture of the case. Describe the real situation and fact stated on the
case. This case situation can be the company profile, company background, company business,
and other case main points you need for further analysis.

(HINT: reading the first and the last section of the case often provide more information you need
to describe the case situation)

First ERP system with client-server architecture developed in 1992 and thousands of
companies worldwide have implemented this software. Nestle USA was one of them. Nestle
USA has seven business division: beverage, confections and snacks, food services, foreign
trade, nutrition, prepared foods, and sales. Yet, there are some popular brands sold in the
united states by nestle are Alpo, baby ruth, carnation instant breakfast, coffee-mate, Nescafe,
nestle carnation baby formulas, nestle tool house, Powerbar, Stouffer’s lean cuisine,
sweeTarts, and Taster’s choice. Nestle ERP implementation code-named BEST (Business
Excellence through system technology). The project’s main goal was to use common business
processes, systems, and organizational structures across the autonomous divisions within the
united states. Jeri Dunn, CIO of nestle USA, joined with executives in charge of finance,
supply chain, distribution, and purchasing to form a key stakeholder’s team for implementing
the SAP. The stakeholder top management require the SAP implementation and it couldn’t be
done without changing the way Nestle USA did business.

Problem Analysis: Problem Definition and Problem Statement

Define the problems of the case. You can use an appropriate tool on how to describe the problem
in case. You may find more than one problem in a case. You may find more than one problem in
a case.

The stakeholder team made it clear to top management that SAP implementation would
require business process reorganization and couldn’t be done without changing the way Nestle
USA did business. However, it didn’t include any member from the groups that would be
affected by the new business process. This causes a rebellion and the employees resisted.
Divisional executives were confused and angry because nobody wanted to learn the new way
of doing things. By the beginning of 2000, the rollout had collapsed into chaos and the project
was halted. The company reconvened the stakeholder team and started the SAP
implementation process from scratch despite they have to finished the project within the
deadline.

After problem is defined using your chosen tool. You can state the problem in one or few more
sentences to be a problem statement or points of real problem faced based on the case.

When the SAP implementation applied, it didn’t include any member from the group therefore
it affected by the new business process.

Nobody wanted to learn new way of doing things and the divisional executives were confused
and angry. It causes a rebellion in the ranks.

Morale sank and employee turnover reached 77 percent, help desk calls reached 300 per day
and the project team had to overlooked the integration points between modules to account for
the Y2K deadline.

By the beginning of 2000, the rollout had collapsed into chaos and the project was halted.

The stakeholder team started the new SAP implementation process from scratch and had to
finish the project before it reached end date.
 Diagnosis: Cause and Proof of Diagnosis
After you know about the main problem in the case, next you need to summarize the diagnosis. Diagnosis is the cause of the problem.
Don’t forget to note the evidence that proof the cause of the problem you defined before. Next, simply identify the impact of the
problem if these problems still occur.

Problem Cause Evidence Impact

Jeri Dunn, CIO of People tend to hate to learn new
Nestle USA This caused a rebellion in the It is stated in paragraph 3 and 4 on the things because they have spent lots of
implementing the ranks and the employees study case, it shows that the time to learn the thing and suddenly it
SAP without include resisted. stakeholder team make it clear that the change and they have to learn the
any members from
SAP implementation is required but it new thing again which is time
the groups.
didn’t include any member from the consuming. That is the reason why
groups therefore it causes rebellion. people most likely to use the
technique that they have been taught
or learn.

Morale sank and

employee turnover
reached 77 percent. The rollout had collapsed It is stated in paragraph 4 on the study The morale sank and employee
Help desk calls into chaos and the project case, that the morale sank and turnover reached 77 percent. It give a
reached 300 per day. was halted employee turnover reached 77 percent, huge impact for the company because
The project team had yet then project team were in tight lack of employee to finished the
overlooked the
spaces for the Y2K deadline. project or do other task. It keep
integration points
between modules to chasing deadline after deadline and in
account for the Y2K the end it ended up into chaos and the
deadline. project was halted.

Cost Problem The ERP implementation at Nestle has Nestle would create savings through
 Cause ERP implementation estimated cost of $210 Million with an group laying power and facilitate data
at Nestle is very expensive IT Staff of 250 sharing between the subsidiaries
and requires a lot IT Staff

The company started The group member prefer The company reconvened the The company wasted lots of times by
the SAP redo the process from the stakeholder team and started the SAP redo the process from scratch rather
implementation scratch rather than have to fit implementation process from scratch. than trying to fit in.
process from the the project into a mold
The group members eventually
scratch shaped.
decided that to finish the project
 Decision Options/Alternative
List the decision option or alternatives you want to suggest as a recommendation based on the
criteria.

Decision Option Description

Nestle company need to choose to if the company wants to maintain their processes,
customize ythe ERP system or follow the they can make adjustments or create software that
SAP process. integrates with the SAP system. however If the
SAP process is better than the current company
system, they must follow the SAP process.

Recommendation
Provide the best recommendation to solve the problem, write down the recommendation and the
reason why you choose that recommendation from several alternatives.

Selected Option Reason

Nestle companies must continue to develop the To be able to solve the problems that exist in
system and receive input from others. their company's system, they must be able to
hear people's input and make considerations so
that their system develops

The Nestle company need to choose to To adjust its business processes, the company
customize the ERP system or follow the SAP must carry out the business processes it has
process. experienced and the system must provide the
best business practices for the company.
Because if the Nestle company chooses another
vendor it will be time consuming and more
expensive, because they have implemented the
SAP system they have to continue the
agreement to make it cheaper and more
flexible.

Conclusion (Min 50 words) :

In summary, ERP implementations are unlike any other system implementation that a
company will ever experience. Despite the bad press that ERP systems and their corresponding
rollouts receive, it is possible to experience a successful rollout. Often, as in the case of Nestle,
organizations will encounter major setbacks and difficulties during the implementation yet still
be able to salvage a successful project.The important point to take away is that the plans must
be flexible enough to change mid-stream to overcome obstacles that appear during the project
and organizations must do their homework prior to beginning an ERP project.Enough
companies have gone through implementations that there are plenty of lessons to be learned if
organizations are willing to accept the advice of others. ERP implementations combine
disparate data sources, re-engineer processes, and involve large numbers of users and
locations.It is nearly impossible to plan for every contingency in projects of this size. The
difference between success and failure is an organizations ability to rally and work together
during difficult times to reach an end goal that will eventually make everyone job easier and
the company more competitive.