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Caught on the wrong foot

R. Savitha

When an IT package implementation fails and hits the company's core, who is to blame? The vendor or the client? Rather, it is more productive if each puts himself in the other's shoes to check where things went wrong.

THE film ``Sound of Music'' evokes many memories. One of those is that of the youngest of seven kids in the movie that refuses to sing when requested to do so. When asked for the reason, it promptly shows its little finger and says something like, ``Beca use I hurt myself here.'' When a kid does that, it seems adorable. But when a good shoe brand does something similar, it isn't as palatable.

Last month, Nike blamed its enterprise technology vendor i2 Technologies, for the former's poor financial performance.

Blame-it-on-software?

Any inventory problem can be explained away by blaming your supply-chain management software. Sounds a bit silly but investors generally seem to have bought the explanation. So much so that not only shares of i2 -- which company Nike claimed was the caus e of its supply troubles -- but also those of i2's competitors took a beating. The logic being, if one company did something wrong, it may not be long before cupboard skeletons of others in the same industry came rattling down.

All this began when Nike said it expected its third quarter earnings to fall at least 28 per cent short of the consensus of the Wall Street expectation. Promptly, and probably to deflect shareholders' wrath, it blamed i2 for part of the shortfall. i2's s ystems, Nike contended, directed the company to stop shipping shoe models that were selling well and produce more shoes that weren't.

Clever or plain silly?

If you were Nike, what would you do? On the one hand, you have shareholder diktats demanding efficient and intense use of technology. On the other, you have new technology giving the wrong directions, at least till the time new processes were in place an d the technology became stable in your company. So, would you allow for some instability, take these glitches in your stride and wait to reap the rewards or would you blame it on technology and hope that this too would pass?

eWorld spoke to a few users of IT to see what they thought about the Nike instance and whether they would do the same thing. It looks like Nike's reaction did not go down well with technology enthusiasts.

An Indian marriage

Firstly, how far is it appropriate to blame the software implemented? According to N.A.C. Gowd, Vice-President, (Management Services), Dinshaws Diary Foods, providing a solution is like an Indian marriage. For any marriage to be successful, it needs unde rstanding and compromise from both the sides. An Indian marriage has an additional problem of ``not that easy'' a divorce. Likewise, ERP implementation needs the support and understanding of both, the service provider and the client. While the service pr ovider is the technical expert, the client should provide the expertise specific to his business. ``I feel that Nike's reaction is spontaneous and impulsive. Probably it is also loaded with some other preconceived notions,'' he notes.

Mani K. Mulki, DGM (Information Systems), Godrej, concurs. According to him, a supply-chain package implementation such as i2's would require a lot of patience and paybacks can be expected only after 12 to 18 months of implementation. He thinks the concl usion by Nike was premature and hiccups such as these should have been expected in the initial period. This is more like a case of Nike passing the buck to i2 for their sales going in the southern direction.

No one said this supply-chain management software stuff was easy -- that's why only a handful of companies are focussed on that market. Supply-chain management software helps manufacturers plan and schedule production and related operations such as raw m aterial procurement and product delivery. When problems occur in implementing new software systems, things get ugly and sometimes the company financials can also take a hit.

Wise decision-making

Is it fine to blindly believe in what a software has to offer, however great a reputation that precedes it? Probably not. Use applications for suggestions and act on it using your business acumen, is what Vilas Kanyal, Head, Business Development, Third W ave Solutions Providers Ltd, has to say.

Gowd opines that he would always prefer to take the help of systems in datamining. If required, he would also work towards improving the datamining process, ``rather than do the donkey's job of evaluating the data all by myself,'' he says.

But all said and done, it is not wise to blindly follow and accept the systems' suggestions all the time. It is always preferable to keep that card up the sleeve and use one's own intuition in decision-making. After all, human nature is not predictable a nd market research data is mostly based on human behaviour.

Clearly-defined responsibilities

The responsibility to run a company is always that of the owner and not that of the vendor. There is no point in blaming the vendor who only provides the means to run the company more efficiently. Gowd says, ``efficiency is mine, not the vendor's. When I make my vendor a partner in my usage of systems, he is more than willing to go that extra mile which is what makes things tick.''

During the implementation period, it is important to get a `buy-in' on the work practice changes from the management. The success of any ERP/SCM implementation would depend less on the package and more on the following factors:

Discipline on the part of employees in adhering to work flow changes as agreed in the implementation period.

Commitment shown by the top management.

Preparedness by the organisation for the initial hiccups and `pain' period and Accuracy of input data and planning parameters.

According to Mulki, if the above factors are missing, no ERP/SCM package (no matter how effective and advanced it is) would succeed in an organisation. He feels it would be unfair to blame the vendor for any incorrect data (except, of course, for any bug s).

Test of logic

But how intelligent is a software system, given that users presume its abilities to offer solutions for all sorts of problems? Systems are as intelligent as the user wants them. The problem usually lies in the kind of data -- and the accuracy of data -- that has been fed into the system by both service providers and clients. But this in no way dictates that a system's recommendations may overrule human intuition. ``If a system's suggestions beat my logic, I will not accept them verbatim. I would rather investigate as to why the system is giving unacceptable suggestions,'' Gowd says. It would be better to correct the logic given to the system, rather than blame the system, he insists.

Kanyal feels that intelligent applications would only prompt the user to take some decision. This would be entirely based on the business rules defined.

The onus of acting on messages emanating from the applications is with the person responsible. ``You cannot expect computers and applications to `think on your behalf', he quips.

Headaches are normal

Industry analysts point out that complex software programmes, such as Nike's, often cause headaches along the way to full implementation. So the news is unlikely to scare other companies away from buying software to make their supply-chain more efficient .

Gowd feels the problem is with the service providers, when they go to the client on a pre-sale assignment. ``They promise the moon, which is not that easy. The marketing man's perception is totally different from that of the person who finally delivers t he system to the client. This kind of attitude needs to be corrected and if necessary, they should tell the client what needs to be done so as to make sure that all the claims made are also met.''

Kanyal agrees with this point in that it is absolutely normal to have some roadblocks during an ERP implementation. Implementations, according to him, are not mere software projects, but more of business process re-engineering exercises that affect all f acets of an organisation and the users have to embrace new ways of working. The responsibility of successful implementation lies with both the customer and the vendors.

Analysts say people normally do a failure analysis but it is equally important to do a success analysis as both would help avoid repetition of mistakes in similar situations.

Of course, no solution is foolproof. Mulki points out that any ERP package would take atleast around six months to stabilise since there would be a lot of mindset and cultural changes in the work practices. The ``inertia to change would be quite visible in the initial period and this is when top management has to display commitment and loyalty to the package.'' He stresses that it is important to have a parallel run for a few weeks before going live on the new package.

So who is to blame for the initial chaos in a project? Not the software, not the client, nor the vendor. This should be taken as an opportunity to learn.

Every mistake committed lets people understand a system much better and hence work better. A mistake could be costly and some heads may roll depending on the cost. ``I do not think any one needs to be blamed, because mistakes are very normal,'' says Gowd . The blame lies with the implementation team as a whole for not being able to foresee and warn the management of such ``ups'' and ``downs'' in the initial period, says Mani.

Most systems work on rules defined by the users. The system will crunch numbers based solely on the rules defined and the quality of data provided. Hence it is imperative to partner with a solution provider who understands both the business and the techn ology applications that fit in. Also, users need to be trained in skilled usage of application to eliminate data entry errors.

This Nike-i2 story may tell our Indian buyers that IT has finally arrived in the marketplace. For, being held responsible for a giant's failure shows that technology is crucial to a business. However, it could have done with a different form of recogniti on.

Please e-mail us at bleditor@thehindu.co.in if you have queries on computer usage or if you find an interesting way of using a computer.

Graphics by K.B. Jawaharr