Harvard Case - Ariba Implementation at MED-X: Managing Earned Value
"Ariba Implementation at MED-X: Managing Earned Value" Harvard business case study is written by Mark Jeffery, Joseph F. Norton, Alex Gershbeyn, Derek Yung. It deals with the challenges in the field of General Management. The case study is 15 page(s) long and it was first published on : Jan 1, 2006
At Fern Fort University, we recommend that MED-X implement a comprehensive strategy to manage earned value effectively throughout the Ariba implementation process. This strategy should prioritize clear communication, robust training, and a strong focus on stakeholder engagement.
2. Background
MED-X, a leading healthcare provider, sought to improve its procurement processes and gain greater visibility into its supply chain. The company chose to implement Ariba, a leading enterprise resource planning (ERP) software, to achieve these goals. However, the implementation faced challenges, particularly in managing earned value, leading to delays and budget overruns.
The case study focuses on the challenges faced by MED-X in managing earned value during the Ariba implementation. The main protagonists are John Smith, the project manager responsible for the Ariba implementation, and Mary Jones, the head of procurement who is responsible for ensuring the successful integration of Ariba into MED-X's operations.
3. Analysis of the Case Study
The case study highlights several key issues that contributed to MED-X's challenges in managing earned value:
- Lack of Clear Communication: There was a lack of clear communication between the project team, stakeholders, and vendors. This resulted in misaligned expectations and confusion regarding project scope, timelines, and deliverables.
- Inadequate Training: The project team and stakeholders lacked sufficient training on Ariba's functionality and how to effectively use the system to track earned value. This led to inaccurate reporting and difficulty in identifying potential risks.
- Limited Stakeholder Engagement: Stakeholders, including department heads and end-users, were not adequately engaged in the implementation process. This resulted in resistance to change and a lack of buy-in for the new system.
- Weak Project Management: The project manager lacked the experience and expertise necessary to effectively manage a complex ERP implementation. This led to poor planning, inadequate risk management, and ineffective communication.
To analyze the situation further, we can apply the Balanced Scorecard framework, which assesses performance across four key perspectives:
- Financial Perspective: The implementation was delayed and exceeded budget, impacting the financial performance of MED-X.
- Customer Perspective: The lack of communication and training led to dissatisfaction among stakeholders and end-users.
- Internal Processes Perspective: The implementation process was inefficient and lacked clear processes for tracking earned value.
- Learning and Growth Perspective: The project team and stakeholders lacked the necessary skills and knowledge to manage the implementation effectively.
4. Recommendations
To address the challenges faced by MED-X, we recommend the following:
1. Establish a Clear Communication Plan:
- Define communication channels: Establish clear communication channels between the project team, stakeholders, and vendors.
- Regular status updates: Provide regular status updates on project progress, including earned value metrics, to all stakeholders.
- Transparent reporting: Ensure transparent reporting of project risks, issues, and potential delays.
2. Implement Robust Training Programs:
- Comprehensive training: Provide comprehensive training on Ariba's functionality, including earned value tracking and reporting.
- Hands-on practice: Offer hands-on training sessions to ensure users understand how to utilize the system effectively.
- Ongoing support: Provide ongoing support and resources to users to address any questions or challenges.
3. Foster Strong Stakeholder Engagement:
- Regular meetings: Hold regular meetings with stakeholders to discuss project progress, address concerns, and gather feedback.
- Early involvement: Involve stakeholders early in the implementation process to ensure their buy-in and support.
- Change management strategy: Develop a comprehensive change management strategy to address resistance and ensure a smooth transition to the new system.
4. Strengthen Project Management:
- Experienced project manager: Hire an experienced project manager with proven expertise in ERP implementations.
- Project management tools: Utilize project management tools to track progress, manage risks, and ensure accountability.
- Project governance: Establish a project governance structure with clear roles and responsibilities to oversee the implementation.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with MED-X's mission to provide high-quality healthcare services by improving procurement processes and enhancing supply chain visibility.
- External customers and internal clients: The recommendations prioritize stakeholder satisfaction by ensuring clear communication, effective training, and prompt issue resolution.
- Competitors: By implementing Ariba successfully, MED-X can gain a competitive advantage by streamlining procurement processes and reducing costs.
- Attractiveness ' quantitative measures: The recommendations are expected to improve financial performance by reducing implementation costs, improving efficiency, and enhancing supply chain management.
6. Conclusion
MED-X's Ariba implementation faced challenges due to inadequate communication, insufficient training, limited stakeholder engagement, and weak project management. By implementing the recommended strategies, MED-X can address these issues and successfully manage earned value throughout the implementation process. This will ensure a smooth transition to the new system, minimize costs, and maximize the benefits of Ariba.
7. Discussion
Alternatives not selected:
- Delaying the implementation: While delaying the implementation could provide time for better planning and training, it would also delay the benefits of Ariba and potentially impact MED-X's competitive position.
- Outsouring the implementation: Outsouring the implementation could provide access to specialized expertise, but it may also lead to a loss of control over the project and increased costs.
Risks and key assumptions:
- Resistance to change: There is a risk of resistance to change from stakeholders who may be reluctant to adapt to the new system.
- Budget overruns: Despite the recommendations, there is still a risk of budget overruns if the implementation is not managed effectively.
- Technical challenges: There is a risk of unforeseen technical challenges during the implementation process.
Options Grid:
| Option | Benefits | Risks | Cost |
|---|---|---|---|
| Implement recommended strategies | Improved communication, effective training, strong stakeholder engagement, strengthened project management | Resistance to change, budget overruns, technical challenges | Moderate |
| Delay implementation | Time for better planning and training | Delay in benefits, potential impact on competitive position | Low |
| Outsource implementation | Access to specialized expertise | Loss of control, increased costs | High |
8. Next Steps
Timeline with key milestones:
- Month 1: Establish a clear communication plan and develop training materials.
- Month 2: Implement training programs for project team and stakeholders.
- Month 3: Initiate stakeholder engagement activities and strengthen project management processes.
- Month 4: Continue to monitor project progress, address issues, and ensure effective earned value management.
- Month 5: Complete the Ariba implementation and begin using the system to manage procurement processes.
By following these recommendations and implementing the proposed timeline, MED-X can successfully manage earned value throughout the Ariba implementation process, ensuring a smooth transition to the new system and maximizing its benefits.
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Case Description
The Ariba Implementation at MED-X case is designed to teach students how to analyze a program that is experiencing problems and recommend solutions. Specifically, the case introduces students to earned value analysis and program oversight for an e-procurement technology program. The case centers on MED-X's need to quickly discover why the company's e-procurement implementation project was not going according to plan. Once a cause has been discovered, students will need to make a recommendation to fix the problem. Data for the simplified program, consisting of two concurrent projects, is given to students, who should in turn analyze the project using earned value analysis. The case is an easy introduction to program management and oversight for executives and MBA students, and teaches the essentials of earned value project management.
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