1. What concepts in this chapter are illustrated in this case?
Symantec Corporation started out with good intentions. Shortly after acquiring Veritas it began an ERP rollout that was designed to standardize and unify the Symantec and Veritas information systems. The goal was to create a single ERP system, within which all of the company’s extensive network of resellers, integrators, distributors, and customers could place orders for over 250,000 different products Symantec offered in the same way. That follows the basic concept of enterprise systems which are based on a suite of integrated software modules and a common central database. When new information is entered by one process, the information is made immediately available to other business processes.
Although companies can rewrite some of the software in ERP systems, the software is unusually complex and extensive customization may degrade system performance, compromising the information and process integration. If companies want to reap the maximum benefits from enterprise software, they must change the way they work to conform to the business processes in the software. Although Symantec and Veritas had each used Oracle E-Business Suite 11d prior to the merger, both used highly customized versions of the systems that made integration a daunting task.
An overhaul of the combined company’s enterprise systems was needed to join together Symantec and Veritas’s data from key business processes. Enterprise systems help large companies enforce standard practices and data so that everyone does business the same way worldwide. Enterprise systems help firms respond rapidly to customer requests for information or products. Unfortunately, the two companies bungled the implementation of the enterprise system almost from the beginning.
2. What management, organization, and technology factors were responsible for Symantec’s difficulties in overhauling its ERP systems?
Management: Most of the issues were due to the company’s shortsightedness in implementing Project Oasis. The initial reaction to the launch of the new system was decidedly negative. Once customers reached a Symantec employee, they could spend up to 20 more minutes troubleshooting problems, and were often told that there was nothing that could be done. There was simply too much change occurring all at once for typical customers to handle. Partners were unhappy with Symantec’s slow response to many of the problems.
Organization: The company was unprepared to meet the increased demand for customer support after the rollout. Symantec neglected to coordinate the development of its new ERP system with the launch of other products from different divisions within the company. The changes to the licensing system were not coordinated with the rest of the project. Customers were unhappy with changes to the stock-keeping unit product system (SKU system). Symantec had overlooked the needs of many customers while designing a technically sound but user-unfriendly ERP system.
Technology: Both companies used highly customized versions of Oracle’s E-Business Suite 11d prior to the merger. Users struggled to process the large amount of information provided to them and were overwhelmed by the increased number of steps, all of them new, required to place orders. Some smaller distributors and partners didn’t update their systems to handle the new SKUs and were unable to submit purchase orders electronically. After the rollout, licensing became much more difficult for Symantec’s customers and partners, forcing them to wait multiple weeks before receiving their licenses.
3. Was Symantec’s response to the problem adequate? Explain your reasoning.
The company initiated a follow-up project named Project Nero. The goal of the project was to recapture the loyalty of customers who were disenchanted by the changes brought about by Oasis. The project reached out to customers and fixed the problems with the information systems to improve response times and streamline operations.
The company began by adding over 150 new customer representatives to handle the increased volume of calls, reducing wait times and increasing customer satisfaction. Executives traveled the country to improve relations with angered customers and partners. The company introduced a master list of product releases readily available and standardized its communication methods between departments regarding new projects and change management.
Symantec used Net Promoter methodology to measure and increase customer loyalty. The results identified specific criticisms and customer problems and dramatically aided Symantec in correcting those problems. Project Nero helped the company weather the worst of the crisis. However, the company does not release the results of its Net Promoter surveys to the public so the extent to which it has repaired its reputation is unclear.
4. What would you have done differently to prevent the implementation problems that arose at Symantec?
Student answers will vary but some of the principles that should be included in their answers are:
Even the most careful planning and well-designed systems can quickly go awry if customers are unable to make use of the new system. Enterprise applications involve complex pieces of software that are very expensive to purchase and implement. The total implementation cost of a large system, including software, database tools, consulting fees, personnel costs, training, and perhaps hardware costs, might amount to four to five times the initial purchase price for the software.
Enterprise applications require not only deep-seated technological changes but also fundamental changes in the way a business operates. Business processes must be changed to work with the software. Employees must accept new job functions and responsibilities. Most implementation projects fail or experience enormous problems because executives, managers, and employees did not understand how much organizational change was required.
Specific Symantec problems that perhaps could have been avoided: • Communicate with employees better to counteract the negative attitude towards the project. • Communicate with customers and distributors better about the upcoming changes. • Make sure all of the systems that were changing were coordinated throughout the organization. • Not change as many systems all at the same time. Even though stretching the implementation out over a longer period may have cost more money, perhaps it would have prevented some of the massive problems overall.
5. If you were a partner or customer of Symantec, would you have switched vendors in response to the ERP overhaul issues? Why or why not?
Student answers will vary. Some principles to keep in mind are:
Enterprise applications introduce switching costs that make it very costly to switch vendors. Companies become dependent on the vendor to upgrade its product and maintain the installation. Many of Symantec’s partners and smaller distributors were reliant on Symantec and perhaps could not afford to switch vendors. That would mean they would have to switch all of their internal systems at great cost.
Customers are often reluctant to switch vendors based on historical relationships. If the problems seem temporary, the customers will hang on. If the problems seem insurmountable, some customers will desert the sinking ship.