IGT's ERP Implementation Challenges

This assignment examines the ERP implementation undertaken by IGT. Students are tasked with identifying both the advantages and disadvantages of implementing an ERP system within IGT's context. The analysis should also delve into the crucial aspect of change management, exploring how IGT can effectively manage the transition brought about by the new system. The role of stakeholders in the successful implementation of ERP is another key focus area of this assignment.

Running head: IGT ERP IMPLEMENTATION
IGT ERP Implementation
Name of the Student
Name of the University
Author’s Note:

1
IGT ERP IMPLEMENTATION
Table of Contents
ERP System.........................................................................................................................2
IGT.......................................................................................................................................2
Question 1........................................................................................................................2
Question 2........................................................................................................................4
Question 3........................................................................................................................6
References............................................................................................................................8

2
IGT ERP IMPLEMENTATION
ERP System
Enterprise Resource Planning is the amalgamated management of business processes or
business activities like finance, sales, marketing, product and production planning,
manufacturing, inventory and materials management (Schniederjans and Yadav 2013). It is
referred to as the sub section of business management software, which is required to control,
collect, reserve and translate data from the above mentioned business activities.
IGT
International Game Technology or IGT is a leading manufacturer of lottery machines and
slot machines. They used to depend on various different systems to manage their different
departments of accounting, manufacturing, sales and orders of customers. When an executive of
the organization needed to learn the status of a particular order, he/she had to undergo all sorts of
system to find a simple piece of information. To solve this particular problem, IGT thought of
adopting ERP package for their business (HassabElnaby, Hwang and Vonderembse 2012). The
case study of IGT ERP Implementation answers some of the questions. The solutions are as
follows:
Question 1
What are the key goals IGT wanted to achieve using an ERP system?
Solution
Enterprise Resource Planning or ERP has various significant advantages that make it
highly acceptable and popular amongst all organizations (Hung et al. 2012). The major benefits
of ERP are as follows:

3
IGT ERP IMPLEMENTATION
a) Competition: ERP helps the organization in competition with all other competitors in
the market. ERP makes the process easier for them.
b) Efficiency: ERP increases the efficiency of any organization and thus makes it popular
(Candra 2012).
c) Scalability: Structured ERP systems are much flexible and scalable for any
organization.
d) Security: ERP systems are highly safe and secured and data does not get lost easily.
e) Cost Effective Maintenance: ERP can easily maintained in low prices and thus can be
known as cost-effective maintenance (Hung et al. 2012).
The objectives that IGT wanted to achieve by implementing ERP as follows:
i) The main goal of IGT was to integrate their applications smoothly. The accounting
department of IGT wanted a single system, which will do all the accounting part of the company.
Similarly, all other departments want their own system (HassabElnaby, Hwang and
Vonderembse 2012). Therefore, it would be easier if they implement a complete ERP system.
ii) IGT implemented SAP R/3 version 4.6 ERP for their business. They wanted to
integrate their three main business functions, which are development of product, manufacturing
and finance through the ERP platform.
iii) IGT wanted to implement a package that is cost effective and simple to be
implemented and thus they chose ERP (Ahmad and Cuenca 2013).

4
IGT ERP IMPLEMENTATION
iv) ERP even helped IGT employees to find out easily which plant locations are building
which of the machines (Hailu and Rahman 2012).
v) Another objective of IGT for utilizing ERP was to design alterations and monitor costs
in launching and producing brand new products, for example the EZ Pay cashless aspect.
The above-mentioned statements clearly signifies the goals and objectives of
International Game Theory, which they wanted to achieve by implementing ERP packages (Galy
and Sauceda 2014).
Question 2
Discuss the pros and cons to customizing ERP system.
Solution
Enterprise Resource Planning is a procedure through which an organization, mostly a
manufacturer, integrates and controls the principal departments of the business (Hasibuan and
Dantes 2012). The management team of an ERP system amalgamates various sections, for
example the inventory, finance, sales, planning, human resources, purchasing and marketing.
International Game Technology has adopted ERP for their business (Schniederjans and Yadav
2013). ERP has several advantages and disadvantages. The advantages of ERP are as follows:
i) Best Collaboration: ERP can be easily collaborated with all other departments and they
can provide best visibility of the organization
ii) Easier Activities: ERP makes the activities like sales forecasting, tracking of
inventory, various orders and revenues of the organization easier (Hung et al. 2012).

5
IGT ERP IMPLEMENTATION
iii) Security: ERP is highly safe and secure for any organization and thus it makes it
popular.
iv) E-commerce Integration: ERP systems easily controls tracking and processing of
online-based order.
v) Several Modules: ERP has different modules implemented within it, for example, the
marketing, SCM, CRM, human resource management, finance, marketing, project management
and manufacturing (Galy and Sauceda 2014).
vi) Centralized Storage: ERP has a centralized storage that stores all the data and
information in a single system. This system even helps in the back up of data.
vii) Cost Effective Maintenance: ERP can be easily maintained in low cost for longer
duration and thus can be claimed as cost effective maintenance.
viii) Scalability: ERP is scalable and flexible for its business.
ix) Business Intelligence: ERP systems provide various functions of Business
Intelligence, which provides overall vision on the processes of business and recognizes areas for
improvements (Hailu and Rahman 2012).
x) Efficiency: ERP increases the efficiency of any organization and thus makes it
popular.
In spite of so many advantages, ERP do have various disadvantages. They are as follows:

6
IGT ERP IMPLEMENTATION
i) Initial Cost: The initial cost of the ERP implementation is extremely high and many
organizations cannot afford it easily. The software, testing, configuration and planning costs are
too high in ERP.
ii) Time Consuming: Another disadvantage of ERP is that it is highly time consuming
and sometimes, it often takes one to three years to get completed and become functional.
iii) Excessive Customization: Little customization cannot integrate the business process
with ERP system (Galy and Sauceda 2014).
iv) Migration: Any kind of migration of existing information to the ERP system is nearly
impossible and thus switching to a new system becomes highly risky for any business.
v) Indirect Costs: Indirect costs are incurred for the ERP implementation.
IGT should have kept in mind the above-mentioned advantages and disadvantages before
implementing ERP in their business.
Question 3
How should IGT handle change management during ERP implementation?
Solution
Implementation of ERP in any organization should be done carefully. There is a drastic
change after the ERP is implemented. The organization’s stakeholders play significant roles in
the selection of ERP, the planning, implementation, adoption and ongoing support phases (Hailu
and Rahman 2012). The roles of the stakeholders are of various types. Stakeholders are those
groups of people or individuals within a particular organization, who have a stake in the outcome
of an ERP implemented software project and whose reinforcement is needed to launch such a
project, operate it further to a successful accomplishment and make sure that the product is used

7
IGT ERP IMPLEMENTATION
completely. Stakeholders have the authority to reinforce a project towards success. They lead the
organization in selecting the perfect ERP package that can help IGT to attain its objectives
(Ahmad and Cuenca 2013). Moreover, they can even help IGT in the implementation process of
ERP. The stakeholders of the organization also handle the change management of IGT. At first,
the scope of the change is determined and then the scope of incorporating the change is
determined. The stakeholders then either approve or reject the change in IGT. Finally, the ERP is
implemented in IGT (Hasibuan and Dantes 2012). Thus, IGT can manage or control change
management with the help of the stakeholders.

8
IGT ERP IMPLEMENTATION
References
Ahmad, M.M. and Cuenca, R.P., 2013. Critical success factors for ERP implementation in
SMEs. Robotics and Computer-Integrated Manufacturing, 29(3), pp.104-111.
Candra, S., 2012. ERP implementation success and knowledge capability. Procedia-Social and
Behavioral Sciences, 65, pp.141-149.
Galy, E. and Sauceda, M.J., 2014. Post-implementation practices of ERP systems and their
relationship to financial performance. Information & Management, 51(3), pp.310-319.
Hailu, A. and Rahman, S., 2012, June. Evaluation of key success factors influencing ERP
implementation success. In Services (SERVICES), 2012 IEEE Eighth World Congress on (pp.
88-91). IEEE.
Hasibuan, Z.A. and Dantes, G.R., 2012. Priority of key success factors (KSFS) on enterprise
resource planning (ERP) system implementation life cycle. Journal of Enterprise Resource
Planning Studies, 2012, p.1.
HassabElnaby, H.R., Hwang, W. and Vonderembse, M.A., 2012. The impact of ERP
implementation on organizational capabilities and firm performance. Benchmarking: An
International Journal, 19(4/5), pp.618-633.
Hung, W.H., Ho, C.F., Jou, J.J. and Kung, K.H., 2012. Relationship bonding for a better
knowledge transfer climate: An ERP implementation research. Decision Support Systems, 52(2),
pp.406-414.

9
IGT ERP IMPLEMENTATION
Schniederjans, D. and Yadav, S., 2013. Successful ERP implementation: an integrative
model. Business Process Management Journal, 19(2), pp.364-398.