IT System Failure and ERP Impact

This assignment examines a case study of BC Company, which faced significant problems due to a failed IT system and poorly implemented Enterprise Resource Planning (ERP) software. The report analyzes the reasons behind the system's failure, its negative consequences on the company's values and employees, and offers recommendations for future ERP implementation and management.

EVALUATING IT
SYSTEM FAILURE
1

Table of Contents
INTRODUCTION ..........................................................................................................................3
Question 1 IT system failure types and there evaluation on BC company...........................3
Question 2 Stakeholder analysis Framework .......................................................................4
Question 3 Critical factors that contributed in the failure of ERP system implementation at BC
company.................................................................................................................................6
Question 4 Recommendation for the usage of ERP system for the company........................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
2

INTRODUCTION
System failure is found when the organization does not fulfil its requirement. Evaluating
IT system failure reports about the problem in the organization due to failure of the IT system.
The problems can occur in the hardware failure or it can be software failure which causes the
system complete freeze, reboot or to some time it even cause erase of data. The information is
not shown on screen. The system can go on shut down and never get started again. Moreover if
there is any error they are blue screen of Death error (Davies and Mazurek, 2014). IT system
failure can be due to bad hardware sector of hard drive, motherboard, processor, Ram etc. while
system failure due to software based are due to bad line code. Whenever the system failure
occurs in IT the computer usually get shutdown to protect other system file. Organization wasted
millions of AUD, utility and respect in order to prevent or during time of IT system error.
Company Overview:
Business Communication (BC) company is situated in Melbourne, Australia Based
company. Company is leading provider of document data based marketing, formatting
information and print outsourcing. The company is planning to use ICTs to improvise in business
along with customer satisfaction. But the company face failure in their IT system and are not
able to take further decision.
The report consist of details related to IT system failure types, Stakeholder analysis
framework, main factors which lead to failure of ERP system implementation in BC company
and recommendation to the company (Huang and et.al., Western Digital Technologies, Inc.,
2014).
Question 1 IT system failure types and there evaluation on BC company.
As described by Hirschheim and Lyytinen IT system failure are four types:
 Corresponding Failure which consist of design objectives which has not been fulfilled
during the time of system development. When Mr. Shanks (CIO) had tried to modify the
ERP software with their own processor but ERP software made by HPT is proprietary in
nature and can't be modified, shared. Also, the company's process time has increased.
 Process Failure: Failure generated when IT system id not delivered or more time is
3

consumed or the estimated cost has increased. For the ERP software, BC has already invested
A$8.5 million in HPT in last 2 years. Company was also facing problem in using the software
provided by HPT and when they they got meaningless result. A$20 million was lost by company
in ERP software which could be utilized in better ways. The system was utilized for the past
three years and had brought company to greater loss.
 Expectation Failure: it occurs when desired values differ from actual values and they
don't meet demand of stakeholder. Similarly the expectation of the CIO in BC was not
achieved as well as by the company as they were not able to update or alter the software
along with that the system proved to be taken double activity as it legacy and running
system are still to be operated (Mathias and Bannister, 2013).
 Interaction Failure: It refers to end user usage of IT system. In the organization the
company A$8.5 million are completely lost as well as it took A$20 million for further
improvement. CIO of BC company want to alter the software according to their company
demand which is not possible as HPT has programmed the software and can't be altered.
The system can't be used by the company and is found to be complete interaction failure.
Also, the company time and money were wasted on this investment.
Question 2 Stakeholder analysis Framework
(a) STAKEHOLDER ANALYSIS
Stakeholder Stake in the
project
Requirement from
them
Perceived
Attitudes
Risk if they are not
involved
Board of
Directors
Process owner
and policy owner,
determining the
administrative
policy
Requirement of
experienced staff
members.
Responsibility for
change
implementation
Lack in clarity
Views IT team as
too technically
oriented.
Closing of project
Company can have
uncontrolled scope
change.
CEO Ms
Pamela
Hinrichsen,
Major discussion
about the
software usage
Software must be
upgraded or previous
version should be
Lack in decision
making ability
(Bardy, Cardiac
Loss to the
organization and
other failure in
4

Mr Stephen
Hawkings;
Ms Sherah
Jones
and other
business decision
continued
Responsible for
implementation and
recommendation
Pacemakers, Inc.,
2015).
providing service
to customer
CFO (Ms
Maryam
Wilson)
Decision related
to investment
Take major decision
where the investment
should made on
software and its up-
gradation
Conscious,
strongly supports
company
philosophy,
conservative in
investment in IT.
Wrong investment
and wastage of
money as well as
time
Mr Steven
Shanks
(CIO)
Major decision
related to IT
section
To improve the ERP
software and upgrade
the software with
Companies
requirement.
Believed that they
could change the
software changes
but were unable.
Expert in IT
system
Loss in the
business as IT is
the main sector for
collecting the
customer data and
maintaining them.
(b) The major contribution to the failure of the ERP system project at BC company is due to the
CEO and the decision made by CIO of the company. The CEO approved the use of ERP system
without knowing the fundamentals about the project i.e. the software can't be reprogrammed or
altered also the project took large investment and time and still no improvement were seen.
Moreover, all the CEO continued to use the software in the company which made further loss to
the company. The decision made by the CIO for up-gradation of ERP software has also made
great loss for the company. Also, the company lacks in management as they CIO can't report
directly to CEO, CFO doesn't want any investment in the IT sector and CIO is not involved in
the meeting of Board of Directors (Al-Muhaini and Heydt, 2013).
5

Question 3 Critical factors that contributed in the failure of ERP system implementation at BC
company
 The main reason was the coordination between the CEO, CIO and CFO. If they have
coordinated correctly they could have possible overcome the situation.
 Second problem was CEO without consulting the CIO approved the purchase of ERP
software which lead to problem and further their decision on upgrading the software
which drastically resulted in failure. Senior management implemented the ERP software
without acknowledging the existing business process, its redesigned and whether the ERP
software can coordinate the BC operation.
 Company must order the ERP software for the trail basis, if they found the software to be
useful they must make investment in it. Moreover, when company had invested in the
software they must employ the members which are able to use those software
appropriately (Kabir, G. and et.al., 2015).
 The company lost over A$20 million further after knowing that company is not able to
perform with those software. Also, knowing that the software is not compact-able for
employee, company continued to use those software and were wasting the time as well as
frustrated the BC employee.
 Alteration of CEO is also great problem. All the CEO further continued to invest on the
altering the ERP software and that too they were not sure about the working of the
software. The software was not working according to the HRT vendor.
Question 4 Recommendation for the usage of ERP system for the company.
Being CEO of the company before implementation of the ERP software major
recommendation made are
1. Decision with the complete team regarding the implementation and if the order is made
for the purchase of the software than trail basis the software will be purchased. Through
which the software implementation can be observed (Yarmuch and et.al., 2017).
2. Second decision made would be if the software are not capable with the BC system then
moving to traditional software and improving the software with the HRT employee and
CIO of the company so other employee don't get disturbed.
6

CONCLUSION
The related report is about the failure of IT system and how it affected the BC company.
The company now regrets about their investment in the software and need further suggestion. BC
company has invested large money in the software and are not having proper management. This
lead to downfall of the company values and also affected the staff members. Moreover, critical
factors are identified which were the main reason for the failure of the ERP software. Some
recommendation are suggested at last which could help the organization in usage of ERP system.
7

REFERENCES
Al-Muhaini, M. and Heydt, G.T., 2013. Evaluating future power distribution system reliability
including distributed generation. IEEE transactions on power delivery, 28(4). pp. 2264-
2272.
Bardy, G., Cardiac Pacemakers, Inc., 2015. System and method for evaluating a patient status for
use in heart failure assessment. U.S. Patent 9,186,061.
Davies, J.C. and Mazurek, J., 2014. Pollution Control in United States: Evaluating the System.
Routledge.
Huang, Y. and et.al., Western Digital Technologies, Inc., 2014. Disk drive predicting spindle
motor failure by evaluating current draw relative to temperature. U.S. Patent 8,804,267.
Kabir, G. and et.al., 2015. Evaluating risk of water mains failure using a Bayesian belief network
model. European Journal of Operational Research, 240(1). pp. 220-234.
Mathias, C.J. and Bannister, R. eds., 2013. Autonomic failure: a textbook of clinical disorders of
the autonomic nervous system. OUP Oxford.
Nguyen, T.K., Beugin, J. and Marais, J., 2015. Method for evaluating an extended Fault Tree to
analyse the dependability of complex systems: Application to a satellite-based railway
system. Reliability Engineering & System Safety, 133, pp. 300-313.
Roney, J.K. and et.al., 2015. Modified early warning scoring (MEWS): evaluating the evidence
for tool inclusion of sepsis screening criteria and impact on mortality and failure to
rescue. Journal of clinical nursing, 24(23-24). pp. 3343-3354.
Yarmuch, J. and et.al., 2017. Evaluating crusher system location in an open pit mine using
Markov chains. International Journal of Mining, Reclamation and Environment, 31(1).
pp. 24-37.
8