BISY2005/ISY2005: Nestlé's Enterprise System Case Study Report

This report provides a comprehensive analysis of Nestlé's Enterprise System (ES) implementation, examining the company's global presence, product offerings, and the business problems it faced prior to ES adoption. It details the benefits of implementing an Enterprise Resource Planning (ERP) system, including accelerated processes and improved efficiency. The report delves into the challenges encountered during the ES implementation, such as selecting the right system, vendor selection, change management, and training. It also explores the impact of change management on the performance of the ERP system. Furthermore, the report highlights the various departments integrated by the ES, the steps involved in ES implementation, and the importance of ongoing maintenance and employee training. This report provides an in-depth understanding of the complexities and benefits of ES implementation in a large multinational corporation like Nestlé, offering valuable insights into the challenges and strategies for successful adoption.

Running Head: ES
Nestlé’s Enterprise System
Name of the Student
Name of the University
Author Note

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Executive summary
The implementation of the ERP system have been beneficial for the Nestle Company however
they have faced certain challenges while adopting the system. The below report discusses about
the company and its global presence. Its products and services in a brief. The business problems
that are present in the company was a matter of concern to them for a long rum. However the
incorporation of the ERP system have accelerated their activities and process to achieve the
highest success in their course of business. The effect of change management is also discussed
briefly on the performance of the ERP system.

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Table of Contents
Introduction......................................................................................................................................3
About the organization....................................................................................................................3
Business problem.............................................................................................................................4
Presence of Enterprise System in Nestle.........................................................................................5
Challenges faced by the implementation of the system...................................................................8
Effect of change management on ES performance..........................................................................9
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................12

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Introduction
The global presence of Nestle is making the Company reach to its highest success, the
amount of service provided and the number of products produced by the company are accepted
and used globally (Mitra and Neale 2014). The implementation of the ERP system in the
company have been useful yet challenging.
Hence, this report discusses about the Nestle Company in brief, then the problem faced
by the company in the past few years, the already existing enterprise system in the company, the
issues and challenges faced by the company while incorporating the ES system in their daily
activities and lastly the effect that change management has made on the performance of the ERP
system.
About the organization
Nestle is one of the pioneer in the beverage production market. It has a range of products
starting producing coffee, chocolates, Maggie and may fast food products. The company has a
global presence. It has not limited itself only to its native land as it is a Swiss Company. The
presence is seen in several parts of Asia like India, China, in the western part it has a large group
of consumers in America. Basically, it has spread its branches to all over the world and
competing with other companies with utmost grace (Ramesh 2018). The overall turnover of the
company by 2016 is about 90 billion. It has provided employment to nearly 339,000 people all
across the world. The company was founded by Henri Nestle in 1866. The purpose that Nestle
has shown is purely to contribute advancement towards the healthier future of the world
(Kronrod and Lowrey 2016). The aim is to shape the world and make a better place for the future

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generation. The long term success of the company is attached with providing the best quality
product and services in this competitive world.
The Company is not only limited in producing food products and beverages but also
showed its interest in the innovation through researches. It has opened up a branch and invested a
huge amount in that. The advancement in nutrition science is facilitated by the company with the
investment of 1.5 billion (Panigrahi and Chaudhury 2015). The R&D department deals with new
innovation, ways and products that are inclusion with newest technologies and approaches. The
working officials are the most trusted assets of the company that are aiming to provide the best
quality product and achieve their goal in the coming years (Ishrar 2017). By the end of 2030 the
company is aiming to for Sustainable Development Goals and make a place in UN.
The motto of Nestle is to have integrity, fairness and honesty in the operations of
business which helped them in growing to such a large and famous company all across the
world. The ability to provide the basic need to the humans being is another aspect that runs by
Nestle (Eugene et al. 2017). The focuses on improving the quality of living and provide best
healthy food products.
Business problem
One of the biggest problem faced by nestle id related to the inclusion of the local
organization for conducting activities in the company at several places. This has led to the
involvement of several information technological devices and with that the cost on those devices
added to the annual cost on the company. It was also seen that due to the huge presence of the
company at different levels of the company the management of the activities and human
resources were becoming a problem (Hofmann, Strewe and Bosia 2018). The management of the
available resources were a point of conflict in the company. The management of information was

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also a contradictory aspect in the company. The company collects a huge amount of information
and details all round the world for its products, services, workers and several other departmental
operations. The manual system of managing all the operation are a huge issues in the company
(Kamasak 2015). Nestle also thought of implementing and ERP system and the choices were
differing for several times. The transfer of the activities from the manual system to the ERP
system was a matter of concern. The people operating the system has minimal knowledge about
the system and the ways to operate that. The technical issues of implementing system is a huge
decision for the managers of the company (Sierra‐García, Zorio‐Grima and García‐Benau 2015).
The switching to a new system and proper success of the system is not in hand of anyone.
The most affected the company got when the operation and activities of the company
were shifted with the introduction of the technologies and the transformation occurring in the
market are totally based on the technological changes occurring. The compatibility of the
operations occurring in the company were not up to the standards of the similar companies
working in the same domain (Mitra, O’regan and Ruan 2014). The tracking of the activities
going on in manufacturing, logistics, production, planning of the operation were not done
properly. The approaches were not strategically effective to the company y in the long and short
run.
Presence of Enterprise System in Nestle
In large organizations the presence of various system to coordinate the activities across
the company is required by the emergence of technology. The various departments such as
production, manufacturing, packaging, sales, human resources and finance are all managed
together. The flow of information through all the departments are required to have an
unavoidable and smooth approach (Mitra O'Regan and Sarpong 2018). The different operation

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occurring in different department are need to be of well aware by the managers and the
workforce. The connection between all the departments are required for smooth operation of the
company. The presence of enterprise system is the about managing the functional system of the
company is a cross functional way. This allows in better coordination of all the departments and
allows to deliver a better integrated process in the company (Solomon 2018). The enterprise
system allows in resource planning, coordinates the sales department about the presence of
products and connects the production, logistics marketing and all the department together.
In the past years Nestle has started a program in collaborating the process of business
with information system. It has included the SAP’s R/3 ERP software, so that the departments
and integrate together. The system helps to manage several works and reflected several benefits.
The system helps is generating real-time reports to the company. The features are the flow
control of the screen, helps in functioning, enterprise modelling, and common service
management and control the transactional flow (Radlo 2016). The main idea behind the
enterprise system operations are to integrate all the activities together in a single system so that
all the information can stay at on place at the time of emergency need. The sections of the ERP
system includes the human resources, finances, CRM, etc.
The process that took place in applying the enterprise resource planning system in Nestle
through variable steps.
 Analysis of the ES requirement in the company- The initiation step is to find out the
requirement of the system in the company (Trinh 2018). The activities and procedures of
the company are listed and if the list reflect the need of the system then the fu8rther
process are taken-up.

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 Expert hiring- The proper experts will be hired who have the full knowledge about the ES
system and its implementation through the correct steps.
 Evaluation of the ES- The requirement of the type of ES system is understood on the
basis of the operations, industry, management, products and services and the ERP system
is decided to implement in Nestle.
 Include change-The shifting from the manual system to the automatic one is a huge
change in the company (Ilkina 2017). The easy acceptance of the change by the
employees, suppliers, customers needed to done smoothly. All the associates of the
company must be aware of the changes and shift smoothly without hampering the
operations of the Company.
 Data allocation- The already existing data in the company needed to be available in the
new system hence the process are followed that are needed by the company to analyze
and validates the data and only the important ones are taken in the enterprise system.
 Implementation of the ES- The ERP system is implemented after all the validation and
analysis from the earlier stages. The system is operated under the supervision of the
experts, configured well in the company and then operated by the respective employees
(Sacks et al. 2015).
 Monitoring of the ES- After the implementation of the system in the company y the
system is monitored well for any failures or damages it may cause can be prevented well
in beforehand.
 Training of the existing employees- The implementation of the new ERP system will
require some expert workforce as well as the knowledge of the existing employees hence

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the employees will be trained as per the requirement of the understanding of the system
to operate properly.
 Launching of the system- The system is configured well as per the standards of the
market and then launched in Nestle for its effective operations.
 Maintenance of the system- The maintenance of the system is carried out by the experts
only. Keeping the track of the progress of the system and gradually updating it with the
newest technologies is the way of maintain the system along with efficient work delivery.
Challenges faced by the implementation of the system
As the emergence of technology is new to the entire Nestle Company. They have faces
several difficulties at several levels of the Company (Trương 2014). Hence it is the requirement
of the officials’ to provide proper trainings. However the possible challenges that have been seen
while implementing the ERP system in Nestle are as follows:
 Implementation of the correct system is the basic and most important requirement of the
Company. The availability of different ES is vast. Hence the suitable one was needed to
be chosen and applied in the company. Only the implementation of the right product can
increase the overall productivity (Baker et al. 2017). The choosing of the right vendor is
also required so that whenever any new requirement comes up, it can be met at the
earliest time possible.
 The implementation of the ERP system requires the authorities to accept the system. This
includes from the top managers till the executives of the Nestle Company.
 The implementation will require a huge amount of time. Hence the productivity of the
company may get hampered. Hence the application of right strategies will only eradicate
that.

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 The inclusion of the system requires the knowledge to handle the system further. Hence,
the unavailability of the proper training to operate the system is a huge challenge to all
the employees of the company.
 It is very clear that ERP is a fully automated system that manages all the inventory works
around the company. Hence the cost included in implementing the system and providing
proper training to all will include huge cost. This is a challenge to the management to
handle all the expenses effortlessly.
 The allocation of the system with the current going activities requires proper management
from the project management team. The system can only be implemented if the staffs of
the company are cooperative enough to accept the new system.
 As the knowledge of the new system will be limited, the possibility of some employees
not understanding the operations of the system is possible. Hence, many employees may
leave the company for not getting adjusted with the new system.
 The continuous monitoring of the system is a challenging work to include in the daily
activities. The unwanted results can lead to huge expenses.
 The investments made on the software and hardware will be high as the system is new
and the operations are unknown. The absence of proper and compatible hardware can
lead to the shut-down of the entire system. The system requires the efficient performance
of the internal hardware and the data generated will require a huge space for storage.
 The maintenance cost is required to be managed carefully otherwise any disruption in the
system can lead to a huge loss.

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Effect of change management on ES performance
The inclusion of new system, project and initiatives by any organization leads to changes.
This takes place to enhance the performance and productivity of the Company. This will include
the changes in the process, structure of the organization, job roles and use of new technologies.
The proper management of all the aspects discussed about is known as change management. This
mainly depends on the working employees and the ways they manager their works as they are
the primary people to work with the change (Richards et al. 2015). The management of change is
about following of guidelines and rule to adopt the changes happened in the Company
environment so that successful outcomes can be achieved in the long run.
The implementation of the ERP system did not require any costly hardware and software,
only the proper change management. The manager of the company did not communicate well
with the other employees about the implementation of the system. This created a chaos between
them when the actual system was implemented. The change management is a formal process that
must be included in the company. This implementation impact each and every person of the
company. The change management was scheduled well with company activities. This lead to the
better performance of the system as gradually all the employees get aware of the overall system
and the system can be handled well with the course of time (Krykavskyy and Mashchak 2017).
The ERP deployment is required for strategizing with the change management across the
company. It has been seen that the proper change management lead to the best infusion of the
ERP system and increasing it performance better. The success and failure of any new system
directly depends on the effective change management in the business environment. The
performance of the employees are also get affected by the proper implementation of change
management.

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The most important aspect in implementing the system is to have proper shift of the
employees working on the traditional system to the technology aided automatic system. The
business reengineering plays an important role here to include all the necessary steps performed
in the system. Hence, to enhance the performance of ES implementation the change management
is a necessary step.
Conclusion
From the above report it can be concluded that the presence of the ERP system in the
Nestle Company will enhance the performance of the company and take their productivity to
different level. With the emergence of technology it is important that the operation of the
company also travelled with the trends and new changes. The availability of the products and
services of the company is on the global level. Hence the requirement of an automatic system to
manage the inventory activities are required to incorporate. The presence of strategic change
management will only effect positively on the implementation of the ES system.

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