Hershey ERP Project: A Critical Evaluation of Project Management

This report evaluates project management concepts using the Hershey ERP implementation failure as a case study. It examines the project's scope, the roles of the project manager and client, and the impact of using a Big Bang approach. The report identifies potential challenges, analyzes their impact, and offers recommendations for improving project implementation. Key issues include improper scope evaluation, unrealistic timelines, and inadequate testing. The analysis emphasizes the importance of proper planning, communication, and risk management in ensuring project success. Desklib provides access to similar solved assignments and past papers for students.

Running head: PROJECT MANAGEMENT
Project Management: Hershey ERP Implementation
Name of the Student
Name of the University
Author Note

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Executive Summary
The main purpose of the report is to evaluate different project management concepts, knowledge
of which helps in successful implementation of a project. The report discusses project
management case associated with the implementation of ERP in Hershey. The report evaluates
the responsibilities of the project client and the project members in successful completion of the
project along with the importance of project scope in project implementation. For a complex
project like ERP implementation, it is essential to properly plan the implementation process. The
report recommends certain approaches that are needed to be considered in order to mitigate
potential problems associated with the project. Choosing an accurate methodology for project
implementation is essential for successful implementation of the project.

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Table of Contents
Introduction..........................................................................................................................3
1. Evaluation of project Scope.............................................................................................3
1.1. Aims, Objectives and Project Scope.........................................................................4
1.2. Amended Scope........................................................................................................5
2. The Role of Client and Project manager..........................................................................6
3. Impact of using Big Bang Approach...............................................................................9
4. Potential Challenge........................................................................................................11
4.1. Challenges Faced....................................................................................................11
4.2. Impact of the Challenges Identified........................................................................12
4.3. Recommendations...................................................................................................13
Conclusion.........................................................................................................................14
References..........................................................................................................................15

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Introduction
ERP implementation by Hershey was a huge project that was implemented in year
1996-1999. The project was considerably complex as the entire project was to be implemented in
30months instead of 48 months. The project failed incurring a huge loss to the company. The
major reason being the impropriate project management and lack of involving the accurate
project management tools in implementation of the project. A successful implementation of a
project involves organizing and supervising all the major steps involved in a project, especially
the testing phase. A series of project management incompetency has led to the failure of the
project leading to a loss of orders worth $100 million. According to Curko, Stepanic and Varga
(2012), the project management team is responsible for planning and supervising a project till its
successful completion. Proper planning holds a very important place in project management life
cycle. Improper scope evaluation further leads to failure of the projects, similar to the ERP
implementation failure of Hershey. ERP or Enterprise resource planning system integrates all the
vital operations of an organization. Hershey wanted to implement the ERP system in order to
integrate their business process and supply chain. The order processing was supposed to be
automatic with the integration of ERP (Leon 2014). However, an improper planning and
execution of the project in a constricted time led to the failure of the same. The report discusses
the different project management issues associated with the ERP implementation by Hershey.
According to Ram and Corkindale (2014), project manager is an integral part of any project and
successful implementation of the same largely depends on the project manager. The report
identifies the role of the project manager in the ERP implementation project and identifies a
potential challenge to the successful completion of the project.
1. Evaluation of project Scope

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1.1. Aims, Objectives and Project Scope
The main aim of this project was to implement enterprise resource planning system, as
efficient IT systems were necessary in supporting their logistics and the supply chain. The
company aimed at reorganizing their business processes in with the enterprise resource planning
system. The company aimed at shifting to the new system by April 1999. The new system was
supposed to manage the business of the busiest period, the Halloween and the Christmas.
Enterprise resource planning system helps an organization in gaining a competitive advantage by
saving organizational resources and responding to the changing business environment. The
objectives of the ERP implementation project are as follows (Sankar 2012, p. 114)-
1. To integrate all the business process running within Hershey with the help of enterprise
resource planning system.
2. To shift to the new system before the peak business season so that the busiest business
season can be handled by the new the system.
3. To use a big bang approach in order to complete the project in a scheduled time.
4. To complete the project in a constricted schedule so that the new system can be
launched in July 1999.
The scope of the project was to integrate all the business operation of Hershey in a single
platform by building a customized enterprise resource planning system for the company. The
main objective of identifying the scope of Hershey project was to implement an integrated
system that will manage the supply chain. The Enterprise resource planning system project was

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an upgrade to the patchwork of the legacy IT system associated with the organization (Kerzner
and Kerzner 2017).
Project Constraints and Assumptions
The major constraints associated with ERP implementation project are as follows-
1. The project needed completion in a constricted time period of 30 months
2. Big Bang approach was the only option to implement the project in a much lesser time.
Furthermore, it was assumed that the project is possible to be completed within 30
months and the new system would be able to handle all the business workflows in the busiest
time of year.
The scope identified for the project was not appropriately fit from the management
perspective. This is because the project schedule was unrealistic and infeasible as well.
According to Ghosh (2012), an improper scope evaluation resulted in failure of the project as the
project skipped a number of phases of project lifecycle including the testing phase. The big bang
approach for this project included simultaneous implementation of the different modules of the
enterprise resource planning system that is to be implemented in Hershey. Therefore, it is
essential to make some changes in the scope of the project in order to ensure that the project is
successfully implemented if it is repeated.
1.2. Amended Scope
The Project associated with ERP implementation in Hershey failed due to a number of
reasons, one of the major reasons being improper scope evaluation of the project and less time
for completion of a project. If the project is to be repeated, it is essential to dedicate a feasible

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completion time for the project. One of the wrong decisions taken by the authorities of this
project was to release the enterprise resource planning software in the busiest time period of the
business. If the project is to be repeated, it is essential to allocate a considerable amount of time
for testing the software (Dwivedi et al. 2015, p. 150). Furthermore, it is not appropriate to use a
Big Bang approach in project implementation.
The ERP system to be implemented is capable of handling the growth of the company by
increasing the communication process within the organization. In order to implement the project
successfully, proper infrastructure support and development of a feasible project plan is required
(Ziemba and Oblak 2013, p. 15). The project if repeated is expected to go live in 4 years after
successful implementation of testing phase and bug fixation. The recommendations for an
amended project scope are as follows-
1. The project requirements are to be identified at the beginning of the project, which
includes setting a feasible schedule for the project (Schniederjans and Yadav 2013, p.373). The
modules of the project will be tested before the integration in order to fix the bugs if any.
2. A proper communication plan will be developed at the beginning of the project that
will be used for communication among the team members and will help in ensuring that the
project is being implemented according to the plan.
3. The project aims at creating an enterprise resource planning software that would be
capable of managing all the vital operations of the organization.
2. The Role of Client and Project manager

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The project manager plays an integral part in successful completion of any project. The
project manager plans and supervises a project so that it is implemented successfully. The project
manager is responsible for governance of a project that contributes to the successful completion
of the same. According to Hernández, Amado-Salvatierra and Hilera (2012) client satisfaction is
one of the major aspects of project success and deals with the understanding, defining and
managing the clients’ requirements. Direct communication between the project manager and the
client is essential for understanding the requirements of the project. Therefore, it can be said that
the project manager and the client of the project plays an important role in any project.
According to Schniederjans, D. and Yadav, (2013) having a proper communication
between the project manager and client is essential for identifying the drawbacks and loopholes
of project implementation. One of the major reasons of project failure in Hershey was that the
project manager could not communicate properly the requirements of the project to the
organization; one of the major requirements was adequate time for project implementation. One
of the major reasons of project failure in Hershey is implementation of the project in a much
constricted time.
In ERP implementation project of Hershey, the project manager were involved in
planning the project so that it can be implemented in a construction schedule. However, it was
the responsibility of the project manager to govern and track the project progress. Improper
project management was a major reason of failure of the ERP implementation project.
The client here is Hershey who wanted to implement the complete ERP system before
their busiest business period. According to AlQashami and Heba (2015), the role of the project
manger and the client is crucial for any project. The project manager of Hershey ERP

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implementation project was responsible for successful initiation, planning, designing and
execution of the project (Amid et al. 2012, p.228). However, the project managers are generally
responsible for monitoring and controlling the projects as well. However, in this case, the project
lacked proper supervision, which was another major reason for the project failure.
According to the different project management methodologies, there is a very significant
role of the project manager in delivery of the project. According to Tomanek and Juricek (2015),
the project manager ensures that a completed project is delivered to the client; however, in this
case, the ERP system that was implemented was delivered without undergoing the proper testing
phase for the project. This had a great impact on the delivery of the project as the project failed
to perform according to the plan. In one of the project management methodologies such as
PRINCE2, the project manager has an important role in interfacing between the project and the
business area of the project (Ghosh et al. 2012). This role of the project manager is important for
communicating and encouraging the need of delivering a completed project. Project manager is
further responsible for development of the contingency plans and managing the project risks.
However, in case of ERP implementation by Hershey, there were no proper contingency plans
and risk management process as the project was to be implemented in a lesser time. Many stages
of the project implementation were eliminated in this project implementation including the risk
assessment and testing phases leading to the failure of the project.
According to Mitra and Mishra, (2016), the project failure could have been avoided if the
project manager applied appropriate planning and control strategies for a project. The role of the
project manager and the client vary in different projects. In certain projects that follow waterfall
approach of project management, the project manager is responsible for planning the entire
project before its implementation. However, in certain other types of projects, that follow a

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different project management approach, the project manager may not be responsible for planning
the entire project and the client is responsible for identifying the project requirements. Therefore,
it can be said that the project manager and the client of a project has a very significant role in
determining the success of the project.
3. Impact of using Big Bang Approach
The ERP implementation project of Hershey followed a Big Bang approach of project
management in order to complete the project in a constricted time. It was the client’s decision to
roll out three systems concurrently using a big bang implementation approach of the project
(Yesil and Dodurka 2013). This had led to the elimination of the testing phase of the project
since all the modules were developed simultaneously. This approach of project management was
a decision that was made by the project team members due to the project time as specified by the
client. However, irrespective of the approach chosen, there was a high chance of project failure
as the complex ERP system was tried to be implemented in an unreasonably short time.
Furthermore, it was unreasonable for the management team of Hershey to expect that the new
ERP system would be able to handle the peak demand. Had the system been implemented in low
business period, the company could have avoided such a huge loss. The big bang approach of
project implementation only ensured the development of different modules of the Enterprise
Resource Planning system. According to Khanna and Arneja (2012), a proper project
management approach ensures that all the modules of the project are properly tested in order to
stimulate the realistic operating scenarios.
According to Dey, Clegg and Cheffi (2013), the scenario could have been completely
different if proper project management approach was chosen. In development of complex

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software, the agile project management methodology is much useful. There are a number of
benefits of using agile approach in project management such as, increase in transparency with
predictable cost and schedule of the project. In agile project methodology, all the modules of a
particular project is not implemented simultaneously, rather, each module is implemented part by
part so that the project team has enough time to test and eliminate any bugs present in the
system. The agile project methodology further provides an option of project improvement in the
implementation phase of the project. One of the major advantages of agile project methodology
is that it focuses of regressive testing phase in order to unveil the bugs present in the project
under development. If an agile approach was chosen for this project, the error in the system
would have been unveiled in the implementation phase itself and the company Hershey would
not have suffered such a huge amount of loss.
The agile project management methodology is a widely used methodology for different
software projects as it helps in delivering a quality product (Stare 2014, p.297). This in turn
reduces the risks of project failure as the visibility of the project progress is quite clear.
Furthermore, there is a considerable increase in project control in agile methodology due to
different project management tools and software in project implementation such as Jira (Špundak
2014, p. 943). Lack of proper project control and undefined scope added to the cause of project
failure in Hershey. Poor management of expectations added to the already faulty project scope
and project scheduling, which could have been avoided if the project followed an agile approach
of project management. According to Amini and Sadat Safavi (2013), every software projects
carry some sort of risks, which was true for this project as well. However, these risks could have
been mitigated if instead of big bang approach, agile methodology is used, which incorporates
proper risk assessment of the project in the initiation phase of the project. The problems, the Big

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Bang ERP implementation led to the project in terms of order fulfillment, processing and
shipping could have been avoided if an agile approach of project management was chosen. The
big bang approach of project management was inappropriately chosen for such a complex project
associated with the implementation of enterprise resource planning system (Kerzner 2017).
According to Serrador and Pinto (2015), agile project management methodology makes
use of the short development cycle called sprint to focus on the continuous development and
improvement of a product. Agile methodology offers changing environments that can be
embrace at any stage of product development giving the company a competitive advantage
(Dybå, Dingsøyr and Moe 2014, p. 287). Furthermore, in agile methodology, a product is
delivered with a higher frequency resulting in a delivery of a final working product. Therefore,
use of different project management approach, such as agile would have a completely different
impact on the project delivery.
4. Potential Challenge
4.1. Challenges Faced
The challenges faced by the project team in implementation of the Hershey project are as
follows-
1. According to Nour and Mouakket (2013), the project was implemented in a very
limited time and therefore, time constraint is a major challenge of the project. The project failed
as it could not be completed within the April 1999, as it was supposed to be. The project was
delayed and could only be completed in July 1999 that too by skipping certain important phases
of the project management life cycle.