Maggies Furniture Inc. is a small manufacturing company built from the ground up over the last 12 years by Margaret, the Founder and CEO. She has faced and survived many crises over the years, and now the company seems to have established a good reputation in the market and is growing well. Margaret is well respected by her peers in the industry, where she is known as a no-nonsense person who knows how to run a manufacturing business, hands-on.

However, with the continued growth of the company, Margaret has recognized that she needs some assistance, and has employed Jim, an experienced accountant who has worked with several manufacturing firms in the past. She has made him the Chief Operating Officer.

Other key employees at Maggies Furniture Inc. include:

• Alan: Runs the manufacturing plant. Likes to have lots of stock on hand so that his plant never stops. Does not believe in modern manufacturing techniques like just-in-time or lean manufacturing. Manages his schedule on a whiteboard in his office.
• Michael: Responsible for placing purchase orders to replenish the manufacturing stock (as well as for other company items). Purchase orders are paper based. Values his excellent relationships with the companys suppliers and trusts them to invoice correctly, so does not always price the orders. With some suppliers, where he has long-term relationships, the terms of sale have been agreed over a handshake and are not written down.
• Maria: Receives stock when it arrives, checks it against a copy of the purchase order and records the incoming quantity manually against an inventory ledger (book), which is also used for issuing stock to the plant. She doesnt record the deliveries in the ledger every day, and is often teased about the pile of delivery receipts in her in-tray.
• Helen: Has been a bookkeeper all her life. An old friend of Margaret, and has been with the company since inception. Can be very abrupt and is feared by everyone in the company. She manages all the accounting functions with an iron fist, and no-one dares argue with her. Margaret notes that Helen has never made a mistake and enjoys stating that there are only three certainties in life death, taxes and Helens books. Helen currently uses QuickBooks for recording everything in the accounting department, but has not integrated anything outside of accounting and uses QuickBooks only as a simple bookkeeping system.
• Jeanine: Helens niece, employed straight out of school by Helen as a junior clerk. Her job each month is to reconcile incoming supplier invoices against the paper copies of the purchase orders and Marias ledger. She then presents the reconciliation to Helen for checking, after which Jeanine enters the amounts into QuickBooks to generate supplier cheques, which she mails to them.

The Scenario

You are a systems implementor in Awesome Consulting LLP. You specialize in ERP systems for small manufacturers.

After a few weeks at Maggies Furniture, Jim calls you (he worked with you two years ago at another firm) and asks you to implement some ERP technology. He would like you to start with accounting, as the systems are semi-manual and, he thinks, outdated. To achieve some of his company-wide efficiency objectives he needs accounting to be efficient, providing the information he needs on demand. After some discussion with Jim, the two of you decide to start with the Purchase-To-Pay (P2P) module of the ERP. P2P includes:

• Generation and placement of purchase orders. Most of these are for stock being used in the manufacturing plant, and there is a separate module, to be implemented later, for managing the production schedule and the bill of materials, integrated into the purchasing system. Currently the plant production schedule is managed manually and Michael will need to enter the purchase orders directly into the system.
• Capture of deliveries, recording stock received against the purchase orders.
• Payment of invoices. This is completely automated, based on: terms agreed with the suppliers, the price on the purchase orders, and the quantity received. Invoices are not needed. This will require:
  • The agreed supplier payment terms to be stored in the system.
  • The supplier banking details to be stored in the system so that payments can be directly deposited.
  • The purchase orders to be accurately priced.
  • The quantity and date received to be up-to-date and recorded accurately.
• Adjustments: although expected to be rare, occasionally there may be a pricing change, or mistake, or an agreement to reduce the quantity received (say because of poor quality), or a discount, etc, which will require the system to be updated by accounting.

Jim tells you that, once the P2P implementation is complete, he plans to implement the production scheduling and bill of materials system in Alans plant.

The Task

Analyze and write about the change problems faced, taking into account the items below:

1. Describe the culture of the company. Consider what stage of evolution it is at and what change problems that may cause. Is the culture consistent throughout the company? What is the general state of readiness for change? What is the general state of competence, compared to the system you will be implementing? What general problems do you foresee?

2. For each person described above, including Margaret and Jim, discuss what is going to change in their current job, and what they will have to do differently?

3. Then, for each person, discuss how they are likely to react. Consider at least the following:
   1. What concerns might they have at the personal level?
   2. How are they likely to behave with you? What concerns are they likely to express to you alone. What concerns are they likely to express in front of you with others?
   3. How are they likely to react when you are not around? What might they say to others in the company?
   4. Will they be supporters of the project? Will you be able to depend on them?
   5. What resistance can you expect? Directly? Indirectly? Will they try to sabotage the project? If so, how?

Try to put yourself into each persons perceived reality. Think beyond what is written in the background and scenario and think about how you would react if you were that particular person.