Vodafone Group: Enterprise Resource Planning

Introduction

Vodafone Group PLC is one of the largest telecommunication services providers in the world and the largest mobile operator by revenue (Vodafone, 2016). According to the information provided on the company’s website, it has more than 470 million mobile customers, almost 10 million TV customers, and approximately 14 million fixed broadband subscribers around the world who are served by 108, 000 Vodafone employees (Vodafone, 2016). The aim of this paper is to analyze the company’s recent decision to implement an Enterprise Resource Planning (ERP) system. The paper will also provide a suggestion for improving the process of implementation and discuss management and technological factors that were associated with the change.

Discussion

Central Issues

An ERP system is referred to as a software package that helps to integrate and manage operational, technological, and informational business processes (Kadir, Ismail, & Yatin, 2015). Many companies that are driven by the desire to improve customers’ satisfaction and streamline their decision-making process invest heavily in the implementation of such systems. Vodafone had also recognized numerous benefits of business-management software; therefore, the company’s board of directors signed its approval for the implementation of the SAP ERP system in 2006 (Case Study, n.d.). The implementation of the system was a part of the plan to transform the organization into a global company.

The company’s decision to implement the SAP ERP system was associated with a range of management issues. The most important managerial factor was the willingness of operating branches of the company to embrace the change. Also, given the scope and complexity of the organization, it was impossible to finish the task without external help; therefore, Vodafone resorted to consultancy services of Accenture and IBM. The first year of the project implementation was spent on identifying and remodeling the company’s business processes (Case Study, n.d.). To this end, the management of Vodafone divided all business activities into two groups: non-customer-facing activities and customer-facing front-end activities. This was necessary to limit the company’s exposure to risks associated with the transformation.

The implementation of the SAP ERP system was associated with numerous technological challenges because the company operated in many locations around the world that had different procurement processes and IT platforms. In order to solve the problem of procurement decentralization, Vodafone established a centralized procurement company, which was directly connected to the SAP ERP platform (Case Study, n.d.). It can be argued that it was an extremely smart decision because it allowed suppliers to streamline their operations and provided the organization with better control over its spending. Also, it helped to solve the technological challenge of differences in interfaces, numbers of users, and regulations between the company’s branches.

Information System Solution

The SAP ERP system was essential to solving the organizational issue of deregulation. Given that the company had 20 subsidiaries that operated in more than 50 partner markets, it was important to increase its business efficiency by centralizing its business activities (Vodafone, 2016). Since the inception of the company, its branches showed different rates of growth, which resulted in the obsolescence of some of Vodafone’s IT systems (Case Study, n.d.). The implementation of the project helped to facilitate information sharing between the company’s subsidiaries, thereby improving stakeholders’ relationships and promoting transparency.

The success of the Project

It can be argued that the implementation of the project was extremely successful. The great accomplishment is underscored by the fact that more than 60, 000 employees of Vodafone had access to a mobile app allowing them to conduct the company’s internal transactions (Case Study, n.d.). Also, the implementation of the ERP system allowed to transfer an essential expense reporting application to mobile devices, which helped to make the process of filing for expenses more efficient (Case Study, n.d.).

The implementation of a new ERP system is a project that necessitates a considerable amount of training as well as effective communication (Masbahi, Semma, & Morocco, 2013). Given that the company’s branches exhibited different willingness to change, the company’s management would be better off if it has centralized employee training. The suggestion to centralize worker training is based on the fact that centrally managed learning ecosystems help to quickly eliminate knowledge gaps, thereby diminishing the resistance to change. Also, a centralized training structure would have helped Vodafone to ensure homogenous training frequency across its many locations as well as to have better control over the relevance of training programs to its needs (Ardichvili & Zavyalova, 2015).

Value

In terms of the value brought to Vodafone by the new system, there is no doubt that due to technological advances provided the platform the company became more responsive to the needs of its customers. Furthermore, the implementation of the SAP ERP system helped to enhance the organization’s business intelligence functionality, which is essential for international companies.

Conclusion

The paper has analyzed Vodafone’s recent decision to implement an Enterprise Resource Planning (ERP) system. It has been argued that even though the implementation of the system was successful and resulted in value creation, the company would be better off if it has centralized employee training.

References

Ardichvili, A., & Zavyalova, E. (2015). Human resource development in the Russian Federation. Abington, England: Routledge.

Case Study. (n.d.).

Kadir, R., Ismail, N., & Yatin, S. (2015). The benefits of implementing ERP system in telecommunications. Procedia – Social and Behavioural Sciences, 211(1), 1216-1222.

Masbahi, M., Semma, A., & Morocco, S. (2013). ERP and customization: Case study of logistics processes integration in a telecommunications company. Journal of Computer Science Issues, 10(1), 198-107.

Vodafone. (2016). Investor factsheet. Web.