What factors were responsible for the trouble with SAP implementation at Novartis? The accounts payable department at Novartis was having problems with the SAP enterprise system, in which the payments in the process of paying invoices were being held and a backlog of overdue bills was building. The faults are arguable, yet some factors of the causes of trouble are as follows: 1.
The recent upgrade to the SAP R/3 financial modules is the source of financial crisis. 2.
Novartis believed that Novartis’s inefficient invoicing process causes the problem, requiring manual approvals from many different managers. 3.
At their discussion, they even wanted to scrap SAP modules that did not meet their needs to re-design their requisition-to-pay process. 4.
Novartis and the information system groups do not cooperate well. 5.
Novartis believed that if too many interfaces between different information systems are needed to deal with if it let the SAP software handle as many business processes as possible. 6.
SAP focuses on integration and tends to ignore the daily needs of Novartis. 7.
Since the software may not be accurate, SAP requires more people involved and disturbs daily work.
b) Was the solution to this problem a good one? Why or why not? The solution to this problem is a good one because:
The solution saves the company about US$4 to $5 million in savings within 6 months. 2.
The solution improve the purchasing process for Novartis so that they do not need to make independent purchases, they instead channel all requisitions through the strategic sourcing department. 3.
Novartis would be able to get large discounts on suppliers due to large purchases. 4.
Reduce late payments by automatically reconciling sourcing and accounts payable.
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