Changes and Challenges of ERP Implementation in the Context of Procurement and Supply Chain Processes - A Case Study at Maersk Drilling

Abstract: Problem Discussion: The oil and gas sector is not very mature in terms of supply chain management. The chosen case company, Maersk Drilling (MD), has problems with a split IT-­landscape with poor data quality. It has caused problems with inefficient and complex processes with much communication required, parallel information and more. Within procurement it translates to problems in spend management and time wasted with tracing orders. The ERP system plays an important role in supporting information sharing, cross-­functional ways of working and a better overview. By introducing a new ERP system some major changes are expected within supply chain and processes will have to be changed. The ERP project is significant hence there are many stakeholders who may perceive the potential challenges differently. Purpose: The purpose of the study is to dig deeper into how the change with a new ERP system will affect the procurement and supply chain processes at Maersk Drilling. The changes bring challenges as well. The study gives a deep understanding of the perceptions of challenges from the different actors. It is important in order to see if everyone works towards the same goal. Methodology: This thesis is a qualitative single case study. The theory was gathered prior to a pre-­study that was made at the company in order to grasp the problem and come up with the research questions. Thirteen interviews were made and archival data from the company was collected. This provided several sources of data and triangulation was possible. The data collection was then matched with the theory in order to secure that the theory would cover the specific research questions. After that the analysis was conducted where empirical data was compared with the theory. Finally the conclusions from the whole study were drawn. Frame of Reference: The reasoning when setting the theoretical framework was that the ERP project is the start of a radical change in the way of working at MD. Many processes are redesigned or improved. The whole study is within the procurement and supply chain area and with this reasoning we then set up the structure for the theoretical framework containing the three areas; Procurement and SCM, Processes, and ERP. In the latter change management plays an important role since the new system means a major change in the way of working for many persons at the case company. Conclusions: ERP has been an enabler for the changes and the new processes will become more streamlined, standardized and cross-­functional. Increased information sharing will help MD to work more efficient and additional/improved data will give MD an enhanced overview in form of management reporting. The new ERP system was not affecting the level of centralization very much, since the structure of decisions in procurement was not changed. The challenges in implementing these changes have been communicated well between the stakeholders and the view of the challenges is overall unified. Master data was perceived as the biggest challenge, most likely since the project is in the establish phase and that MD has a starting point with very poor data. The data quality is of high importance when migrating data to the new system. MD furthermore needs to look closely at how the offshore personnel perceive the project and how they will meet the changes. The vision was also containing technical and management jargons, which makes it less understandable. Today they use good information and many channels but MD needs to make sure that the communication reaches the end users to achieve buy-­in.