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Orange Electric is the leading electrical manufacturing company in Sri Lanka with commanding market share of more than 70 % in Electrical Switches & sockets market. They are well known for high quality of their products both domestically and internationally.
The company has three state of the art manufacturing plants which manufacture electrical switches, sockets, low voltage circuit breakers and cables. The head office is located at Maharagama and the company has a distribution network which has spread throughout the island. Each of these distribution points, offices and factories are interconnected via a VPN (Virtual Private Network).
Orange Electric is one of the early set of companies to move in to implementing an ERP system in Sri Lanka in year 1999. With the change of business processes the company management has decided to upgrade the system with new functionalities. This was done after analyzing new requirements and future opportunities.
II. Recognizing the problem
There were numerous irregular behaviors observed in the organization after the migration to the new system. Most of those observations were directly related to the business process of the company.
• Daily productivity reduced
It has been identified that after implementing the system there was no delay in physical production of goods. However there is a significant delay in recording the information in the system it terms of
- Entering material issues / receipts
- Production order completing
- Reporting operations
Due to this although the produced goods are there in the warehouses company couldn’t release those to customers using the system, hence manual systems needed to be used which lead to a serious drop in productivity.
• Day to day activities got delayed
o Supplier Payments
o Financial statements
o Purchase receipts
• Customer complaints increased (internal & external)
Most of the customers and partners complained about the delay in delivery of orders and payments. This was happened due to the delay in recording particular transactions in the system.
• Cultural issues started to arise
o Inter departmental conflicts
Departments are having their own schedules and goals. Due to the delays occur in the process each department started blaming others. Moreover most departments were in a huge conflict with the IT department for implementing such a complex system.
The staff seems to be de motivated by the system change and most of them still wanted use the old system. Some of the employees complained that they are de motivated because of the complexity of the new system.
III. Define the problem
1. Employees are not attending to training programs
While analyzing above mentioned issues at Orange Electric we have found out that main reason for almost all issues is that end users have not properly been trained on the new system.
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2. How did we found out that this is the problem?
In order to identify that lack of training is the problem for all the issues, we have carried out a small research which consisted of observation and interviewing. In the interview we have forwarded some simple questions (Appendix I).
The data collection and observation was done on selected random samples of each department. For this initial research we have selected a random sample size from each focused group as this supposed to be an abstract level of research carried out to identify the cause for the problem. The focused groups were selected from Stores / Warehouse, CR department, Finance department, IT department and top level management. The gathered results were analyzed further and it has been identified that during the period of ERP system implementation at Orange Electric there was a general tendency of users not attending to training programs.
Having identified the symptoms we carried out series of in depth interviews with some open ended questions (Appendix II) with key management personnel and employees as well as of a number of focus group interviews to understand the root cause of these symptoms.
Further to these interviews we understood that the primary reason for drop in daily productivity, delays in day to day activities, increasing customer complaints, interdepartmental conflicts and de – motivation is that employees resist attending training programs attempted at managing the change to a new ERP system.
To test this hypothesis quantitatively we collated data on daily productivity since the implementation of the new ERP system, number of invoices per day, average number of customer complaints per month, number of internal complaints and number of absent days per employee and plotted it against average attendance for training programs. A regression analysis was then carried out to find to what extent each of these symptoms was impacted by the attendance to training programs.
Based on the above we defined the problem as follows:
Having defined the problem we then proceeded to develop a process to understand the problem further and through that recommend possible solutions.
In order to dive deeper into the problem we first carried out a Mind Map (Appendix III) to identify all possible reasons for the resistance to training programs. Having identified a number of key reasons we carried out a Why – Why analysis to further understand each of the reasons.
For the purpose of carrying out the Why – Why analysis we conducted a short survey aimed at obtaining possible reasons and then a series of in-depth interviews and focus group interviews. The interview guides consisted of both quantitative and qualitative questions in order to obtain a right brained as well as left brained perspective on the problem.
By looking at the problem and its nature we realized that there is a logical behavior behind the problem. And also as we are trying to analyze a simple business problem occur in an organizational environment, plus the team also consisted of left brain thinkers, we selected “Why – Why” approach to analyze the problem.
3. WHY – WHY Diagram
Most of the respondents of the survey indicated that one of the main reasons they avoided attending training programs was that they did not see a value addition from the training programs and that they did not see a direct benefit from the training.
Further investigation revealed that one of the root causes for this problem is that there was no proper needs assessment carried out at the early stages. Although management realized the need for training employees in the new system there was no assessment of current skills and no proper understanding of the skills gap.
Stemming from the fact that there was no proper skills assessment and no proper evaluation of the skills gap, the training objectives were not clearly stated nor were they clearly linked to the organization goals and objectives. The result was ad hoc selection of employees for common training program which in turn has resulted in the lack of measurable benefits either to the employee or the organization as a whole.
Due to the fact that training requirements have not been clearly linked to company objectives, budgetary allocation for training too have to a large extend not been given priority. This has resulted in management cutting corners in the quality of the trainers etc. the opinion of many employees is that training is provided merely for the sake of providing training, instead of providing tailor made, state- of –the- art training.
A second reason for training programs to fail was the fact that the program itself was not designed well. Due to the act that needs had not been assessed well and training requirements were not linked clearly to company objectives, the training programs themselves were not designed effectively.
A number of reasons resulted in a poorly designed training program. There was almost no involvement of employees in trying to understand the training needs or in developing the training programs. Many employees felt that there should have been a more interactive system where employee feedback was taken into account when developing and deciding on training programs. This they feel would have enabled HR to develop a training road mad more relevant to the requirements.
Further many employees feel that there is a bridge between trainers and themselves. Many survey respondents feel that the trainers do not properly understand the context or requirements and do not pitch at the required level. Indepth discussions with employees revealed many of the negative sentiments towards training stemmed from the fact that some employees felt that training was pitched too high while others felt that it was pitched too low. As a result neither group benefited from the training offered. Further many employees were less receptive to trainers because of language issues and problems with connecting to the trainers.
Another reason why employees are not motivated to attend training programs is that they do not see a direct relation to performance evaluation. Management has not clearly linked benefits from the training to key performance indicators; therefore employees do not always see the direct impact of the training programs.
In addition, most employees felt that management did not encourage training and that they did not place enough value on training or believe in the benefits of the training. As such support in terms of time off, reduced work load etc is not forthcoming. Many employees felt that stress levels have increased since no allowances are made by superiors for time taken out for training time.
Another main reason why training programs have failed especially at the middle management level is that many of these employees are reluctant to attend training programs due to the fear that incompetencies being highlighted in a group setting. This has a more serious underlying reason that many of the middle management is not always the most competent and therefore many of these individuals who are in middle management levels and reluctant about attending training and discourage more junior members from attending training as well.