[pic] Tosco’s success begin by COMETS In February 2001 Donna was very pleased with the success of COMETS. It was a warm February day. Sunshine provided some badly needed relief from the winter’s blues. Donna was sitting in her office observing the green lawn bathing in the warm sun. It was a beautiful day for her observing the performance of COMETS. Estimated costs of COMETS After four-and-a-half years of implementation and approximately $40 million excluding costs of Tosco’s internal staff and ongoing maintenance costs of COMETS over the initial approved budget, COMETS was a success.
COMETS had allowed Tosco to grow through major acquisitions Unlike many IT projects that are scrapped after millions have been spent, COMETS worked and had allowed Tosco to grow through major acquisitions, even during the implementation process, without adding many more personnel. However, implementing COMETS was far from smooth or easy. The COMETS project was finished. Donna reflected on the whole experience. The implementation of the project Tosco maintained a customized approach Because of the unique business process Tosco maintained, the company decided on the customized approach.
To write the software programs for COMETS, Tosco formed teams comprised of operational and accounting users, systems analysts and programmers, and consultants from Aspen Consulting. The project people were mostly part-time workers Most of the Tosco people assigned to the project were assigned part-time. It was for the advantage of part-time workers who are brilliant in terms of working, so that they can work in the firm anytime. Formation of teams from different functional areas and locations
People, when available, were pulled off their jobs from different functional areas and locations. The teams were made up of 70% Tosco and 30% Aspen Consulting in order to keep costs down, obtain buy-in from upper management, and retain knowledge within Tosco. Tosco tracked budget every month for the COMETS project Budget was tracked monthly within the COMETS project. The teams had to re-examine some requirements and get additional funding, although the convenience stores would largely continue to be run on their own system.
The major acquisition of Circle K by Tosco expanded Tosco’s core business In the first year of implementing the COMETS system, Tosco had another major acquisition that of the Circle K convenience stores, headquartered in Phoenix, Arizona. The teams had to re-examine some requirements and get additional funding, although the convenience stores would largely continue to be run on their own system. The Circle K acquisition expanded Tosco’s core business, and adjustments had to be made to the COMETS system.
COMETS process was tasking longer which was doubling the initial price tag of the task In 1996, as Donna expected, the cost overruns on the COMETS project started to surface. Cost growth began gradually and was mainly due to underestimating the difficulty of the project design phase. Time and again, Donna was approached with news that a particular process was taking longer than expected, sometimes dramatically longer, and often doubling the initial price tag of the task. Each time, Donna went back to Aspen Consulting and argued for them to absorb the costs.
The change orders to date were growing and she often wondered if COMETS was ever going to materialize. Five-person management team in Tosco She was growing tired of the heated discussions within their five-person management team (three from Tosco, two from Aspen Consulting). If requirements had not been clearly communicated by Tosco or if requirements were added, Tosco would have to pay. The cost management of Tosco Fortunately, Donna had kept good records of Tosco’s stated requirements that enabled her to win at a 70-80% rate.
Still, these change orders raised the cost of the project from $10. 5 million to $40 million, even after she cut out the fluff. COMETS steering committee was composed of heads of different departments In her monthly meetings with the COMETS Steering Committee, this was composed of heads of different departments such as operations, accounting, and marketing. The COMETS project was more complex and lengthy Everyone realized that the project was much more complicated than previously predicted and that changes would need to be made to the system.
After Donna gave her report on the progress of COMETS, the Committee’s discussions about which reports to add or subtract would often become quite complex and lengthy. Donna was under stress to cope with the requirements of Commercial department Donna was also struggling with getting buy-in from certain key groups, primarily the Commercial department. The traders in the Commercial department were the most important users of the system since they initiated the input of required information that everyone else down the process would need.
If they refused to use the system and use it the way it was designed, the whole ERP system would not function. The traders of commercial department were reluctant to filling out on the details of the contracts in the computer The traders were frustrated by the drastic change in their job duties. A few individuals began deriding the system, calling it “Vomits” in private conversations. Donna was sympathetic, realizing that while traders did their core job well as getting the deal done, they often neglected the actual filling out on the details of the contracts in the computer.
Donna was scared about the traders how to get their jobs done rightly which would affect whole system’s integrity of COMETS Getting the traders to input relevant information into the new system, which was more demanding than Tosco’s earlier systems, was proving too challenging to do on her own. The system drastically changed their work requirements. Donna had to make sure they did their jobs right or else the whole system’s integrity would be compromised. She wondered about the implications of going to upper management at this stage, but she felt she really had no other choice.
COMETS was yet to get the trust of Commercial department They were holding up the whole project and all the other departments. She felt she would never get them to be enthusiastic about COMETS, but she felt there was little she could do about that, particularly under the short time constraints. While going to upper management forced the Commercial department to comply, she knew that a sacrifice in employee morale, and perhaps even her own reputation, had been made. The requirements become bigger and complicated to get COMETS online
In March 1997, the pressure to get COMETS online dramatically increased with the $1. 4 billion acquisition of three Union 76 refineries in Los Angeles, Santa Maria, and San Francisco, as well as pipelines, terminals, and the 76 service stations. COMETS had not been launched, and the requirements had just become bigger and more complicated. The story of successful ERP projects versus unsuccessful ERP projects True to his word, Tom O’Malley was on a mission of growth. Donna was thankful that the first part of COMETS would be launched the next month. She needed to get it moving and get some successes under her belt.
While there were many successful ERP implementation stories and how ERP saved companies millions of dollars after installation, Donna was well aware of perhaps as many stories of other companies’ failures in installing new information systems. Hershey Foods Corporation hurried a supposedly four-year $112 million ERP project into just 30 months and went live with the whole system in July 1999. In the following months, the new ERP system cost the company tens of millions in lost profits instead of providing millions in savings due to system glitches that led to shipment delays, deliveries of incomplete orders, and inventory pileups.
First phase of COMETS launched in 1997 to stop use of Microsoft Access in Commercial division In April 1997, COMETS first phase was launched, which included deal capture, scheduling, contract issuance, and administration. This was supposed to stop the independent Microsoft Access databases being used in the Commercial division, but they continued as questions about the data integrity, particularly about inventory numbers, persisted. In 1998 Phase 2 of COMETS had some problems January 1998 was the mini-launch of Phase 2 of COMETS, the billing module.
This installation took longer than expected, but since it was modular, it could be put in partially. The smallest region was chosen for testing in order to reduce risk. For the most part, it worked despite problems with inventory data and reports needing to be fine-tuned. The full launch of COMETS went fine April 1998 brought the company to a major decision point like how should the issues brought to light in the test be fixed like entailing a delay of a few more months or should they bite the bullet and go to the full launch of Phase 2.
Donna’s recommendation that COMETS be launched was supported by the Steering Committee. To the delight of everyone, the full launch went fine. Namely, they billed their customers. Still there were some problems regarding the full launch of Phase 2 for COMETS Again, there were inventory and reports problems due to bugs in the design, data were not showing right, columns and details had been forgotten, user requirements had been cut or left out, but their customers were billed. Problems were worked around during the next several months.
Phillips a fully integrated petroleum company wanted to buy Tosco The operations of Phillips As a fully integrated petroleum company, Phillips was engaged in exploration and production worldwide: gathering, processing, and marketing natural gas and refining, marketing and transporting petroleum and petroleum product. Phillips also produced and distributed chemicals and plastics. Phillips had three US refineries that produced 360,000 barrels per day and operated 6,000 retail outlets under the Phillips 66 gasoline brand and Kicks convenience store name. [pic]
Chart: Number of Gasoline stations at year end of 1998, 1999 and 2000 for Tosco The acquisition of Tosco would make Phillips the second largest oil company in the United States In February 2001, Phillips Petroleum agreed to buy Tosco Corporation in a $7 billion stock transaction. The acquisition would make Phillips the second largest oil company in the United States, behind Exxon Mobil, and in the top 20 of the Fortune 500 companies, with projected sales of $45 billion per year. Tosco’s refining capabilities would give Phillips a significantly expanded downstream capability.
Jim Mulva, Phillips’ Chairman and Chief Executive Officer said that they are acquiring the assets and expertise of the country’s largest independent refiner and marketer, combining the complementary skills of the two companies, including Tosco’s refining capabilities and convenience store expertise along with Phillips’ branded wholesale skills and expertise in refining and fuel technologies. Chart: Merchandise sales in 1998, 1999 and 2000 Donna was wondering about Philips SAP-based system The purchase was expected to gain full shareholder and government approval by the end of the third quarter of 2001.
Donna was not sure how this piece of news would impact the outlook of COMETS. Phillips used the SAP-based system. Like Phillips will allow Tosco to keep its own information system or not and would Phillips insist Tosco convert to the SAP system for the purpose of integration as a one system based company. The successful COMETS project was system could be maintained by Tosco’s own IT staff Tosco’s COMETS project was largely finished. While the initial hope was that the system could be maintained by Tosco’s own IT staff, attrition left Tosco with no choice but to outsource that function largely to Aspen Consulting.
The problems with inventory were just about fixed, which would cap off the last large concerns with the system. While Phillips Petroleum waited for the merger to be approved by regulatory bodies, Phillips was in process of deciding whether to convert Tosco from COMETS to its SAP-based system. Near the end of her 26-year career at Tosco, Donna was proud of the success of COMETS. In an interview, she stated with a satisfied smile. [pic] After analyzing the existing situation in the case of ERP in Tosco and the whole industry we think there are some discrepancy among the company, industry and people associated with it-
What strategy should Donna, the 26 years experienced employee of Tosco, follow with Phillips to allow Tosco to keep its own information system without converting COMETS to SAP-based system? [pic] In this portion of the case solution, we’ll focus on various Internal & External areas of Tosco, where various discrepancies exist & which have the needs to be sorted out. To assess the internal & external needs of Tosco, we’ve to focus on the following questions ? Does a performance discrepancy exist? ? Is it important to the organization? Is it correctable through employee development? ? Is employee development the most cost effective solution that can be? Does the Performance Discrepancy exist in the company? Yes, there was some performance discrepancy exists in the company both internally and externally. The unique business process Tosco maintained. The company decided to follow customized approach. Tosco formed teams comprised of operational and accounting users, system analysts and programmers and consultants from Aspen consulting to write programs for COMETS. Tosco people assigned project as part time.
In their project, Tosco assigned as part time, People were pulled off their jobs from different functional areas and locations. Teams were made up of 70% Tosco and 30% Aspen Consulting to keep cost down. Budget was tracked monthly within the COMETS project. Tosco acquisition of the Circle K convenience stores. In the first year of implementing the COMETS system, Tosco acquirement the Circle K convenience stores. The team had to re-examine some requirements and get additional funding, although the convenience stores largely continue to run their own system.
The Circle K acquisition expanded Tosco’s core business and adjustments had to be made to the COMETS system. Cost escalations of project design phase. Donna provide information that the process of working take longer time and doubling the price. After a management, discussion of five members still escalated the cost of orders. After that, Donna cut out the fluff. Struggling of getting buy certain key groups. Donna found the need of groups, primarily and commercial Department. The traders in the commercial department were the most important users of the system.
They initiated the input of required information that everyone would need to process. The whole ERP system would not be function they used the previous designed system. COMETS launched phases. COMETS first phase was launched in April 1997. It included deal capturing, scheduling, contract issuance and administration. This was support to stop the use of independent Microsoft Access database in the commercial division. The phase 2 was launched in January 1998. It was billing module and took longer time to installation than expected. The smallest region was chosen for testing. Phillips buying Tosco.
In February 2001, Phillips buys Tosco Corporation in a 7 billion stock transaction. This acquisition makes Phillips the second largest oil company in the United States. Phillips was in process of deciding whether to convert Tosco from COMETS to its SAP based system. Is it important to the organization? The discrepancy company was facing was extremely important to the organization. Tosco’s earlier system was too challenging. Tosco’s earlier system was too challenging. After installing the new system, they realized it is more demanding than earlier system. The system drastically changed their work requirements.
In March 1997, COMETS online dramatically with the $ 1. 4 billion acquisition of three union 76 refineries in Los Angels, Santa Maria and San Francisco, as well as pipelines, terminals and 76 service stations. So this new improved system is important to continue system. COMETS phase structural problems. COMETS first phase used in commercials division but there is questions about the data integrity, particularly about inventory numbers, persisted. COMETS phase 2 chosen for testing in order to reduce risk. For the most part, it worked despite problems with inventory data and reports needing to be fine-tuned.
This problems crated market competition. COMETS was launched was supported by the Steering Committee. The Launched of COMETS was fine in April 1998. They billed their customers but again there were inventory and reports problems due to bugs in the design, data were not showing right, columns and details had been forgotten, user requirements had been left out. However, their customers were billed. This problem was long lasting for seven months. That was why COMETS success was in question. Is it correctable through employee development? Management team is divided into three from Tosco and two from Aspen Consulting.
Tosco improve their employees about the project of Tosco. The reason is if requirements had not been clearly communicated by Tosco or if requirements were added, Tosco would have to pay the cost. The new system is better than the previous one. This new system develop the productivity and knowledge of employees. Buying new groups, primarily and Commercial department. The traders were frustrated by the drastic change in their job duties. A few individuals deriding the system in private conversation. They often neglected actual filling out on the details of the contracts in the computer.
This new department help to required information and to function ERP. Is employee development is the most cost effective solution that can be applied? Yes, employee development program is the most cost effective solution that can be applied at Tosco. Employee training is the responsibility of the organization. Employee development is a shared responsibility of management and the individual employee. The responsibility of management is to provide the right resources and an environment that supports the growth and development needs of the individual employee.
For employee training and development to be successful, management should: • Provide a well-crafted job description – it is the foundation upon which employee training and development activities are built • Provide training required by employees to meet the basic competencies for the job. This is usually the supervisor’s responsibility • Develop a good understanding of the knowledge, skills, and abilities that the organization will need in the future. What are the long-term goals of the organization and what are the implications of these goals for employee development?
Share this knowledge with staff • Look for learning opportunities in every-day activity. Was there an incident with a client that everyone could learn from? Is there a new government report with implications for the organization? • Explain the employee development process and encourage staff to develop individual development plans • Support staff when they identify learning activities that make them an asset to your organization both now and in the future. [pic] Tosco, formerly known as the oil shale corporation was formed in the mid 1950s.
At the initial state of formation they come up as a research and Development Company which pioneered the technique of extracting crude oil from oil shale rock. As days passed, Tosco construct or build them to be in the market in many ways such as acquiring refinery or by acquisition with other renowned brand like Exxon, BP, Philips Petroleum Company etc. All these things done on thinking in mind to capture or gain the market share of the company. Tosco diversified its business in many operations such as distribution, marketing, refining, extraction process and many others.
Tosco also sold its inherent business of extracting oil from oil shale to Exxon Corporation. After ups and down they positioned themselves in the refining industry with steady growth in around 1986. As in with different business strategies Tosco was very much concerned or aware of keeping cost down on the other hand making Tosco competitive and make the operations like make the departments such as Marketing, Manufacturing, Operations, Accounting, Sales and distribution, Commercial Linked and more efficient as much as possible.
So in the continuation of this process Donna, an attractive women in her 50s was very much concentrated towards her job and also in the track to implement some planning for increasing company’s effectiveness, efficiency introduced a plan to the company and its top executives about the plan of ERP which is known as Enterprise Resource Planning. ERP (Enterprise resource planning) is a dynamic tool for managing multiple aspects of a firm’s operations. ERP is based or runs on an integrated database. This is a software.
The software package includes different modules for the financial, logistical, production, marketing and planning functions. Specifically, product planning, parts purchasing, maintaining inventories, interaction with suppliers, providing customer service, tracking orders and many other aspects of business are targeted or carried out by this specific customized software package which facilitate the business works, save many unusual losses in the organization or in the industry and also this is a system to increase efficiency, coordination and profitability. There were few benefits that were used to present ERP.
Those things are really important to improve the company’s effectiveness and these things includes many or different aspects, which are to be integrated via this outstanding performance of the software. All these features are included in the system after evaluating or taking in depth interviews from the company people who are associated directly with each and every department works. In the whole scenario the cost was a great matter for Tosco to go ahead. Donna presents the time frame of three years and cost of around $15 to $17 million which was so high o the company at that point of time.
The feature that included – ? A database with common data source shared among users of different departments. ? The transaction processing is organized to group related steps together. ? There should be integration of different group or module to run the operations. ? One of the biggest benefits is about integrating financial data’s together. ? Ensured standardized manufacturing or working process of each department. ? Have the capacity to carry extra inventory to prepare for the worst. In the whole it has the opportunity to save company’s millions of dollars and allow it to grow at full speed.
As with all the benefits but the raising cost was a barrier to Tosco and that was a problem for the company to implement this software to the company. As the company given the green signal to start the work on it with giving limited budget of $10. 5 million and time of only 18 months. They ensured the project but also thrown out the critical steps or programs to minimize cost. Then after a long process to be done Tosco come up with their initial budget and within their time frame they came up with a new ERP system called COMETS System.
It was a customized software system build up on assessment of company individuals but as it was changed in the meeting so many plans were under table and that’s why Donna is worried about that. In 1994 It started to run with an estimated budget of $7 million in staff reduction and many other aspects as well. So in the whole system COMETS started to work and was a success after in the operation of 4 and half year with the exceeding budget over $40 million. In the case of projects implementation there was a few problems or few good things happened. Some development programs or initiative should be taken.
So the existing arrangements were compiled with ups and down. Tosco maintained or decided to go on the customized approaches. Tosco included personnel from different areas of business suppose accounting users, system analysis’s, programmers, consultants to make it a effective teamwork and to find out the needs through the needs assessment of the program. Pros Throughout this approach of customization the chance of wastes and unnecessary increasing costs has decreased. It got to know from the personnel from each department about their specific needs and ensuring ERP in each department. Cons
Getting knowledge of various needs increases costs in the other hand and if the demands or need are not satisfied department wise then it creates dissatisfaction to the employees and it becomes a problem in the organizational behavior. Tosco was highly concentrated on keeping costs down and they were more integrated to the own company management. For this reason, the teams were made up of 70% Tosco and only 30% Aspen members. Tosco’s budget was tracked monthly with the COMETS Project. Pros More associated with intra-organization members. Keeping costs down reduces the risk associated with the ERP.
Because of Aspen’s involvement new ideas and solution helps to build the ERP structure more dependable. Cons To much concentrate on costs may drop down the quality of ERP. It may be create problem in employees in terms of power because in acquisition both may deserve same positions. My create problem in decision making. It can produce complexity in the system of work and in decision making. Tosco run on many business acquisitions from the first. These acquisitions was done to make them more positioned in the market with increased intelligence, efforts, money etc.
In the life cycle of Tosco they had many major acquisitions with renowned companies like EXXON, BP etc. One major acquisition was with Circle K convenience stores. The Circle K expanded Tosco’s core business and those adjustments were made to the COMETS system. Pros Due to acquisitions Tosco didn’t stand beside its core business functions which made them more stable in the market and the use of COMET also done in the acquisition. Through this Tosco got additional funding which helped Tosco to go in the long run. Cons Due to acquisition there was a chance of diversified the business core position in Tosco.
By additional funding Tosco may be in a position to go under Circle K. Cost was escalated gradually in 1996 and those started to surface and were mainly due to underestimating the difficulty of the project design phase. As the needs were increasing the cost was also increasing much Absorbing the costs was main choice there to Donna. As Donna had kept good records of Tosco’s stated requirements that enabled Tosco to win the rate around 20-30% decreased rate. Pros Stating of good and valid records give the chance to absorb or reduce the total costs which is helpful for Tosco. Due to this many things are examined before stating needs.
By this costs may drop down and also using of COMETS may be more appropriate. Cons Decreasing costs more cut out many necessary and important functions of ERP, which may be the critical processes of ERP. Cost escalation was a tough situation for Tosco in their cost minimizing minds and that was very much challenging and hard to continue for Tosco. The steering committee, which was composed of heads of different departments such as operation, marketing, manufacturing, accounting was concentrated and very much associated with the ERP systems. They were aware of the changes that need to be done on the system.
As they worked on the committee as a whole but there the discussion often had to face complexity and lengthy. Pros The team can turn out new things. Many things may be considered or find out as new and the need s assessment can be productive enough and teamwork may facilitate and group coordination are practiced within the organizations. Cons The misunderstanding between groups or the steering teams in the Tosco can create organizational or team decision complex and this complexity and it can create dissatisfaction within the company or team which may decrease the output and productivity may decrease.
Donna was concerned about focusing on key group matters. In the case Donna was concerned about commercial department. Because in the Tosco’s ERP system commercial department was the most important user of ERP and if they don’t use ERP then the other implication of ERP’s will be not so helpful. Pros By this coordination among groups facilitated and group dynamics worked. Interactions between groups were increased and linking of groups done in such a way that understanding of departments was more done. Cons Focusing on individual group can create group dissatisfaction and may be sometimes.
It means sometimes that the key department is the main department. As new system of ERP introduced and it focused on changes in the whole organization structure. As those changes were knew by employees abut as the top executives cut down many things from the whole plan so the function was quiet difficult and the jog was changed which was drastic. Due to this drastic change the traders were frustrated and some people claimed it as “Vomits” Pros Changes in the organization due of ERP bring out new things and was planned to do the job more effectively, efficiently.
Culture of changes and adaption with it is a great deal n business. Through this practice employees may be sustain with the changes. Cons Drastic changes without training can be a great problem. There are chances of mistakes in the job may be in the critical stages which may create problem in the whole work structures. Make people aware of change and implementing other things can create dissatisfaction and may find out unfavorable responses of work system. In the continuation of ERP implementations the system was quiet challenging and tough as it was going further.
In the whole case letting know the upper management that the current scenario or stages were done and all these things are done to make COMETS more interesting and dependable to the systems within short time constraints. Pros Challenges turn out to find good work, more productivity; new things etc. By knowing the stages may be more budget can be gained throughout this whole process to develop ERP at Tosco. Cons More challenges and tension about the return can make the work less productive. The pressure of top management may be high that is not letting the employee to work by their own wishes.
Short time constraint is a barrier to go ahead. So it becomes problem to work in these circumstances. COMETS online dramatically increased under pressure with acquisitions of three refineries. All these were the acquisitions of $1. 4 billion. As days passed the need and demand grew on an increasing basis with the mission of growth. It come up with many good things such as saving of up to millions due to glitches that led to shipment delays, deliveries of incomplete orders and inventory pileups. Pros As demand of ERP increased it goes more valuable in the company and the different industries as well.
As it shows savings and improvements this helped a lot in the whole understanding of ERP in Tosco. Cons Growth may not be same for the all industries. Customization should be done by keep in mind that these will help in truly by concentrating on organizational objectives. High demand may increase the price of ERP or cost of ERP more. COMETS was introduced in three phases. There were rooms for improvements in every steps and the using of modules. In the second phase many problems were still in hand such as scheduling, deal capture, time, and cost etc.
But all in all in the last the final launch was quiet fine but there were problems still in the ERP system. Problems were handled for the next few months. Pros In the phases that were introduced in three times come up with problems and with solutions of it. As the problems occurred that was handled and gone through next steps which makes the ERP perfect. Cons Problems were till the final phase which can create problem and it may be unusual for the employees to work on wrong phases. It took longer time to work finally and work may be difficult to consider.
At the last Tosco was sold and it was bought by Phillips Petroleum, a renowned exploration and production and marketing company. The company bought Tosco by $7 billion. The acquisition made Phillips to be the second largest oil company in the world after Exxon and also one of the top 20 Fortune 500companies. That was a great deal and acquiring of assets and expertise said by the chairman of Phillips Jim Mulva. COMETS were a success for Tosco. They build up their customers, runned by them, the process was showed by them and by this software many industry was gained enough and increased their efficiency and effectiveness.
Training and Development to Deal with Current Change Plan #1: Training the existing employees in a continuous basis to cope up with the changing environment and new technologies. Employee Development Needs Training is recognized as being vital to the success of any organization and its employees. Having an effective training and development plan ensures that employees are adequately trained for their jobs while maintaining a high morale within the workplace. It is plays a significant role in service oriented job. The introduction of the software ERP being named as COMET in Tosco will obviously effect the efficiency of the company.
All employee need to be accustomed to the system. The commercial department people, who face the client daily basis, should be equipped with proper training. In other words, companies need to be adapted with the changing global market and its technological advancement. Therefore, to be with the same pace of global changes, Tosco needs to implement ERP in the company. This ERP will help them to maintain a proper and integrated Enterprise Resource, for this they needs to develop its employees through integrated training policies on a routine basis.
Reasons In general, it is a very fluctuating industry where business operations, methods changes time to time with diversified features. Since Tosco is in extremely competitive market where everything is changing within a blink of eyes as per the needs and demands of the clients, the company should make their employees eligible to respond according to the market demand. Even though Tosco is in leading position in its industry, it is heading for an alarming situation of falling behind other companies due to the lack in utilization of advanced technology.
Philips have been using SAP system efficiently for a long time. And Tosco decided to use COMET any how. And as study shows that, COMET will save plenty of money for Tosco. According to the case content, Tosco spends huge amount of money in technology but they couldn’t use the full potential of it that they could have. In other words, Oil market is growing like anything with lots of opportunities, risks and competition for the local companies. Moreover, employees of Tosco are not expertise enough in using the latest technological means to develop their ideas and planning.
If the employees were given proper training in advanced technology, they would have been skilled to deal with any uncertainty and changing environment successfully. Since 1996, it was oil market, where the companies were going to fully automated database system to coup up the present challenges in the large market. The clients were demanding more sophisticated and efficient service. Therefore the company for its operation purpose and also to retain customers needed to reshape the technological utilization.
Tosco need to shape them into more advanced and developed form, which can be predicted and utilized by training the in-house employees. Potential Outcome Obviously, this training will help the employees to a great extent in managing and controlling the clients by providing complete satisfaction. As the employees will gain proper knowledge about the utilization of technology in the changing and dynamic environment like European market, they would be capable of representing the diversified nature of their new and innovative billing system along with a superior infrastructure to be updated of the inventory position.
Thus they are capable of retaining competitive edge of the global economy. To be more precise, it will help the company to establish a strong communication network among the employees and the firm as a whole. In fact, sharing of knowledge will aid the firm to take effective and efficient decision that possesses less risk and maximum benefit for them. As a result, in either way it be helpful to retain Tosco’s premium position in the market. Pros If they implement this policy, it will aid the employees by increasing efficiency and reducing the same mistake or error done by other employees previously.
Indeed, the employees would be competent in their specialized area, which will bring success to the organization as a whole and definitely, sales would be generated to the utmost level. More importantly, employees of Tosco will be able to notice the overall summary of the company position and thus will be given opportunity to take decisions in their area of operation. This will help to give an instant response to the clients and the environment as well in an effective and efficient manner. Cons However, the drawbacks of this initiative cannot be ignored even though it’s very little compared to the benefits.
First of all, the upper management of company might have different reaction regarding this plan. As we know from the case that, Donna was thinking a lot about how to convince the upper management to use the COMET system, so the plan can create different reaction. More over the management can have different planning, thoughts about the changing the organizational aspects. Finally, this may lead to a conflict and mismanagement within the organization. Training and Development to Organizational Culture Plan #2: Arranging an experience sharing program within the employees to get new ideas from the front line employees.
Employee Development Needs Positive business results are accomplished when organization adopt the process of knowledge sharing through utilizing its intellectual assets and turns it out into a synergy for the firm. Therefore, experience sharing program helps to take advantage of an organization’s most valuable asset — the collective expertise of its employees and employers as well. This program acts something like a library in that it provides a repository for written information on a given subject, but it also tries to make available to the organization as a whole the knowledge that is in people’s heads.
This knowledge may be the most valuable of all because it is put in context and it is frequently more extensive and up-to-date and, therefore, more useful for decision-making. In short, experience sharing helps ensure that the right information gets to the right people at the right time to make the right decisions. Reasons As we know that experience does a lot of work, Tosco should introduce such policy within the organization to increase its productivity and efficiency.
Each of the management have a full of potential and experiences throughout their working life span that can be useful to the employees while implementing in their workplace whenever needed. In other words, it will increase the proportion of efficiency and productivity of the employees through gaining knowledge from this process. As it is mentioned in the case that many employees are not experienced enough in doing their job effectively and efficiently, so, there should be session of sharing the experience among the employees about their job, activities, learning, efficiencies and many more.
Wong was not completely successful in making the contact with the clients because he had not proper competencies in doing so. That meeting could be turned into a successful one if he was acknowledged properly before, which could be done through employees’ experience sharing program. In an organization, synergy plays a significant role in maximizing benefits and reducing costs. At this consequence, Tosco can practice this through experience sharing program. As there is a huge gap between the knowledge and experience gained by sales representatives, so, it can be eliminated through implementing this plan.
In short, it will help to generate more innovative and unique ideas to attract more clients in future. Potential Outcome Whenever the company shares the experience of the front line employees with the lower line employees then the total system of the company become much more efficient because new employees can be able to share their views with the views of the experienced employees and those top line employees can show the lower line employees whether they make any kind of mistakes or not and if they make any then the top level employees
Sharing experience will help to make the employees much more competent in making any kind of decision and get their jobs done. In a nutshell, it will enrich their knowledge, expertise, values that will finally help them to be aware of any uncertainty and make themselves adapted with the changing environment of the market condition according to the needs and demands of the clients, since the power is on customers’ hand right now. Pros In terms of pros, it will always keep the company up-to-date and energies the company from internally and aid severally.
In addition to that, it will reduce the probability of being failure in making the COMET successful and to maintain any contact with the clients, as the employees will be capable of dealing with more confidently based on practical evidence. Indeed, it will create synergy among the employees and more importantly empathy, which will ensure a greater quality of services provided by the most competent employees of Tosco. Cons In terms of cons, conflict might takes place as result of different consent, thoughts and ideas regarding any concept or ideas possess by the employees.
Moreover, to some extent it will increase the cost of the company because of adapting this policy to implement. Above all, if the employees are not willing to involve in this policy, it would be nothing but wastage of time and money for Tosco. Training and Development for Managers Who Recruits and Selects Employees Plan #3: Redesigning the selection and recruitment process to ensure an intensifying success to persuade more customers by the expert and efficient employees.
Employee Development Needs The Recruitment and Selection process promotes successful hiring decisions that can truly impact the success of a department or the organization as a whole. In a word, it can be successful in terms of reducing costs, failure to perform any job and many more. In order to enjoy the premium position in the market, the organization should think of long term objective and it’s the human capital that can lead the company to reach its objectives.
Therefore, recruitment and selection process has a significant contribution to lead the company towards the success at a faster pace than that of others in the industry. Reasons As per the case content, the hiring process is extremely poor in quality and standard. The candidates only need a Bachelor of Arts degree, an outgoing personality and motivation. Definitely, this can never be sufficient to manage the job of operation in a firm like Tosco where always the need to be prepared to handle any business opportunity and circumstance.
The sales representatives need to have educational qualification on the area of job content. In fact, there should be an appropriate job description and specification for each job area. However, it is mentioned in the case that Tosco emphasizes highly on the hiring a good trainer to ensure its success of the training program, the firm is not being able to assure this aspect properly. Moreover, the firm is heading for minimizing costs and while doing so, they are ignoring this important key issue of fruitful operation of business in Tosco.
Potential employees will be capable of adapting themselves with any changes in the environment and contributing to the organizational success. The selection of a candidate with the right combination of education, work experience, attitude, and creativity will not only increase the quality and stability of the workforce, it will also play a large role in bringing management strategies and planning to fruition. Therefore, redesigning the recruitment and selection process has become a vital element for Tosco in order to survive in the competitive market and retain its position in the oil industry.
Potential Outcome At the end of the day, Tosco will be successfully capable to retain the one of the most effective and efficient employees through designing the hiring process in an organized and systematic way. Moreover, it will reduce the cost of training the new employees by investing enormously to prepare them from the very beginning. In short, it will help to deal daily business and to deal with clients more confidently, as the hired employees will have strong background and expertise in their specialized area.
Enterprise Resource Planning is a dynamic software which enables the organization to reduce the expenses at large. So the plan of initiating implementation of COMET a customized ERP is a great step taken by Tosco. This ERP software is sophisticated enough to provide better customer service. Now Tosco need to redesign the employee recruitment system to create a successful impact on the whole organization. The outcome of this plan is obviously productive. As technologically efficient employee will take Tosco to new arena by a successful usage of ERP system through proper training.
So recruitment system redesign will generate more productivity. Pros Revamping the entire hiring and selection process will benefit Tosco a lot in several ways. At first, it would help to reduce the cost of training at the very initial stage. In addition to that, it will help to have more employees in future, if Tosco practices an appropriate hiring process with specific job description and specification. In short, we can conclude that through utilization of this special plan everyone will be able to satisfy everyone. Cons On the other hand, it has some cons as well.
One of them is the increased cost of hiring process along with the process of examining other aspects of relevant issues. Furthermore, existing employees will have a perception of inferior complexion about themselves compared to the newly hired employees. These might lead to further conflict in the company. Training and Development for Better Customer Relations Plan#4: Building, Developing and maintaining good customer relationship through broadening the service range, making remarkable customer relation, giving the customers dimensional experiences.
Employee Development Needs If a company wants to become successful to build a good and durable long-term customer relationship, people get loyal enough to get service from that firm for the rest of one’s life. According to the case if they serve the customers very well, customers will always remain loyal and bring more customers to the firm. Reasons According to the philosophy of the Tosco, the management have been successful up to now in maintaining successful customer relationship with customers by providing effective services along with proper billing system.
Recently, they are not being able to maintain the relationship, as customers are not satisfied enough with their offerings and associated benefits regarding the training program. Each customer has different needs and preferences but the offerings are very limited and constrained to their area. To be more specific, Tosco has not offered any customized service regarding the oil industry. Since the market is getting more and more competitive in nature, Tosco should be more concerned in dealing with customers through building a positive relationship with them.
The firm should offer according to the needs of the customers rather than emphasizing on reducing costs of services. In addition, offering products at reduced rate is not sufficient enough to persuade the clients that are found from the case. If this situation continues, competitors will get the opportunity to take Tosco’s position within a short while. Being successful is much easier than retain that success in the market for a long time. Unfortunately, Tosco is ahead to loose this position due to being limited with the offers given to the clients in an attractive and effective way as the clients want it to be.
ERP is very efficient system to be used within the organization to achieve efficiency along with proper inventory management and better customer service. In addition, they are stuck with the initial offering and facilities rather than generating something new and innovative, which would persuade the clients to have the service from Tosco and remain loyal to them for a long run. Potential Outcome The potential outcome may include the expansion of business to the highest level. As clients always expect something cost effective and beneficial to them, so, Tosco would be capable of having largest number of clients to it.
As the company has been dominating in oil market in the region of America and UK for the long time, it has got the possibility to be successful by offering something beneficial to the clients as well as to Tosco in the long run. In other words, it will help the company to maintain the premium brand equity of Tosco in the market. Different range of services with lots of benefits will ultimately reduce their operational cost, as they would reach to the economies of scale generated by larger number of clients at the end of the day. According to Donna, the salvage value of an existing client is very low.
This can be reduced through maintaining good relationship with them and this can be done through continuously providing effective training program with lucrative discounts and other benefits. Pros Pros of this plan refers that providing excellent service implied building and maintaining a close relationship with customers. Tosco would be successful in increasing the number of loyal customers and bring new customers as well. As a result of this customer-focused strategy, customers and employees felt like part of a family or a separate unit. Cons Cons include the initial cost of maintaining the relationship with the clients.
Since customers want the things at a cheap rate, meeting their expectation will somehow increase their cost at the beginning stage. As a result, profit might be reduced at that pace of business. Training and Development for Employee Plan#5: Keeping the employee up-to-date, through proper training, garnished salary-benefits and annual showdown. Employee Development Needs It is not all to provide training time to time. Besides training a well garnished salary-benefits motivates people to do a lot of work in favor of the company, which is not possible either by only good salary or benefits.
As we know that annual showdown helps a lot in this regards. Reasons Regarding to the case perspective, the cost of consultants is getting higher and higher day by day according to their efficiency level and reputation in the market. Furthermore, it has been challenging to implement ERP to reduce the operational cost of organization accordingly of the firms regardless the increasing cost of operation, sales representative, consultant, customization of programs etc. At this situation, if the firm introduces an effective training program to make the employees up-to-date, it would reduce the cost to some extent.
It is mentioned in the case that Tosco has no permanent Human Resource Department with the facility of training its existing employee and future employee to coup with the necessary requirement. According to the current market condition, Tosco should not depend on the externals rather it should hire trainer as well as consultant on a permanent basis by providing garnished salary-benefits in a scrutinized process. Otherwise, Tosco would more likely face difficulties to fulfill the need of implementing ERP in their business and provide service to clients in a diversified and customized way.
The employees especially the technical people and commercial department employee and sales representatives of Tosco are not up-to-date enough to deal with the clients and make them satisfied with the proper replies. In fact, they don’t have effective background to handle the job in a successful way. Since the employees are the asset for the firm, it should do something to motivate the employees and we know that incentives, bonuses can be the best motivator for them to devote themselves into their job.
Therefore, a basic training and common compensation structure isn’t enough to make them advanced and up-to-date with the changing market condition. In Tosco, there isn’t any system of annual showdown of employees instead they have a rule of reporting on each contact made by the manager. As a result, there isn’t any proper evaluation method of assessing the performance of the employees in a rational way. Moreover, they don’t get to know whether the existing system is perfect or there is a necessity to make any changes in the organizational structure.
In a short, employees are somehow deprived of what they have actually done to move the firm a way ahead to the success. Potential Outcome As a whole, the organization will be benefited in every way. First of all, the employees will be motivated to a high extent to perform better. The proper evaluation process will help the company to assess the need of making any changes in the organization so that it can remain successful in the industry for a long time. Maintaining a proper hierarchy and job structure will help to utilize the human capital in the most effective and efficient way.
In case of competition with other firms in the industry, Tosco will definitely be the successful one as a result of implementing and practicing the ERP policy. Adaptability to change itself with the changing demand and needs will let the company to reduce its cost and respond quickly in the way clients want from the market. In a nutshell, the probability of being successful in the market will increase like anything for Tosco by implementing this policy. Pros The pros are unlimited in all aspects for Tosco. If the employees are motivated they can revolutionize the company.
Over time, the firm developed four corporate values that summed up their business philosophy and defined their company. These values played an important role in Tosco’s growth and success. The company culture promotes awareness of the values and their application in day-to-day business operations. Cons If the employees are not motivated enough they can create bottle neck. When employees will become overconfident about their acknowledgement in their specialized area, they might abuse the power to the extent they want.
As a consequence, firm will have to suffer in managing and controlling them and get the best out of them. Training and Development to Technology Plan#6: Developing and maintaining an innovative environment through TQM, E-commerce team, Automation team, Marketing Strategic team, Distribution team, MIS team and so on. Employee Development Needs As we know that the new management concepts are very powerful to aid a company to achiever it destination. It should strive to achieve such concept in wide range. Reasons Tosco is in the leading position in oil market.
However, the situation and demand has changed so far than that of in six years back. Tosco hasn’t changed its internal system so much adjustable with the changing environment of the global economy. In fact, the management are still directing and managing within the same organizational structure. According to the case content, the competitors are coming up with lots of innovative and highly advanced technological changes and benefits for the clients. In contrast, Tosco is still in the old system of hiring external trainers to provide new training service to its clients.
Since the firm is not organized with the new managerial concepts and ideas that can give a new shape to its features, clients are showing dissatisfaction and reluctance to get service from them. As inventory management is a new concept in the current perspective, clients are also quite unaware, unfamiliar with the concept, however, they want to train their employees in this concept. At this situation, Tosco doesn’t have any proper planning or team to develop the idea in a sophisticated and understandable way to its clients. Tosco doesn’t have any HR department, which is a drawback of the firm.
Because of this they don’t have any proper design and planning of how to make the internal part of the organization much more developed with new managerial concept and ideas in order to be in the strong competitive position in the market. Indeed, it doesn’t have any proper integration of the team management, strategic development process and many more so that a proper communication flow can be maintained through effective knowledge sharing process that can lead to the organizational success in the long run through assessing the needs and taking steps accordingly to generate sales. Potential Outcome
Tosco would become able to utilize its resources effectively and efficiently in applying the concepts at the right place in the right time by the right people of the organization. Whenever the company shares the experience of the front line employees with the lower line employees then the total system of the company become much more efficient because new employees can be able to share their views with the views of the experienced employees and those top line employees can show the lower line employees whether they make any kind of mistakes or not and if they make any then the top level employees Pros
By adopting this policy, it would be capable to aid the employees by increasing efficiency and reducing the same mistake or error done by other employees previously. Moreover, the employees will be enriched more through sharing their views, knowledge, ideas and concepts. As a result, the culture of the firm will integrated with complete and effective values, intellectual capital and advanced technology. Cons In terms of the cons, it would more likely increase the cost of the firm. As a result, the revenue will go down for the time being. Since there would be a huge change in the management, chaos can be a common issue in that circumstance.
More importantly, a change in the notion of the employees can create confusion and dissatisfaction, if it’s not communicated properly. Training and Development to Deal with Current Change Plan #1: Training the existing employees in a continuous basis to cope up with the changing environment and new technologies. Priority of Development Needs Need to Adjust to the Improved Conditions Since Tosco is in extremely competitive market where everything is changing within a blink of eyes as per the needs and demands of the clients, the company should make their employees eligible to respond according to the market demand.
Even though Tosco is in leading position in its industry, it is heading for an alarming situation of falling behind other companies due to the lack in utilization of advanced technology. According to the case content, Tosco spends huge amount of money in technology but they couldn’t use the full potential of it that they could have. Allocation of Resources Whom to Train The decision makers of the company have to be sent for training to learn to adjust to improved economic conditions. All the employees in the performance process have to be trained to use new software tools.
The aim is to increase productivity. The training has to be tailored to fit the employees’ level of understanding and the company’s need. The persons who will be sent for training have to have the basic eligibility to understand the training content. Type of Training The decision makers can be sent to off-the-job training by classes. These classes can be only technical or both technical and theoretical. There can also be on-the-job training through Job rotation, coaching, modeling etc for the performance workers. The management has to choose the type of training s most effective. Performance Appraisal and Feedback A small group can be sent for training at first. After completion of the training, management has to check on the progress through supervisors. It can also be a 360degree one that involves peers, self and subordinates also. With both upward and peer appraisal, the management can realize the effectiveness of the training program. The company will decide whether to continue or not on the basis of the appraisal. Cost This company surely has enough monetary resources to provide these two small trainings to its employees.
Here, the better the company performs in a given year, the easier it becomes for them to send employees for training. Time When training is done through off the job training, then it is best to do the training after work, during weekends or during work consisting of a small amount of time. This way there will be minimal reduction in the performance level. On-the-job trainings will also require minimum time as the employee learns while he/she works also. If the training program is properly planned, time will not be a problem. Working Plan More Efficient Workers
When employees are trained to use new technology to meet the demands of a healthier economy, they will be more efficient. Time and motion analysis can tell them where they are wasting time and effort. Then they have to adapt to the new and improved ways to perform the tasks. The company has to bring major changes in the performance process, operation procedures and employee skills inventory. Increased productivity through training of workers on new equipment and new technology can give them an edge in the industry to be more competitive. Time and motion analysis can tell them where they are wasting time and effort. Then they have to adapt to the new and improved ways to perform the tasks. More Insightful Consultants and Decision Makers After training the consultants and decision makers, the company will have specialist decisions tailored exclusively for the company. Having effective economists who can predict the aftermath of a change in policy and suggest possible courses of action to adjust to the rapidly changing technology, can give Tosco a competitive edge.
If these economists are outsiders, the training that makes them aware of the internal factors at Tosco will make them able to make the right decisions exclusively for the company. Tosco needs to have effective economists who can predict the aftermath of a change in policy and suggest possible courses of action to adjust to the rapidly changing economy. If these consultants are outsiders, then they need to be given the training that makes them aware of the internal factors at Tosco to make better decisions. Reducing Time and Cost of training Trainings are usually time-consuming.
The company can avoid it by training a smaller number at a time so that the performance is not badly hampered and provide incentives for training after work. Otherwise, it would be costly to shut off performance for a couple of days to train the workers for a big company like Tosco. Training all the employees will be expensive. If it is done through off the job training, then it is best to do the training after work, during weekends or during work consisting of a small amount of time. This way there will be minimal reduction in the performance level. Overcoming Resistance to Change
There are a lot of workers who are reluctant to learn new skills at Tosco. They might want to leave the company instead of adapting to a new environment. There can also be increased turnover of employees who don’t want to or don’t believe that they can learn new skills. The company has to make the employees realize how important it is for the company that the employees take the training. Then they have to be given incentives to give extra e