Supporting a Global Enterprise

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Supporting a Global Enterprise

• 2008 MIS Council Fall Conference
• John Pilon, Principal

2008 October 13
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Agenda

• Introduction
• Dimensions of IT Support
• Cases Studies
• Q A

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1. Introduction John Pilon

• 21 years Auditing / Consulting with 7 years in
  Asia
• Primary industry is Automotive / Commercial
  Vehicle
• OEM, Tier 1/2/3, Dealer, Aftermarket
• Projects have included
• SAP FI/CO for Japan Commercial Vehicle OEM
• QAD design for 52 plant Tier 1 supplier
• BPR / ERP Planning for Korean Heavy Equipment Mfg
• IT BPR / IT Strategy for Taiwan High Speed Rail
  Company
• Hyperion portal design for Japanese Auto OEM (26
  countries, 200 entities)
• Various projects for US, European, and Japanese
  T1 / T2 suppliers in North America, Japan

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Key dimensions for discussion

• Today we would like to focus on cases studies
  involving the following dimensions of IT support
• Data Standards and Metrics
• Common Processes and Templates
• Applications and Architecture
• Infrastructure and Support
• Organization and Governance
• Each dimension is impacted by the choice of where
  and how to strike a balance between global
  commonality and local optimization

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Data Standards and MetricsSupporting the global
executive

• Vehicle OEM
• Strong emphasis on common data standards and
  metrics across all business units and markets
• Data standards focused on financial, procurement,
  and product classification
• Metrics focus on key measures for each business
  unit
• Business benefit
• Provides ability for executives to understand the
  status of assigned business units anywhere in the
  world
• Facilitates executive exchange and central
  oversight

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Common Processes and TemplatesAnticipating Local
Requirements

• Supplier A
• Tier 1 automotive supplier
• 50 production sites globally, 3 product
  divisions
• Full scope ERP replacement using common template
• Design team assembled from plant and parent
  representatives
• Template designed with Red Global / Yellow
  Divisional / Green Local concepts to define were
  localization was permitted

• Supplier B
• Tier 1 automotive supplier
• 100 production sites globally, 9 market channels
• Full scope ERP replacement using common template
• Design team based in parent country, best
  practices for template derived from domestic
  production processes
• Centrally controlled template changes, limited
  mechanisms / definitions to support localization
  requirements

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Common Processes and TemplatesAnticipating Local
Requirements
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Applications and ArchitectureBetting on a vendor

• Vehicle OEM
• Strong emphasis on working with approved IT
  product vendors
• Success with dealer management system (DMS) in
  home market and smaller global markets
• Attempted to bring DMS into a large market where
  vendor had limited capability and tarnished
  reputation
• Consumer Products Mfg
• Year 2000 problem, had selected mid-market ERP
  for home market
• Decided to use same solution in major Asian
  market
• Vendor represented by local company with few
  resources

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Applications and ArchitectureBetting on a vendor

• Issues with approach
• Assumption that past success in other market
  ensured fit in new markets
• Laws, regulations, business practices, language
  differ greatly between each major market
• A vendor that has not penetrated a major market
  is likely to struggle trying to adapt a product
  to the local market conditions
• Local reputation is more important than global
  brand
• Failures in the local market can become an easy
  excuse for local management to resist the change,
  pointing to success in other markets is rarely
  credible
• Local reputation problems generally indicate
  issues with the quality of the localization or
  the skills of the local support organization
• There are very few corporations that are
  effective in every market so dont expect IT
  vendors to be consistent on a global basis

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Infrastructure and SupportIncorporating New
Acquisitions

• Dental Products Manufacturer
• 2000 people, product in 60 countries
• Strategy to acquire independent distributors in
  order to take control of supply chain and
  marketing / sales efforts
• HQ as primary supplier, no complex procurement
  rqmts
• Acquisition generally a carve out of a portion
  of the national distributors product portfolio
• Needed to establish a base level of Day 1 IT
  support
• Connect to global WAN
• Basic ERP (GL, AP, AR, PO, SO, IM) using central
  SAP template
• Very centralized IT operations and organization

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Infrastructure and SupportIncorporating New
Acquisitions

• Keys to Success
• Local IT footprint well documented
• Fully specified and ready for local vendor
  quoting
• Global vendors specified for key components,
  vendors permitted to specify locally acquired
  materials
• Allowed effective bidding in each market, local
  relationships respected if price / product was in
  line with global standard
• Clear definition of central vs. local IT roles
  and responsibilities
• Ensured key activities conducted by central
  experts (design, configuration, development,
  security)
• Allowed local experts to focus on market specific
  activities (translation, process mapping,
  training, testing, data conversion)

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Organization and GovernanceIncorporating an
acquisition

• Parent Global OEM
• Large, experienced, multi-discipline IT group
• Participates in global forums to determine
  governance and operations standards
• Professional organization built through internal
  development and recruiting external experts from
  IT vendors, major IT consulting organizations
• Budgets available to build and implement
  management toolsets
• Acquisition Regional Manufacturer
• IT had not been considered core discipline
• Poor business performance resulted in minimum IT
  budgets
• Circulating management development resulted in
  few IT experts in management positions

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Organization and GovernanceIncorporating an
acquisition

• Approach to post-acquisition integration
• Top level IT management (CIO, special assistants)
  parachuted into subsidiary operation displacing
  existing management team
• Aggressive programs defined to upgrade and
  incorporate network, infrastructure, engineering,
  HR, ERP, and other key applications
• More emphasis placed on explaining new targets
  and technologies, little effort to map and
  understand existing systems and operations
• No efforts to map or reconcile IT governance and
  operation differences
• Issues with approach
• Parent management and subsidiary department heads
  did not have common understanding of IT
  governance
• Parents basic, unspoken assumptions were
  completely foreign or missing concepts for those
  people asked to executed the programs
• Assumptions that local system integrators could
  bridge the gap were incorrect as local talent
  was universally unaware of global governance
  practices
• Aggressive schedule ground to a halt due to lack
  of common governance skills