Putting the Enterprise into the Enterprise System

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Putting the Enterprise into the Enterprise System

• By Thomas H. Davenport

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Discussion Outline

• A lesson on the values, pitfalls, and
  requirements for successful Enterprise Resource
  Planning
• The promise of Enterprise Resource Planning
  Systems (ERPs)
• Why ERP Systems Fail
• A Plan for Successful ERP
• Advise for Bush Boake Allen
• Advise for Alibris
• Conclusion/Questions

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ERP in Action
Central DB
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Why Launch an ERP Project

• To integrate disparate systems
• Provides savings and efficiencies
• Improved customer service
• To provide centralized control, or
• To decentralize control
• To maximize central and local control the
  federalist approach
• To support an overall business strategy

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ERP Win Stories

• Autodesk used to ship most customer orders in two
  weeksnow they ship 98 of their orders same day
• IBMs storage systems division reduced the time
  to re-price all of its products from 5 days to 5
  minutes, and the time to ship a replacement part
  from 22 to 3 days
• Fujitsu Microelectronics reduced cycle time for
  filling orders from 18 days to 1 ½ days and the
  time to close the financials from 8 to 4 days

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Why ERP Systems Fail

• Is it because they are complex? Yes
• Is it because the companys culture is not
  consistent with the system? Yes
• Is it because they can level the competitive
  playing field? Yes
• Most often it is because the ERP system was not
  designed is as integral part of the business
  strategy

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Bush Boake Allen

• The Business Situation
• Long Development cycle (customer feedback
  loop)long cash collection cycle
• Commodity type businessthey need a competitive
  advantage
• Fragmented supply chain (no source more than 4)
• Local control in each country to meet local
  market needs with centralized financial control
• Market growth coming from developing countries
• Technology available to expedite the process
  (Project Mercury)

• Recommendation
• Evaluate strategies for improving customer
  service, expediting the development process,
  creating a competitive advantage and aligning the
  organization and the ERP system to facilitate
  this task
• Leverage Mercury to create a competitive
  advantage (bring customers on site to collaborate
  on the final stages of development)
• Design the ERP using the Federalist model the
  right amount of local and centralized control
• Launch the ERP on a small scale where it is
  needed /needed most

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Alibris

• Recommendation
• Refine strategy to consolidate orders and deliver
  to customers.
• Clarify competitive advantage and how the IT
  solution supports it.
• Problem that there are no people in the
  organization who have solved a similar problem to
  what is faced. Find the right people.
• Gradual installation will be difficult. Need
  cash now, and at the same time should not
  band-aid a solution then shortly have to change
  the look and operation of the website. A bad
  launch could doom the company.
• Need a solution that works now, and has growth
  capability.

• The Business Situation
• Converting a service to retail outlet
• No real clear business strategy
• No clear definition for an ERP system
• No more cash
• New opportunity
• No working eCommerce solution
• New moneynew solutionbig decision

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Designing an ERP System for Success

• Make the ERP System a part of companys strategy
• Align the organization and the system around the
  business strategy and ensure that both are
  optimized
• Leverage technology and the organization to
  attain/sustain a competitive advantage
• Get the right people on the bus
• Use the divide and conquer approach to install
  the ERP system

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Any QuestionsNo Questions!

• Thank You