ERP IMPLEMENTATION SUCCESS FACTORS

- Involvement of senior management

- Cross functional implementation team
- Accountability
- Performance measurement guideline
- Consultant strategy
- Training
- Most of time is spent on business requirements and how does that software meet
requirements
- Full time involvement of the best and most knowledgeable employees
- Process oriented approach
- Involves the user community
THE STRATEGIC LEVEL
- Current legacy system evaluation: evaluate existing IT, processes, organization structure,
culture
- Project vision and objective
- ERP implementation strategy
- Hiring consultants: ERP selection, business process planning or reengineering, ERP
implementation, end-user support, ERP maintenance and support
- Benchmarking
TACTICAL LEVEL
- Client consultation
- Business process change
- ERP software selection
- Implementation approach
OPETATIONAL LEVEL
- Business process modeling
- Configuring system
- Final preparation
- Going live
STRUCTURED
- Project initiation: feasibility study, planning, determining scope, costing, and staffing
- Process improvement: as-is analysis and to-Be development
- System configuration: configuring, testing, and deploying R3
- Monitoring: evaluate, support, maintain and upgrade systems

NIBCO
Why did it need it?
- Had information silos and legacy systems

- Information poor, needed to step away from patchwork systems

What did BCG recommend
- Get integrated systems
- Implement over 3-5 years
Actions
- Gary Wilson to oversee IS (20 yrs experience, 4 project implementations)
- BCG hired to help develop strategic information systems plan to meet new business
prospective
Approach for selecting vendor
- Cross functional team: Chief Financial Officer and 8 director level managers
- ERP package evaluations
- Module walkthroughs
- Vendor customer visits
- Strength and weaknesses of each mapped into evaluation matrix
ERP implementation strategy
- Big bang
- Benchmarking and success rates analysis
Team recommendation
- Rejected BCG advice
- Single vendor
- SAP R/3 benefits: multimillion dollar operational improvements and reductions to inventory
costs
- Move from mainframe to client/server environment
Board agrees
- Contract signed for modules, 620 user licenses
Final plan
- Change in scope: North America only, consolidated 17 distribution centers down to 4 large
ones
- Incentive pay bonus for implementation that is on time, successful, and within budget
- Retention incentives: stock options
- 17 million budget: 1/3 technology infrastructure, 1/3 team & education costs, 1/3 third
party consulting
Project Success Criteria
- On time, successful, within budget
Change Management Practices Catagories
- Identification of new work
- Automation of old work
- Elimination of related activities
- Transfer of work between groups
- Risk of process not being efficient
- Increase in level of difficulty
- Identification of new business relationships
User Training
- 1200 hours of training
- 2 NIBCO training sites
- Training focused on new processes
Harley Davidson
Process: procurement/ supplier management
Importance: purchased parts comprise of 55-60% of motor cycle value

Selection criteria for project team members

- Opinion leaders
- Power users
- Though customer
- Worker mix progress
Supplier selection process
- Create functional specification of system (RFQ)
- Get internal acceptance
- Determine potential supplier candidates (internal/external)
- Ask for intent to bid
- Provider conference
- Proposals and presentations (self- evaluation checklist)
- Short listing (criteria functionality vs. cost)
- Creating scenarios
- Site visits