ERP Implementation at Maruti Suzuki India Ltd

A secondary research based case study on implementation of Oracle based ERP system

INTRODUCTION
Subsidiary of Suzuki Motor Corporation Leader of market for 20+ years

Sales 1.13 million

9000+ employees

Largest sales and service network in India

300 strong dealer network scattered across India

Manufacturing and sale of motor vehicles and spare parts Added finance, leasing, insurance and pre-owned car businesses to its portfolio

MARKET SHARE OF
MAJOR PLAYERS IN PASSENGER CAR SEGMENT(2010-2011)

PRE ERP SCENARIO

Deployed an extensive extranet to reach business partners in 1990 Small application running on the dealers' PCs to manage their daily activities Home-grown systems for managing various lines of business Different divisions followed different workflows preventing real-time access to critical statistics Reliance on rudimentary system and basic spreadsheets to manage the process Used mismatched systems to manage expanding workforce

GROWING NEEDS OF MARUTI

Addition

of four new business sectors in 2002 Operations across hundreds of locations within India Disparate systems could not talk to each other Various lines of business were using homegrown systems Requirement to enter data multiple times Constant monitoring and human intervention

GROWING NEEDS OF MARUTI

Lack

of control over processes Poor information quality Huge turn-around time Collaborate with global teams Streamlining the process of vehicle localization Enhancing quality and reliability

WHY ORACLE ERP

Open architecture of Oracle components made simplified integration with Suzukis system possible

Already had Oracle Database, Oracle Application server

Used some of resource planning modules of Oracle EBusiness Suite

With Oracle the company would be able to standardize the technology used

IMPLEMENTATION: PHASED OR BIG BANG? Maruti chose a phased approach to make a shift from the legacy systems to the new ERP

BIG BANG
No need for temporary interfaces Limited need to maintain legacy software Cross-module functionality No going back Lower cost if no surprises

PHASED
Smoothing of resource requirements Able to focus on a particular module Legacy system fall back Reduced risk Knowledge gained with each phase

IMPLEMENTATION PHASE 1

Project Team Project Governance Organization Readiness

Project Organization

Phase 1

Project Kickoff

IMPLEMENTATION PHASE 2
BUSINESS REQUIREMENT DOCUMENT A business requirements document (BRD) details the business solution for a project including the documentation of customer needs and expectations Objectives : To gain agreement with stakeholders To provide a foundation to communicate to a technology service provider what the solution needs to do to satisfy the customers and business needs To provide input into the next phase for this project To describe what not how the customer/business needs will be met by the solution Packaging the BRD: Project charter information, scope, and objectives Current environment assessment Future process map Process detail table Overall project business rules and constraints Impact assessment (fishbone for process functions) Functional requirements Schedule and budget Approver information Team information

IMPLEMENTATION PHASE 3
Project Planning Detailed implementation pla n, quality review plan, resource plan, financial plan prepared Design & Development Based on analysis of the existing process, simplifying or creating new ones where required Configuration of the new systems, interfaces and supporting legacy systems Setting up of business rules along with approval matrix Controls Regulatory, Statutory and Financial built into the system Methodology of Implementation Single Instance with Phased approach of implementation followed region wise

IMPLEMENTATION PHASE 3
Data Migration

Identify the data

Collate the data

Consolid ate

Clean & Verify

Conditio n

Create & Verify

Migrate & Verify

Unstructured Data

Manual Forms

Excel Files

Legacy Systems

Ledgers

Word Documents

Identifying the owner of various data sources Data collection and removal of redundant data Checking for data integrity Making suitable modifications to fit the standard format Verification of data with original after migration

IMPLEMENTATION PHASE 3
Testing

Developing scenarios as test cases based on users previous experiences

Creation of testing team and development of the test environment Define all business transactions or business processes that use the system Define expected results for all testing scenarios Build tools for comparing results in the parallel test phase to match the ERP to legacy system data

Unit Testing

Integration Testing
System Testing UAT Conference Room Testing

IMPLEMENTATION PHASE 3
Training
Comprehensive training provided to each stakeholder as per their usage of the system Train the Trainer program created to propagate the usage of the system and developing familiarity of its features Obtaining user Scenarios cover Walkthrough feedback and Operational, Daily improving upon any Activities, Monthly gaps in training Activities, Strategi & process Company Specific ones User Guides Scenarios

Simple features such as ease of navigation to complex functionalities covered

Pilot

Simulation

Making users aware of the impact of their operation of the system on related functions

Retraining of users after a period of 1 week to ensure that there are no gaps in understanding of the system

CHANGE MANAGEMENT
Change management is a structured approach to transitioning individuals, teams and organizations from an Existing Current State to a Desired Future State Goal To provide a structure necessary to effectively prepare the Human Capital for Change Hard Facts which were considered at Maruti 42% Leadership Issues 27% Cultural Issues 23% Technology Issues

Institutionalize the change

Create Urgency

Build on the change

Form a powerful coalition

Change Management Model

Create short term wins

Create a Vision

Remove obstacles

Communicate the Vision

RISK MITIGATION
Phased stepby-step implementation approach and not Big-Bang approach

Developing adequate Contingency plans

Training of users and employees to uniform standards

Reinforce
Celebrate success Analyse feedback to manage resistance

POST IMPLEMENTATION BENEFITS

Single, integrated, in-strata system
Smart and Process Oriented Workforce Tight integration for real-time performance Budget and credit checks completed online Lowering support and maintenance costs

Easy upgrades for the future

Provide end-to-end visibility

WHY ERP PROVED SUSTAINABLE FOR MSIL

WHY ERP PROVED SUSTAINABLE FOR MSIL

WHY ERP PROVED SUSTAINABLE FOR MSIL

FUTURE DIRECTION
Appraise Oracle Advanced Supply Chain Management and Oracle Enterprise Asset Management Suppliers to be adopting cloud ERP
A

Cloud ERP to make the company truly integrated in the global sense

video from Oracle consultancy: Maruti Suzuki Drives Business Growth on a Full Oracle Stack.flv

REFERENCES

The official website of Maruti Suzuki India Limited Oracle Consulting case study, 2008, Maruti supports business growth with scalable, high performing ERP system Maruti Udyog Limited: A bumpy road ahead, Vision- the journal of business perspective Vol 10,January 2006 S. K. Majumdar, M.P. Gupta, 2001 E business strategy of car industry Maruti Suzuki case study, oppapers.com Leon , Alexis, (2008), ERP Demystified, 2nd Edition Hammer,M., Champy.J., (1993), Reengineering The Corporation: A Manifesto For Business Revolution., Harper Collins, London Ford, Jeffery D. and Ford, Laurie W. (April 2009), Managing Yourself: Decoding Resistance to Change, Harvard Business Review

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