64764233

Unit six , Case Study NIBCO’s “Big Bang”: A great SAP Rendering Professor: Rich Yellen Scholar: Vo Ngo Lan Phuong Course: Pork 23 IDENTITY: 217496 Teacher: Richard Yellen Student: Vo Ngo Local area network Phuong Course: Ham twenty-three ID: 217496 Hanoi, 11/2012 CASE STUDY Table of Articles I. Overview3 II. NIBCO’s implementation of ERP solution3 III.

Advantages and disadvantages of “BIG-BANG” approach for ERP4 4. ERP task implementation: lessons and recommendations6 List of Reference9 Case Study , NIBCO’s SYSTEMS APPLICATIONS AND PRODUCTS Application Implementation I. Guide

The case reveals the rendering of SYSTEMS APPLICATIONS AND PRODUCTS ERP answer in NIBCO, a company of water line and fixtures, a mid-size manufacturer with about 3, 000 personnel and earnings over 460 million USD. The company has implemented successfully the full package of ENTERPRISE RESOURCE PLANNING solution, offered by SAP, the main solution provider under the consultancy of Boston Consulting Group. NIBCO has gained the success when i say good management and project group understanding, willpower and activities. The method of implementation of NIBCO just for this ERP answer is working all in one time, this provides the company into a quite risky situation if something wrong occurs.

But the business has work the system efficiently, with positive results. The execution succeeds due to all the preparing, personnel, administration and the co-operation with app providers and consultants. NIBCO has above 3, 1000 employees and operates 15 plants, and 17 centers for distribution over US. The sources and info systems aren’t integrated for that reason cannot connect and work together effectively, that causes time and attempts wasting. As well, over the years of development, the organization processes transform, the information info increase, the system are unable to meet the needs of get across functional functions.

With the consultants from BCG, NIBCO has developed a plan intended for implementation of recent ERP program, using specialist solution by a leading provider, SAP. The goal of NIBCO should be to set up a fresh, large, built-in information system to replace the old system, linking and including all the IS USUALLY from production facilities, plants and distribution centers all over the country. With all the initial project duration approximated as over 3-5 years, the supervision and task team provides implemented the full system in just 18 months, and successfully. II. NIBCO’s implementation of ENTERPRISE RESOURCE PLANNING solution

Using the consultancy companies from BCG, the information system of NIBCO was very fragile and poor. The system usually do not support the provision of information for manager timely, would not support means of decision making, especially for functional departments as accounting, purchasing, selling, marketing and customer supports. Due to the lack of real time data writing the managing and production meets problems to improve quality and efficiencies. Over the years of operation, factories and departments have applied their own segments or application such as purchase entry, manufacturing, distribution and accounting.

Because of the non-systematic app and setup, in independent factory and department, every single user may well have their individual software, distinct version, and separate repository. Therefore it is hard to integrate and cooperate amongst factories and distribution centers. To put into practice the new system, NIBCO is using professional agency services, purchase leading software application from top vendor, and assigned top managers to handle project staff, system creation, and IS personnel for preparing, and developing, designing, putting in the new system.

Although the BCG determined there is a need starting now in info system of NIBCO, the current method is “poor” and needed “cut loose” to grow the business and become more global. The BCG’s suggestion for three to five years implementation should be too long, for some reason, this can cause more expense and efforts for NIBCO than real need (Brown, 2012, p. 491). 3. Pros and Cons of “BIG-BANG” approach for ERP NIBCO utilized the procedure called “BIG-BANG” for ENTERPRISE RESOURCE PLANNING implementation, or perhaps cutover aiming to put the whole information program to run inside the same day, at all the production facilities and division centers, particularly for common and key modules.

All the sections, most of staff will be troubled by the new systems at the same time. Actually the other approach may be doing a initial implementation at a manufacturing plant or division centers, or only implement for only some popular products. But by doing this can cost more hours, efforts and cannot evaluation the capability in the whole system. Also, with the investment in consultancy and buying the leading solutions from leading ERP distributors, the NIBCO aim to get the new program run for the business unit, and the real time running also can test the performance of the new program, also save cost and time for implementation.

Running together can also help the testing of integration and cooperation among factories and distribution centers. The big-bang or cut over approach requires the great skilled staff, and also practicing the new devices, working operations and jogging, maintenance the modern system. The productivity was reported a reduction in the initially month following your new program running, although improves little by little in the after months. The accounting studies can be done in two or three working day, rather than 2 to 3 weeks with all the old systems.

Also, together with the new system, sharing and collaboration assists reduce inventory, as much as 25%, and also increase the fulfillment rate from many of these to 95%, service top quality has improved to 98%. Source: http://www. nibco. com/ The BCG consultants realized that the legacy environment and databases happen to be out of control, which may cause IS and IT staff too active with correcting the issues a lot more than focusing on expanding supporting system for practical activities.

The company used specialist consultancy solutions from BCG but will not follow the suggestion from BGC, the cutover or big-bang approach was implemented as the management commanders do not support multi years plan, as well the fund for the project was 17 , 000, 000 USD, and can take 1 fourth of the company’s members to involve in implementation to get the job. The short time the project will take, the better and more successful it will be. 4. ERP project implementation: lessons and advice 4. 1 . Human resource intended for ERP task

Project was leaded by CEO, while the task Champion, Rex Martin, who also acted since the task leader and project champ. The top administrator plays the important thing role for the ERP project, because this type of project will involve and affect all people and departments and units of company. With CEO in control, the project will be maintained all the Vice Presidents in decision making and raising the resources for the project. The CEO set up the Professional Leadership Group to act as the screening and monitoring committee, this team plays a key position in controlling the job because it help make sure that almost all decisions are produced at the top level.

The CIO, as well as the Vice President, Scott Beutler was responsible for the ERP bundle, it means the fact that VP from it and IS will probably be responsible for the functionalities in the software application, during process of project. The Information system managers, Whilst gary Wilson, combined with all the CAN BE staff (about 30 people), will be involved with project, support the functions and implementation, development, repair. The CIO, IS market leaders and IT staff will the support of top leaders will play important roles in assessment of ERP deals, testing, exhibition and working the devices.

The key themes of ENTERPRISE RESOURCE PLANNING package for NIBCO, SAP R/3, includes: finance, supply chain, material, warehouse supervision, production preparing and supervision, sales and distribution. Likewise, the HUMAN RESOURCES module was purchased but actually will be applied later. The leaders possess played important roles in running the project, for instance , Beutler take care of the business procedure, Wilson for technology and software packages, and Davis for managing job activities. Because of the scale of project, and it potential effects, 1 / 4 of the company directors have already been appointed towards the project supervision board.

This kind of shows the commitment in the managers and in addition provide enough human resource to get project to make sure that it can cut time by 3-5 years to 18 a few months. The participant of commanders and managers will make the project decisions faster and it may be the key reason for shorter form the life long project. four. 2 . Working with solution merchant ERP job requires both equally software, components, networking partners to entail in rendering. NIBCO provides selected IBM as 3rd party provider for the system’s infrastructure, SAP as the software program solution provider.

For professionals and engineer support, NIBCO and companions appoint six consultants for functional and business procedures, who function regularly with all the project staff. Also, the utmost personnel can be raised to as many as 55 consultants in high time. The other staff are also provided for training, confirming, programming, technological assistance, knowledge management … All the helps are officially stated in the contract with solution services and lovers. In fact , Wilson has an IS DEFINITELY department and personnel quantity up to 35, also he previously mainframe app, HP and IBM platforms.

The NIBCO has several legacy systems for order entry, developing, distribution and accounting, nevertheless the problem is they can be bought independently, with separate databases, that make integration challenging or very difficult to implement. NIBCO has considered and evaluated seven ENTERPRISE RESOURCE PLANNING packages comprehensive and in information. With the authorities and business from useful departments involving in evaluation process by testing the modules, coming from several distributors. They are also brought to visit the prior or common customers to get the feedbacks from real users.

The key matter was the financial and supply string management segments, using the distributed database, and should be able to connecting and adding all the themes together. 4. 3. Job management team The range of the task is decided for the factories and distribution centers, the operation was stared on the same day time for 10 plants and distribution middle. This decision for range was quite risky but saving some cost pertaining to NIBCO. The project crew was released earlier than planned, the productivity was down a bit but improve gradually, the project cost was a very little under finances.

All these factors are due to good encounter and cooperation in task management. The real key to success may be the Gambling triad, that has been led simply by Wilson and Beutler, who was working fulltime with ERP project. The Martin was added by simply CEO scheduled appointment to joint Beutler and Wilson being a third co-lead project. David with experience in total quality supervision could help project focus on change management and maintaining top quality. 4. 5. Training inside specialist For ERP project, training and technology copy is key to success.

Main knowledge and skills must be transferred to CAN BE department and all the functional departments to get operation and maintenance. Supply: http://www. sap. com/solutions/bp/enterprise-resource-planning/solutions-overview. epx Four director leaders and two organization system research were chosen for review roles, working with other market leaders from sales and distributions. One fourth or seven out of 28 directors of NIBCO have been completely selected pertaining to project while full time. These individuals must have great business know-how to see the potential issues and settle issues. 4. 5. Project crew assignment

The project managers are assigned for specialized teams, which include: sales and distribution, monetary, material managing, and creation management. Every team work together with experts from remedy vendor. Organization member will certainly consider method, business features, power users, business method analysis. CAN BE and THAT engineers will be responsible for technical sides, which include infrastructure, encoding, testing, set up and running. Each team has their assisting IBM consultants, with their technical knowledge to this they will make joint decisions, and also transfer the knowledge to NIBCO core team at the same time.

Consultants by solution merchant, SAP, also work together with the group. The final job cost was 17 million USD, and one third pertaining to infrastructure expense, including the option software. 1 anther third for education, team work and the previous one third to get consulting (Brown, 2012, s. 501). 4. 6. Encounter in modify management The cutover strategy or big-bang implementation of ERP bundle as NIBCO used needs a good modify management in every business capabilities and division. Because business processes happen to be changed, much or very little depends on the nature of organization, therefore each of the related staff will be damaged.

Also, the application in wide variety, all five first industrial facilities and distribution centers will be affected same day, same time. The important thing to success of NIBCO implementation is most likely the careful preparing and actions. The examination and style, communication and management effectively, as well as the good coordination with consultants and vendors’ specialists. The support and course from best management to departments’ mind involving the setup of ERP can also help the success. Big bang implementation requires transform management that was not essential strength of IBM.

Teaching was used generally to increase skills and knowledge of users, with 450 diverse business activities in 15 locations. Available communication by provision info to project teams, more than 1, 2 hundred hours to train, over 4 months before going online or perhaps Go Live. The grace period was used for much more scenario training, with more concentrate on business processes. After rigorous, effective and serious teaching, the company could possibly be ready to run R/3 on its own without answer or partners expert working away at site. List of Reference 1 . Brown, 2012, Information Technology Management – seventh Edition, Prentice Hall