Ryan Boyd

1
Management Information Systems Chapter 6 Real
World Case 2 Agilent Technologies and Russ
Berrie Challenges of Implementing ERP
systems Instructor Dr. Ahmad Syamil, CPIM, CIRM
Presented by Group 2

• Ryan Boyd
• Luke Duffner
• Ashley Elinburg
• Eric Gosselin
• Dirk Lange
• Charlotte Prévost
• Muhammad Zeeshan Ali

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Agilent - CEO
Edward W. (Ned) Barnholt
Luke Duffner
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Competitors
Luke Duffner
4
Company History

• Agilent Technologies was formed in 1999 when
  Hewlett-Packard (HP) split off its measurement
  business.
• Initial Public Offering on Nov. 18, 1999, raises
  2.1 billion and breaks records as the largest
  IPO in Silicon Valley history.
• On June 2, 2000, Agilent Technologies becomes a
  fully independent company, following HPs
  distribution of its Agilent shares to HP
  shareholders.
• 2002 Agilents first listing on Fortune
  magazines list of the top 500 U.S. companies
  No. 212

Luke Duffner
5
Company Background

• Agilents Five Divisions
• Test Measurement
• Semiconductor Products
• Life Sciences/Chemicals
• Communications Solutions
• Automated Test Equipment

Luke Duffner
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Company Background Cont.

• Net Revenue 6.1 Billion
• Employees 36,000
• Agilent has facilities in 30 countries
• Serves customers in more than 110 countries
• Products
• Automated Test Equipment, Fiber-optic equipment,
  Bioanalyzers, Telecom Network test equipment

Luke Duffner
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Financial Information
Luke Duffner
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Angelica BerrieChief Executive Officer
Dirk Lange
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(Main) Competitors

• The Boyds Collection Ltd
• Enesco Group Inc

Dirk Lange
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Company History (Russ Berrie and Co.)

• Founded by Russ Berrie in 1963
• Mission "Make someone happy"
• 1963, the product line consisted of Fuzzy
  WuzziesTM, little fur mice and stuffed animals
• in New Jersey Palisades Park, U.S.

Dirk Lange
11
Company Background

• Products
• teddy bears and other stuffed animals
• baby gifts, soft baby toys, bibs, mobiles and
  development toys.
• picture frames, candles, figurines, home decor
  gifts, home fragrance products and a wide variety
  of seasonal and everyday gifts
• 7,000 items!

Dirk Lange
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Company Background (cont.)

• Present in 97 countries
• 1,775 employees
• sales team of over 600 men and women worldwide
• 55,000 customers (and their customers, who number
  in the millions)

Dirk Lange
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Company Background (cont.)

• Financial Information

Dirk Lange
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Case History Agilent

• Agilent says that ERP components in Oracles
  e-Business Suite 11e software froze production
  for the equivalent of a week leading to massive
  losses.
• The Oracle system handles about half of the
  companys worldwide production of test,
  measurements, and monitoring products.
• All of its financial operations

Muhammad Zeeshan Ali
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Contd.

• Agilent shifted 2200 legacy applications that it
  inherited from HP to Oracle.
• 6000 ordered had to be converted to an
  Oracle-friendly format.
• Lesson for Agilent ERP implementations are more
  than just a software
• They are a fundamental transformation of a
  companys business processes.

Muhammad Zeeshan Ali
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Russ Berrie and Co.

• 2nd try on ERP
• Plan to implement J.D. Edwards One World Xe
  ERP system
• The project will take 18 months
• Sales are anticipated to jump from 225 million
  during the 1st nine months of 2001 to 1 billion
  with in the next 12 months.

Ryan Boyd
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Russ Berrie Cont.

• Reasons to be cautious
• In 1999 Y2k related migration failure
  involving an ERP system
• From Homegrown distribution, financial, and
  customers service system to ERP applications.
  (SAP AG)
• Major System failures
• Cause Russ Berrie to fall back on there old
  legacy systems.

Ryan Boyd
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Question 1

• What are the main reasons companies experience
  failures in implementing ERP systems?
• Underestimation of the complexity involved in
• Planning
• Development
• Training
• Trying to convert to the new system to quickly
• Failure to sufficiently convert enough data and
  perform enough tests
• Companies rely to heavily on ERP software vendors
  or on the assistance of prestigious consulting
  firms

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Question 2

• What are several key things companies should do
  to avoid ERP systems failures? Explain the
  reasons for your proposals?
• Have support from top management
• Reengineer the existing business processes
• Choose your ERP system carefully
• Involve employees who will be affected by the
  system in its planning and development (design)
  stages
• Integrate the ERP system with other business
  information systems

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• Populate the new ERP master file with enough data
  from the legacy system so that the system can be
  adequately tested during the testing phase of
  implementation
• Plan on extensive training for employees to
  enable them to perform new work tasks that will
  be required by the ERP system
• Introduce the ERP system slowly
• Carefully select and manage employees and
  consultants who will be in charge of training
  and/or implementation do not rely heavily on
  consultants or on promises from the software
  vendors

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• Additional information
• Application of the ERP in the National Institute
  of Health and Medical Research, France

Question 1 Question 2
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INSERM is composed of 366 research units. 98
of INSERM laboratories work in collaboration with
many different countries 4,400 International
projects (2,240 with European countries, 1,330
with North America) . These research units are
important and also very diversified.
GOAL To attribute budgets efficiently amongst
units
Step 1(10 years ago) INSERM create 7 independent
divisions which take care of the business of each
unit. Step 2(2 years ago) INSERM implemented
ERP systems via SAFIr (an American version of
Oracle for the French administration).
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• These are their main reasons for having
  experienced failures in implementing ERP systems

First, SAFIr is not appropriate for the French
administration. Second, people working in the
different medical research units were not
prepared at all, to that new software, and the
complexity of its application. Third, people
didnt even try to do their best to work with
SAFIr.
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How INSERM could avoid ERP systems failures

• First of all, INSERM had to work in strong
  collaboration with the American company to have
  an application which is totally appropriate.
• Second, INSERM should create training for all
  their staff.
• Third, INSERM should divide people into groups
  those who have to focus on orders, those who are
  focus on the invoice payment and another group
  who are responsible for the balance of payment
  and the attribution of money from the government.
  
• Finally, INSERM should hire experienced and
  expert staff to solve every single problem with
  the software, and not rely too much on the
  American.

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Question 3Why do you think ERP systems in
particular are often cited as examples of
failures in IT systems development,
implementation, or management?
ERP systems are very expensive and complex
software packages The backbone of a company Lack
of companys knowledge, preparation, and testing
of ERP systems Scarce resources decrease the
likelihood of any projects success Think about
the human aspect Choosing the right ERP system