Putting the Enterprise into the Enterprise System

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Putting the Enterprise into the Enterprise
System

by Thomas H. Davenport
Shirley Justice, Trang Le, Brad Lucas, Corey
Pincock, Brian Reich
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Agenda

• Allure of Enterprise Systems
• Scope of Enterprise System
• Anatomy of Enterprise System
• When System and Strategy Clash
• Configuring Enterprise System
• Impact on Organization
• Role of Management
• Case Study Doing It Right at Nike
• Critical Success Factors

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Allure of Enterprise Systems

• A solution to the fragmentation of information in
  large organizations
• Multiple Data Repositories
• Legacy Systems for Each Function
• Productivity and Performance Drag
• Maintenance Leads to High Costs

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Scope of Enterprise System
Financials
Operations Logistics
A/R A/P Asset Accounting
Cash Mgmt Forecast Cost-Center Accounting
Executive Info System Financial
Consolidation General Ledger
Product-Cost Acctg Profitability Analysis
Profit-Center Acctg Period-Related
Costing
Inventory Mgmt MRP Materials Mgmt
Plant Maintenance Production Planning
Project Management Purchasing
Quality Management Routing
Management Shipping
Vendor Evaluation
Sales Marketing
Human Resources
Order Management Pricing
Sales Management Sales Planning
HR Time Accounting Payroll
Personnel Planning Travel
Expenses
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Anatomy of Enterprise System
Managers and Stakeholders
Reporting Applications
Financial Applications
Sales and Delivery Applications
Sales Force Customer Service
Manufacturing Applications
Back-Office Administration
Central Database
Customers
Suppliers
Service Applications
Inventory and Supply Applications
HR Mgmt Applications
Employees
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When System Strategy Clash

• Challenges
• Business must be modified to fit the System
• Vendors structure systems to reflect Best
  Practices, not the Customer
• Some degree of customization
• Investment ranging from 50m to 500m
• Benefits Realization
• Alignment
• SAP isnt a software package its a way of
  doing business.
• Competitive Advantage - Integration

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Configuring Enterprise System

• Modules
• For each function, there is a module to install
• The customer picks which ones to install
• Generally, the more modules, the greater the
  integration
• Configuration Tables
• Enables adjustments to the system to achieve best
  possible fit with your companys processes

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Impact on Organization

• Company Strategy
• Streamlines Management Structure
• Centralization of Information
• Culture
• Standardization of basic business transactions
• Integration-enabled flexibility
• Transparency
• Organization
• Global alignment

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Role of Management

• Weigh ES implementation with its cost and
  complexity
• Ensure the company addresses all business
  implications
• Management Questions
• Strengthen our competitive advantages?
• Erode our competitive advantages?
• Effect on organization and culture?
• Extend to all or some functions?
• Global roll-out or Regional roll-out?
• Other alternatives to ES?

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NIKE

• Over 100 legacy systems throughout our global
  infrastructure
• Global Function leaders to create Future Vision
• Business Systems 1st Business Processes 2nd
• Vision Strategy Change the
  Game

Picked best in class partners to create a
competitive strategic advantage

• Planning 5 years Implementation 5 years
• Phased Implementation Approach
• Canada USA EMEA APAC Americas
• Organizational Cultural Changes

Resources
Time
Scope
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Critical Success Factors

• System Strategy Alignment
• Its a way of doing Business
• Integration and Transparency
• Extensive Planning Implementation
• Short, Mid, and Long-Term Plans
• Risk Mitigation
• Functional Experts to Lead the Charge
• Understand Organizational Impact
• Systems, Processes, Culture, People
• Functional Experts to X-Functional Experts