InformationWeek
Defining The Business Value Of Technology
September 14, 1998
CIO Forum: Lessons From ERP
Sue Leboza VP of IS, Baxter International
hen Baxter International Inc. decided to launch a global enterprise resource planning project for finance, logistics, and regional order management in May 1997, the key objectives were clear: Make it easier for customers to do business with us, and enhance the productivity and response time of Baxter employees. It was also clear there would be challenges with such a massive project. Among the biggest: integrating multiple business processes; implementing the process and systems changes globally; meeting a very aggressive time line; and adhering to budget guidelines.More than a year into the rollout, we've learned several important lessons. First, commitment from business leadership is critical. To integrate business processes, difficult decisions must be made, potential customization must be evaluated, and future needs must be addressed. One example of a complex business decision we made was consolidating multiple customer ID numbers, used to help track orders, into one number for all business units. Achieving integration wouldn't be possible without the commitment of business leaders. We've set up integration teams from systems and business to work with a global steering committee that monitors the project and provides direction to the functional teams.
Second, challenge ERP vendors on their global readiness. Vendors must have software designed to function in different countries, and staff in these countries who are knowledgeable and accessible. Also, if you're moving to global ERP simultaneously in all regions, it's critical to install the same version of software in every region. Unfortunately, some ERP vendors don't have a significant presence in all countries and must bring in people from outside. This jeopardizes the on-time, on-budget objective. To avoid a "global readiness gap," don't rely on vendors' claims that they can handle these in-country issues. Consult peers who have implemented successfully in regions outside North America.
Third, be prepared to meet your own aggressive time line. The non-negotiable year 2000 date-field deadline can be an advantage to installing ERP. Many integration projects in the past have failed because of loss of focus, lack of funding, and minimum business participation. But the year 2000 problem is providing a strong incentive for completing ERP projects on time. Unfortunately, because implementation must be completed quickly, some nonessential standardization and process change must be delayed. The steering committee's role is to make trade-off decisions for implementing as much change as possible without sacrificing the deadline. We had to implement regionally in one phase, and were forced to push some standardization to the second phase.
Fourth, set clear milestones for the project, communicate goals, and celebrate their completion. ERP projects take a long time, and team members can become weary of the global travel and resolving difficult challenges. By focusing and delivering on each milestone, the goal seems more immediate and achievable. Recognition can come through project updates in company publications, commentary from the president, or visits from senior management.
Finally, invest in training and communication. Communicating clear objectives throughout the project is critical, particularly when the implementation not only involves employees but customers as well. Investment in training initially is a given. But follow-up communication after training is critical to calm the waters, because change is never easy. Identify those people in the organization who can help educate employees and keep them abreast of project developments.
Implementing ERP is only part of the solution to creating a seamless operational environment. The complete solution involves making a business commitment, implementing truly global systems, delivering on expectations, maintaining momentum over the long haul, and investing in training and communication as part of a continuous change process.
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