A 12 Country Business Transformation and International ERP Challenge (Part 1)
It all started with a request through our website to contact a company – let’s call it KRONOS.
This is what they told us in the initial call:
“We are well established in the US with Manufacturing in Minnesota and sales and support in 7 other states. We just merged with another group, headquartered in Munich, with manufacturing in Poland and China and local sales and support in The UK, Sweden, Holland and Spain. We want to use this occasion to transform our company , we want to work as one company, reorganize and develop synergies between our different subsidiaries, improve our competitiveness and be much more agile and efficient than we have been so far. Can you help us?“
Clear talk from a potential customer: “We want to work as one company, develop synergies, utilize the new scale of business we have obtained through the merger and become more efficient and more competitive”.
In Pipol we really appreciate a customer who knows what they want. This makes it much easier for us to match expectations and provide a well aligned roadmap for their business transformation.
So how do you approach a complex international business transformation case such as the KRONOS one? Where do you start?
Pipol see ERP as a key instrument when engaging in major business transformation activities. Our first response is always to assess the readiness for a potential shared ERP system and ensure that it is possible to match the structure of the business to an application that supports the business, in this case KRONOS’ goals and strategic decision making.
This is established through a Readiness Assessment Workshop, where the customer needs to address questions such as:
- Your visions are clear and understood, but is your organization supporting you and is this also their vision? And if yes, how ready are they to join you into this major transformation path?
- Do you have sufficient financial funds available to bring such a project to completion?
- Do we have a mutual understanding of a realistic timeframe for the project?
- A major transformation project like this requires time and dedication from key employees in Kronos. Will they be available?
- Is there a good fit expected within the Microsoft Dynamics product suite?
Among the key initial questions any customer has is always “How much is this going to cost?” and “How long is this going to take?”. To answer those questions, we every year in January obtain prices for resources, software license cost, add-on products and required local functionality from +50 countries around the world. This data is an integral part of our configurator, where it is combined with information from more than 500 international projects. This configurator is a key tool in our Readiness Assessment Workshop and enables Pipol to provide the KRONOS decision makers with a detailed high and low estimation of time and money before startup of their project.
Readiness Assessment Workshop
International studies show that when large ERP projects fail the main reason (+65% of all cases) is because the receiving organization fails to adopt the changes or are unwilling to accept the changes. Our experience is that organizations generally are conservative and will resist change which, can result in total failure. These factors will also be identified and investigated in more detail in our Readiness Assessment Workshop.
Pipol have after the deployment of more than 500 international ERP projects learned, that the decision to engage in larger projects, such as the KRONOS one often are taken with short notice and tight deadlines for completion. A risk is therefore, that no proper revision of the current business processes has taken place, no sufficient time has been allocated to assess new potential engagement strategies with customers & suppliers, and that the company will end up with a new solution without any major improvements. Our Readiness Assessment Workshop will identify such gaps and secure a good ROI!
The management of KRONOS will after this workshop have a basic understanding and key knowledge about the project they are about to enter into and Pipol will have a good understanding of the complexity of the project, the customer expectation and the tasks we are expected to perform.
The workshop has hopefully also revealed to the parties that a successful project is a joint venture that requires an active and professional participation from both customer and supplier!
Check out the four other parts of this international ERP case story:
- Part 1: A 12 Country Business Transformation and International ERP Challenge (this)
- Part 2: Dealing with Transition Management In Multi-Country ERP Deployment
- Part 3: Leadership Alignment in a Multi-Cultural Organization While Deploying ERP
- Part 4: International Business Process Optimization
- Part 5: ERP Roadmap for an International Business Process Optimization