CASE STUDY GBI ERP Implementation Project GBI Background Global Bike is a world class bicycle company serving the professional and prosumer cyclists for touring and off-road racing. GBI had been experiencing some challenges running multiple independent application environments. This was introducing complexities, inefficiencies, inaccuracies, and unnecessary expenses into business processes. In addition, information was not available in real-time. With many obsolete processes, there appeared a need to dismantle existing processes into individual activities and to put them back together in a new set of business flows. Without prior experience in business process reengineering, a business consultant was engaged. Following the assessment of GBIs business and technology platforms, the consultants recommendation was for GBI to consider a systems integration project with two specific objectives: To link the business with its external partners and stakeholders To integrate internal functional silos of the organization into an enterprise application Technology selection To validate the recommendation of the business consultant, GBI engaged a technology consultant who again assessed GBIs business and technology landscape and agreed with the recommendation of the business consultant. Further to this, the technology consultant then recommended the implementation of two specific enterprise technologies: Enterprise Resource Planning, and Customer Relationship Management. The technology consultant also evaluated different systems on the market and recommended two systems with similar architectures that include a Web services, Web browser, Application, and Data tier: (i) SAP Business One, and (ii) SAP CRM. Technology Implementation The ERP implementation project was planned to simply utilize core ERP functionality, with business processes re-engineered and aligned to the ERP system. This plan also exempted the customization of core ERP modules. The conversion from legacy systems to the ERP system was scheduled to take place one module at a time. Eight different modules were implemented, first starting with the Sales and Distribution, Procurement, and Accounting modules. Next the Warehouse Management, Production, and Asset Management were included, and finally, the Project Systems, and Quality Management modules. Implementation Problems The implementation project was not without problems. Problems experienced in the implementation of the first three modules were also experienced in the implementation of the subsequent modules. Interviews with staff during the project revealed a culture of closed communication and very little commitment to training. At some point, there seemed to be no more contribution from the implementation partner, who was also responsible for providing training. The project took eighteen months to complete, and several staff resigned before the end of the project as they were unsure of the changes happening in the company. The Chief Technology Officer (CTO) resigned, adding to the complexity of the project. A new one was hired. Despite the issues, the system went live. Difficulties continued in the first sixty to ninety days. Further interviews with staff indicated that there was a huge number of support calls recorded

as many of them could not utilise the capabilities of the system and had in fact forgotten most of the things they had been taught about the new system. Many comments reflected that it took so much time to learn the system. Implementation Outcomes Stabilisation took a little longer than expected. One year later however, the implementation of SAP Business One was considered successful. By implementing the ERP, GBI gained cost and time efficiencies. With a technology platform now built on well-defined technological standards, GBI now maintains an interconnected and IT infrastructure that can accommodate the implementation of additional technology. Current Situation The centralized approach offered by SAP Business One offers GBI an advanced business platform which enables consistency of operations and process integrity across the globe. Given the requirement for multiple accounting standards across the US and German companies, GBI maintains one leading accounting ledger for both companies. GBI also maintains two accounting books, one for the US company and another one for the German company. Due to several tax and export issues, the headquarters remains located in Dallas following US GAAP accounting standards while its subsidiary company which is based in Heidelberg is subject to IFRS accounting standards and German tax regulations. Global Bike is currently establishing an extensive partner operation to ensure process continuity with partners. This will aid the delivery of best-in-class products for its customers. Special attention is directed towards building strong relationships with suppliers. Presently, the identification and selection of vendors, including negotiation of general conditions of purchase and contracts, for the US facilities are organised centrally from the US head office. Similarly, Identification and selection of vendors for the German facilities are organised centrally from the German head office in Heidelberg. For a standardised approach for managing customer credits, all credit for the US customers are managed by the US head office and all credit for the German customers are managed by the German head office in Heidelberg. Whats Next? For the future, GBI seeks to set up a plan to continuously re-examine its endeavours towards strategic objectives by initiating many other projects. First, the identified SAP CRM will be implemented, specifically to build close customer relationship through analysis of customer information that then permits a coherent view of customers. The CRM system will incorporate a help desk ticket management software with fully integrated customer database to be connected to the implemented ERP system. GBIs key requirement is to provide gateway for customers to interact electronically with the company and in so doing create interaction points between the organization and the customer. Before the CRM implementation however, the new CIO who was hired during the ERP implementation project has proposed an internally focused project. This project will equip GBI managers in better understanding the new business processes to ensure the processes are managed more effectively. Following this internal project, another external project will be considered to further engage suppliers to through joint design and collaborative planning, forecasting, and replenishment. To make this new strategy work, GBI is beginning to investigate new supply chain technologies and processes to drive the speed-to-market requirements of the new growth strategy.

Questions

As technology consultant, recommend a tool that GBI might use in assisting its managers in further understanding and optimizing processes. Discuss how this tool will be beneficial for improving business processes.