Problem/Issue
Statement
The problem in
this case is that Bombardier has already experienced two-full scale ERP rollouts
first in its Mirabel plant and then in its Saint-Laurent location that were of
increasing success but still flawed.
For its third ERP installation the company needs to correct the gaps
between its processes in implementation and the standard of best practices
illustrated by companies, consultants, and the press.
The main problem in this case is that although the
implementation at Saint-Laurent represented a much more efficient deployment
including ability to meet deadlines, appropriate involvement of management, and
a simpler and more practical training program, there still does exist
disagreements between the project team and the company employees over the
validity of certain processes and the necessity and scope of some methodologies. Some of the symptoms of this problem
include an improper concentration of knowledge in a narrow set of users, a
project structure perceived as overly complicated, the absence of contingencies
or “shadows” for specific key employees, and the sense from some users that the
new system did not apply to enough of that person’s responsibilities.
The scope of the problem is the ERP systems in place at
Mirabel and Saint-Laurent, as well as the locations where the ERP system at the
next plant where Bombardier is planning to transition from a legacy system to
an ERP platform.
Situation
Assessment
The context of this problem is that Bombardier Limited is a
leading international manufacturer aerospace and transportation products with
its aerospace division reporting $8.2 billion in 2007. In an increasingly competitive
aerospace manufacturing industry, Bombardier recognized that it needed to
transition its legacy information systems towards an ERP system. Although technically a success
according to management due to its ability to reduce inventory by $1.2 billion
without jeopardizing operations or production, the first rollout of ERP at the
Mirabel plant was extremely frustrating to users due to a large communication
gap between the project team and employees and the mismanagement of user input
and expectations by executives and the project team. The second roll-out was a much smoother transition that
trained employees more adequately and was the result of a clear vision and
unified message from senior management as to employee involvement and the
priority placed on a company-wide support of the new system’s
implementation. This third foray
into ERP deployment should build on the successes of Saint-Laurent and improve
on its failings by adhering to ERP best practices.
The decision criteria should be how well the determined
solution can adhere to the established ERP best practices. In line with these guidelines, an ideal
ERP implementation would have:
- Sponsorship of the project by executive management and
implementation by VPs
- Active involvement by executive management in the
implementation process
- Shared responsibilities in the deployment between the IT
department and functional areas where the system is being installed
- Executive management that fully understand the company’s
ability to adapt to changes brought by the new system
- A project manager who is assigned full-time to the
implementation
- A project team that represents all the functional areas
where ht software is being deployed
- A project team whose normal duties have been reassigned to
different personnel during the project
- Training for staff on successful teamwork before
implementation commences
- A retention of ownership of the deployment process by the
institution wherein skills have been fully transferred from consultants to
employees
- Training for all users of the new system
- A reformation of administrative processes by the company to
fit the new system
- Appropriate communication of deployment details to the
business community
List of Plausible
Alternative Courses of Action and Evaluation of Alternatives
The possible courses of action would be to either change the
implementation process to more closely reflect the ERP best practice standards
with several alterations in the company’s transition approach or to simply
follow an implementation that closely resembles the deployment in Saint-Laurent
without any serious adjustment.
Understanding that historically many ERP implementations within and
beyond our industry have come in over budget past deadlines and with subpar
performance, maintaining the status quo with our existing ERP transition
procedures could potentially avoid any disruptions in normal business
activities and serious financial losses resulting from these changes. Keeping essentially the exact same ERP
transition process would most likely give Bombardier another successful
roll-out leading to cost
reductions and greater efficiency, albeit without any attention to the flaws
observed in the previous two roll-outs.
Changes that could be made that would allow Bombardier to
follow an implementation governed by ERP best practices would be:
-Enlist more employees to become team members that possess
the specialized knowledge required to insure the continuity and stability of
the project. One of the major
challenges faced in the second roll-out was the dearth of team members with
specialized knowledge needed to work intensively on each deliverable. By being better prepared to meet the
demands of the project with greater resources, Bombardier would be better able
to retain ownership of its own implementation process by having enough internal
employees with the requisite skills to facilitate deployment. Additionally, this would represent a
better cognizance by management of the company’s ability to adapt to changes
that occur through implementations, as more team members with the requisite
skill set could meet the rigorous informational demands of ERP implementation.
-Clearly inform the project team that any communication with
the users and management must be transparent and that any overt embellishments
will be punished. In order for the
implementation to have productive communication between the project team and
the business community, there has to be a trust that develops through the
transaction of truthful and accurate information. Although the project team may be tempted as in the
Saint-Laurent deployment to exaggerate certain details to keep the business
side from worrying, any false information from either side is unacceptable and
must be addressed as such by top management to allow for the smoothest
transition.
-Train employees prior to project initiation and then add
them to the team during the course of the implementation. One of the major issues in the Mirabel
deployment was that the quality of the support was not adequate because the
team members were too far removed from the everyday business responsibilities
(some of the team members during the Mirabel implementation had not had
business responsibilities separate from the project in over 10 years). To meet the best practices of training
for employees on teamwork prior to the project and insuring the project team’s
composition represents all functional areas where the software will be
implemented, Bombardier could give the project team a more updated sense of how
the implementation could reflect functionality over process and the actual daily
business tasks.
-Change training program to be less rigorous before the Go
Live period and more advanced shortly after the Go Live period. This would respond to the complaints of
users who felt that by having a base knowledge of the system prior to the Go
Live and then learning more of the advanced SAP functions once they were
familiar with the tool they would better be able to fully take advantage of the
new system. If done properly, this
would qualify the project better under the best practice standard of all
employees using the software receiving thorough training.
-Maintain a project manager that is assigned full-time to
the deployment. In order to insure that this project
costing hundreds of millions of dollar is functioning as perfectly as possible,
the lead project manager must be dedicating his entire workday and necessary
overtime to the implementation.
This would be a clear message to the entire staff that this project is a
top priority and is being handled with the necessary attention.
Recommendation
My recommendation upon preparing for the consultants’
presentation is to adopt the five proposed alterations to the implementation
process based upon their feasibility and net impact. From my perspective, none of these changes would demand an
inordinate amount of resources, although some merit more than others. Having a
full-time project manager, adjusting the training program’s depth before and
after the Go Live, and setting a clear standard for the veracity of
communication all can be done with relatively little constraint on the
budget. However, increasing the
quantity of team members with specialized knowledge of the project and
injecting additional staff into the project team during the project would
represent additional investment for Bombardier as well as a shift of human
capital away from actual business related responsibilities. Considering the hefty sum invested in
an implementation and the potential cost savings associated with inching this
process towards perfection, I would recommend that we adopt all five of the
proposed changes in order to better align the deployment process with ERP best
practices.
Presentation
The consultants’ presentation should be both educational
about the best practices they have chosen as their world class standards and as
specific as possible in what activities in our company’s prior implementations
should be modified to better meet these practices. I would suggest that the consulting team propose several adjustments
to our current policies and inform us as to which ones will be most costly and
what will be their ultimate impact in terms of improving profitability,
efficiency, sustainability, and/or morale. Since our company does consider that our previous two ERP
implementations were successful (although we do recognize the capacity for
improvement), the burden of proof rests on the benefits of any proposed shifts
in process. I would hope that the
consultants offer a balanced view that gives proper credit to the improvements
made during the Mirabel roll-out instead of simply advocating for change without
recognizing Bombardier’s progress in transitioning its legacy systems.
Reflection
Sir,
After processing last night’s presentation by the
consultants I remain adamant in my belief that although management has
considered the first roll-out of our ERP system a technical success and our
second-roll out at Saint-Laurent a significant improvement, there are several
steps Bombardier can take to optimize its implementation procedure.
I tend to agree with he consultants decision that there
existed deficiencies in the implementation in adhering to the best practices of
sharing responsibilities between IT department and functional areas where
software is being deployed, maintaining a project team fully represented in all
functional areas where the software is implemented, having our company retain
ownership of the implementation process, and adequately changing internal
administrative processes to fit the software.
I completely concur with their suggestion to include
functional specialists in the project management team in order to create a
greater synergy in the implementation process between the project team and end
users. This action is completely
in line with what I had originally thought would be a solution as to enlisting
the help of more internal employees for the project team so that specialized
knowledge would not be so heavily concentrated in just a few individuals. Although I believe this also applies to
the best practice of management fully understanding the company’s ability to
adapt to changes brought by the new system, I definitely believe that this is
the best way to improve a project structure that has been perceived as overly
complicated and slightly malformed by the business end. I do feel, however, that the cost cited
by the consultants might be understated, as it simply addressed the opportunity
cost of reassigning the functional specialists to the project team with a
tacked on $11,000 for “additional costs.”
However, these functional specialists happen to represent some of our
most knowledgeable and thus valuable company resources, and consequently I
cannot foresee how Bombardier would be able to operate properly without hiring
suitable replacements in the interim. Truthfully, even acquiring the best possible replacements
would not be ideal since they would not be versed in internal procedure so as
to fully offset the loss of these functional specialists. While I believe the cited figure of a
$560,000 efficiency benefit is well worth the 2 month absence of some of our
greatest talent, I do feel that it is more costly than explained by the
consulting team. The team’s other
suggestions on this topic of revising scorecard reporting and diversifying the
project support team were satisfactory and represent a far lower cost to
enact.
The presenters’ proposal to hire IT specialist experts and
phase out Bombardier’s reliance on consultants in order to bridge our knowledge
gap in internal SAP support was intriguing. I had not previously assumed that we had any issues with our
external SAP support, however I can understand how this does not align us with
the principle of retaining ownership of the implementation process. Although I understood there were
problems with the support, I had head more complaints that the support was
inadequate because of the composition of the project team in which a gap
existed between business knowledge of the support team and current business
employees created by the lag in non-implementation related responsibilities for
project team members. I still
believe that my proposal to cycle in business employees periodically to the project
support team would help to resolve this issue. I see the value of hiring SAP subject matter experts (SME),
although I do not feel that they can necessarily replace the 400 SAP developers
we have on staff. The savings
analysis by the consultants implies that the SMEs would completely replace the
400 developers and I am not convinced that 3 SMEs could fully handle the workload.
Lastly, the consultants’ accurately illustrated the problems
with our contract management processes.
I do believe as the asserted that simply rewarding contract agents for
negotiating the cheapest contracts creates an inefficiency resulting from lengthier
contract negotiations. The two
suggested courses of actions in either completely fitting SAP to the process or
fitting the process to SAP are unrealistic and create unnecessary
limitations. I have no issues with
adopting a hybrid approach that would both standardize the process and expand
SAP features, although I would first like to get the input of the contract
agents as to their interpretations of this solution’s impact on their daily
responsibilities to ascertain whether they believe this alternative would
resolve their complaints about the new contract management procedures.
In summary, I largely agree with the proposed solutions of
the consulting team, however would accept them with some modifications. I would recommend that we
do include functional specialists in the project management team, however, in
preparation for this we should properly train replacements in advance of their
displacement. I would also
recommend that we revise scorecard reporting to create greater transparency and
take the necessary actions to diversify our project support team. We should further explore the idea of
hiring SMEs to replace our SAP developers to insure that the suggestion is
feasible, in addition to altering the project support team composition to include
business employees that are less removed from non-implementation related
responsibilities. Finally, we
should adjust our contract management system by creating a standardized process
and expanding the SAP features after first consulting with the contract agents
themselves. Taking these actions
will achieve significant progress in aligning Bombardier’s ERP implementation processes with established best practices.
Thank you for your time and consideration.
