Successfully Navigating the Skies of a Large-Scale ERP Implementation (with reflection)

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.