Tektronix
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As Tektronix decided to implement the new Oracle ERP system, the company chose to introduce it in phases, based around the specific functionality or a particular geographic region. Implementing in phases, or in waves as Tektronix called it, allowed the company to experience regular feedback on specific areas of implementation, allowing time to adjust processes and scheduling as needed. The phased approach enabled the company to achieve frequent victories, which kept team and employee morale high throughout the process and provided encouragement to the Board despite the high cost and long timeline of the overall implementation.
To ensure Tektronixs success, the ERP implementation was divided into five manageable sub-groups: (1) Financials, (2-4) Order Management/Accounts Receivable (OMAR) in the three divisions, and (5) the global rollout. Within the sub-groups, additional waves were created to ease into the system. For both the Financials and OMAR, Tektronix decided to implement the new system in the United States first. Though the ultimate goal was for location to be irrelevant in the system and processes required for an order to be completed, it was important that the company see the added-value of the implementation as it proceeded.
When deciding whether to implement in stages or full scale, a company must consider several factors related to the feasibility of each option. Like Tektronix, companies with multiple and/or unrelated business units will benefit more from a phased implementation approach. This allows the company to evaluate the success or failure of the implementation at different stages and in various functionalities. Implementing in stages incurs less risk for large companies than a full-scale approach, as the entire operation does not need to be suspended for the change to take place in phases.
Smaller companies with fewer business units or simpler processes would benefit more from a full-scale implementation approach, as well as companies who do not have the luxury of time for a phased approach. A full-scale approach requires less down-time in the system, which is crucial for smaller companies and companies who have a tighter time frame for implementation.
Because Tektronix previously had problems implementing IT projects, the company was mindful that replacing their legacy systems could be a risky undertaking. Further, it was well-known that wide-scale ERP implementation would be a very costly endeavor. Consequently, Tektronix managed the risks of its ERP implementation by having a coherent, guiding vision entailing: 1) separability of the businesses; 2) leveraging shared services; and 3) staying as “plain vanilla” as possible.
Deriving from this structure, with regard to separate businesses, each division demanded standardization and had an overall “Frankfurt is Orlando” mindset. However, it was recognized that each division was very different than the next and had varying distribution and selling methodologies. Hence, each division would have its own instance of the system to manage the customer fulfillment process, and a decentralized approach to implementation details (such as each division choosing its own partners). This minimized the risk of having the relative requirements of one organization driving the practices of another.
Leveraging shared services minimized risk because “apples to apples” comparisons could be performed on financials, ensuring divisions were meeting targets. In addition, cost reductions became apparent from accurate information on which areas could be consolidated. For instance, a single financial and accounts receivable system could be implemented worldwide, eliminating redundancies and associated costs.
Finally, “plain vanilla” implementation reduced risk by minimizing changes in the ERP software. The idea was to change the business process, not the software, unless absolutely necessary, which decreased the chance for human error. Also, this maintained the integrity of the software, and risks related to non-standardized systems were less frequent.
Another measure that minimized risk was the decision to outsource an ERP package, which removed the company from the issues and business problems that software developers face. Besides the manufacturing package, the company chose a single vendor ERP strategy to decrease maintenance, integration and upgrade risks from implementing