September 28, 2007
bITa Planet
By Jennifer Zaino
Organizations that want to grow global have to go global, in their visions and in their ERP deployments.
For many mid-size companies, that means taking what may be multi-national deployments of ERP technology and rethinking them in a significant way. Multi-national organizations have operations in various countries-manufacturing facilities, service organizations, and so on-but they don't necessarily have what global businesses have, which is a single face or presence to the outside world.
Virgil Bagdonas, ERP practice director at an enterprise implementation company, said you want to show the customer that you are capable of providing the same service, goods and relationship no matter where you are.
“If you have operations in Singapore, the Netherlands, North and South America, anyone from anywhere could call into your service line or use your web ordering system and have the same experience, regardless of which server is up and running,” he says.
Easier said than done. Getting to this level is not just a matter of reorganizing systems but re-orienting culture and practices. “Our method says you need to have a global strategy and vision, and we need to link that to the IT roll out that meets the global vision,” Bagdonas says.
Green Beacon specializes in working with mid-size companies on Microsoft Dynamics AX implementations. As these organizations re-orient their systems to global operations, it requires the flexibility to support both centralization and decentralization for certain parts of the application.
For instance, in geographically dispersed manufacturing plants, products, throughput and workflow will vary based on physical layouts, supply chain distribution and even different product costing structures. This necessitates some local deployments of the ERP solution in order to meet the global strategy of delivery to customers within 24 hours of order-taking, regardless of country or continent.
Or, financials must be consolidated with a global chart of accounts that takes into consideration sub accounts for local compliance with tax structures and the like. Another key: standardizing taxonomies for master schedules or parts numbers or production processes so that everyone relates to that single definition, even if there are variations locally for, say, the components of a particular part.
The wins are in ease-of-use and lower cost-of-ownership, Bagdonas says. He cites the example of one client that had 17 data centers, each of them on the same ERP system but using different versions with lots of customizations. They were unable to get any consistency on customer service delivery, and when it came time to upgrade to a new ERP version to improve performance, it was a “monumental nightmare.”
It could take years to reconfigure, re-customize and localize each version. But when the company decided to move to a global ERP deployment, they were able to get down to four regional data centers, and reduce ownership costs by making upgrading easier thanks to introducing consistency in workflow processes.
“The biggest ah-ha moment came when they realized they could improve operations and reduce costs if they had a sense of vision,” he says.
And it is the “vision thing” that counts. Organizations who want to move forward this way have to understand the need to operate concurrently on all fronts-vision, strategy, process management and technology-not sequentially, to ensure alignment of their goals and the steps they are putting in place to achieve them.
“Regardless of the size of the company, CEO sponsorship and commitment are needed-not just signing the contract and issuing a mission statement but active participation,” he says.
The CIOs who lead this kind of visionary change have to have strong management and communications skills so that they can lay out the issues-and win the support of mid-level managers who may balk at the changes to their habits. “You do it and eventually you will have lower TCO, and you will have decision making taking place at the appropriate levels where you can have flexibility and agility, “ he says.