Blog# 9: Bombardier: Successfully Navigating the Turbulent Skies of a Large-Scale ERP Implementation Pre and Post-Presentation Notes

Case: Bombardier: Successfully Navigating the Turbulent Skies of a Large-Scale ERP

Implementation

Problem/Issue Statement

• The problem presented by Joseph-Armand Bombardier is the upcoming third round of ERP implementation in his organization. Even though a big improvement over the efficiency and success of execution between the first ERP round (Mirabel plant) and second round (Saint-Laurent plant), there is still room for improvement.
• The focus is to identify the practices vs. the best of the best practices in the industry in relation to ERP implementation and offer specifics on how to make this third round provide a higher success rate.
• Main Problem: The rollout of ERP at the Mirabel plant and then followed by the Saint-Laurent plant did improve, but still had their fair share of challenges. Our area of improvement will be from the results given after ERP went live at Saint-Laurent. The main problem appears to be still be a disconnect between the business vs. project team and properly communicating and training those who will be using the new ERP system (SAP in this situation). While the overall response was positive, not every issue from the Mirabel plant has been corrected and resolved.
• Symptoms: A few symptoms mentioned was that specialized knowledge was concentrated in a few individuals, embellishing the scorecards to mask some of the issues, gaps in understanding of priority between project team and actual business, and finally some feedback on wanting SAP to have done more for an individual’s current job.
• The scope of the problem involves the next plant/location of Bombardier that will have ERP implemented to replace their legacy system. It is vital to establish “best of best” practices to provide a seamless transition with positive short and long-term results. We do not want to take a step backwards with loss of productivity, dissatisfied employees, and weak communication within the organization.

Situation Assessment

• The context of the problem is based primarily on improvements over the last ERP implementation from the Saint-Laurent plant as well as looking at the best of best industry practices for successfully rolling out ERP in a large size corporation. We, as the consultants, must look at what’s been done both internally and externally, and develop strategies to help guide Bombardier into a smoother process. Again, with looking at the symptoms that Bombardier is currently experiencing post-Saint Laurent plant, the company has a clearer vision on how to proceed.
• The decision criteria to consider include: Greater active involvement with management, stronger communication, closer link between business and support group, and increase in productivity and output.

List of Plausible Alternative Courses of Action and Evaluations

• The alternative courses of actions would be to adopt key best-of-best practices that have led to a positive ERP implementation. Based on a study down by Panorama Consulting (Link# 1), we see that five key findings found in ERP implementations done in 2010 include the following:

1. ERP implementations take longer than expected
2. ERP implementations cost more than expected
3. Most ERP implementations under-deliver business value
4. Software as a service (SaaS) implementations take less time than on-premise ERP implementations, but deliver less business value
5. Companies do not effectively manage the organizational changes of ERP

Based on these five problems, I would recommend that Bombardier adopt/continue to strengthen the following best practices (Cite #1):

1.      Executive management should endorse the ERP project and remain active throughout implementation. – As was seen with the Saint Laurent plant, management was very active in meetings, progress reports, and being a pro-voice for ERP. Even the Vice-President could be seen at the location promoting the new software. Moving forward, this model should be continued and strengthened. By having upper management communicate (see item# 5) the feedback and updates to all personnel, it will show that every employee has a role to play and is vital to the success of this rollout.

2.      Project manager should be assigned full-time to the implementation. – By not having to separate one’s time from work and ERP preparation, you can ensure that focus and attention is being given as a high priority. This will trickle down to show employees that this is not a haphazard process, but one that takes time and is meant to have a lasting effect on the organization.

3.      Employees should receive training on how to work as a team on a project before implementation begins. – With SAP, departments are connecting in a way that may be unfamiliar to those who were used to having their own system and methodology for working. For that reason, I would recommend having these team building exercises to make everyone aware and comfortable with sharing information. Aside from that, it is important for everyone to know how their work in the new system can directly (and indirectly) affect others in different departments. For instance, knowing what happens when a wrong route code is entered and the effect it has on logistics can help to prevent these errors and eliminate this “me” mentality.

4.      Employees should receive training before and after implementation. - One key area that was improved from the Mirabel implementation was that not a lot of training should be given before vs. after ERP is live. Instead, it is wise to have the employees aware of the changes coming, but to also provide more in depth training sessions and refresher courses after those employees have had time to use the system. As stated in the case, a lot of unknown problems/issues originated after the system went live and the company would do well to retain a support staff on location (or easily accessible via phone/computer) if questions do arise.

5.      Communication must be maintained throughout process and in an efficient manner. – By holding department meetings, producing a newsletter, or just having impromptu updates, employees will be kept in the loop and will see the importance of ERP implementation. While management would not want to communicate any issues during these phases, it would be wise to be honest with employees and to offer a forum for feedback and suggestions. This is important as the employees will be the ones using the system more than anyone else involved in setting up ERP and when employees concerns go unheard, it can lead to disengagement and resentment.

I am not too concerned about budget costs, mainly because Bombardier is already familiar with the process and as they continue to bring SAP over to their other facilities, there is a positive network effect of sharing information from the other locations and even bringing those “power users” over to assist. Whereas other companies looked at in other case studies may have had experienced far greater risks with ERP implementation, this is because the organization was not ready for change.

                     

Recommendation

• In this scenario, the quality recommendation and the logical recommendation are one and the same. As I’ve mentioned earlier, Bombardier has been through this process twice and are ready to rollout the ERP system to their next location. Which location that is has not been determined, but the course of action is what is being discussed. If the steps above, taken from the best of best practices are implemented, then Bombardier will just be able to improve upon the process and have an even higher return rate (both in employee satisfaction and productivity). As with the Saint Laurent plant, the BMIS team was able to communicate efficiently across the business and provide the proper training, support, and meet the due dates. Regardless of the next plant to undergo this system transformation, management and key personnel involved in the implementation have to remain positive, proactive, and continue to reinforce meeting the timeframe and addressing any concerns that arise immediately.

 Presentation

• The key visuals I would include are:
• PowerPoint
• Clearly showing the benefits of best of best practices
• A list of potential risks and the proper methods for coming to a solution as quickly and efficient as possible
• A cost structure to outline the publication of a newsletter, having training sessions at various junctures during the implementation (pre and post), and an estimated look at productivity after ERP vs. before with the Legacy system.
• To sell this system, I would rely on employees at all levels from the Saint Laurent and Mirabel plant to give testimonies to how ERP has changed their workload/flow. 

Follow-Up Post

Good afternoon Mr. Bombardier,

After taking a few days to review and reflect upon the consultants’ presentation, I wanted to provide you with my feedback on how best to enhance our ERP implementation.  To recap, the consultants stated that, from the list of best-of-best practices, our organization should focus on the following:

Originally, I had mentioned to you that I believed more training was needed prior and after SAP took effect and to ensure that management remained active throughout the implementation phases. Yet, after hearing the presentation, I do agree with the recommendations listed above, particularly on hiring IT specialists full-time and establishing a broad, but standardized, process for SAP features.

            In regard to hiring 3 SAP SMEs, the expected benefits of $130,000 will allow our organization to not have to rely on outside consulting while increasing the knowledge base internally. This can have a positive domino effect of continuing to train and transfer skills to create more power users, especially when it comes time to bring SAP to another one of our locations. I foresee a reduction in wasted time as employees would not have to rely heavily on outside help with possible different hours of operation and difficulty understanding the needs of the business (vs. internal staff who could remain on site).

            In regard to processing contracts, being able to simplify the process for Logistics and automate contract recording processes will also reduce the time and increase the overall amount of contracts that can be obtained. As discussed in the presentation, the one-time cost of $88,000 will produce an expected benefit of $225,000/annually while still allowing retaining half the specialized contracts. By bringing Logistics on board with SAP, you are allowing other areas to interact with Logistics and vice versa. Plus, by not having to constantly go around the system to input manual contracts (or other services), this reinforces the company’s agenda and shows dedication from the management side that they are behind ERP and all its functions.

            I want to thank you again for allowing me to attend the meeting and please feel free to let me know if I can be of further assistance.

Link #1: http://www.zdnet.com/blog/projectfailures/erp-failure-new-research-and-statistics/8253

Cite #1: Pollyanne S Frantz, Arthur R Southerland and James T Johnson, ERP Software Implementation Best Practices, EQ, 25(4), 2002