Tektronix, Inc.: Global ERP Implementation

Presented by-

Deven Sudame (131119) Harsh Asthana (131125)

Harshita Singh (131126) Kamesh Joshi (131128)

Manjary Agrawal (131130) Mihir Thakor (131131)

Mradul Saraswat (131133)

History

• Founded in 1946 as electronic test equipment maker in Oregon.

• Expanded into manufacturing electronic tool and devices

• Business split: 1) Measurement Business Divison(MBD)

2) Color Printing and Imaging Division(CPID)

3) Video and Networking Division(VND)

• Presence in 60 countries and a worldwide leader in Oscilloscope, television test measurement and monitoring equipment.

Need for New IT system

1) Lack of integration and presence of incoordination of IT system.

2) Global competition was increasing

3) Financial performance was suffering

• 460 legacy systems in US alone

• No standardisation

• Redundancy of order entry at multiple places

• Chance of error

• Incomplete and Inaccurate information

Moving Towards ERP system

• Neun (CFO) vision’s: “Frankfurt is Orlando”

• Initiated by Roy Barker, President of CPID

• Inability of existing system to support the division

• CPID expansion plans: from niche market of graphics terminals in mainframes to mass market PC based customers

• Easy justification for ERP implementation

Expanding The Vision

Neun’s vision for the enterprise had 3 components

• Separability of the businesses

• Leveraging shared services

• Staying as “plain vanilla” as possible

Planning for ERP

Selecting Software Project Organization &

management

Worldwide business model Project Schedule

Selecting Software

•Retain manufacturing package

•Buy v/s Build

• Single vendor ERP strategy to refrain from issues like

• Maintenance

• Integration

• Upgradation

•Choosing Oracle

Worldwide business model

• Steering committee

• To develop a “Global business model”

• To develop “Business practice changes and guiding principles”

•Complex Architecture

Business practice changes and guiding principles

ERP System Architecture

Project Organization and Management

• Key roles like program manager, user leader, global leader, functional experts, power users, functional sub teams and test teams.

• Combination of technical and functional strength to resolve issues.

• Project headed by Carl Neun (CFO) – final arbiter and had complete authority on implementation. Also established a set of fundamentals.

• Division presidents and Neun acted to resolve major project management problems.

Project Schedule

• Carl Neun believed scheduling much more important than budget.

• A single change program consisting of many “waves”.

•Waves were scheduled to deliver a specific functionality with feedback expected.

• Also some flexibility in scheduling.

Implementation

• Split into five major sub-projects

• First led by Gary Allen, IT Director – Finance and HR Systems, two through four led by divisional IT Directors consisting of OMAR projects and the final global rollout led by Gordon

• Financials in parallel with OMAR in CPID division (first in US)

Implementation - Financials

•Goal to have single view of all financial information worldwide

•Required a number of changes in business processes

•Allow visibility of up-to-date information

about financial status by standardizing charts-

of-accounts and eliminating complexity

Implementation – Financials (contd.)

• Europe with larger changes

Profit-center to a straight commission basis

No supervisory duties but only administrative

Change in financial transaction processes with single location i.e. Marlow, England

• Single language and single measurement basis inside Tektronix

• Sales people using local language

• Oracle package not satisfying all requirements

Implementation Support

• Small and large consulting firms as well as independent consultants

• Aris Consulting specialized in Oracle implementations

• Functional expert teamed with user and IT leads from Tektronix

• For less functional and business expertise lower cost technical consultants, developing interface between Oracle and manufacturing package small firms

• Cost reduction due to resell the interface to other companies

Order Management/Accounts Receivables (OMAR)

• Omar implementation was similar to financials in its approach, but different in execution. “Plain Vanilla” implementation is not fully possible here because of following reasons :

1.Different business lines have different types of customers.

2.Oracle did not have some of the functionality required for OMAR.

3.Customer facing documents should be in local language.

4.Each country had slightly different legal language for official documents.

Implementing OMAR at CPID

• Natural choice – Favoring Management, build to order stock.

• Initially launched in beta version and instability forced implementation team to spend months on debugging.

• Initially Poor results by large consulting firm, later hired Aris, oracle and other consultants.

• Tektronix took responsibility of business change while consultants worked on the system details.

• For additional Manpower Tektronix hired contractors from otther small firms.

Implementing OMAR at MBD

•More Complex Structure, large number of Products.

• CPID assembled products domestically and relied heavily on local distribution centers, while MBD’s new business model demanded direct shipment to end customers.

• Hired Oracle consultants at a very early stage.

• Extensive testing was done which delayed the project but resulted in zero startup problems.

Implementing OMAR at VND•Advantage:

• VND was the smallest of the three divisions at Tektronix.

• The implementation team was in a position to benefit from all the prior work that had been done in the other two divisions.

• Issues:

• The most complex products.

• Division was in the process of absorbing a recent acquisition.

Implementing OMAR at VND

•VND went for a rapid implementation.

• They were helped by their small size, since few people needed training and few people could mount aggressive resistance.

• In the end, the fast, high risk approach worked for VND.

• They were able to implement ERP quickly.

Global Rollout

• Taking the “wave“ approach to the international sites, starting from Europe.

• Because implementation in Europe would address majority of international implementation issues.

• Started with distribution center in Holland because everybody used that.

• Implementation was successful. They were able to ship even more quickly than before.

Global Rollout

• After Holland DC implementation, the Tektronix team opted to implement Oracle in pilot set of countries representing both EU and Non-EU nations.

• This followed by big bang for the rest of the European countries

• Big bang implemented all three divisional systems together.

• After Europe, the American implementation adopted similar big bang approach.

• For implementing in Asia/Pacific region Tektronix team first went after English-speaking countries Singapore and India.

Global Rollout

• After this two countries they tackled the language difficulties in Korea, Taiwan, and Hong Kong.

• The final country to be implemented was Australia, which had older, mature business processes, and complex legacy systems needing simplifications.

• The rollout covered 23 countries in less than 500 days.

Results

• Same day shipments in some divisions rose from 15% to 75%.

• Tektronix had visibility into business goods inventory regardless of where the inventory was located

• Improved inventory turnover ratio.

• Employees satisfaction level increased.

Results cont…

• Improvement in data integration lead to drilling down of detail to single account

• Better position to expand business.

• Company become more flexible to acquire new businesses.

• Time spend on data collection reduced from 90% to 10% and time for analyzing