Cut and paste for business processes

Foils and laminates manufacturer API is about to go live with Oracle's E-Business suite at its Laminates Division in NW England, and expects to roll the ERP system out across all of its global businesses – five operating groups and 15 locations – by the end of next year. That's fast, and Iain Anderson, API's IS director, says it's down to Oracle's On-Demand services, it's Business Flow Accelerator methodology and systems – and doing first things first. Anderson explains that, as with most businesses, the pressure was on to get economies of scale, and to drive efficiencies and opportunities on the back of real-time business information and automation. But that requires visibility and standardisation – bringing data together and making it accessible both at the systems level and in terms of business processes. It also requires a cohesive IT and network infrastructure. "We didn't have that," he says. In fact, Anderson inherited the all too familiar mess – the result of piecemeal growth through well-intentioned but ultimately flawed local controls. "From PCs to the ERP system, we needed to do some serious work to get the infrastructure, sorted out, settled and stable," he says, "so that's what we concentrated on first." And that was key. He indicates, for example, that there were around 10 email environments across the sites: "It was all Microsoft Exchange, but different versions, some connected to the outside world without security…" That's more common than many realise, so worth a thought. At API, it's all been consolidated with standard anti-virus cover, policy-based management and the rest. Beyond that, on the software side, there were potential licence issues: "Licences had been bought, but given to users … and they didn't know where they were." Again a classic story, needing tidying up. Then on the hardware side, it was a picture of PCs being built in-house to save £50. "We changed all that too, and standardised on Dell PCs and servers throughout." And on the network infrastructure: "We had various suppliers, operating at different bandwidths, some with voice and data systems that couldn't talk to each other… Now it's all BT's IP VPN and it's seamless." He admits it took a considerable effort and investment – for the networks alone, around £100,000 in the UK and a further £50,000 in Europe plus £80,000 in the US. But the savings in terms of service costs alone have been enormous. "It was a no brainer," says Anderson. "ROI was less than a year." Apart from that though, it also resulted in rapid improvements in business users' confidence in their systems and the available business information – and it hugely reduced exposure to risk. "It meant the users had better basic tools to do their jobs and could benefit from accessible information. Customer service was up and costs of the whole infrastructure were down," says Anderson. Then attention turned to the business systems themselves – at the time, a mix of systems across its sites including BPCS, MTMS, Syspro and Compass. "They're all great systems, but the company had given the local businesses autonomy, so there was no consistency in set-up or business processes, and a high degree of bespoke software. It had all been done to provide the businesses with what they believed they needed at the time, but it meant the organisation as a whole didn't have the visibility it needed. £1 million to stand still "Also, if we stayed with them, we would be forced to follow expensive upgrade paths that would involve considerable rework simply to replicate existing functionality. We would have spent over £1 million over the next two years just to stand still." Clearly, not an option, and there was another classic issue. "People were using departmental spreadsheets and workarounds. They were doing a great job, but it's a lot of effort to get information that's out of date." The bottom line: "We had to standardise: we wanted to maximise consistency and minimise support costs," says Anderson. "We looked at our existing spread of ERP systems and they're all mid-tier applications, and we're a mid tier company, but although they were all doing an OK job, none would do everything we wanted off the shelf, unless we customised – and then you're back to Square One." So he looked at the bigger guns. "We had the perception that the likes of PeopleSoft, Oracle and SAP would be too expensive and not targeted at our kind of company. But we were encouraged to start discussions, and we established very quickly that there's a lot more to be had out of a Tier One suite." He also established that price and the software vendors' focus were not as he'd thought – and eventually selected Oracle. "The E-Business suite was a good fit for our businesses. We're a mix of make-to-order and to-stock, and we also need to handle the production variability and variances typical of most process sector companies. Also, Oracle's approach to us as a customer was excellent: it's a real one-stop shop, with all licensing, consultancy services and the hosting environment included." In fact, API has gone the whole hog – unusually for a manufacturer, taking the full Oracle On Demand service. "There was a lot of debate about it," Anderson concedes. "The perception of many was that we could do it cheaper internally and have more control over it. But we looked at it professionally and over a two year period it proved cheaper to outsource than to do it ourselves even by setting a high baseline on the SLAs. "And it takes a lot of the headache away. Now, we'll be looking after the IT infrastructure ourselves, but Oracle will do the rest. Having the application expertise in-house would mean a very high investment, and even if we did that we couldn't do it as well as Oracle." He also makes the important point that part of the deal is continuous review and IT cost reduction. "We went through a process recently with them, and they re-profiled our usage. Oracle came to us and said the per-user fee would give us a significant saving. It's great." Turning to the ERP implementation itself, Anderson says Oracle Consulting Services was instrumental in establishing the high level end-to-end business processes. "For us, there are six business flows, so we encapsulated those and adopted Oracle's recommendations, mindful of our business goals – which included the need for a global template for rapid roll-out." Making that work took the first six months of this year – building the business process templates for the companies, sites and departments across the UK, Europe and North America. The firm has been at pains to ensure that ideas, methodologies and experience are shared globally and validated, using both real and web hub meetings. It also used Oracle's Business Flow Accelerators to make that work transferable and thus reduce the cost of integrating business applications. Anderson says that achieved 70% commonality, the rest still having to be site-specific, but still out of the Oracle box. He also comments that using Oracle processes and templates has meant the promise of very rapid implementations. "Without this approach, it would have been six months of analysis and four months of set-up for each of the businesses," he says. In fact, the first implementation is due to go live in December at the Laminates Division in the NW of England. The Foils division will be next, and the entire global implementation will be complete by the end of next year. That includes full top end business dashboards with total global information visibility and Oracle's much vaunted daily business close.