Tektronix Inc. ERP Implementation [MOT6107-IT Strategies]

Georgia Institute of Technology
Executive Master of Science of Management and Technology (MSMoT)
MOT6107-IT Strategies
EMSMOT 11
Tektronix Inc. Case Questions

(a) What are the typical reasons why IT projects (and ERP implementations in particular) fail? What are some of the best practices in managing IT projects to reduce such failures? Base on answer on your past experience, trade articles and research on the Internet

IT projects fail for many and varied reasons. At the outset, the project leader must be given an adequate scope of authority and an executive mandate in order to achieve the desired objectives. Furthermore, the leader must be able to create a project team who will use their delegated authority generate buy in across the project and maintain the momentum needed to sustain a long-term cost and time intensive project. Beginning from the executive and board level, Neun’s ERP project carried with it an overarching authority that could access the entire global organization.

Neun’s approach also involved the divisional leaders such as Roy Barker, president of CPID. This allowed each department to participate in the framing of the implementation around their unique business processes. By fostering project buy-in on the divisional level, and having the executive committee’s blessing helped to ensure that the mandates were created and that they would not create unnecessary structural upheaval in fundamental division level processes.

Improper planning and scoping will always lead to disaster and failure. Neun demonstrated a unique ability to conceive a simple yet broad reaching schema for the ERP implementation plan. His vision made it possible to stay within project goals and measure against these milestones. The plan offered clarity of the progress throughout the project. The progress was captured and celebrated as “waves”. This solved a common shortcoming of IT projects, loss of momentum. Each wave built confidence in the company ranks and reinforced the impetus of the project.

Neun also did a lot of to “sell” the project to the various compartments around the global entity. There existed a lot of pain and inefficiencies. “Five Calls Does It All”, leads to employee dissatisfaction, increased costs, reduced customer service levels, delayed order fulfillment cycles, and overall losses due to operational inefficiencies. This negative feedback loop also prevents Tektronix from growing through disposition, acquisition, and expansion of its various business units.

In past experience, an IT project is usually driven from an IT manager level and not from the business manager or executive level. The initiative takes form within the ranks of IT, gets approved somewhere up the ladder without adequate investigation into whether, where, or how the proposal will fit within the entire organization’s framework. Then, the approved plan proceeds without proper research, requirements gathering, obtaining user buy in, or setting relevant success milestones. As each subsequent project falls short of the mark, the feedback amplifies and generates more and more dysfunction in the environment. This dysfunction takes the form of siloed data resources that are non-interactive with other organizational resources. This leads to missed business opportunities related to the business tools not working in a responsive and rapid manner. The dysfunction cripples the organization in waves as each project unnecessarily removes efficiencies with each failing project.

(b) Did Tektronix effectively manage the risks associated with implementing an ERP system? Analyze the salient features of Tektronix’s approach to implementing the ERP system.
Did Tektronix effectively manage the risks associated with implementing an ERP system? Analyze the salient features of Tektronix’s approach to implementing the ERP system.

Tektronix managed implementation risks by setting a well-researched plan in place supported by full buy in from the top levels of the organization. The pains and current shortcomings were well documented. The inability to access real time and reliable date of the status of assets such as work in progress, finished goods, and the location of the inventories all spoke of a complex and potentially paralyzing business infrastructure. The thorough review of these shortcomings generated a strong basis from which to implement a planning model to simplify the environment and then integrate the new platform to each separate business model, in effect creating the “global business model”.

They reduced risks by identifying which processes were substantively similar and could be shared by all the various business units. Accounts Receivable, General Ledger, a common Chart of Accounts, a central customer services registry (CRM), and a single-item master table would tie all the divisions together. This provided near real-time visibility into worldwide operations.

Enrolling the Key Players in each functional and geographic area further reduced risks to the project. These ran interference and acted as negotiators when business change was needed. This resolved issues through a combination of technical and functional strengths. Getting project buy in from each of the divisional leaders, as well as the IT department management, Neun had the necessary basis from which to make the tough calls. The downsizing of the European employees would have been a difficult play considered the labor law environment. And there is more – Neun managed to impose English as the worldwide internal company language. Foreign languages were only used in customer facing interactions. Imagine what it must have been like to adopt this management directive in a country like France, who have a notorious disdain of other languages and a pride of their own. One would have to have inscrutable authority to make such deep changes to the cultures of the global offices.

Apathy is an often-overlooked risk in large projects that consume long time frames. Neun’s team created a rhythm of waves. Each milestone was celebrated. Each project phase was delivered in waves. Each wave built upon the previous successes. The successes built heightened levels of eager anticipation, project confidence, and general satisfaction during the change implementation.

Vendor issues were well addressed. In IT, as in so many other endeavors, it is best not give your vendors the ability to “punt”. They will, when given the opportunity, point the finger at some other vendor and cast the blame. That vendor will do the same in turn to the next vendor, and so on. The only way to end the dissonance is to somehow orchestrate a meeting between all these players and force them to confront the matter. There is usually no easy or expeditious way to facilitate such a useful meeting. Tektronics addressed the matter rather handily. After selecting Oracle as their platform, they made sure to hire in Oracle’s own consultants. These individuals would have access to all the inside people who had the answers and latest patch fix upgrades. They also would have no excuse whatsoever to be able to pass the buck to some outside vendor.

Roll-out risks were managed by carefully orchestrating the timing and order of rollouts. They began with US CPID the simplest organization moving to US VND, and then to US MBD. The MBD was the most complex business model. Having proven the functional solidity of these three implantations in the US divisions, they chose to roll out in global regions based upon which would be incrementally more complex in terms of culture and language technical challenges. Overall, this move went from basic Western ISO, Latin based character sets and languages to the complex 2 byte Asian character sets and there associated languages. This approach minimizes the chances that implementation errors will be magnified via global replication.

(c) Overall, what is your impression of the ERP implementation at Tektronix? Is there anything you would do differently?

Tektronix ERP Implementation Team employed relatively simple approach to such a complex and far-reaching challenge is quite impressive. The simplification of every single business process was achieved through this effort while preserving the integrity of each division’s unique business driven processes. The overall time line was surprisingly short. The breadth of accomplishment and the substantial gains in performance monitoring and service delivery are obvious, even if they are hard to quantify in terms of real dollars. In an industry that rapidly moved from expensive high margin products to a thin profit margin commoditized model, Tektronix ERP project, in all likelihood, is one of the main reasons the company remains viable to this present day. Therefore, we are satisfied with the manner in which this project was conducted, and would hope to bring the same level of insight to our own business challenges.