There are many cases where organizations operate across multiple sites — where different divisions within the company cover the entire asset lifecycle, from design and manufacture through to service and project management. And all of these divisions could be running different ERP systems, or at least different instances of a common ERP.
In the Aerospace and Defense (A&D) market in particular, this can often bring about huge challenges in being able to deliver on agreed SLAs and within a given contract.
Eliminating silos of ERPs
Having multiple ERP systems in place results in multiple reporting tools, multiple analytics and multiple supply chain monitors. This all results in fractured reporting, meaning that the organization has no way of understanding or optimizing performance across all operations and identifying where actions can be improved.
All in all, having multiple ERPs in place can make for extremely expensive infrastructure, software, maintenance and contracting capabilities. This, in turn, means that the organization lacks agility to adapt to market changes, adopt the latest best practice, adhere to standards across the board and remain consistent in conforming to regulatory control.
But how can this change?
By implementing a single, centralized management solution across the organization, it's possible to see a single version of the truth across all operations — and this dynamically unlocks value by actively managing performance, thereby supporting business process change. And we're not just talking about internal performance here — additionally, a single-instance ERP system can significantly help in interfacing and integrating with external supplier or customers' systems in a more efficient way.
But putting in place a single ERP solution does not happen overnight — a change management strategy is key to achieve adequate buy-in from stakeholders across different departments. By using the same ERP system, all departments will be measured and reported on in the same way resulting in a lot more visibility of what goes on across the organization — so employees have to be on board.
Here is a five-step methodology to implementing a single-instance ERP solution across the organization:
1. Initiate the project
The first step of any change management strategy has to outline the end-to-end process, determine the technology to be implemented and communication method to employees. By assigning a project team, the scope of the project begins to be discussed, stakeholders are engaged, and KPIs are set to define the output requirements of the project.
2. Map out the solution
The next step is to review what you do now, and agree the future procedures as required. By specifying new interfaces and defining the transformation requirements at this stage, it's possible to get to the testing stage of interface units at this early point in the project. It's important to assure that the ERP solution design meets business needs from the very top of the organization down to the lowest levels.
3. Establish the solution
Once decided upon the centralized solution, it's important to test end-to-end processes as part of an application solution test, which usually requires sample volume testing — perhaps even from different departments to ensure consistency of functionality and reporting capabilities.
4. Implement the solution
This stage sees full solution testing, as well as using Corporate Performance Management (CPM) tools to train expert users in the technology. By facilitating end-user training, it means that employees will be ready once the solution goes live, thereby ensuring a seamless transition.
5. Go Live
And finally, the solution will be ready to go live. This is the point at which you apply the test configuration to the live environment, start the management from day one, and continually evaluate performance levels using advanced Business Intelligence (BI) tools.
Saab solves it
One company which did exactly this is Saab. As a company of around 14,000 employees, Saab delivers a huge range of products, from complete weapon systems and defense solutions to software products highly integrated into the customer's solution, as well as solutions in the civil security market. The company has grown significantly through a number of acquisitions, and is now also a world player in air traffic management.
When Saab was first founded, it consisted of around 20 separate business units operating multiple ERP systems. But three years ago, the company decided to move to just one common platform — and selected IFS Applications to do so. With their latest installation, Saab has now replaced almost 100 legacy systems.
Improving data integrity
Having just one integrated ERP system has provided Saab the opportunity to manage data in a secure way, which is proving not only reliable to the company, but also its customers and partners too. Maintaining data integrity is essential for any company operating in the A&D market, and implementing a centralized ERP system across all departments eliminates the need to transfer data from system to system as it moves from department to department.
As a result, data integrity is significantly improved, at the same time as providing a 360 degree view of operational business processes and performance in order to successfully meet those ever-demanding SLAs.
Kevin Deal isVice President for Aerospace and Defense at IFS North America.