UK: The backbone of a better business - IT integration across Europe

IT integration is not a luxury. Growth by acquisition has resulted in a mass of disparate systems for many major manufacturers. The situation is usually manageable when member companies operate autonomously. When, however, the group wants to move forward as a unified whole, common financial reporting is simply not enough. Without effective reporting structures, the ability to make like-for-like comparisons across the group and visibility of the underlying detail, wholesale business improvement is much harder to achieve.

Our consultancy and PeopleSoft™ practices have been working with a global producer of fast-track building products to alleviate just this situation. Although the company had built a strong business by approaching national markets through independent operations, it now recognizes the need for a single view of its entire European operation to drive best practice. A common IT platform will provide the backbone for a centralised approach to cost reduction, planning improvements and process and supply chain efficiencies.

We were initially engaged for six months to review all business processes, document them in their ‘as is’ state and recommend both long and short term improvements. Although many companies try to shortcut this stage, it pays dividends in the long term. It builds a thorough knowledge of the business, helps plan effective process changes, makes sure that the IT chosen is right for the task and creates business process owners who will be capable of maintaining momentum once the implementation is underway. The company chose Deloitte as its partner because, unusually, we understand the combination of business issues and software capabilities.

To carry out the mapping exercise, our teams sought input from senior management and production operatives alike across facilities in five European countries, and dissected the findings with central project groups based in France and the Thames Valley. Interestingly, contrary to individual plants’ expectations, there was a high consistency of processes and, therefore, of software requirements across the organisation. We recommended a move to a common business process model for manufacturing and shipping with specific changes made to accommodate national preferences in customer contact. The underpinning IT is PeopleSoft Enterprise One (previously known as J D Edwards OneWorld).

This fully integrated system will eventually serve 1000 users across all five European companies, handling financial, procurement and stock management, planning and forecasting of raw material and inventory, shopfloor scheduling and customer-facing operations.

The business case was approved by the group in the autumn of 2003. Since then, our team has been working alongside PeopleSoft consultants to support the company’s own members through the scoping, planning, design and construction phases. Importantly, this client has taken the staffing of the project extremely seriously which is reflected in the quality of the proposed implementation. All of the key elements have a business process owner and there is a Project Director drawn from the Senior Management Team.

We have delivered an initial Common Business Model design which is being validated and localised ready for roll-outs which will start in March 2005. The project is on target to deliver an upfront reduction in working capital of £11 million through reduced inventory throughout the supply chain and annual savings of £7 million through process improvements and reductions in IT costs. Additional savings are expected through improved pricing accuracy, improved delivery to promise, better understanding of the relative profitability of customers and better sharing of promotional costs.

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