The ORBIT Case. Mikael Söderström Department of Informatics

Transcription

1 The ORBIT Case Department of Informatics

2 The Case Company An international business group in the forest industry Sales offices, distribution terminals and paper mills in several European countries Expansion by buying mills continuously, but mills still worked independently Paper was sold by sales offices that each and one by tradition were associated with their own mill => Decentralised company with sales organisations associated to the production plants The company acted like several small units on the market => Ineffective utilisation of production resources 1

3 The Case Company The company got a new CEO in 1994 The CEO spends the first year diagnosing the company. During this he finds that: - Modo Paper is focused on production and products - Customers are perceived as annoying - Problematic when we have customers who operate in perhaps ten European countries that want to make one deal with us => The company has to become more marketoriented and deliver superior service To make Modo Paper a winner he initiates a large change program in

4 The Case Company The vision of a new company From production focus to market and customer focus No added customer value in their products => Competitive advantages must be gained through better service Instead of a company consisting of 4 mills, employees should see 12 production lines effectively servicing their customers A new business strategy was formed based on these observations and conclusions With a management consultants top management made a minor reengineering of the company 1997 is spent on business process re-engineering 3

5 The ORBIT Project When the change program becomes a normal project in march 1998 it gets the name ORBIT-2000 (Overall Restructured Businessdriven Information Technique) A project with the purpose of leading the company into a new millennium with a modern integrated information system for all activities, from orders and production to distribution, accounting, payments and follow-up The overall goals for ORBIT-2000 was to create: 1. An integrated company presenting one face to the customer 2. A production network 3. Improved level of service 4. Improved capacity utilisation 4

6 The ORBIT Project To reach the goals the different units of the company has to be integrated To accomplish this integration the management of the company decided to obtain the enterprise system SAP R/3 The integration wished for was not possible with the existing systems; an archipelago of systems The CEO says - With SAP R/3 we tie all units together and become a more efficient organization, enhancing customer service and our competitiveness 5

7 The ORBIT Project A rather detailed description was worked out of the business processes that would implement the new business strategy Present IT-systems could not support the new integrated organization envisioned The company board decided to go for SAP R/3 to replace the old systems with sufficient ITmuscles 6

8 The ORBIT Project The systems Archipelago (Company booklet) 7

9 The ORBIT Project SAP R/3 (SAP booklet) 8

10 The Research Project Planned to be action research, but circumstances made it into an in-depth case study, Triangulation of data sources; semi-structured interviews, participant observations and document reviews Direct observations of project meetings, individuals at work and training classes Reviewed documents include company documents (presentations of strategies, visions and goals), promotional material, project material (working papers, schedules, systems specifications, newsletters, etc.) and training material 9

11 The Research Project Interviews made with - R/3 users in Husum, October-99 & June-00 - Project members ORBIT-2000 in France, December-99 - R/3 users in sales office in Westerham, May-00 - R/3 users in distribution terminal in Tilbury, May-00 - Managers, June-99, October-99 & June-00 - The total number of interviews is about 40 Besides - A number of formal and informal meetings with both project members and R/3 users - Participation in one training class 10

12 The Vision (Change program) What did this vision and change program involve? Change employees view of the business in general (from production to market and customer) They were going to do partly different things than before (reengineered business processes) They were going to do some things different than before (more integration, better service) They couldn t do this without IT 11

13 The Vision (change program) They were going to throw out their tailor made, main frame driven, terminal based IT-systems They were going to install a gigantic standard system, client/server driven, PC based with web interface IT-system 12

14 The company (point zero) ORBIT-2000 Project goals The company ( the vision) Production oriented Product, no competitive advantage Independent mills Individual use of IT 1. An integrated company, one face to the customer 2. A production network 3. Improved level of service 4. Improved capacity utilisation Customer, market Service, the competitve advantage One face to the customer Integrated company Organisational utilisation of IT

15 The ORBIT Project The company were clearly aware that they were doing something of strategic importance Whole change effort in one project A clear message from the top that this was not just another IT-project Putting a senior business manager as project director Putting the IT Director (CIO) as project leader They knew that the vision required the new system to be implemented at the same time that changes in work routines and organizational structure took place They appointed a change manager, who s task was to prepare the organization for the changes 14

16 The ORBIT Project 15

17 The ORBIT Project Although they knew that ORBIT-2000 wasn t a traditional IT-project it was managed this way - Top-management made the strategic decisions - Middle management and external consultants worked out new routines - Key users (super-users) were selected and appointed to work in the project, mainly to help specifying the new system - Future users validated the design of the system - Most time was spent on adapting SAP R/3 - The consequence was that the project lost its strategic focus and became like any other IT-project 16

18 The ORBIT Project Complicated way of working 1. Business Process Reengineering resulting in Business Process Clarification (BPC) 2. The company decides to invest in SAP R/3 to be able do work the way they want to work 3. The project realizes that BPC isn t precise enough in order to be able to adapt R/3 to the new business processes => A Business BluePrint (BBP) is created, a systems specification 4. Adoption of R/3 to BBP 5. Some managers and super users sign-off adapted R/3 modules, but this isn t done based on BBP. What is signed off is what is shown on the computer screen 17

19 What happened? After the implementation of the new system the company became quite chaotic The system had some severe bugs and teething problems Many employees were rather unsure about their new tasks in the organization The old support-structure didn t work due to reorganizations A new support structure was not in place The employees thought it was a big mistake to change the system and the organization at the same time 18

20 What happened? Most super-users spent a lot of time figuring out how they could make SAP R/3 as similar as possible to their old systems Some consultants were more than willing to help out This made SAP R/3 a copy of (some) of the old systems The new strategy became somewhat unclear Most users worked the same way with SAP R/3 as they worked with their old systems, but they regard R/3 as an inferior tool for the job The new system did not support users to work differently 19

21 What happened? The strategic aim of ORBIT-2000 was to create organisational utilisation of IT This was not reflected during systems development, which seems to have been dominated by a focus on individuals use of IT This is not surprising since the idea of IT as tools for individuals permeates the company as well as most systems development methods The outcome of this way of working was to preserve a large part of the work practices that it was ORBIT-2000 s ultimate aim to change Through its operations ORBIT-2000, despite running smoothly, unintentionally but rather systematically undermined its own strategic aim 20

22 What happened? Company at the beginning of change ORBIT-2000 Envisioned company described in blueprint A B Company after change Company after change 21

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