Tektronix ByWeNotI

Tektronix, Inc.
: Global ERP
Implementation
Case Write-up
Submitted byGroup 2-We not I
Mohit Almal
Manish Madhukar
Ritu Madhogarhia
Nabendu Kar
Piyush Golus
a) Why did Tektronix implement ERP in stages? How does a company decide between
implementing in stages and going big-bang?
Tektronix implemented ERP in stages for the following reasons:
The organization was not ready to commit to the changes expected for the postimplementation business environment
The proposed implementation represented a significantly different method of doing
business than the current business environment
Implementation in stages will also give them flexibility in making decisions
This approach allows for regular feedback and reviews after each phase.
Hence,
encouraging learning from previous experience and mistakes
The IT infrastructure was running huge legacy programmes hence its flexibility to take the
entire ERP project at once was risky and cost intensive ,a stage wise implementation was
therefore undertaken
With constant victories through small achievements of going live with ERP gave high team
morale and also defined a clear vision and objective of the project
Decision between Implementation of ERP in stages and going big-bang:
IT infrastructure: A company having various application systems running through its different
functional units with huge legacy systems is more likely to have its ERP implementations in stages
so as to implement ERP only in those functions, which are, considered to be of strategic importance
Integration: When a company wants the advantage of getting the full benefit of the integrated
software across all functions of the organization it generally goes the big bang approach
Multiple Location: Those companies that are geographically dispersed need reliable communication
links for on-line processing and uniformity in its implementation often go for ERP in stages as later
they can be rolled out to other locations. Tektronix was having presence in 60 countries, mainly USA.
Going for big bang approach at a time was very difficult from the point of view of its efficiency and
effectiveness from financial aspect
Customization: When an organization wants customization, the job of fitting the ERP software to
meet the demands of a particular organization and mapping of the organizational structures,
processes & environment of the organization into the corresponding model of the organization that is
embedded in the ERP software it generally prefer going through stages
Continuous Workflow: Some organizations opt for 'Big Bang' ERP Implementation Methodology,
where, the ERP team works in parallel and configures the ERP system, without disturbing the current
process workflow. It is very important to keep the existing business process working
Dependency: The problems of implementing in stages are that each stage relies on information from
other stages. During the phasing in of the system there may be incorrect messages, so companies
strongly prefer big bang for all the key modules
For these reasons, the staged approach to implementation was better suited for large-scale projects
like ERP that require significant finance.
b) How did Tektronix manage the risks of ERP implementation?
Tektronix faced implementation risks. As an older company, primarily a manufacturer of measurement
instruments and colour printers, they faced a much more complex legacy environment, a more diverse
product family, and a more geographically distributed implementation rollout. Tektronix successfully
controlled the various risks associated with ERP implementation
The risks in ERP implementation:

ERP system implementation demands a great deal of planning. If planning goes wrong, there
are very high chances of failure
Technical difficulty in implementing ERP
The implementation might take longer time than expected
Failure in matching business process with the ERP system
The actual cost might exceed the budgeted cost
o Tektronix controlled the various risks in the following ways:
Waved implementation: Their ERP implementation was viewed as a change programme
that consisted of different waves of change. Each wave in the program would deliver
functionality to a different business unit or geographical region. Although each wave would
be managed independently, the overall project team would manage the interdependencies to
ensure that program remained on course. The advantages of wave implementation are:
Feedback and how well it is being implemented
With each successful wave, there is victory that can keep morale high
Waves ensure flexibility
Attention to schedule: There was complete importance given to schedule. This mitigates
the risk of delays. Momentum is maintained and it helps to maintain discipline among
employees
Strong responsibilities: Carl took the overall responsibility very well. A steering committee
was established to monitor the overall implementation process. There was assignment of
responsibilities. By resorting to monitoring and steering committee, it becomes easy to
identify risks and therefore work towards them
Vendor: Tektronix did not spend much time in comparing features and costs across vendors.
They chose Oracle, as their environment was compatible with Oracle. Tektronix took three
years to implement its Oracle applications. In the first year they implemented a general
ledger in 16 countries. Then they focused on converting accounts receivables and cost
management in its regional accounting centres throughout the world. After financial
applications were implemented, they added new capabilities as part of their business unit
product information
Strong Management Support and Building a Coalition: With the mandate that Carl
obtained from the CEO, he was able to execute the project with unlimited authority and cut
through the politics, allowing him to make quicker and more effective decisions. He also
received strong support from the presidents of the business divisions, various IT managers, in
each division. This helped lower resistance to change and sustained momentum for the
project as it quickly established a strong coalition of the willing to guide and support the
change
Minimum interference: Carl was given complete freedom in the implementation. This
helped in making quick and efficient decisions
Quality of team: There were full efforts to choose the right project team, and there were
consistent efforts of proper communication
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
c) What is your overall assessment of the Tektronix ERP project?
Wave approach: The wave approach provided a number of advantages. Each wave supplies
feedback as to how the system implementation is proceeding and how well it is being
accepted. Waves are also flexible; if a new release of the ERP software becomes available
then the program managers can add a new wave
Time conscious: Rather than having the best-of-breed approach, a single vendor was
appointed for better demonstration and efficient time management. Multiple packages from
different vendors meant more issues of maintenance, integration and up gradation. Even the
ERP vendor was selected in short time span as Oracle emerged their clear favourite
Plain vanilla strategy adopted: The idea was to minimise the number of changes to the
software after it was purchased. This would facilitate standardisation, maintenance and future
upgrading possibilities. In such a global architecture, it was essential to retain the integrity of
the software except in conditions where competitive advantages could be gained. This
approach also enabled a number of changes in the business processes around the world, which
in turn provided the stimulus to implement any improvement. Even traditional local needs were
sacrificed in the name of standardisation. Here we can say that Tektronix choose
standardisation over autonomy in their ERP
End user acceptance: One of the most important parameters of a successful project is the
end user reaction. In case of Tektronix the buy-in for the ERP project was high. Employees felt
more satisfied and effective at their jobs.
Comparability factor: This refers to creating a common platform among diverse units.Since
standardization was achieved, comparisons were easily made, even though functional units
maintained separability.
Cost control: The entire ERP implementation focussed on getting the project running with no
cost overruns. Selection of consultants was split into two sections. Any mission critical
decisions and scope of the applications were managed by Aris Consulting which was a high end
service provider. Roles of lesser functionality and business expertise were managed by low cost
consultants
Goal driven top management: Tektronix was successful in its ERP implementation primarily
because of the attitude of the persons behind the project. The top management comprised
goal driven professionals who could understand the need of the moment and were driven
by the need for change. Moreover they knew exactly which levers to focus upon
Post ERP implementation scorecard
Logistic improvements:
Day Sales Outstanding and inventory levels show improvement
Inventory visibility improved regardless of its global location
Same day shipments increase from 15% to 75%
Prior 24 hour credit approval wait virtually eliminated
Data level improvements:
Data integration allowed financial analysts to drill down multi level in accounts
Financial book closing process accelerated(earlier it was 2 weeks)
Information leveraged to make better decisions
Reporting on sales become more efficient
Qualitative improvements:
Satisfied end users
High employee morals and satisfaction
Feeling of ERP as an enabler irrespective of the project cost incurred is optimistic

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Tektronix, Inc.

The risks in ERP implementation:

Feeling of ERP as an enabler irrespective of the project cost incurred is optimistic

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