Information Systems in Organizations

German software giant SAP (SAP), the 41-year-old maker of financial and supply-chain software, has been slow to shift to cloud computing and has struggled for years to catch up to U.S. competitors such as Oracle (ORCL) and Salesforce.com(CRM). Among other things, it’s broken some of its brightest engineers into startup-like teams far from its main campuses. While waiting for them to spawn new products, the company is doubling down on plan B, for “buyout.”

http://www.businessweek.com/articles/2013-08-01/sap-invades-silicon-valley-via-acquisitions

Coca-Cola Supply Chain Management Success Story

A Modern Supply Chain for a Classic Beverage

When it comes to the world’s most powerful brands, Coca-Cola is still number one. The iconic beverage maker, which has dominated the global soft drink market for more than a century, continued its 12-year reign at the top in 2011, according to Interbrand’s latest global rankings.

For Coca-Cola, achievements like this are byproducts of a vision and an operating framework that is built on excellence. At Coca-Cola Enterprises (CCE), the exclusive Coca-Cola bottler for its territories in Western Europe, the company’s goal is to be the number 1 or strong number 2 choice in every category it competes in.

But on the road to long-term, sustainable growth, CCE faces similar challenges to many other manufacturing and logistics businesses. A top priority is replacing dated systems with a modernized platform across markets to create a cohesive view of metrics and streamlined processes.

Bottling iconic brands in Europe

CCE is one of the world’s largest marketers, producers and distributors of Coca-Cola products. CCE buys concentrate from The Coca-Cola Company and combines it with other ingredients to create some of the most popular beverages in Belgium, Great Britain, France, Luxembourg, the Netherlands, Norway and Sweden.

In 2010, CCE completed a significant transaction with The Coca-Cola Company, selling its North American operations, while retaining its European territories and acquired new bottling rights for Sweden and Norway.

CCE’s executives recognized that establishing a uniform IT program across all of its business units would be critical for expanding CCE’s footprint in Europe.

“It is very important for us to have a set of consistent standards and processes, so that when we acquire and integrate new territories into our business we can easily put those practices in place in a short time,” says Kemal Cetin, vice president of European deployment at CCE.

Driving regional expansion with IT

As part of its Genesys program, CCE set out to deploy a new supply chain management solution at all 17 of its European plants. The new system would replace and automate many of CCE’s supply chain processes and required new skill sets to ensure the required speed of deployment.

CCE needed a partner to help deliver this new SAP-enabled business transformation. This would involve not only delivering a technology solution, but also training users on the new processes to ensure the full benefits were realized.

CSC was selected because it has combined a strong ‘front office’ business transformation and change management consulting capability with a ‘back office’ technology delivery capability for CCE since 2008. Prior to Genesys, CSC had already been supporting CCE’s applications with SAP, including order processing, manufacturing, financial transactions, human resources, procurement and other related processes.

“We started Project Genesys not as an IT project, but as a business transformation project to enable CCE’s day-to-day business to work in a harmonized way,” says Cetin. “Since CSC knew our processes, people and solutions, we thought that would carry over very well into the deployment process, and especially from an acceleration perspective, because the learning curve would be relatively short.”

“Beyond that,” Cetin adds, “CSC has very experienced and capable people from an implementation perspective. And, we needed to make sure the cost-quality equation worked for us. CSC met our criteria and satisfied us from that perspective as well.”

Filling a gap between supply and demand

The Genesys program is an integrated SAP Enterprise Resource Planning (ERP) solution that will replace CCE’s legacy systems in the processes of “order to cash,” “requisition to payment,” and “record to report.”

Genesys will allow CCE to shorten cycle time in these processes and be more productive. It will also help bring more visibility into the business and improve decision making.

“We are a shelf-replenishment company, a supply chain company, a sales and customer services company,” says Esat Sezer, senior vice president and chief information officer of CCE. “It is very important for us to integrate our manufacturing plants all the way up to the replenishment of shelves in the retail outlets. Through the information side of the equation, we are basically tying those two ends of the business process together: the manufacturing side, which drives the supply of our product, and the shelf-replenishment side, which drives the demand part of our product.”

CSC is playing a major role in expediting the delivery of Genesys across CCE’s operations, allowing CCE to deploy Genesys at multiple-country locations at a much faster pace than if CCE had forged ahead alone.

“There are a lot of technology areas that require some capacity that we might not have or some technology areas that we might not have the knowledge about,” says Sezer. “So whenever we have those knowledge gaps, we turn to our strategic partner CSC to fill in. Whenever an accelerated deployment need arises, we leverage CSC, and we can generate value much more quickly.”

Questions:

1)  If you were the Chief Executive Officer of Coca-Cola Europe would you develop your own team to customize a Coke SAP system or hire an outside company to implement the new SAP system?   

2) How would you approach transitioning the 17 manufacturing plants, secondary bottling companies and numerous warehouses?  Would you transition one plant at a time and have two systems in place for a period of time or transition all of the locations at the same time?      

3)  If you were Esat Sezer (CIO at CSC) would you be nervous knowing that if your transition does not go well, you could cost Coca-Cola Europe millions of dollars as well as hurt their brand equity? 

AVON incorporates a new management order system for its processes but shut it down after employees found it difficult to use and it disrupted operations.SAP refuses to take full blame for this pointing out the fact that their software is “woking perfectly as designed despite any issues with implementing it”

http://www.forbes.com/sites/benkepes/2013/12/17/avons-failed-sap-implementation-a-perfect-example-of-enterprise-it-revolution/

1. Do you think an enterprise software is efficient or ” working perfectly as designed”  if the end user cannot use it?

2.If enterpise software is going to keep up with the way the world is moving, do you think it will get easier to use or will it get more detailed and complicated to use

3. Are people less patient with technology more now than they were in past years?

SAP recently announced it’s plans to acquire Fieldglass,  a cloud-based vendor management system for procuring and managing contingent labor and services.

http://www.chicagobusiness.com/article/20140326/BLOGS11/140329827/why-fieldglass-sold-to-software-giant-sap

Questions:

1 – With services such as these becoming cheaper and easier to use, will companies move more towards crowdsourcing instead of hiring permanent workers?

2 – Will cloud based procurement systems for labor and services increase the “pool” of potential employees? Will it become more commonplace for a small to mid-size company to hire employees in different states or countries?

3 – With SAP being one of the largest and most notable sellers of ERP products, are they forcing society to change to cloud-based vendor management systems when they acquire these companies?

This article briefly explains that cloud computing is the future of ERP systems and that they will be more successful if they integrate the two. It states that many systems are already a “hybrid” and that it is a lot easier to integrate an ERP system as this hybrid than it is alone.

1. The article stated that cost for this “hybrid” would be lower than integrating a regular ERP system. Do you feel that reduction of cost out weighs some of the risks of cloud computing?

2. Do you agree or disagree that the “hybrid” way is the way of the future or should the two systems continue to be separate? Why?

3. The article also mentions a project that Microsoft is developing where users with no programming experience could soon develop applications. Do you think this will be successful? Would it be bad for IT/programming job security?

http://smartdatacollective.com/robert-kugel/193046/erp-s-future-hybrid-cloud

This article supplies several points on why the author believes enterprise resource planning has the potential to become obsolete.  With the growth and demands of cloud computing, can ERP systems adapt?

1.  As the article suggest, do you believe the expansion of cloud computing will phase our ERPs in the near future?  Why or why not?

2.  Are ERPs better for the manufacturing industry as opposed to service based organizations?

3.  How can ERPs change to better serve their customers withing the next 5 to 10 years?

http://www.cmswire.com/cms/information-management/will-disruptive-cloud-computing-kill-enterprise-resource-planning-024001.php

http://www.computerweekly.com/opinion/Why-in-sourcing-ERP-support-makes-good-business-sense

1.  With the majority of businesses using some form of ERP, do you think it most beneficial for the business to create their own ERP or have a professional perform the initial setup and training? Why? Why not?
2. What makes ERP valuable to the business?
3. The system processes of ERP systems are selected by the business needs.  If you were establishing a new business would you invest in ERP software at the start of your business? Why? Why not?

This article discusses a survey conducted by Panorama Consulting about companies with more than an annual revenue of $25 million about its use and experience of its ERP systems over the time period of January 2013 to February 2014  (Drew. 2014).  The article states that the companies’ expectations did not fully exceed their desired benefits, and that the increase in costs and scheduling concerns also contributed to the companies not fully utilizing or experiencing all that the ERPs had to offer (Drew, 2014).

1.  One issue that the article brought up is employee cooperation in utilizing the ERP, and how this can be a challenge for midsize businesses.  Do you think the benefits of using an ERP outweigh the costs and time of training employees to use these systems, particularly in a midsize business?

2.  The article discusses the level of dissatisfaction that companies may have with their ERP system, particularly by going over budget on projects.  What do you think the companies should do to ensure this kind of issue with budgeting does not occur when utilizing the ERP project, or do you think that this is the nature of the software?

3.  The article does state “that this survey was conducted by an ERP consulting company, which stands to benefit if ERP software implementation is considered too difficult for IT to handle,” while acknowledging that ERP implementation can be challenging.  Based on what you read in the chapter and any real life experience, do you believe that ERP systems may be too challenging for a business, or is it a matter of proper training and budgeting?

Link to article:  http://midsizeinsider.com/en-us/article/erp-software-implementation-is-growing-m