Tektronix is one of the largest providers of electronic tools and devices in the universe with one-year gross revenues of over $ 2 Billion and presence in about 60 states. It was founded in 1946 in Oregon. USA and has three independent lines of concerns – Measurement Business Division ( MBD ) ; Color Printing & A ; Imaging Division ( CPID ) ; and Video & A ; Networking Division ( VND ) .
However. the company was fighting financially in the context of increased planetary competition taking to the fundamental law of a five-year recovery plan. Net income had declined 28 % Y-o-Y in 1998 while capital outgos had increased 38 % in the same period. In add-on. there was no standardisation either in concern procedures or in IT systems worldwide. Third. the bing bequest systems slowed processing and client service. Fourth. there was a deficiency of integrating between the assorted fiscal systems which made it hard to place which concerns were profitable and which were non. Fifth. the IT systems were non projected to be able to back up aggressive divisions such as CPID for long and hence. there was an pressing demand for IT capableness that would turn with the concern.
The key objectives/expected benefits of the enterprise to implement a new ERP system were – ( 1 ) Standardization and simpleness across the organization/the “Frankfurt is Orlando” attack ( 2 ) Increased velocity of operations ( 3 ) Reduced costs ( 4 ) Separability of the concerns ( 5 ) Leveraging shared services ( 6 ) Minimizing the customizations to the new ERP system to the extent possible.
The key challenges that the enterprise to implement a new ERP system faced was – ( 1 ) Complexity and planetary graduated table of the alterations that had to be made – for illustration. there were 460 bequest systems in the United States entirely ( 2 ) Tektronix had merely late completed execution of a manufacturing-related bundle developed by a really little company and hence direction did non desire to set Manufacturing through another execution so shortly ( 3 ) Several major concern alterations were necessary to ease IT-related alterations in several states such as those in Europe ( 4 ) Absence of internal accomplishments in undertaking direction. proficient and functional accomplishments on Oracle ERP and Unix ( 5 ) MBD & A ; VND’s merchandise complexness that ran contrary to the authorization for standardisation ( 6 ) Reduced employee committedness at VND to the ERP execution on history of their being in the center of a recent acquisition.
? ‘Hard’ benefits such as decrease in Day Gross saless Outstanding. increased stock list turnover. drastic decrease in the rhythm clip for recognition blessings. ? ‘Soft’ benefits such as the acceleration in the ability to shut fiscal books. improved handiness & A ; better quality of information to help decision-making. significant decrease of clip spent by employees in roll uping informations therefore supplying them more clip to analysing it i. e. increased efficiency and productiveness. better visibleness into clients and merchandises. and greater flexibleness to the direction in geting new concerns and depriving bing 1s.
Relevance and Analysis
? The Tektronix instance is a timeless but highly relevant instance that attractively captures the quandary. hurting. and fears that most organisations went through in the 1990s and 2000s in the procedure of upgrading to ERP systems. Unlike Tektronix. several companies have failed in the execution and a closer expression at common booby traps is indispensable to understand the cardinal success factors. ? First. IT is inextricably intertwined with concern and hence. the most of import index of success is support for the enterprise from the top leading. At Tektronix. the CFO Carl Neun had the complete support of the CEO Jerome Meyer. and Carl Neun in bend backed his CIO Bob Vance. ? Second. if the concern scheme behind the execution has non been clarified and communicated to all stakeholders before the alteration. the alteration is less likely to win.
Tektronix did this really good by making a steering commission and developing a “global concern model” and “Business Practice Changes and Guiding Principles” in front of elaborate work on the undertaking. ? Third. a competitory advantage demands to be created with the ERP system because if the bundle is installed without any customization. one can be certain that competition has the same system. Tektronix did a great occupation once more by insulating faculties such as OMAR from others where standardisation was a cardinal demand to drive efficiencies. ? Finally. ERP execution must be done in stages or “waves” . This non merely manages the hazard of failure but besides demonstrates “quick wins” to all stakeholders guaranting high squad morale throughout the long-drawn procedure of alteration. I believe Tektronix was excessively aggressive with its timelines and would hold tempered those through they did finally win in the plan.
hypertext transfer protocol: //www. Hoovers. com ( Company Profile of Tektronix & A ; Acquisition-related information ) Puting the Enterprise into the Enterprise System. By Thomas H. Davenport. Harvard Business Review.