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Together As One

Together As One

At Ericsson, a second-wave ERP implementation effort has the company's CIO thinking globally and acting locally as the company looks to create a standard international platform.

It's a phenomenon Ericsson IT director Cameron Maroney calls"conscious incompetence". Ericsson knows how deeply it is suffering from it, accepts it is a self-inflicted wound, and takes comfort in knowing that it is not alone.

Like many of the major organisations that invested vast amounts on core systems over the course of the 80s and 90s, Ericsson woke up in recent times to just how much of that investment has coalesced around a particular product brand - SAP in its case - without achieving anything like the seamlessness it thought it could achieve in the business. Now it is determined to do something about it, with a"second wave" implementation effort that builds on the relatively new robustness in such technologies and works to drive optimum value from its investment.

Maroney says most leading ERP systems have reached the point of development where they represent a pretty powerful selection of best practice capability, which means an organisation must consider how far it wishes to drive the functionality of these platforms across the business."There is that level of increasing awareness where companies have recognised the intrinsic value and the integrity of the technologies they have invested in, and have also recognised that they really haven't as a business got full value out of the integrity of those platforms," he says.

In Ericsson's case there are two dimensions to the phenomenon. Locally, Ericsson implemented SAP in 1998/99 and has since achieved a well-developed and robust implementation. At the global level, Ericsson market units (in most cases that means each country) have also gravitated towards the SAP platform, but there are still a number of other ERP systems deployed around the business. However, if competence was the goal, it is a goal that is far from being realised because each market unit has gone about implementing SAP largely as it saw fit in terms of its own needs, just as Australia did."About the only thing they really have powerfully in common I suppose is the nameplate," Maroney says.

The results have been dramatically distinctive implementations with numbers of idiosyncrasies that are rarely particularly compatible. For instance, some market units have picked up an SAP system or its like and just run with the financial modules. Others have run a comprehensive range of modules from project management through to inventory control, and are far more extensively driven towards running their business on an ERP platform. Small wonder the question of how well the company's core systems - its financials, HR systems, production control systems, inventory flow systems and so on - work together remains a fundamental bone of contention. Conscious incompetence indeed!

And frankly, Maroney says, organisations only have themselves to blame for a situation that is all too common.

"Too many companies have picked up these big ERP systems and run with them, but they have tended to run all over the place with them," he says."While these companies have had a number of implementations, they really haven't sat down and said: Â'Well this is how we want to run our business. This is how we want to drive the technology in our business in line with how we wish to run it.' Consequently companies have ended up with the same platform but implemented in a number of different ways."

Look at the way so many organisations have struggled to achieve a common chart of accounts, for just one example, Maroney says. The difficulties mean that at the line item level in the financial system there has not been a consistent agreement on what costs to include in that account."It means it's pretty difficult then to add them all up and get a sensible answer," he says.

Ericsson is determined to tackle the problem head on, by moving to a global SAP platform, and by actively moving to standardise the highly individual implementations in different market units.

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