1. International Game Technology (IGT) is a leading manufacturing company with plant operations spreading across multiple locations in USA and England. Some of the major business operations for this organization comprises sales, customer orders, manufacturing including material requirement planning, accounting etc. Till 2002, IGT was dependent on several disjointed applications to run each of the business operations. Real time tracking of the status of a particular order was not possible as the information systems were not integrated.
On the other hand, enterprise resource planning (ERP), a new software package comprising single integrated platform for the set of core business operations, was evolved by 2000. ERP offered cohesive information technology in terms of availability of single system of truth for information spanning across all the business functions.
Benching the information technology adoption trend of similar large enterprises, IGT opted for ERP to fulfil following business objectives
To enable an executive to learn the status of any order from a single system on real time basis.
To store and to retrieve all business information from single repository.
To improve efficiency in ordering to manufacturing cycle.2. Any ERP package offers a number of integrated business processes spanning across the business functions like finance and accounting, sales, inventory, manufacturing, human resources etc. SAP, a pioneer ERP package, comprised of a flexible product configuration engine to allow IGT to perform build to order process. However, users of SAP in IGT had to re-align its ordering process to align with the way the software package works. This was the point from where the requirement of customization came up. SAP offered certain flexibilities to customize the package to align the system driven process with IGT’s business transactions. However, IGT faced major challenge for customization as the organization didn’t have all the unique aspects of their products documents. Hence, IGT was not in a position to perform detailed testing of all the configurations. Customization of any integrated packaged application like SAP demanded detailed testing in order to ensure that the data integrity across various process and business operations remained intact.
On the other hand, IGT could realize the business benefit that the organization would gain with customization like streamlining their material requirement planning, production scheduling, easier way to develop and to launch new products, on time delivery of materials to the production line etc. As IGT arranged a team of dedicated people from various departments to perform the task of customizing the ERP system to accommodate complex bill of materials for various product lines, the organization, as a whole, get benefitted on a long terms perspective as all the unique aspects of their products got documented during customization exercise.3. IGT was relying on a number of disconnected software applications to run their business. Due to island of information availability across various business operations, IGT realized the necessity to adopt newer technology platform as the other companies had already started adopting it to enhance overall process efficiency. However, IGT found it necessary to change some of its business processes to accommodate the new technology, especially adopting an integrated ERP package like SAP. In some of the operational areas, IGT could face difficulty to adopt to the new technology. For example, IGT continued to use its homegrown factory control system and got it integrated with new SAP system. With prior experience of similar integration with the older version of MRP (Material Requirement Planning) system, IGT found it easy to redirect the interface with SAP system.
However, the organization struggled to implement and to operationalize in SAP environment in some other areas where they could find the gap between the process of operations offered by SAP package and the way the processes was being followed by the users of the company till 2002. This situation demanded appropriate change management prior to taking a decision to get into implementation activity. IGT should have formed a cross functional team to identify gaps between the current operational process followed in IGT and the standard process offered by SAP. Detailed fit gap analysis with the mitigation plan to bridge the gap should have identified before get into implementation mode.
Each gap offered the element of change. Two type of change should have initiated; either to change the existing operations like ordering process that was being followed in IGT or to customize SAP package. Activities like documentation of complex bill of materials across all the range of products should have done prior to start of SAP implementation. In that case IGT could complete ERP implementation project on a shorter timeframe.
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