Implementing ERP, however, is complex and requires a considerable amount of knowledge and experience by ERP professionals and the team to successfully implement an ERP project.
Implementation Process At Tata Steel
The implementation of the software was done in a systematic and in a phased manner. They chose the best ERP software available in the market. They involved all the stakeholders in the implementation of the ERP software. The period set for the implementation was a major challenge and was set cautiously to 8 months.
The business was divided into two main segments. All core functions were classified as major ones and the supporting functions as minor ones. The company ensured that all the impacts of the proposed ERP was studied and drafted out in detail. Everyone concerned was educated about the importance of the change that was to be brought in through the implementation of the new process. This was done to avoid any resentment in the organization. Efforts were made and sessions were organized to discuss all apprehensions regarding the change and clarifications were made.
Carrying out the implementation diligently the organization was able to complete the ERP implementation within the stipulated time of 8 months. TISCO is Asia's first and India's largest integrated private sector steel company. It has a state-of-the-art 3.5 million tonne steel plant and is capable of meeting the most rigorous demands of its customers worldwide.
The adoption of the ERP technology provided the company with the much needed advantage in the competitive steel industry. It has transitioned from a production-driven to a customer-driven company through constant learning, innovation and a willingness to adapt itself to the new changes in its business operations. The existing technology had become obsolete. Exchanging and retrieving information from the system required a considerable amount of effort and time. The difficult task of integrating the different pieces of information made the existing system all the more undesirable.
The inconsistency, duplication and redundancy of data from different departments made the gathered information all the more unreliable. Also there was no built-in integrity check for various data sources. Several times even the information against certain items was found missing.
An Early Response
In order to respond to the changes taking place in the market Tata Steel decided to adopt a new robust solution. The need to support the re-engineered core processes was also felt strongly. Moreover, the needs of the customers were changing and it became imperative for the company to respond to it. Initiatives like study on competitiveness, a formal business plan, followed by ISO 9002 certification and benchmarking initiatives were undertaken.
Design
In 1998-99 a small team from across the different functional units in the organization was established. It also comprised two consultants from Arthur D. Little (Strategy Consultants) and IBM Global Services (BPR Consultants).The task before this team was to redesign Order Generation & Fulfillment and the Marketing Development processes, the two core business processes. This was done to improve customer focus and facilitate better credit control. The latest production and business practices were adopted to meet the changing demands of its global and local customers.
Choosing The Platform And Technology
The aim of the management at Tata Steel was two folded.
to be able to integrate the existing information system with the new software
provide compatibility with its future implementations.
The parameters that were studied were functionality, cost, time, compatibility, esteem, operability, support and future organizational requirements. After an in depth study of these parameters the software hat was chosen was SAP.
With the implementation of SAP software TISCO wanted to introduce a culture of continuous learning and change. It also wanted to achieve its other strategic goals of making its products and services of a world class and strengthen its leadership position in the industry. The new software was desired to help in a faster decision making process, transparency, and more authentic data and improve responsiveness to all its customers.
The Real Challenge
B Muthuraman, MD (Designate), said, "Implementing any ERP system is a challenge for an organization because of the declining success rate of ERP implementations world-wide." At Tata Steel however the real challenge was not to be able to successfully implement SAP across 46 geographic locations across the country in just eight months. The real challenge lay in creating an atmosphere where the implementation of SAP was accepted by both the employees and the customers of Tata Steel. The company was successful in rolling out the implementation across 46 locations within the stipulated time period of eight months.
Mapping Technology To Business Processes
The detailed plan to implement changes through SAP was chartered out. A HUB and SPOKES model was followed. All branches with huge and complex transactions were identified as a HUB and smaller branches with comparatively lesser complex transactions and consignment agents were identified as SPOKES ,attached to the HUB.'TEAM ASSET' an acronym for Achieve Success through SAP Enabled Transformation, was established in January99 which consisted of the selected employees from TISCO. The TEAM ASSET had two simple axioms:
Go-Live date - 1st November 1999
There are only 24 hours a day
Preparatory task forces activities were conducted and 'Change Management' was initiated within the company. All the core business processes were mapped to the SAP modules. The objective of the 'Change Management' was to involve people related indirectly to the project and acquaint them of the developments and changes taking place. They also aimed at making Tata Steel the best in the industry by adopting the latest technologies.
Tata Steel adopted a big-bang approach for launching its SAP modules. On 1st November 1999 it launched the implementation of SAP modules across 46 locations country wide, as per the decided deadline. It involved a lot of meticulous planning and thought process to keep up with the pace of the implementation.
Achieving Business Agility Through SAP
Marching ahead, Web enabling of SAP R/3 is on the cards. On the surface, it means it would allow anyone to access our SAP R/3 over the Internet. But beneath it, the implications are tremendous, as it would result in sharing of information with enterprise accounts and key customers. The success in Marketing and Sales has prompted a re-visit of the existing system in the works and a detailed rollout is expected as below.
Phase I - To Extend SAP in Works with FI, CO, MM, PP & QM
Phase II - To implement SAP modules such as Asset Management & Budget management sub-modules of FICO, Plant maintenance, Human Resources, Production Optimizer (such as SAP APO)
Phase III - SEM (Strategic Enterprise Management)
The company also plans to adopt the my SAP Customer Relationship Management solution to enhance its customer relationships in the near term and eventually realize its dream of a becoming the most efficient and competitive company in the world in its vertical.
