1. 1. Siam University 1/2012Strategic Technology Management By Siriwong Kangsumrith, PMPCase Study Member#Name ID1 Keo Viasana Thach # 54171920062 Vanthuong Nguyen# 54171930043 Chansothi Thach # 54171920024 Prabin Rai# 55171900455 Socheat Sam # 5517190055 MIS- (1)
2. 2. Outline Slide #Group Members MIS- (1)IntroductionMIS- 1Executive Council of BSE MIS-4News and Awards MIS- 5Case Study: Questions and Answers (Q & A) MIS- 4ConclusionMIS-17ReferencesMIS- 18
3. 3. BORDER STATES INDUSTRIES FUELS RAPID GROWTH WITH ERP Introduction Company Name: Border States Industries, Inc. (BSE) Location: Fargo, North Dakota Industry: Wholesale distribution Products and services: Construction, industrial, utility, and data communications supplies and services Revenue: More than US$880 million Employees: Approximately 1,400 Web site: www.borderstateselectric.com Implementation partners: IBM and SAP Consulting Goal: To provide customers with what theyFigure 1: Locations of BSE Sales Offices and Clients need wherever they need it, includingSource:https://www.borderstates.com/wps/portal/utilitynavigation. providing custom services beyond delivery oflocations Accessed September 5, 2012.products (a wholesale distributor and also a provider of supply chain solutions).MIS- 1
4. 4. Challenges and Opportunities Replace legacy system to support growth goalsConsolidate existing system to create a single version of the truth Solutions and Services Software functionality found today in the SAP ERP application3rd-party solutions from Automatic Data Processing Inc., Inovis Inc., Esker, PaymetricInc., Resite Information Technology, Taxware, and Vistex Inc. Approach Automate transactional processesSupport value-added processes providing services that directly contribute providingservices that directly contribute to bottom-line profitability MIS- 2
5. 5. Implementation Highlights Utilized big-bang approach for both initial development andupgrade in 2004 Complement 2004 upgrade on time and within budgetFacilitated successful software implementation by utilizinginternal business experts Why SAP Reputation of SAP Flexibility of software Real-time information for customers and vendorsMIS- 3
6. 6. MIS- 4 CEOTammy Miller Chief Financial OfficerJeremy Welsand President Gary MillerSenior VP Sales and MarketingGeral Poke BuckVP Business Development VP ITVP Supply Chain Service VP MarketingVP Human Resource VP Operations & InventoryBlake SextonRyan StallKeith HollandBarry NelsonSherri Sandvig Jason SegerVP West Region & Xcel VP Southwest RegionAlliance Director VP Northwest Region VP East Region VP Northeast Region VP South Central Region Matthew EddlemanPhil Settles Lex Silbernagel Jason Stein Bruce Johnson Ken Rowland
7. 7. NEWS & AWARDSJune 1, 2012, FARGO, N.D. Tammy Miller, CEO of Border StatesElectric (BSE), was inducted into Beta GammaSigma of Minnesota State University Moorhead(MSUM) as the first chapter honoree.The mission: to encourage and honoracademic achievement in the study of business,to foster personal and professional excellence,Tammy Miller, CEO ofBSE:to advance the values of the society, and to Joined Border States as serve its lifelong members.the accounting manager Miller was inducted as the chapter honoreein 1991. Appointed treasurer inas a professional who has furthered the1992. societys ideals of honor and integrity, pursuit of Named president inwisdom, and earnestness through outstanding2005 and CEO inJanuary 2006. business and managerial leadership.MIS- 5
8. 8. CASE STUDYQUESTIONS AND ANSWERS (Q&A) A 1. Problem Definitions of Border States Industries: management, organization and technologyManagementProblem Definitions Even Senior management worked closely with IBM and SAP on Used its own legacy system implementation, operations still suffered on the project. Trained too early and being retrainedERP system to support itscore business processes.Organization Designed exclusively Prior to the implementation: no experience with SAP software,for electrical wholesalers. accept a few consultants. Adoption: BSE hired consultants marking its new system look Nolongersupportlike its old system.BSEs new lines of The extensive customization: pushed back four months and thebusiness and extensivecost of implementation increase by $3 million.growth.Technology BSE chose enterprise Writing its own software to enable the ERP system to interfacesoftware from SAP AG as automatically with other vendors system.itsnewinformation Converting and cleaning data from BSEs legacy system.system. The existing SAP software didnt support the additional changesof internets need. MIS- 6
9. 9. A 2. The development of a solution using SAP ERPsoftware In 2004 BSE upgraded its SAP software to support more e-commerce activity, automated special price agreement processing, and terminal-based credit-card processing. + completing its upgrade on time and within budget. It kept customization & best practices for wholesale destruction. It replaced other software components providing more integration throughout the companys business processes. The second implementation went smoother: target date and costs were 14 percent below budget. The new users able to run BSEs SAP software within a day after the acquisition had been completed, when BSE acquired a large company that added 19 new branches. MIS- 7
10. 10. Quotes Tammy Miller, CEO of BSE Prior to deploying the SAPsoftware, we waited 15 to 20 daysto get our monthly financialstatements. Now, if the monthends on Monday, our month-endyear-to date financial results areavailable on Tuesday.Additionally, all of our budgetingand planning information is onlinein SAP software. We used SAP software for anumber of years, and we werevery happy with the functionalitywe had. We were largely able todesign the solutions we wanted . MIS- 8
11. 11. A 3. The benefits from the SAP softwareQuantitativeQualitative ROI of 37% per year Ability to integrate acquired companies Total investment payback in 2.5 yearsquickly Total savings of $30 million over 9 years Flexibility to find and create customized(approximatelyone-third of BSEs solutions for customerscumulative earnings during that period) Increased employee productivity Increase in inventory turns to more than 4per year Reduction of days sales outstanding by 2days ( delivering $2.6 million in cash to BSE)MIS- 9
12. 12. A 4. The new system solution transforming thebusiness of the solutionSince its initial SAP software deployment in 1998, BSEhas expanded through both organic growth and acquisitions.The company attributes many benefits to its SAP software,including the following: Sales have climbed nearly 300%. Profits have climbed more than 500%. 60% of accounts payable transactions now take placethrough EDI. MIS- 10
13. 13. 70% of accounts receivable take place through alockbox system, which has reduced BSEs manualtransaction processing. Reduce rebate fulfillment time from 15 to 30 daysto 72 hours SPA processing has been reduced by 63%. Inventory turns are greater than four per year. Days sales outstanding have been reduced by twodays, yielding $2.6 million in cash. BSE processes more than 360,000 SPA claims overthe course of a year, with the IP functionality process. MIS- 11
14. 14. A 5. The metrics used to measure the success of the solutionfor BSE Gartnersanalysis supports the finding: the SAP software implementation initiated in the period from 1998 to 2001 was a success. Moreover, between 1998 & 2006, SAP software implemented at BSE has delivered and aggregate total savingsof approximated $30 million. The total ROI for project has been $3.3 million per annum, or 37% of the original investment. The outcome of its study isreliable (Gertners confident). Figure 2: Payback on Investment MIS- 12
15. 15. Compared to the years priorto the 1999 deployment ofthe SAP software, BSEs ITcosts rose by approximately$3 million per year after theSAP solution went live. But when measured as apercentage of sales, theincreased overheadassociated to a cost increaseof only 0.5%.The increase in IT costs in2005 and 2006 can beattributed to its additionalpurchase of SAP softwareand the ramp-up for a largeacquisition.Figure 3: BSE IT Costs MIS- 13
16. 16. The cost trends since1998 indicates: the deployment of SAPsoftware at BSE has resulted incumulative cost savings ofapproximately $30 million, andamount equal to one-third of thecompanys earning during thissame period. Figure 4: Cumulative Cost Savings MIS- 14
17. 17. A 6. If our group had been in charge of SAPs ERP implementations, we would have done differently Two key lessons emerged from BSEs early experiencesAvoid unnecessary customization: Extensive customization during the initial development of SAP softwareimplemented at BSE precipitated both a three-month delay in going live and a $3million cost overrun. In retrospect, the customizations and the related cost overrunappear unnecessary. Engage internal business experts: The vice president in charge of the deployment project had engaged several keybusiness experts to consult on the deployment, and this took them far enough awaytheir day-to-day tasks that their ability to do their routine work was compromised. Additionally, next steps for BSE: Expanding OnlineTaking Advantage of Radio Frequency TechnologyIncreasing Business Intelligences. MIS- 15
18. 18. HOW SAP WORKS HOW ERP WORKSHOW CRM WORKS HOW SCM WORKSMIS- 16
19. 19. BSE appointed one of its VPs to oversee the implementation. CONCLUSION The VP worked closely with IBM & SAP Consulting. The VP also engaged many of the most senior managers within BSE and solicited in the implementation of the SAP software. BusinessChallenges Management 1988, Regal system had been designed exclusively for electrical wholesalers. By the mid-1990s, it could not support BSEs new line lines of business and extensive growth. Operationssufferedwhile the managers were Informationinvolvedwith the Organizationimplementation of the SystemSAP software. Rigel system: Supporting its core business BSE sales haveprocesses. SAP ERP application: sales & distribution; climbed nearlyTechnology,materialsmanagement;financials&controlling; human resources.300% since 1998 & Three third-party companies: Taxware profits more than Doing a great deal of customization in itsSystems Inc., Inovis Inc., Topcall InternationalSAP software implementation.GmbH. SAP NetWeaver Master Management, 500%. The target date for going live was overly SAPs Web Dynpro and using SAP BusinessNetWeaver Business Intelligence software tooptimistic. learn more about customer: buying habits,expanded; profits Costs were 50% over budget. opportunities to cross-sell and upsell products. Total accrued deployment costs had and inventory turnsmeanwhile climbed to $9 million. increased.MIS- 17
20. 20. ReferencesI. Book:1. Kenneth C. Laudon and Jane P. Laudon, Management Information System: Managing the Digital Firm, Twelvth Edition, 2012, Prentice Hall. ISBN-10: 0132142856, p. 360- 394.II. Internet viewed on 12th September, 2012:1. https://www.borderstates.com/wps/portal/home2. https://www.borderstates.com/wps/portal/!ut/p/c1/04_SB8K8xLLM9MSSzPy8xBz9CP 0os3g3f6NARydDRwMDf2dDA0- fYCND_5AAYyMjI6B8JJK8e4iFI1Dey8XVy8TCyN_YnIBuP4_83FT9gtyIcgCpVAee /dl2/d1/L2dJQSEvUUt3QS9ZQnB3LzZfRk8yUUFCMUEwMFFHRTBJRENETDNG VjMwMDE!/3. https://www.borderstates.com/wps/portal/!ut/p/c1/04_SB8K8xLLM9MSSzPy8xBz9CP 0os3g3f6NARydDRwMDf2dDA0- fYCND_5AAYyMjI6B8JJK8e4iFI1Dey8XVy8TCyN_YnIBuP4_83FT9gtyIcgCpVAee /dl2/d1/L2dJQSEvUUt3QS9ZQnB3LzZfRk8yUUFCMUEwRzMzRTBJRE1KSTNRR UxJNTU!/MIS- 18
21. 21. Thanks for your attention!!! Welcome to general questions!!! The end of BSEs presentation group!!!