For some businesses, the productivity gains that are drawn from their first enterprise resource planning (ERP) systems often whet their appetites for more functionality. Process improvements, granular information analysis and better positioning for e-commerce with customers and suppliers are just a few of the possible perks of upgrading to a newer release.
Nevertheless, these companies are the exception to the rule, since many battle-scarred ERP veterans wince at the thought of revisiting those painful and lengthy initial installations. “The vast majority tend to avoid major upgrades and stay on an older release, as long as it can meet their business needs,” said Bruce Fram, president of Luminate Software Corp., a Redwood City, Calif.-based firm that monitors ERP systems and other applications for Fortune 1,000 companies.
Still, there are the hearty few who are willing to upgrade their systems in order to squeeze out even more business process improvements.
For example, streamlining human resources operations was the rationale behind GKN Automotive Inc.’s upgrade to Pleasanton, Calif.-based PeopleSoft Inc.’s PeopleSoft 8.0, which began last month. The Auburn Hills, Mich.-based maker of drive shafts for front-wheel-drive vehicles is upgrading from PeopleSoft 7.5, which it installed last year.
GKN’s decision was driven by the company’s human resources strategy to move to employee and manager self-service technology, said Ted Bishop, project manager for human resources information systems at GKN. The software will provide employees with the ability to directly change personal information such as marital status, dependants and tax withholding instead of using the HR department, Bishop said.
Meanwhile, managers who are burdened with paperwork, approvals and benefits questions will be able to use the self-service system to initiate pay increases, find out when new salaries will kick in and answer other questions.
“We weren’t looking for cost savings but to transform the work HR was doing from reactionary – dealing with paper and manual tasks – to proactive, being on the cutting edge, making people better employees,” Bishop said. PeopleSoft 8.0, he adds, turns human resources into a 24-hour service, eliminating data-entry functions. It also has about 10 times the employee self-service functions as PeopleSoft 7.5.
Play It Again, SAP
The Allstate Corp. has a more efficient financials area and is better positioned technologically to provide customer service, thanks to a minor upgrade from SAP 4.3 last year.
Mary Fontaine, director of enterprise reporting and analysis at the Northbrook, Ill.-based insurer, said the upgrade to SAP 4.5 has added functionality in the financials area and for expense processing. “It’s now more efficient, and we’re able to run functions in parallel,” such as allocations, she said.
Prior to the upgrade, Fontaine said, allocations were processed in sequence, which required each job to be completed before the next one could be started. With the SAP upgrade, all those jobs can now be processed at the same time, 40 per cent faster than before. What once took six days can now be finished in three and a half days, said Mike Wahls, an Allstate project director.
Sometimes, even a minor “point” upgrade can make a whopping difference. That’s what happened when Cybex International Inc., a manufacturer of high-end fitness equipment for gyms and personal use, upgraded from PeopleSoft 7.5 to 7.52 in October last year. “The upgrade was painful, but it was night and day – 7.52 added so much functionality,” said Brian Lyman, manager of e-commerce at the Medway, Mass.-based firm.
For example, PeopleSoft 7.52 helps Cybex manage its customer database better. “It allows us to build customer roles and associations – for example, if a health club leases our equipment, we don’t have to go back and forth between one and the other,” said Lyman.
Since the company’s on-line store was launched last December, Cybex customers have been able to place orders into its backbone system, track orders and see what Cybex sees. “Some of our equipment is made-to-order; the product configuration module lets customers pick colours for the frame and upholstery without the re-entering other modules require,” thus shortening the product ordering cycle, said Lyman.
Nevertheless, Cybex had to sweat through some bugs in PeopleSoft 7.52 and needed the vendor’s help to get the system running properly, Lyman said.
For Schurman Fine Papers, a designer and distributor of greeting cards, stationery and gift wrap to retail chains like The May Department Stores Co. and Target Corp., the impetus to upgrade its older J. D. Edwards WorldSoftware legacy system is coming from its electronic data interchange (EDI) provider.
Schurman’s upgrade last December didn’t generate enough information to its EDI provider, Harbinger Corp. (now Peregrine e-Business Connectivity Group, after being acquired by San Diego-based Peregrine Systems Inc. in June), to map and format the EDI transmissions properly when product shipping for this Christmas season began in July. So the firm was forced to do considerable customization. “The software didn’t go down to the right hierarchical level required by our trading partners – they had no idea what was in each box,” said Bob Jellison, vice-president of IT at Schurman in Fairfield, Calif.
This meant identifying fields in existing table structures, with actual box numbers and universal product codes for each item; scanning each box; and providing additional coding to sort it properly, he said. Schurman will probably upgrade to version A8.1, which Peregrine said is more compatible, sometime next spring, Jellison adds.
“We realize J. D. Edwards is not in the EDI business and [Peregrine] is not in the ERP business, but we need them to work together without getting in each other’s backyards,” he said.