…And the two (and-a-half) shall become one
From an operational standpoint the big challenge for Celestica was collapsing its multiple ERP systems into one.
According to Kirk that wasn’t as daunting as it may have been were another multinational firm trying to accomplish the same thing. “There are [other global] companies with tens of SAP systems – or even more – in place. Celestica had two and a half.”
Essentially, he said, Celestica had one ERP template that was used throughout Europe, and with a little modification throughout the Americas. There was another separate one for Asia. Apart from those two, there were a bunch of discrete, smaller (what Kirk calls “cats and dogs”) instances.
“We bought a business here, another business there….those [systems] were all separate.”
Over time, even prior to Project One, many of these “cats and dogs” systems were gradually incorporated into one or other of the two huge target platforms. “So we really just had to collapse those two big platforms into one.”
The hardware on which these systems ran, however, was different story.
Celestica’s hardware architecture comes from its multi-state, previously balkanized background and as Kirk puts it, “is not as efficient as it might be.” But he says it has one common characteristic: it is hard to kill. “I can lose a country and the rest of the world doesn’t know too much about it. So while it is expensive, and a bit messy, it is robust.”
Honey I shrunk the reports
One significant Project One accomplishment was the tremendous compression Celestica achieved in the reports it generates worldwide through its SAP systems.
“We enumerated more than 5,000 different [such] reports,” said Kirk. “When you boil them down generically into all the different functional groups or reports and then double the resulting number, you get 400. So it’s more than ten-to-one compression.”
In the area of Finance, for instance, Celestica initially had as many processes – as the countries it operated in. With Project One it standardized all those processes to a remarkable degree.
“There is still a country ‘layer’, said Kirk, because legal requirements for reporting, presentation and so forth are slightly different in different countries (time-zones, currencies, tax rules etc).”But that’s usually a 2 – 3 per cent layer above the 92 per cent or more that can be kept fairly constant.”
Did Project One prove to be a worthwhile exercise? Were the key goals achieved? Was there a steep price to be paid?
Read about this in Part IV – the final part – of this series: Reaping the rewards