Executive Summary For Bombardier Case

Summary for Bombardier Case

Bombardier is a company that has presence in almost every continent in the world. Bombardier has been involved in a lot of acquisitions and mergers over the time and that has not gone that great with the company in terms of IT integration. IT Management never realized that having different data systems for each location or each department will impact the organization terribly in the coming years. As the business expanded, it created redundancies in the system and business processes were duplicated in each function leading to increased costs. Eventually it became very difficult for the management to make well-informed decisions as complete information for product costs, pricing etc. was not available since there

was no integration between the several systems within the organization. Hence, it will be right to say that Bombardier was not an integrated company because there was no system integration practiced in the organization and hence there was communication between various divisions in the company. With time an organization must change to adapt more organized structure to allow easy integration of information and be more flexible.

All above factors were the business justification of the ERP implementation project.

A system integrated approach would improve the business process and hence enable the different functions to share information. It was clearly identified that the ERP deployment would benefit the company through all these elements. In the case, benefits of ERP adoption were not quantified but improved cost and better pricing strategy were discussed to justify the ERP project financially. It can be interpreted that ERP, leading to improved cost analysis, cost control, less redundancy, optimized production and better pricing, would result in low costs and hence higher profit for the company. Financial justification for the ERP adoption can also be inferred through the fact that it would lead to resolution of several problems which the company faces

now.

There were three project dimension that influenced inherent risks in the implementation tasks. First one was Relative size of the project itself. The cost associated with the project was large and about $363 million. There were about 9500 users in seven sites that were to be affected with the implementation. There were 63 different types of systems that had to be integrated that increased the complexity of the entire project implementation. Secondly, Bombardier had bad experience with the technology implementation in the past. Their past experience with the implementation was a failure which taught them a good lesson to be better prepared for future. Thirdly, Requirements could be extremely volatile. They tried to define the project vision and detailed functional requirements early on, but changes were made several times during the implementation process. They also changed software methods from HMS to SAP workbench.
Bombardier did take some smart steps to manage these risks precisely.

They incremented the implementation process by creating an inclusive project team. Everyone in the management were assigned with specific responsibilities on project vision. Bombardier did learned from the first failed implementation project attempt. Therefore, this time they contracted SAP consultants to assist, but less than they engaged during the initial launch by 10:1 ratio. Project team created a detailed project blueprint of the system requirements this time. Certain employees were designated from the functional areas to be on project team to create a project vision. This way Bombardier did a fairly decent job in the overall risk management

process.

The Mirabel ERP implementation contributed to a $1.2 billion cost saving reduction which is outstanding. This gave Bombardier additional cash flow, improved Bombardier’s balance sheet and made potential company acquisitions. It is commendable the way implementation was structured using the Mirabel site as pilot with integrating testing, training and Go-Live. When, SAP implementation was fully completed, the cost savings was extremely favorable within the year. There was a significant reduction in $1.2 billion in inventories within the first year of Go-Live. Although there were some difficulties as well while implementing like unclear responsibilities for employees, inconsistent knowledge, significant delays in queries and people still using legacy system.

Second phase of the project may have 3 areas to make improvements implementation: training, eliminating legacy systems, and Finance. There were several opportunities to improve your training program. As discussed in the case third party consultants were never provided with the proper training material and internal staff was not satisfied with the training program. There could have been a better model for the training being provided. Secondly, there were still the users after the Go-Live from the Mirabel plant that were using the legacy systems. Management should have discontinued access to all legacy systems. This is not an effective way of learning a new system. Thirdly, there were challenges with processing purchase orders during the Mirabel implementation. SAP was automatically sending fax purchase orders to vendors, causing problems within the MRP engine. Current system had the capability to email purchase order and there was no real need of sending fax to the suppliers each time there was an update to the system.

Overall the ERP implementation project was hit for Bombardier. Sap created an effective solution for their inventory and integration problem. ERP implementation at bombardier was made successful because of the proper vision and dedication to the system from the very beginning. The new system provided better organization, inventory visibility, purchasing, customer services, finance facilities and functional control.