Deploying a Silver LiningBy Sean Gallagher | Posted 2003-04-01 Print
The best time to upgrade an enterprise may be when things are at their worst.
The economy sucks. Revenue is falling. Uncertainty about the outcome of war covers everything like a wet blanket. What better time to change the enterprise resource planning software you use?
So figured Saint-Gobain Semiconductor Equipment, the San Jose subsidiary of the $30-billion-a-year French conglomerate Saint-Gobain. Formed through the acquisition and merger of two smaller companies at the end of 2000, Saint-Gobain Semi's two existing accounting systems weren't up to producing financials for the combined company.
Both companies started out as machine shops, making metal components for factory equipment. But in the past three years, they had come to be integrators of chip manufacturing systems. One planning system, from Votaw Data Systems, was weak. The other, Visual Financials from Lilly Software Associates, was "not bad, but not good enough," in the eyes of CIO Brian Wong.
Then the bottom fell out of business. Sales for Saint-Gobain's High Performance Materials division, of which Saint-Gobain Semiconductor is part, fell 21% in 2001 and another 10% in 2002 (to $3.6 billion a year worldwide). So Wong figured that the time was right to replace not just one system, but both.
After all, when the good times start to roll again, you want to be ready. "Our concern was that we'd be in the middle of an implementation when the industry came back," says Wong. "We were worried that the ramp-up would come in the middle of our project and we'd be in trouble."
Wong brought in consultants to interview "half the company" to determine the type of system that was needed. A hundred possible packages were winnowed to 12.
Finalists included SAP and J.D. Edwards, two established purveyors of enterprise software. "But then we were introduced to Adonix," remembers Wong.
Adonix's X3 planning software is a "mid-market" system, designed for manufacturers and distributors doing between $30 million and $300 million in annual business. "We found it provided just about all the bells and whistles we needed for our situation at a much lower cost up-front, as well as from an ongoing maintenance standpoint," says Wong. The price tag: $500,000, compared with $1.2 million for SAP R/3.
"We liked SAP," says Wong, but Saint-Gobain would have had to change how it operated to work with the software most effectively. "At the end we thought it was going to be way too cumbersome for our company to use and make changes to," says Wong.
Saint-Gobain had just 12 people in its technology department. The company was on its way to cutting its work force to 300, from 1,000. A fast, reliable rollout was key.
Adonix may have actually been less flexible than SAP. But it was geared to companies of Saint Gobain's size, with such features as integrated financials and job scheduling, all accessible from a Web browser.
And it could be in use after eight months, while SAP might take twice as long to put in place. Yet, while business was down, the workload on systems didn't really slack off. Saint-Gobain was still handling about the same number of transactions as it had when business was booming—"it was just fewer dollars per order," says Wong.
As it turned out, Wong says there were no major problems. But that's not to say the move was a cakewalk. The company's downsizing, while not directly hitting Wong's staff, did place resource and time constraints on the project. That meant the staff on the implementation project also had to cover other operations requirements—and Wong didn't have the luxury of bringing in outside help. "It has definitely been an adventure," says Wong.
Unfortunately, the adventure is ongoing. Business is not in any hurry to turn around. But at least when it does, Wong won't be saddled with the distraction of changing the software that underlies his basic operations.
These days, you have to take good news where you find it.
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