AgriBeef: Cattle DriveBy Larry Barrett | Posted 2004-11-01 Email Print
WEBINAR: On-demand webcast
Next-Generation Applications Require the Power and Performance of Next-Generation Workstations REGISTER >
The beef distributor wanted new software for billing, accounts payable and receivable software. The winning vendor had six weeks, instead of the usual 12, to get it installed—or lose the job.
Casey McMullen found himself in a bind a year ago when he and the executive team at Agri Beef were close to signing a contract for the firm's biggest software implementation to date, one that could cost up to $2 million. For just six weeks of work.
The Boise, Idaho, cattle feeder at the time had 1,100 employees, including six who worked under McMullen, the beef ranching and distribution firm's director of information systems. The conundrum: McMullen had to convince the company to sell himself and his organization to PeopleSoft, the business applications vendor. In the transaction, Agri Beef would be adopting the Pleasanton, Calif., company's billing, accounts payable and accounts receivable software.
"We were going to do this implementation in six weeks," McMullen says, about half the recommended time.
Agri Beef didn't want to pony up more licensing fees for its aging IBS financial software. Moreover, following the acquisition in May 2003 of Toppenish, Wash.-based Washington Beef LLC, the company had set as its goal to get the tracking of results of both companies onto the same financial software by the beginning of the next fiscal year, on Jan. 1, 2004.
Getting the project completed quickly could also only be done at the end of a year.
"The fourth quarter tends to be our slowest quarter," McMullen says. "And the first quarter is one of our busiest. If we couldn't have gotten the system implemented by Jan. 1, we would have had to postpone the project until May or June of 2004."
By going live at the beginning of a fiscal year, Agri Beef could also reduce its workload. By making the switch at the instant a fiscal year changes, all its technology staff would have to transfer would be the balances in general ledger accounts. Converting all of the details behind thousands of general ledger, accounts payable and accounts receivable transactions that would otherwise accrue after Jan. 1 could be avoided.
"When this process began, we didn't anticipate only taking six weeks to complete the project," McMullen says. "But once we started down that road, there was no looking back."
Even though Washington Beef had been acquired in May, Agri Beef kept comparing the offerings of vendors such as Microsoft Great Plains, Lawson and Epicor until November. Then, it chose PeopleSoft—with 42 days to go before Jan. 1.
For the folks at PeopleSoft's Global Services group, the Jan. 1 mandate seemed unrealistic at best, potentially disastrous at worst. "When they made it clear that they wanted it done in six weeks, I know I had that questioning look on my face," says Geetika Mohindra, PeopleSoft Global Services' project manager for the Agri Beef implementation. "There were some people who said, 'It cannot be done. It cannot be done.'"
Putting in financial systems often involves extensive configuration to meet the needs and desires of a company to report financial results in a manner to which it has become accustomed. For PeopleSoft Global Services, knowing how complicated this can get, the definition of a "rapid" implementation was 12 weeks. Even then, the implementations were stressful and required a somewhat rare animal: a highly motivated customer willing to commit the time and people to make a tight schedule happen.
Mohindra and the PeopleSoft team decided to take on the roughly $2 million project, even though there might not be enough time to train Agri Beef's employees or make the 13 connections needed to draw information from existing Agri Beef systems and applications. Also possibly squeezed out of a sprint to the finish: proper testing and debugging.
The planning for rapid training, which billing and customer codes would be used, and other details began hours after the contract was signed on Nov. 23. Mohindra and her team met with McMullen and Agri Beef's vice president of business development, Rick Stott, to lay out what would become "Project Unity."
The race to Jan. 1 meant mobilizing the company's four divisional controllers as captains of the effort to unify financial reporting processes. These were the "key users" who had been painfully slogging away for years with dozens of Excel spreadsheets generated from various financial systems every month and quarter to compile consolidated reports. The controllers made critical decisions on the spot at each stage of the project.
One of the biggest decisions, made early in the implementation by the controllers, was agreeing to a new numbering system for vendors and customers. This way, all of the accounts and billing statements would match across the entire organization.
"Our old system did not share the customer and vendor table across companies," McMullen says. "So there was a lot of duplication, both in names and numbers. We had to come to an agreement for not only new numbering but also new business processes with respect to who gets to set up customers and vendors from go-live forward."
McMullen and Stott also recruited for the project the company's controller, the director of information technology at Washington Beef, the controller for the company's PerforMix Nutrition Systems unit, and a lead programmer from his own staff.
This sponsorship from on high cleared the way for
cooperation and commitment from Agri Beef's operating managers.
Out in Pleasanton at PeopleSoft Global Services' laboratory, a team of 11 consultants specializing in the PeopleSoft Enterprise financial software systems, five of whom would be dedicated to the Agri Beef project full-time, gathered to review strategy. Their job: make hard choices about which processes could be abridged or truncated to meet the six-week mandate.
Originally, the plan called for six financial "modules" to be implemented by Jan. 1: general ledger, accounts payable, accounts receivable, billing, cash management and fixed asset management. In the end, only the first four modules made the cut. The cash management and fixed asset management modules would come later.
No New Code
The biggest decision? To write no new code. Agri Beef could only pull off this six-week implementation if it used PeopleSoft's Enterprise Financials software out of the box with no customization at all.
"There's no way we could have done this had we customized the software or made significant modifications," McMullen explains. "Any business-change decisions needed were made either well before the project started or on the spot with the help of the PeopleSoft consultants."
This approach meant Agri Beef had to make choices about how it would configure the PeopleSoft software from the options already available. That would cut the configuration stage to one week, from four.
Agri Beef employees would have to be trained in half the time usually required. Normally, a customer would fly its key users into PeopleSoft University for four days of on-site training. For this project, PeopleSoft sent its consultants to Boise for two days to lead a condensed boot camp at Agri Beef.
Testing would also have to be compacted. For example, while the Agri Beef managers and PeopleSoft consultants were checking functions of the system in one corner of a lab in Pleasanton, technical teams were in another part of the lab reviewing screen interfaces and the generation of reports.
Mohindra says the first few weeks of the project tested the resolve of all participants.
"To be honest, it was really intense and stressful," she says. "There were times we did have some doubts. But as we reached certain milestones, it became fun despite the crazy hours and pressure. Nobody wants a failed implementation, and if they weren't live on 1/1, it would have been a failure."
Once the basic configuration was completed, McMullen says the company ran into what would be the only significant snag in the process.
"We had to order the new servers for the system, and we weren't sure exactly how much capacity we'd need with this new software," he says. "And the problem was that it takes about three weeks to order and receive the hardware. So we had to make some quick decisions because we were about three weeks away from Jan. 1."
To make that happen, Agri Beef relied on an assessment of needed hardware from the PeopleSoft consultants. This came three weeks earlier than usual.
"The truth is, a lot of customers don't want to pay the extra expense for us to do a technical assessment of their hardware needs," Mohindra says. "But by this point, there was a level of trust and credibility on both sides. A decision like this can often be very political, but Agri Beef was committed to their timeline and agreed with our assessment. And they got their hardware delivered and installed in time."
Agri Beef purchased a Dell 2650 Web server with dual 3.2 GHz processors, two load-balanced Dell 2650 application servers and one Dell 2650 database server to accommodate the new business software.
Brian Zrimsek, an analyst at Gartner, says he initially was very skeptical that any company could pull off an ERP implementation, vanilla or not, in six weeks. But ultimately, he says, the short timeline might have been a blessing.
"It's very hard for a project to go in the ditch in six weeks," he says. "Also, this was a very limited implementation, just financials, and really only for about 50 users. To their credit, they were able to leverage PeopleSoft's lab and had very strong executive sponsors. That makes a big difference."
Zrimsek says Agri Beef was also able to unify the two companies under one system mainly because there was very little overlap between their business models.
"Basically, you had a processing company and a ranching company," he says. "It's the meat business. It's not terribly complex. You grow stuff, you kill it, you package it and you ship it."
Once the hardware was on the ground in Boise on Dec. 9 and the configured system was finalized at the lab on Dec. 12, McMullen's team and the PeopleSoft consultants worked through frigid weather and the December holidays to meet the New Year's deadline.
The last two weeks of the implementation focused on loading the databases, testing the system and finalizing the interfaces between the company's homegrown production and supply chain software and the new financial software.
Agri Beef's old systems didn't allow for automated recording of transactions between its 22 business units scattered at 10 different locations. Every time an order of meat was sold from one of its ranches to one of its distributing units, a clerk would have to type up a paper invoice and cut a check to a division even though they were both inside the same company.
When an inter-company transaction occurred, that physical check was then deposited into the other company's account so that all sales, cost of sales, inventory, and accounts payable and receivable transactions would be created. Then, for consolidation purposes, those transactions would be manually accrued and rolled up to the corporate controller for approval.
McMullen estimates that more than 4,600 man-hours were devoted to this implementation. But the savings will be lasting. He says Agri Beef now recoups at least 200 man-hours every month compiling the data for its financial reports. Transactions between business units are automated, and every unit in the organization is using the same system for the first time in the company's history.
"We met the goal and went live in January," McMullen says. "We're not the only ones in the world who can do this. Once you have convinced yourself and you've convinced your vendor, it can be done."
Commitment and concentration is what counts, according to Mohindra. And an appreciation for the difficulty of cutting schedules in half—to get to the meat of the order.
In this case, that appreciation could be tangibly expressed, she says. "They took us out for some expensive dinners after it was all over to celebrate. And we actually had some of the Agri Beef meat."
Agri Beef Base Case
Headquarters: 1555 Shoreline Drive, 3rd Floor, Boise, ID 83702
Phone: (208) 338-2500
Business: Raises, processes and distributes beef throughout the western United States and Japan.
Director of Information Systems: Casey McMullen
Financials in 2003: Posted sales in excess of $500 million.
Challenge: Install PeopleSoft Enterprise financial software for general ledger, accounts payable, accounts receivable and billing.
- Complete implementation in 42 days, half the normal time.
- Consolidate two financial reporting systems into one.
- Reduce collection of financial data by 200 hours each month, from 800 hours.
- Eliminate Excel spreadsheets for monthly, quarterly and annual financial reports.
Agri Beef: 42-Day Countdown
PeopleSoft said it would take at least 12 weeks to implement its financial software. Agri Beef said six. Here's how they met the cattle feeding company's 42-day dictate.
Path of Six-Week Agri Beef Implementation
- Develop tentative project plan
- Install PeopleSoft system in lab
- Create databases
- Design, develop and begin to test transfer of data
- Develop connections to existing systems
- Design tests
- Finish project plan
- Document new procedures
- Test and debug connections to other systems
- Create support plan
- Install servers
- Load data
- Begin tests
- Train employees
- Complete testing of connections
- Finish transfer of data
- Test entire system
- Prepare for cutover
- Set up security
- Go live
Path of a 12-Week Peoplesoft Implementation
- Develop tentative project plan
- Conduct workshops on configuration
- Begin to design configuration of system
- Finish design of system
- Develop final project plan
- Validate configuration design
- Configure system
- Configure system
- Configure system
- Finish configuring system
- Test modules
- Complete testing of modules
- Test integration of modules
- Make extensions where needed
- Test system
- Convert and validate data fields
- Test system, with data
- Migrate data to new system
- Test complete system
- Go live
SOURCES: Agri Beef, PeopleSoft