ZIFFPAGE TITLEOne System, One LanguageBy Tom Steinert-Threlkeld | Posted 2004-10-01 Email Print
The contact lens division of Johnson & Johnson was doing its first global rollout. So its project team spanned the globe, too.
One System, One Language
How does one get "absolute speed" in taking orders, the prime objective in the worldwide overhaul of Vistakon's systems? By eliminating duplicative systems used only by a few countries and standardizing on a single software suite, with SAP AG business software the primary means of presenting information. Even with SAP as the glue, Vistakon to this day uses applications from Siebel Systems to manage relationships with customers, products from Manugistics to handle factory operations, and code from Cognos to let executives analyze what the sales and other transactions of daily operations really mean.
But the company is relentless in adopting a single way of managing orders and financial reporting. Indeed, Vistakon has one of the simplest mechanisms for enforcing a single means of running its business around the world. When it comes to tracking orders online, there is only one language in the end: English.
The translation takes place with each customer service representative. Whether an order is taken in Italian, French, Spanish or German, it is entered in English.
And, in the end, the translation takes place at the system level. The differing legal and tax requirements of each country in which Vistakon operates have to be taken into account, in every invoice or requisition that Vistakon creates.
"That's why you appreciate getting accurate requirements and detailed requirements and approved requirements, " Allen says. In Italy, for instance, the credit manager for Vistakon's sister company faced what seemed to be a relatively simple problem for his American counterparts when the order processing system went live in June. The new system automatically calculated both taxes and handling charges, but it failed to make a key distinction between types of lenses. Corrective lenses were medical products, by Italian law, and subject to lower taxes and handling charges. Uncorrected lenses were "luxury" goods and faced both higher taxes and handling fees. The new Vistakon system allowed for the higher taxes but incorrectly figured handling charges.
No big deal? Well, if the discrepancy went uncorrected, the Italian credit manager could go to jail, and his company might face a hefty fine.
As with the 14-character-field problem in the U.K., the handling charge issue was resolved in 24 hours, with collaborative efforts involving Sunbury, Jacksonville, Bangalore and Italy.
That kind of small but critical detail is why Vistakon did not even think of rolling out its "SAP at the core" system all at once. No project with thousands of variables, like this one, could take off without a hitch. The staffing requirements to avoid a worldwide meltdown upon launch would have been huge. "Who knows how many people you would need?'' Allen wonders.
If Vistakon could reduce its scattered operations and enforce a single system for processing orders, the benefits were obviousand tangible. Getting payback on the $50 million expenditure could take as little as two years if the division could achieve expected savings in inventory, streamlined planning, write-offs of obsolete products, and purchasing and technology costs.
The key, in Kuhbander's estimation, would be how to pull off a global rollout in a "very fragmented company." Inventory was spread all over the world, with as much as six months' worth of sales sitting on shelves in some regions.
To get going, the Atlas team, consisting mainly of Kuhbander, Allen and global business design chieftain Chuck Wyckoff, staged a two-day roundtable in 2002 with key Vistakon business managers in finance, sales, marketing and distribution. The question: Could the entire company, worldwide, convert to a single system of taking orders? And, if so, what would it take?
According to Wyckoff and Kuhbander, the answer was, in one sense, yes. And, in another, it was to pull business managers and technical experts from different parts of Vistakon who could spearhead and manage nine rollouts in nine months.
The result was a series of project teams to handle technology and finance, including processes for converting orders into cash, issuing requisitions and making payment, making accurate forecasts, getting products into stock, monitoring employee performance and converting data into a form the new systems could use.
All told, about 120 experts went onto eight teams, with about 55% coming from Vistakon's ranks and the rest from systems integrator Accenture and other contractors.
Here's how the deployment worked, as Atlas rolled out order processing and financial reporting systems in Europe through July:
Indeed, it would take dozens of pairs of eyes to head off problems spawned by changes to the system, like that required for invoicing in Italy. After all, what would happen in the first few weeks of implementation often could transcend the preparation that went before. "Training is important, but coaching and practice is more important,'' Wyckoff contends.
Just as important is pacing the project team. In the European rollouts, Kuhbander and Wyckoff drove their teams hard. In most months a cutover was happening in one country, or a set of countries, while the SWAT teams were still taking two or three weeks to tidy up work from the previous month's cutover. That kind of two-barreled pressure can last only so long. By April, the project leads decided to give their teams a breather, delaying the launches in Spain, Germany and France by one month.
More moderate pacing will be part of the second phase of the rollout, which will include Japan, the Pacific Rim and Latin America. In those cases, cutovers and SWAT remediation will occur in consecutive months. Where rollouts in Phase I came close to two countries a month, the frequency will fall closer to one every other month in Asia and Latin America.
Vistakon chose to spend most of the fourth quarter of this year making sure its documentation of U.S. business processes met the standards of the Sarbanes-Oxley Act, which was enacted in 2002. The new law tries to head off fraudulent reporting of financial results by publicly traded companies. In August, the company went live with its new financial reporting system and some related systems, such as the way it would forecast needs and stock accordingly.
The order entry and distribution pieces of the project, however, won't go live until Jan. 3, 2005, at least in the U.S. That is five months behind the original plan.
The good news: Though the rollout is focusing on a sequence of countries in a series of continents, Vistakon has not had to deal with any major blowup of systems. And it has been able to manage the focus of the rollout, so teams are teed up to tackle each stage in a logical, controlled fashion.
Now, there is just one distribution center, one manufacturing facility and one "customer interaction center" for all of Europe. And one order-taking system. An average 4-line-item order takes 42 seconds in the Americas, 26 seconds in Europe.
Which goes back to Wyckoff's guiding principle: The way to head off problems is to acknowledge they always exist. The solvent: Rapid communication, then rapid response. As Wyckoff points out: "You want to give the business confidence early on, because things are going to go wrong."
Vistakon Base Case
Headquarters: 7500 Centurion Pkwy., Jacksonville, FL 32256
Phone: (904) 443-1574
Business: Makes disposable optical lenses.
Project Leaders: Larry Kuhbander, Charles Wyckoff
Financials: $1.3 billion in revenue in 2003; $1.2 billion in 2002. Profits not disclosed.
Challenge: Establish a single worldwide method for taking orders from individuals, opticians, health-care professionals and mass merchants.