Evaluation Report On Nibcos Legacy System

Published Date: 02 Nov 2017

Introduction:

Go live was started on December 30, 1997 Day in NIBCO Co., Ltd., is a privately held mid-Scale manufacturer, headquartered in Elkhart, valves and fittings. In 1996, NIBCO has more than 3,000 employees (called "associates") and annual Revenue of $ 461 million. Although there are a lot of consultants, they interviewed Do not agree with the Big Bang, the plan is to convert the SAP R / 3.

All 10 factories and four distribution centres in North America in the same Time. The price for the 15 months of the project, estimated at $ 17 million. Special items in the first quarter, the company's senior management, including a former vice president of operations (Beutler), were including the leadership triad Director of Information Services (Wilson), and the former director of the Quality Management Department (Davis).

The NIBCO’s journey to go live day began three years ago, when a major strategic planning work the place. At a cross-functional team was charged at the same time with the reorganization of the company's supply chain processes to better meet customer needs.

An important conclusion from these efforts, the organization cannot flourish with the current information system recently significant investment, information technology over five-year earlier. Those systems have evolved into a patchwork of legacy systems and reporting tools. After initially negotiations with several consulting firms, senior management at the Boston Consulting Group (BCG) in August 1995, to help the development of the company's strategic information systems plan to meet the new business objectives.

NIBCO management team consensus is that the company is "Information poor" need to "cut loose" from the existing system. Their Main concern is to be able to grow the company, and the world does not have comprehensive information. December 1 BCG.The proposal is NIBCO replace its existing system, with common integrated system, can be achieved in small chunks, 3 - 5 years Schedule.

Into cross-functional, matrix structure in January 1996, the company began restructuring. It also created a new cross-functional strategic planning process. Scott Beutler was relieved of his line management responsibilities, to focus on the development of a new IT strategy.

Executive Summary:

Beutler NIBCO in early 1990 to join the business sector re-organization the retail business unit. When of general manager, he becomes the vice president of operations - the residential sector. Beutler was Responsible for learning whether a new type called enterprise resource planning system (ERP) system solution package will be the best of IT investments to drive the company forward.

NIBCO the consensus of the management team, the company is "poor information" needed "cut loose" from the existing system. The growth of the company, to become the main concern of the world does not have a comprehensive ability. December 1 BCG

The suggestion is that NIBCO replace its existing system with universal, integrated system, can be achieved in small chunks, in the 3 - to 5-year timeframe.

According Scott Beutler integrated in your thinking ability to process common system is a major factor in the common communication manufacturing and distribution area, across the enterprise. '

Gary Wilson’s recent survey shows, the new head of the department in May 1995, soon became a member of the research team of the BCG. Wilson more than 20 communications AIS in six years of experience, including in a multi-partition management group

Company and leader in the four project implementation. It is reported that he, Dennis Parker, the Chief Financial Officer. Wilson inherited the IS department about 30 NIBCO experts, including

Who ran the host application HP3000 and IBM / MVS platforms. About half COBOL programmers. The wages in NIBCO including contractors up to five years, the number of.

Four main legacy system support order entry, manufacturing, distribution and accounting functions (Figure 1). Buy their own their own versions of the same application package and plants running their manufacturing package, a separate business unit accounting databases. Where production packaging system running IBM, Hewlett-Packard, and a distribution package, repackaging running on the IBM run. Talk to each other. Distribution is not see what the manufacture and manufacturing cannot see what doing.

Jan Bleile said that the distribution and sale of electricity users in the BCG study when, with the environment and data functions, causing widespread dissatisfaction with, at best, because the suspect's

Multi-point access to multiple databases. The system developers spent most of the time of custom interfaces between the system and attempt to resolve the "disconnected".

Identification and discussion of processes that contributed positively/negatively to the final outcome:

According to Beutler the process of the establishment of a cross-functional team selected ERP package, as early as in 1996.CFO Parker is the executive sponsor and eight, including Director-level manager. Wilson has played a role of the internal technical consultants, also Beutler management group, which is seriously immersed in a data warehouse project.

The selection team also made some reference Implementation Measures And the success rate. Some team members feel, BCG recommends 3 - 5 years of implementation of ERP implementation is not the best way NIBCO.

Negative concerns, the company will just get to the point where it will say "enough" implementation of the entire plan team. The members also observed that some of the companies, with the most successful in a phased, "go slow" approach. In the same Time business plan calls for faster implementation.

Jim Davis said, the strategic planning process led restructuring team, was asked to facilitate the selection panel to develop recommendations Executive Leadership Team (ELT), because I experience the convenience, someone asked me, in order to facilitate the meeting, so there will be an objective person, no special

Interests or prejudices, to help guide the discussion ... it is actually a bit of a breakthrough, because in the context of the meeting, we changed our approach solutions from a single point in three to five years ERP big Explosion.

A recent survey by Jim Davis introduced the project Joint Lead change Management. In 1996 in July, in the ERP selection panel recommended ELT NIBCO Purchase a single ERP system: SAP R / 3. Benefits to millions of dollars of business improvement and reduce inventory costs; 6% of NIBCO revenue on the basis of the ROI the growth forecast. AIS communication costs estimates include estimated the number of R / 3 license from mainframe to client / server platform, and move. Consulting fees according to the method of the Big Bang is still high - about one-third of the project budget.

They will be lower than the estimated 1000 days for 3 - 5 year phased approach. Both methods will need to spend a substantial increase. ELT support the recommendations as soon as possible the implementation of the R / 3 may pull Business, focused, and complete it were assumed as final positive outcome by the senior supervisory.

Identification and discussion of processes that posed a risk and how those risks were minimized/insufficient information to take action:

The R / 3 purchases and the Big Bang of the implementation plan, and then submitted to the Board of Directors of NIBCO. The Board considers that the methods of the Big Bang, because of the high Risk, high return. Implementation of new supply chain and customer-oriented strategy, in order to quickly put in place systems to out Strategic planning process, the company must submit an important part of their resources. This means dedication to the best talent to the project.

To ensure that the implementation of risk as well as the signing of the contract with SAP FI / CO, MM, PP, SD and HR modules and about 620 user license shortly after managed. A HR (human resources) Module will be implemented later. Rex Martin, chairman, president and CEO of NIBCO. In the first few months of the project, co-led work with IBM project leaders of honed scope, cost and size of the project. Development of the final project plan and realistic budget. In early December 1996, the final scope of the project and resource estimates and the ELT Board to live based on the date of the last 12 months later.

The project budget is estimated at $ 17 million, 30% higher estimated that more than the height of summer. A significant increase in one of the important reasons including change management costs (including training) have been missing from the summer budget. The final budget is about one-third of the cost of the technology infrastructure, including R / 3 software.

Another third on the cost of the team and education NIBCO associates. The final third is a third-party consulting. The monthly plan also discusses two major changes of the scope of the project. A proposed, including North America only.

For example, the United States (as in Poland) sales offices, will not be included in the the Big Bang implementation. A second range changes due to technical problems. NIBCO, 17 distribution centres at the end of 1996, but its long-term strategy is to consolidate

At least half of this figure. R / 3 projects involve 17 distribution centres, with high technology installation and operating costs, as well as high Due to the location of the sheer number and complexity of the project. Therefore, the distribution centres to integrate ERP go live date technology while reducing cost and complexity.

Detailed planning is the incomplete distribution centre (DC) merger, the final project plan was submitted to the Board by March In 1997, the company is committed to consolidate from four large 17 small DCS: one of the existing facilities will be expanded, new managers and associates will be hired to run three new DC facility. Our goal is to complete

Merger in September 1997, in order to have the time of the switch to the ERP system.SAP ready to provide the opportunity for integration, this situation is not uncommon. The company decided on a certain amount of consolidation something.The original timing completed ahead of SAP's warehouse merge a couple of months.

Gary Wilson made measures where the Project Co-Lead, technology has several major business risks associated with the project, but also For administration. First, the integration of the work, or any aspect of the organization, claimed that they are no better Close, and even less well-off than before the implementation of the project.

This means that the team will have to make the decision to focus on the goal of integration, which will result in along the way to kill some "sacred cows".

Second, the company can significantly damage in the course of the project, because most of the other company initiatives, basically "set aside". The only exception was the integration of the distribution centre, which will involve large-scale personnel changes and increased demand for training. At the same time, it will be important to maintain as much as possible of customer satisfaction possible. Management of also know that, if the project is late, it may really hurt Company. Therefore, the quality of the project must be completed on time result was a potential risk.

Therefore with insufficient information the project cannot pull the 27 full-time employees of the business is running quite thin, and then backfill, and expect companies to go on the merry road. Therefore at the scene SAP process with our competitors, we realize, and the first two weeks of their lives, they cannot take a customer's order. Leading to the Real life risk.-before us horror stories. Therefore, risk management, from our point of view: we want to "deep six this company, if we do so poorly, or if we do not do this time.

Jim Davis, Project Co-Lead, change management, project team members without backfilling positions NIBCO associates project team had to take extra work to maintain Normal operations. This means that the need to be submitted to the entire organization of the ERP project. Pre participate in one-third of the goal of NIBCO the salaried associates set up to ensure that they understand where the project, in order to promote buy and get the job done.

Identification and discussion of processes that were not undertaken but might have contributed positively, if they had been included:

The project carried out four major stages: Prepare, analyze, design, sale and Implementation. Because several tools for the team built a number of with the process script and project management tools to help. For example, the project office is the NIBCO development of tools, project management and project tracking using Access database (MS Office 95).

The Project Office all project planning documents, databases and assembly table to support the project documentation, test plans and results, on-site

For example, access to and training programs, issued records, sales order processing script, including more than 100 pages of detailed documentation, and As the basis of classroom training document. This tool enables team members to access the latest project file and measure key milestone in the project.

Due to the time requirements of the project, all team members to provide a laptop, so that they can work 24 hours a day, 7 days a week, from anywhere. They wanted TIGER project support mobile (remote access), any time / anywhere support also NIBCO's commitment to help its employees to use their symbolic and better use of information technology.

An evaluation of the overall effectiveness of the Purchase:

The purchase process was divided into seven ERP package in-depth evaluations. Representatives from each functional area participated in the exercise of a particular module, and Select team also visited a number of different suppliers, customers. The strengths and weaknesses of each package is mapped to an evaluation matrix. One of the key decision-making is the best financing package series and Supply chain solutions around a common database, or select a single ERP system integrates all the modules.

According to Jim Davis the overall effectiveness came up after few months, the project began, a special pay incentive bonuses, every salaried NIBCO associates. The bonus is tied to a half-dozen of the standard. The plan must be satisfied to live, or no incentive pay. Allocated as follows: 30-day grace period is allowed only from the original date set, which is the Monday after Thanksgiving (Nov. 29).

Also establish incentive compensation pool will be reduced by 50 cents for the whole project per dollar budget. Four "successful" standards, as well as with a specific Measures. The results of these measures will be implemented two months after the review of ELT, regardless of whether these results jointly met the criteria for success; the Board will make the final decision.

A ‘lessons learned’ to inform future any Purchase Process:

Purchase program will be one of the biggest lessons of all accounts payable items change is concentrated dispersed plants have been in the past. Swartzenberg flowers Additional development documents, including flow charts and other tools to help the transition. For example, the checks and balances process.

Designed to look for specific areas in the transaction will be the first visible. The first month of the accounting group every day to do these checks. After go live, the problem could be fixed, as they occur, and avoid hitting the wall first fiscal year end. To help develop an extended marketing team members from earnings reports (P & L) product line, copper fittings, cast iron pipe fittings, plumbing,, Heating valves, and other information, cannot be used under the old system.

Section-B

Question-1

Reflective Essay:

While using SAP software Firstly, I installed it in my laptop. It was good experience to use new software. I login by using given username and password. Then I reset my password.

In next week, when I tried to login again to do second exercise, my login was failed, might be my password was not working or I forgot my password , but I was very sure that I did not forget my password, i tried number of times but again its giving login failed. I totally frustrate this time, i contacted to my tutor, she helped to login but it was not working, then she advised me to send a mail to course leader about this problem to reset password again. I sent mail and he gave me option to reset my password again and then finally i reset it and login to do my next practical class work.

There are five criteria, which could be used by end user in while using SAP. Mobility, Database Technology, SAP Accounts Payable, Accounts Receivable, Bank Accounting.

Mobility: The global mobile workforce is growing and beginning to overwhelm enterprises. Even large multi-national companies do not have the resources to support complex mobile deployments, and the current global climate is forcing them to make hard decisions on which IT projects get the green light. With limited budgets and growing mobility business needs, many of these companies are striking the right balance with a different model.

Database Technology: The SAP Database & Technology category includes our new SAP HANA in-memory platform for analytics and applications, as well as SAP Sybase ASE, SAP Sybase IQ, SAP Enterprise Information Management and other components of broader technology portfolio.

SAP Accounts Payable: Accounts Payable Manual, It is very descriptive for beginners. The end-user manuals will find in this package such as Adjust Advance against Bank Guarantee and Adjustment of Advance against Bank Guarantee.

Accounts Receivable: Accounts Receivable manages the accounting data of all customers. It is also an integral part of sales management. It is possible to freely define all country-specific characteristics, such as the specifications for manual and electronic payment procedures, payment forms, or data media. The payment program can automatically carry out direct debiting and down payments.

There are a range of tools available for documenting the transactions that occur in Accounts Receivable, including balance lists, journals, balance audit trails, and other evaluations. When drawing up financial statements, the items in foreign currency are revalued, customers who are also vendors are listed, and the balances on the accounts are sorted by remaining life.

Accounts receivable is not only one of the branches of accounting that forms the basis of adequate and orderly accounting. It also provides the data required for effective credit management, (as a result of its close integration with the Sales and Distribution component), as well as important information for optimizing liquidity planning (through its link to Cash Management).

Bank Accounting: This SAP provides the details about Bank accounting in SAP FI module. This component is used to handle accounting transactions that you process with your bank. It includes the management of bank master data, cash balance management (check and bill of exchange management), and the creation and processing of incoming and outgoing payments. All postings in Accounts Receivable are also recorded directly in the General Ledger. Different G/L accounts are updated depending on the transaction involved (for example, receivables, down payments, and bills of exchange). The system provides a range of tools that we can use to monitor open items, such as account analyses, alarm reports, due date lists, and a flexible dunning program. One can configure the correspondence required to suit the requirements. This is also the case for payment notices, balance confirmations, account statements, and interest calculations. The incoming payment can be assigned to the receivables due by means of easy to use screen functions or electronically (EDI).

SAP Exercises

Chapter 02: Introduction to SAP

Exercise 02-01: SAP Navigation

Multiple Company Codes

Q1: In the "Customer Balance Display" screen, what is the top field what is the top field information that can be inputted:

Answer: Customer

Q2: What is the second field information that can be inputted?

Answer: Company code

Q3: What is the third field information that can be inputted?

Answer: Fiscal year

Q4: What is the transaction code for display balances?

Answer: FD10N

Q5: What is the Customer Account Number definition?

Answer: A unique key used to clearly identify the customer within the SAP.

Q6: Search the navigation path for "Material Master." What is transaction code of the first item?

Answer: FD10N

Chapter 03: Financial Accounting

Exercise 03-01: Review Master Data

Multiple Company Code

Q1: What is the transaction code to view balance sheet account?

Answer: FS00

Q2: What is the G/L Account number for the Bank Account?

Answer: 100000

Q3: What is the Account Group?

Answer: Liquid Assets

Q4: What is the Account Currency?

Answer: USD (United States Dollar)

Q5: Is posting to this account without tax allowed:

Answer: No

Q6: What does the Tax Category E0 stand for (Hint: To look up possible entries. Press F4 button while having your cursor in the tax category field):

Answer: A/P Sales Tax, exempt

Q7: What is the Sort key 003 sort the accounts by:

Answer: Document date

Q8: What is this Bank account sorted by:

Answer: Posting Date

Q9: What is the field status group:

Answer: ZGBS

Q10: Is this account relevant to cash flow:

Answer: Yes

Q11: Are posting to this account done automatically:

Answer: No

Q12: What are the language keys defined for this account:

Answer: English, German

Q13: why do we have those particular languages defined for GBI:

Answer: Because GBI is joint venture and multinational company between German company and US company.

Q14: What is the transaction code to view a profit and loss account?

Answer: FS00

Q15: What is the G/L Account number for the Supplies Expense?

Answer: 740000

Q16: What is the Account Group?

Answer: Profit & loss accounts

Q17: List five other Account Groups available:

Answer: Balance sheet account, fixed assets, Liquid assets, Material accounts, Reconciliation account.

Q18: What is the Account Currency?

Answer: USD (United States Dollar)

Q19: Is posting to this account without tax allowed:

Answer: Yes

Q20: What is the field status group?

Answer: ZEXP expense accounts

Q21: What does the field status group determine?

Answer: Document entry

Q22: What is the ZREV field status group?

Answer: Revenue Accounts

Q23: What is the B1 Planning Level?

Answer: Outgoing Checks

Q24: What are Planning levels used to control?

Answer: Displays in cash management

Chapter 03: Financial Accounting

Exercise 03-02: Basic Financial Accounting Process

Single Company Code

Q1: What is the transaction code to post a journal entry?

Answer: FB50

Q2: What is the resulting document number?

Answer: 100000017

Q3: What type of document is this?

Answer: Financial Accounting Document.

Q4: What is the transaction code to view account balances?

Answer: FAGLOB03

Q5: What is the G/L account number for the Bank Account?

Answer: 100000

Q6: What is the document currency?

Answer: USD

Q7: What are the current debit balance for the Bank Account?

Answer: 748,500.00 USD

Q8: How many accounts are being affected within this transaction?

Answer: 2

Q9: Which account is being debited?

Answer: Bank Account

Q10: Which account is being credited?

Answer: Common Stock

Q11: Which period did this transaction take place in?

Answer: 6

Q12: What is the transaction code to purchase assets?

Answer: FB50

Q13: What was your document number for the purchases of Supplies?

Answer: 100000023

Q14: What is the G/L account number for the Supplies Expense?

Answer: 740000

Q15: What is the G/L account number for the Bank Account?

Answer: 100000

Q16: What is the Posting key for the Supplies Expense?

Answer: 40

Q17: What is the Posting key for the Bank Account?

Answer: 50

Q18: What is the transaction code to enter a G/L account document?

Answer: FB50

Q19: What was your document number for the purchases of Supplies on account?

Answer: 100000082

Q20: What is the G/L account number for the Supplies Expense?

Answer: 740000

Q21: What is the G/L account number for Payable- Miscellaneous?

Answer: 300200

Q22: What is the Posting key for the Supplies Expense?

Answer: 40

Q23: What is the Posting key for the Payable- Miscellaneous?

Answer: 50

Q24: What period did this transaction take place in?

Answer: 9

Q25: What was your document number for the payment of the payable?

Answer: 100000083

Q26: What is the Posting key for the Bank Account?

Answer: 50

Q27: What is the Posting key for the Payable- Miscellaneous?

Answer: 40

Q28: What period did this transaction take place in?

Answer: 9

Q29: What is the transaction code to used to pay the rent?

Answer: FB50

Q30: What was your document number for expensing next month’s rent?

Answer: 100000078

Q31: What is the G/L account number for Prepaid Rent?

Answer: 215000

Q32: What is the G/L account number for Rent Expense?

Answer: 740300

Q33: What was your document number for expensing next month’s rent?

Answer: 100000081

Journal

Date: 18 September, 2012

Chapter 02: Introduction to SAP

Exercise 02-01: SAP Navigation

Multiple Company Codes

While doing 1st exercise using SAP software, it works easily. Firstly, I installed it in my laptop. It was good experience to use new software. I login by using given username and password. Then I reset my password. I got problem in question no. 7, it was about plant used in a parameter settings. This exercise was based on first session and I was confused to found plant. There might be direct steps.

Chapter 2: Introduction to SAP was easy. I got all answer very easily. This software has so many features like to search a particular screen by giving its transaction code. In the test field at the top of page, by entering search_sap_menu and pressing enter. It opened a new screen that had a location to "search text only".

Date: 25 September, 2012

Chapter 03: Financial Accounting

Exercise 03-01: Review Master Data

Multiple Company Code

Chapter 3: Financial Accounting, it provided an exercise to review master data by using Multi company code, it is the advanced feature of SAP, I done this exercise easily, but got little bit problems that were solved with the help of my tutor.This exercise is based on financial accounting, which reveals the information about accounts that how to view the display balances and check transactions. It was very informative.

Date: 2nd October, 2012

Chapter 03: Financial Accounting

Exercise 03-02: Basic Financial Accounting Process

Single Company Code

The Basic Financial Accounting Process was the third and last exercise. It was big exercise having 33 questions. In this exercise, I found problem in question no. 16 and 17. It was about posting key and there was no direct information to find posting key, after getting confused, I asked my tutor to help me. I got posting key from bank account screen, because it show all the document information.

Overall, it was good experience to learn about new software and its features that are quite helpful in IT as well business stream. These exercises provided the basic information and key idea to access SAP.