With its business at a sustained growth rate of 37% for close to 10 years, SMART Technologies knew it was time...
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to make some tough technology decisions about some of its aging legacy systems.
The Calgary-based company, a leader in developing interactive white board products, realized it needed an ERP system with more muscle to serve as a foundation for its financial operation and streamline its global supply chain, and one that could scale in function and performance as fast as the company was growing.
"The real motivator for the change was our growth, the fact our [existing] systems would not scale and there were some significant functionality gaps," said Mike Battistel, SMART's vice president of information systems. "The E-Back Office system couldn't support multi-currency or multiple inventory locations."
In searching for a more comprehensive ERP-based solution, SMART started by looking at a handful of "Tier 2" products, according to Battistel, but the company decided that none of them would do a sufficiently good job beyond the next few years. The company quickly switched its focus to the "Tier 1" players, namely Oracle and SAP.
After extended conversations with both Oracle and SAP, SMART chose Oracle's E-Business Suite 12, for a couple of reasons. First, the company chose Release 12 over Release 11 of the Oracle product to save the time, cost and aggravation of another reimplementation. The second reason, the more important of the two, was that Release 12 is designed to comply with the International Financial Reporting Standards (IFRS) standard.
The implementation process has gone relatively smoothly. Phase 1, which was completed in April 2008, consisted of Oracle Financial Management, Oracle Purchasing, Oracle Order Management, Oracle Warehouse Management, and Oracle Business Intelligence Suite Enterprise Edition. Phase 2, which began last August, consists of implementing Oracle Advanced Supply Chain Planning, Oracle Inventory Management, and Oracle Discrete Manufacturing.
Battistel said the process has gone smoothly, largely because the company rolled out the pieces of Release 12 slowly but surely.
"We phased it in function by function, because it is just likely to be more successful if you take it in bite-size chunks," Battistel said. "We had to rewrite some interfaces because E-Back Office interfaced with a number of systems here, like our reseller ordering system. It wasn't a big deal, more like a medium-sized one."
SMART still has some of E-Back Office in place because it has not yet converted all of its manufacturing operations over to Oracle's product.
SMART hit a few potholes along the road to full implementation. A number performance and stability problems with the product cropped up, particularly with the financial component, Battistel said.
Consequently, Oracle sent in a team from its technical support organization that spent four months working with SMART's IT team to isolate the root causes of the problem.
"They did help us isolate some of the root causes and acted as sort of ambassadors to Oracle's tech support so we could get these issues resolved more quickly," Battistel explained.
SMART had also contracted with OSI Consulting Inc., a third-party support organization that deployed between 15 and 20 technicians, to help with the switchover.
SMART has been pleased with the ROI from Release 12. The company has seen a 40% improvement in productivity for order management and a 25% productivity improvement in shipping and warehouse management, Battistel said. It has similar expectations for productivity for its manufacturing operations, but the company is still in the process of implementing those modules.
Looking back, Battistel said one thing he would change is to offer users more in-depth training on the new products. He said users should have received a better "end-to-end" view of some of the decisions and choices they make in using the system and what the rippling effects of those decisions are to other users.
Detailing one recent example, he said the company made some changes to its item master involving a couple of its products. With those changes, the company also changed the flag that determines whether the serial number is selected at the time the product is shipped or at the time the product is ordered.
"Our business process calls for serial numbers to be selected when the product is ordered, and that selection is done automatically by the system. So when it is shipped, people can pick those 10 SKUs, scan them and put them on the truck," Battistel explained. "But the woman changed the flag, so people would have to go out and find the 10 specific SKUs with the serial number that had been assigned at the time the product was ordered. She admitted she didn't realize what would happen by changing the flag."
Besides E-Business Suite 12, SMART has also deployed Oracle 10g and 11g databases. But when it came to software that would integrate the two, the company went with software from Tibco and not the Foundation Packs part of Oracle's Application Integration Architecture (AIA) lineup.
"Tibco had more functionality, and there were actually more pre-written services for Oracle in the Tibco product than in the Oracle product," Battistel said. "Also, price was a factor -- Tibco was significantly less expensive. We couldn't get Oracle to budge on price, and the thing is, they knew we were looking at Tibco."