Transcript SAP at Saladino's - A Complete PowerPoint Presentation

ACHIEVING OPERATIONAL EXCELLENCE
BY IMPLEMENTING ERP
Agenda
 My Background
 Saladino’s Overview
 The ERP Decision
 Current Systems Landscape
 The SAP Decision
 Success To Date
 Road Map
 What an Executive Should Know About ERP
Projects
Background
 Education
 Bachelor of Information Technology /
Telecommunications
 Master of Information Systems Management
 Master of Business Administration (Cohort 5)
 Experience
 4 years U.S. Coast Guard
 5 years consulting (systems engineering)
 6 years corporate IS, including 2 years as CIO
Saladino’s Overview
 Over 3,700 deliveries per week across California,
Nevada, and Idaho to over 2,300 customer accounts

394,000 cases shipped per week between both Dist.
Centers
 Expected 2008 Revenues of $395 million
 Extensive growth in last three years, added Ontario
distribution center in April of 2007
 Two Distribution Centers


Fresno, CA ~109,000 sq. feet
Ontario, CA ~100,000 sq. feet
The ERP Decision
 Why Saladino’s needed a Tier-1 ERP system
 Reduce IS software and hardware maintenance costs
 Reduce the time and resources required to close
accounting periods
 Improve integration of business processes and access to
real-time business data across functional areas
 Improve warehouse management capabilities
 Improve management of vendor rebates & charge-backs
 Adapt to growing customer needs (e.g. improved reporting, B2C
integration, etc.)

Ensure that our system capabilities will scale to future
growth and needs
Current Systems Landscape
 AS/400 Based Legacy System (ERP)
 Multiple batch interfaces needed for online sales, order
entry, and analytics
 Inflexible platform for companies growth
 Inability to keep up with new customer demands and
requirements (new requirements usually require custom AS/400
development)


Costly to maintain
Insufficient accounting system
Current Systems Landscape
 Accounting System
 Detached accounting system that requires journal balances
to be transferred between systems
 Decentralized AP payments, (expense vendors are paid
through external accounting system, inventory vendors are
paid through legacy system)
 Insufficient managerial accounting capabilities
 No concept of cost/profit centers or budget control
Current Systems Landscape
The SAP Decision
 Quick SAP Facts
 Over 38,000 companies run SAP software
 $1.7 Billion invested into R&D in 2006
 Currently holds over half of all Fortune 500
 44,500 installations world wide
 More than 2,200 SAP partners including IFDA
 More than 13,000 developers
The SAP Decision
 SAP Business Drivers
 Single Integrated Solution
Real-time business process automation for operational
speed and accuracy
 Improve decision making with better visibility across the
entire enterprise


Platform for Growth
Rock-solid platform with proven scalability
 Reduce TCO with modular deployment

The SAP Decision
 SAP Business Drivers
 Embedded Wholesale Distribution Best Practices
Optimize business processes with industry-specific,
preconfigured solutions
 Leverage best practices for successful business
transformation
 Configured for rapid implementation and time to value
 Ability to recruit associates that have SAP experience
which allows shorter training period

Retirement Systems Landscape
Future Systems Landscape
The SAP Decision
 The Selection Process
 Started evaluating ERP software January 2007




Only evaluated Tier One Software Solutions
Made Decision to move forward with SAP October 2007
Signed SAP contracts December 2007
Selected Consulting Partner January 2008
Partner had specific knowledge and capabilities within
Wholesale Distribution and Foodservice. Partner was very
flexible and has experience with implementing catch weight
management
 Cost of installation was a major concern, our partner was
able to overcome any cost concerns and deliver a complete
solution

Current SAP Success
 Phase One
 Go-Live completed May 12, 2008
Eight week implementation of SAP Development, Quality
Assurance, Solution Manager, and Production Systems
 Eight week implementation of Accounts Payable, Expense
Purchase Orders, General Ledger, Asset Accounting, and Full
Financials
 Typical SAP financials implementation is 6-8 months
 Utilizing SAP “New GL” in ECC 6.0
 Utilizing Profit and Cost Center Structure
 Not one code modification was required (SAP is highly
configurable)

Road Map
 Phase Two
 Started phase two of the project June 2, 2008
Phase two will consist of order to cash, completion of procure
to pay, and warehouse operations
 Fujitsu Consulting will continue the implementation of this
project
 Implementation of Vistex Rebate and Chargeback module
 Anticipated go-live for phase two is January 31, 2009

Road Map
 Phase Three
 Starting phase three early 2009
Phase three will focus on the advanced Warehouse
Management System (WMS)
 Voice Picking is being considered

 Phase Four
 Starting phase four the middle of 2009
Human Resource Management (HRM) module
 Payroll and Employee Self-Service

What an MBA Should Know
 Clearly document ERP requirements and goals
• This will ensure project confusion is avoided
 Make sure all vendor research is completed prior to committing to a
vendor
• This will take out the possibility of bias to a single vendor
 Speak with the vendor in specifics and not general terms
• Doing so will eliminate the possibility of capability gaps during
implementation
What an MBA Should Know
 Clearly define what partner qualifications are required for the project
• The matching process will not become a popularity contest
 For project success
• Work with the ERP vendor and partner to establish trust and
open communication. This will promote flexibility
 Be careful with partner pricing schemes
• Remind the partner who the customer is, and that the project
will be completed your way. Explore out of the box pricing
models such as a modified fixed bid, and shared risk
What an MBA Should Know
 Formulate your own ROI for the project
• Many partners will show huge gains in ROI to justify their
consulting fee
 If the ROI is not high enough for the project, don’t discount the
intangibles
• Don’t discount the capabilities that can’t be quantified, for example
customer satisfaction and attracting new customers
 For an ERP project to be approved a leader must show where the value
will be derived
• ERP projects should not be considered “technical projects”, ERP
systems are for business users. The leader of the system may not be
the CIO but a business executive that see’s the overall vision and
competitive advantage
What an MBA Should Know
 Don’t allow the project team to focus on a solution, focus on the problem
or business case
• When ERP projects are implemented, many times there are cost
overruns related to loosing focus of the goal (business case)
 Send in an experienced negotiator
• Software and consulting firms negotiate deals everyday, make sure
to do your homework when preparing. Make sure your
representative has had a chance to get to know the negotiator on the
other side
 Make sure you are very conservative when doing financial calculations
• DO NOT make any assumptions related to the cost of the project, it
will come back to haunt you
What an MBA Should Know
 Do your due diligence and create a solid scope of work (SOW)
• This is directly related to the financial impact of the project. If a
fixed bid is negotiated, the SOW is the only guarantee you have the
project will be completed to your specifications
 Build flexibility into your project scope (SOW)
• Work on negotiating a flexible project scope and project plan with
your partner, no matter how well the SOW is put together changes
will need to be made
 If as an Executive you want the project to go well….
• DO NOT underestimate the organizational change management
(OCM), and training requirements. The project can not only be a
technical success, but needs to be an enterprise success
What an MBA Should Know

Don’t forget to market your accomplishments along the way
• An ERP project is a major undertaking, probably the largest any IS
Department will ever take on. Market your accomplishments internally and
externally

Become a technology market leader
• Think outside the box, don’t keep business processes the same and hope the
new ERP will be the “magic bullet”, do things differently and make sure you
involve all level of associates to find better ways to complete the process

If the budget starts to get away from you…. And it will
• Don't be afraid to stop the project and make the best decisions / changes for
moving forward. The original project plan will not always work the way you
thought it would. It will cost the company more to continue to make the
same mistakes
What an MBA Should Know
 Run as a textbook project…
• This is always what project teams strive for, unfortunately this is
not always possible and adjustments need to be made. The
business will always want the solution faster than what the
textbook approach and budget will allow
 Find a unique style for running the project that conforms to YOUR
organizations culture
• Consulting firms will always try and get YOU to adapt to their
culture, project management style, and pace. Make them move
at your pace, using your style
What an MBA Should Know
 Learn to manage conflict
• There will be several different stakeholders involved in your project,
you need to identify them and formulate their stake (what they want
to get out of the project), each stakeholder has a different priority
your job is to figure out what it is and how to manage it
• The CEO
• The CIO
• The CFO
• The various VP’s
• The consulting firm
• The business users
• The software company
• Your customers
Contact Information
GOOD LUCK WITH YOUR PROGRAM!
Craig Urrizola
[email protected]