Tektronix, Inc.: Global ERP
Implementation
Case Write-up
Submitted byGroup 2-We not I
 Mohit Almal
 Manish Madhukar
 Ritu Madhogarhia
 Nabendu Kar
 Piyush Golus
a)
Why did Tektronix implement ERP in stages? How does a company decide between implementing in stages and going
big-bang?
Tektronix implemented ERP in stages for the following reasons:
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The organization was not ready to commit to the changes expected for the post-implementation business
environment
The proposed implementation represented a significantly different method of doing business than the current
business environment
Implementation in stages will also give them flexibility in making decisions
This approach allows for regular feedback and reviews after each phase. Hence, encouraging learning from
previous experience and mistakes
The IT infrastructure was running huge legacy programmes hence its flexibility to take the entire ERP project at
once was risky and cost intensive ,a stage wise implementation was therefore undertaken
With constant victories through small achievements of going live with ERP gave high team morale and also
defined a clear vision and objective of the project
Decision between Implementation of ERP in stages and going big-bang:
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IT infrastructure: A company having various application systems running through its different functional units with huge legacy
systems is more likely to have its ERP implementations in stages so as to implement ERP only in those functions, which are,
considered to be of strategic importance
Integration: When a company wants the advantage of getting the full benefit of the integrated software across all functions of
the organization it generally goes the big bang approach
Multiple Location: Those companies that are geographically dispersed need reliable communication links for on-line
processing and uniformity in its implementation often go for ERP in stages as later they can be rolled out to other locations.
Tektronix was having presence in 60 countries, mainly USA. Going for big bang approach at a time was very difficult from the
point of view of its efficiency and effectiveness from financial aspect
Customization: When an organization wants customization, the job of fitting the ERP software to meet the demands of a
particular organization and mapping of the organizational structures, processes & environment of the organization into the
corresponding model of the organization that is embedded in the ERP software it generally prefer going through stages
Continuous Workflow: Some organizations opt for 'Big Bang' ERP Implementation Methodology, where, the ERP team works
in parallel and configures the ERP system, without disturbing the current process workflow. It is very important to keep the
existing business process working
Dependency: The problems of implementing in stages are that each stage relies on information from other stages. During the
phasing in of the system there may be incorrect messages, so companies strongly prefer big bang for all the key modules
For these reasons, the staged approach to implementation was better suited for large-scale projects like ERP that require
significant finance.
b) How did Tektronix manage the risks of ERP implementation?
Tektronix faced implementation risks. As an older company, primarily a manufacturer of measurement instruments and colour
printers, they faced a much more complex legacy environment, a more diverse product family, and a more geographically
distributed implementation rollout. Tektronix successfully controlled the various risks associated with ERP implementation
The risks in ERP implementation:
 ERP system implementation demands a great deal of planning. If planning goes wrong, there are very high chances
of failure
 Technical difficulty in implementing ERP
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The implementation might take longer time than expected
Failure in matching business process with the ERP system
The actual cost might exceed the budgeted cost
o Tektronix controlled the various risks in the following ways:
Waved implementation: Their ERP implementation was viewed as a change programme that consisted of different
waves of change. Each wave in the program would deliver functionality to a different business unit or geographical
region. Although each wave would be managed independently, the overall project team would manage the
interdependencies to ensure that program remained on course. The advantages of wave implementation are:
 Feedback and how well it is being implemented
 With each successful wave, there is victory that can keep morale high
 Waves ensure flexibility
Attention to schedule: There was complete importance given to schedule. This mitigates the risk of delays.
Momentum is maintained and it helps to maintain discipline among employees
Strong responsibilities: Carl took the overall responsibility very well. A steering committee was established to
monitor the overall implementation process. There was assignment of responsibilities. By resorting to monitoring
and steering committee, it becomes easy to identify risks and therefore work towards them
Vendor: Tektronix did not spend much time in comparing features and costs across vendors. They chose Oracle, as
their environment was compatible with Oracle. Tektronix took three years to implement its Oracle applications. In
the first year they implemented a general ledger in 16 countries. Then they focused on converting accounts
receivables and cost management in its regional accounting centres throughout the world. After financial
applications were implemented, they added new capabilities as part of their business unit product information
Strong Management Support and Building a Coalition: With the mandate that Carl obtained from the CEO, he was
able to execute the project with unlimited authority and cut through the politics, allowing him to make quicker and
more effective decisions. He also received strong support from the presidents of the business divisions, various IT
managers, in each division. This helped lower resistance to change and sustained momentum for the project as it
quickly established a strong coalition of the willing to guide and support the change
Minimum interference: Carl was given complete freedom in the implementation. This helped in making quick and
efficient decisions
Quality of team: There were full efforts to choose the right project team, and there were consistent efforts of
proper communication
Roll-out risks were managed by carefully orchestrating the timing and order of rollouts. They began with US CPID
the simplest organization moving to US VND, and then to US MBD. The MBD was the most complex business model
c)
What is your overall assessment of the Tektronix ERP project?
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Wave approach: The wave approach provided a number of advantages. Each wave supplies feedback as to how the
system implementation is proceeding and how well it is being accepted. Waves are also flexible; if a new release of
the ERP software becomes available then the program managers can add a new wave
Time conscious: Rather than having the “best-of-breed” approach, a single vendor was appointed for better
demonstration and efficient time management. Multiple packages from different vendors meant more issues of
maintenance, integration and up gradation. Even the ERP vendor was selected in short time span as Oracle emerged
their clear favourite
‘Plain vanilla strategy’ adopted: The idea was to minimise the number of changes to the software after it was
purchased. This would facilitate standardisation, maintenance and future upgrading possibilities. In such a global
architecture, it was essential to retain the integrity of the software except in conditions where competitive
advantages could be gained. This approach also enabled a number of changes in the business processes around the
world, which in turn provided the stimulus to implement any improvement. Even traditional local needs were
sacrificed in the name of standardisation. Here we can say that Tektronix choose standardisation over autonomy in
their ERP
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End user acceptance: One of the most important parameters of a successful project is the end user reaction. In case
of Tektronix the buy-in for the ERP project was high. Employees felt more satisfied and effective at their jobs.
Comparability factor: This refers to creating a common platform among diverse units.Since standardization was
achieved, comparisons were easily made, even though functional units maintained separability.
Cost control: The entire ERP implementation focussed on getting the project running with no cost overruns. Selection
of consultants was split into two sections. Any mission critical decisions and scope of the applications were managed
by Aris Consulting which was a high end service provider. Roles of lesser functionality and business expertise were
managed by low cost consultants
Goal driven top management: Tektronix was successful in its ERP implementation primarily because of the attitude of
the persons behind the project. The top management comprised goal driven professionals who could understand the
need of the moment and were driven by the need for change. Moreover they knew exactly which levers to focus upon
Post ERP implementation scorecard
Logistic improvements:
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Day Sales Outstanding and inventory levels show improvement
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Inventory visibility improved regardless of its global location
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Same day shipments increase from 15% to 75%
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Prior 24 hour credit approval wait virtually eliminated
Data level improvements:
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Data integration allowed financial analysts to drill down multi level in accounts
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Financial book closing process accelerated(earlier it was 2 weeks)
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Information leveraged to make better decisions
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Reporting on sales become more efficient
Qualitative improvements:
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Satisfied end users
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High employee morals and satisfaction
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Feeling of “ERP as an enabler” irrespective of the project cost incurred is optimistic