When Sydney-based Blackmores set up its $5 million IT upgrade to heighten its competitive edge it developed a change management strategy that smoothed the way for the project that dumped the vitamin supplier's 20-year-old legacy system.
Blackmores project manager Michelle Fitzgibbon said the company's early research into ERP systems showed that 85 per cent of such projects failed to deliver desired business results, because of people problems, not the technology.
For this reason, the company - based in Sydney's northern beaches suburb of Balgowlah - took a people-focused, rather than a technical, approach to the $5 million systems overhaul.
It focused on keeping users informed during the rollout by ensuring the staff understood changes to business process, the reasons for change and their impact on the end user, Fitzgibbon said. The project team also ensured key users attended process workshops and all phases of system testing.
"Fear of the unknown unsettles people. Because there was change, people assumed jobs were at risk," Fitzgibbon said. "But we kept people informed through a company-wide charter which wasn't just about budgets or a timetable, but having supportive project sponsors and a project team focused on service and getting honest feedback from users." Fitzgibbon was speaking at the third annual JD Edwards Users Group conference, Quest Australia and New Zealand, in Melbourne last week.
In early February, Blackmores migrated to a JD Edwards solution based on the vendor's OneWorld Xe ERP applications from a 20-year-old Qantel legacy ERP system.
Without the upgrade, Fitzgibbon said the organisation would expose itself to competitive struggles in the regional market. It needed state of the art ERP technology to help manage its core business of marketing and distributing health and preventive remedies. "With Qantel we had to pull levers as opposed to push buttons," she gibed.
Codenaming the project BBQ (bye-bye Qantel) Blackmores is decommissioning the legacy system because it was outdated and cumbersome.
"Qantel had no capacity for R&D, EDI (electronic date interchange) was not possible through it, and it prevented our exposure to new personnel - nobody wanted to work with old technology."
Also, because long-term staff had minimal IT training for that system and were stuck in a green-screen environment, it made it impossible to improve business efficiency, she said.
All these factors, combined with senior management's high growth targets for the next fiscal year, confirmed the legacy system would hinder Blackmores' market penetration in the future, Fitzgibbon said.
It took Blackmores two years to manage a transformation from ancient technology to the new, but with some careful organisation-wide involvement, the heart of which was communication, the implementation is proving to be a success.
The project team was in no rush to choose a new solution; instead it focused solely from August 1999 on presenting to the company a business case for an ERP overhaul. The technology was chosen six months later.
"While it took us around six months to select the software - and we only focused on the evaluation part-time - it was a reasonable [approach], because by the time it came to buy, JD Edwards' OneWorld Xe was out there," Fitzgibbon said.
* Helen Han was a guest at the Quest Australia and New Zealand JD Edwards Users Group conference in Melbourne