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Strategy

Making the ERP Leap of Faith


From start-ups to billion dollar organizations, executives are embracing enterprise resource planning as an integral part of their financial strategies. It’s imperative to keep up with digital trends, but this shift is not without its challenges.

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Whether at the largest chocolate manufacturer in North America, or a 150-employee Korean start-up, technology continues to disrupt the status-quo as financial executives adopt enterprise resource planning (ERP) software.

Transitioning to an improved ERP system is not without its challenges, however. “Trying to get people to rethink was tough,” Raymond Carney, vice president of corporate finance at New York Life Insurance Co., said at the recent SAPPHIRE NOW and America’s SAP Users’ Group (ASUG)  Annual Conference. “Over the years we’d gotten very data-manipulating-oriented. Everybody had their own spreadsheets and home-grown databases. We got the work done, but it was in a lot of disparate ways.”

When asked what advice he would give to a decision-maker looking to implement a new system, Carney advised that the change start at the top and not to drag your feet. “Don’t wait. There’s never a perfect time. My background is in accounting and finance, technology is outside of my comfort zone. Just embrace it and get after it. It starts with the mindset more than anything and you have to change the culture.”  

New York Life Insurance Co. faced challenges and risks likely familiar to long-established organizations hoping to thrive in the digital age. With a new CFO in place, the company was posed for a transformation. “Our CFO’s vision was to focus less on data collection and more on adding value. We needed a financial system change and we needed better tools,” Carney explained. The implementation of an improved ERP system allowed the company to restart with a common platform allowing for less time spent on tracking down and examining data.

Similarly, Hershey’s digital transformation started at the top. J.P. Bilbrey, Chairman, president and CEO stressed. “This has to be CEO-led. No one else can provide the conviction for this level of change.” Marty Mrugal, CIO at SAP North America echoed Bilbrey, “We often work with clients that have that digital vision but don’t have the conviction from the c-suite. Working with Hershey really reinforced how critical that is.”

And that vision entailed moving away from a finite system of syndicated data. Bilbrey shared, “Today we live in a world of predictive analytics. As we were looking at our own information systems we would continue to find that we have all these disparate buckets of information.” With a new platform in place, Hershey can focus on, what Bilbrey refers to as the “democratiziation of information” and increasing transparency.

Memebox, Inc. began as a 150-person cosmetics sample delivery startup out of Korea. Riding the wave of the Korean beauty trend, they refocused and created an ecommerce platform for distributing products to retailers and later started their own cosmetic brand. With plans to expand to China and the U.S., the global expansion of MEMEBOX plus a much broader range of products and channels resulted in massive data growth that pushed the company’s existing ERP system to its limit. Though highly popular among small-sized companies in South Korea, their existing ERP system proved to be inadequate for the growing needs of MEMEBOX and failed to fully support day-to-day business operations.

The time had come to replace the existing ERP system with a solution that would support MEMEBOX in delivering on its long-term vision, but the decision was not without its risks. Jason Kim, Global Finance Team Manager at MEMEBOX shared, “The capital, labor, time and opportunity costs were a huge burden for the company of this size and the implementation risk was enormous for us. We were constantly going through business transformations and often operated without any established business processes.” Ultimately, access to real-time data through the use of the new ERP system was critical for fast decision-making, which allowed for rapid growth. The ability to collect customer information led to improved insight to trends and shorter product development time. Today, the company has 500 employees globally and continues to grow in all directions.

In the presentation, “Migrate Finance Accounting and Controlling (FICO) to SAP S/4HANA”,  Steve Strout, Vice President of Corporate Technologies at Sabre Corporation summarized the lessons learned when implementing a new ERP system with the following:

  1. Clean up your data before data migration.
  2. Start with the end in mind.
  3. Balance what you can get done initially with your capabilities.
  4. Automate testing.
  5. Build a culture of continuous and incremental change.
Going through a digital transformation takes a commitment from the c-suite and often a leap of faith. But with the proper partners in place, the cultural and financial benefits can be extraordinary. This topic is currently being discussed by your peers on FEIConnect. Join the conversation today.