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Timberjack Parts Packaged software selection process By: Abhirup Mukhopadhyay(02) Aniket Singh Mahra(10) Bhanu Manchanda(26) Disha Kashyap (32) Lopa Mudra Panda(58)

Timber Jack Final

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Page 1: Timber Jack Final

Timberjack PartsPackaged software selection process

By:Abhirup Mukhopadhyay(02)

Aniket Singh Mahra(10)Bhanu Manchanda(26)

Disha Kashyap (32)Lopa Mudra Panda(58)

Page 2: Timber Jack Final

Scope of Timberjack

• Leading manufacture of heavy equipments.• Formed through number of acquisitions during

1980s and 1990s.• Operated two service parts operations in Marsta

and Sweden .1995 :Market Share : 25%Sales : 627m USDProfits : 88 m USDEmployees : 1600

Page 3: Timber Jack Final

Why ERP• Instability of the existing system

• Heavy modifications led to frequent system failures

• Lack of user reliability

• Future need for integrating manufacturing, dealer network , parts and service.

• HP’s reluctance to provide further support to it aging software MM3000.

• Issues with integration of financial data

Page 4: Timber Jack Final

Timberjack: Sweden

• needed a faster change as its operations were badly effected

• Not satisfied by the RPF model used to select vendors

• Strong preference for QAD

• No customization

Timberjack: Atlanta

• had time and wanted to implement a universal system.

• Satisfied with the RFP model

• Strong preference for Oracle

• Needed to customize

Page 5: Timber Jack Final

Decision Rationale

• Aging MM300 software

• Instabliity of existing systems

• Financial Integration

• Employee transfers

• User reliability

Business

• Narrowing down to common requirements of Atlanta/Marsta

• Disparate systems

• Oracle/ QAD Preferences

• Different application and server requirements

• Risk of obsolescence

Technology

Page 6: Timber Jack Final

• Customizations Required- QAD : Dealer System , Oracle : Order Processing

• Implementation Cost / Time : Oracle – High

• Consultant support

• Overhead Costs (Oracle high)

• Support Fees (QAD high)

Implementation

• Cyclical Industry

• Backward and Forward Integration (Manufacturing/Dealer/Service)

• Integration of North America operations

• Competitive advantage in vendor selection

• Complete “Distribution Package”

Strategic

Page 7: Timber Jack Final

The RFP processCONSULTANT-COOPERS & LYBRAND

Sessions with members from each functional

area

Ensure all processes are

covered in detail

Consideration for any additional

software

Business process breakdown

Timberjack list compared with C&L

list developed for prior clients

List of requirements were sent to Marsta for

review

Additional requirements

for Marsta

Benefits review started at Woodstock

Business statistics and dealer system

details incorporated in

RFP

Hard copies and soft copies

dispatched for vendors

Page 8: Timber Jack Final

Issues regarding the RFP

-Woodstock vs MarstaADDITIONAL REQUIREMENTS FOR MARSTA

Requirements related to: Multilanguage capability

EFT for payments to suppliers

Intrastat reporting used in Europe for tracking of goods

ADDITIONAL REQUIREMENTS FOR WOODSTOCK

Benefits analysis to weight the potential functionality improvements

OPPOSING VIEWS Marsta wanted an enterprise syatem

at the earliest while woodstock was in no hurry

Marsta would have preffered a RFP running for just 5 pages while that developed by Woodstock went on for 200 pages thus building in a delay in RFP evaluation by the vendors

Marsta was focusing short term to solve its current needs while Woodstock had a long term perspective going into the project.

Page 9: Timber Jack Final

VENDOR SELECTION

Constraints limiting the potential suppliers

• System to be UNIX based , as specified by DSI

• A preference of Oracle database as corporate standard

• Package’s presence in both Europe and North America

Vendor list based on manufacturing systems with secondary strengths in distribution and service

Out of 13 companies selected, 6 bids were received – Lawson, Oracle, Computer and Associates, QAD, Scala and American software

Critical functionality – Planning, customer service, warehousing & finance

Scala and American software dropped due to lack of functionality & UNIX based modules

Page 10: Timber Jack Final

Narrowing the vendor list

ORACLE•Early presentationnot received well –staff inefficiency,complicatedsoftware & technicalproblems

CA• Relied on software

acquisition ratherthan ongoingdevelopment –concern aboutsupport& longtermcommitment to thepackage

Lawson• Techinically strong

software packege,but lacked somefunctionality thatwere critical toAtlanta team

QAD• System was not

flexible enough tmake changeswithout affectingthe source codedifficulties inmigrating to Oracledatabase

Oracle –preference by Atlanta

group

QAD –preference by Swedish

group

Factors considered for narrowing to two vendors:License fee for software , Functionality comparison , Implementation consulting cost , Gartner Grouparticles

Page 11: Timber Jack Final

Factors Oracle QAD

Functionality shortfalls – Work needed in these areas

Order processing module to match current dealer system functionality

Customization on dealer systems, order type & safety stocks

Total cost of dealer system modifications

$ 30,000 $ 200,000Mod in safety stock program & order type functionality requirements

Implementation Consulting More consultants over a longer duration, consulting fee to install in both sites is $ 500,000 USD, later reduced by 25%

Not much consultants required as it is not a huge and complicated package

Installation time At least one year Six to seven months

Complication Highly complicated & hence require more personnel assistanceinitially

Simple & hence easier implementation with lesser personnel assistance

Site visits True TemperStepwise implementationLarge no. of people used for installationProject took more than 1 year to complete

MatrixRunning on a low version packageModules hard to modify without affecting the core system

Page 12: Timber Jack Final

Recommendation

• Oracle as first choice to be implemented as compared to QAD (Sap based software)

Page 13: Timber Jack Final

Reasons to support Oracle

• Covering 95% of functionalities as compared to 88% of QAD hence low customization and more reliable.

• QAD being SAP as base is more rigid in structure (good for standards but poor flexibility)

• A huge gap in forecasting and dealer system which are very essential part of the ERP module needed in industries( Gap analysis in sec 7)

• Oracle as a organization is more reliable for future existence hence secured future maintenance.

• Noncompliance penalties applicable over Oracle also makes it more viable.

Page 14: Timber Jack Final

Oppositions

• Need for 2 different systems for manufacturing and parts and services

• Higher cost for Oracle

• 40% higher overhead required in database

• Expensive hardware and software expected