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Overcoming tyranny of distance

Overcoming tyranny of distance

An IT upgrade allowed a geographically segmented firm to pull together.

Sometimes survival in business comes down to doing what you do differently, so as to do it just that little bit better. That was the pitch Tony McAlister, national IT manager for custom-made steel specialist Stramit Building Products, needed to take to the company's 1000-plus employees in 2004.

At the time, the company was using Wang hardware to run four versions of an enterprise resource planning (ERP) system called Fact. "There are still people out there who support the hardware, but there's not been a new piece of Wang hardware released for more than a decade," McAlister says. "So if we wanted to upgrade, we knew we'd have to revisit the whole system."

In times past, when interstate communications were more of a challenge, Stramit's 28 locations around Australia had been split four ways geographically. With each operating largely stand-alone for more than a decade, the accumulation of small changes to business processes had resulted in four very different versions of what had started out as the same software.

McAlister realised he would need to do more than upgrade the technology if a new ERP system was to take hold. He would need to upgrade company procedures as well.

"Originally the whole project was viewed as a hardware replacement, then revisiting the ERP system became interesting as a more effective way to get a national view of our business instead of a series of regional views," McAlister says.

"Really what we were looking at was the opportunity to standardise business processes across the company."

Generalist ERP systems were turned down in favour of industrial supply-chain specialist Lawson, and the ageing Wang hardware was to be replaced with IBM iSeries boxes located in Sydney. Optus then provided the backbone for a wide area network capable of linking the company's different offices.

What began as an IT challenge was shaping up to be a fairly extensive reworking of company processes. Rather than tackle it on his own, McAlister called for back-up. He recruited a 15-strong project team with expertise in business process rather than IT, and with representatives from each geographic division, which set about configuring the ERP system.

"We spent a lot of time working on process documentation, and on tweaking our physical processes so that the cut-over process would be relatively straightforward," says McAlister.

"We tried to be as pragmatic as possible. There's a fair degree of flexibility in these systems; but you need to be careful what you ask for, because you might just get it."

Rather than attempting to play favourites - configuring the operational practices of one or other division into the ERP system - McAlister opted for a brand new approach, under which each team would have to change its operations.

Within three months the initial configuration was complete, and the new system went live in the northern region, covering Stramit's offices in Queensland and the Northern Territory.

"After the first deployment we spent a little time modifying the configuration and the processes around them, but we didn't change very much," McAlister says.

"Our intention was to run a standard configuration around the four regions, then once the new work practices and the software had had some time to bed down, we can adopt a regime of continuous improvement to upgrade our work practices."

Working clockwise around the country, a full 18 months passed before the technology installation was complete. McAlister says the gradual approach enabled the company to work around Stramit's peak business season, and iron out problems as they occurred.

"Now we can start to see across the business, and because of the common reporting there's the potential for benchmarking," he says. "It's delivered a level of transparency to the business, which gives us the option of exploring different markets and different service offerings which we just wouldn't have been able to do previously."

Armed with the ability to see across the different divisions for the first time, McAlister is now keen to take the technology to the next level, using it to reduce delivery times and improve customer service.

And while the immediate benefit of the ERP upgrade has been the streamlining of the order process, McAlister says business reporting ultimately will be a far more powerful and important tool for the company.

"Now when a customer rings the Cairns office, they can immediately tell him where his order is, and how long it will take to be delivered, which brings us a whole new opportunity to improve those services," McAlister says.

"But the ERP system installation is just the starting gate. Now that the rules are set, it's just a question of working through the detail. We have the opportunity to identify potential traps and problems before they arise, and maybe avoid them altogether."

© Fairfax Business Media

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