A teaching case, prepared by:
Carol V. Brown, Ph.D. Associate Professor of Information Systems Kelley School of Business Indiana University 801 W. Michigan St. Indianapolis, IN 46202-5151 Phone: 317-274-4871 Email: firstname.lastname@example.org
Iris Vessey, Ph.D. Professor of Information Systems Kelley School of Business Indiana University 1309 E. 10th Street Bloomington, IN 47405-1701 Phone: 812-855-3485 Email: email@example.com
Winner of the Best Teaching Case International Conference on Information Systems, 2000
c) Brown and Vessey 2000
NIBCO’S “BIG BANG”
December 30, 1997 was the Go Live date at NIBCO INC., a privately held mid-sized manufacturer of valves and pipe fittings headquartered in Elkhart, Indiana. In 1996 NIBCO had more than 3,000 employees (called "associates") and annual revenues of $461 million. Although many of the consultants they had interviewed would not endorse a Big Bang approach, the plan was to convert to SAP R/3 at all ten plants and the four new North American distribution centers at the same time. The price tag for the 15month project was estimated to be $17 million. One-quarter of the company's senior managers were dedicated to the project, including a leadership triad that included a former VP of Operations (Beutler), the Information Services director (Wilson), and a former quality management director (Davis). One of the major drivers of the whole thing was that Rex Martin said ‘I want it done now.’ That really was the defining moment—because it forced us to stare down these implementation partners and tell them ‘…we’re going to do this Big Bang and we’re going to do it fast’. Scott Beutler, Project Co-Lead, Business Process We took ownership: it was our project, not theirs. We used the consultants for what we needed them for and that was technology skills, knowledge transfer, and extra hands. Gary Wilson, Project Co-Lead, Technology It was brutal. It was hard on families, but nobody quit, nobody left…. Professionally I would say it was unequivocally the highlight of my career. Jim Davis, Project Co-Lead, Change Management Company Background NIBCO’s journey to the Go Live date began about three years earlier, when a significant strategic planning effort took place. At the same time a cross-functional team was charged with reengineering the company’s supply chain processes to better meet its customers' needs (see Timeline in Exhibit 1). One of the key conclusions from these endeavors was that the organization could not prosper with its current information systems. The firm’s most recent major investments in information technology had been made over five years earlier. Those systems had evolved into a patchwork of legacy systems and reporting tools that could not talk to each other. After initial talks with several consulting firms, top management brought in the Boston Consulting Group (BCG) in August 1995 to help the company develop a strategic information systems plan to meet its new business objectives.
Cross-functional teams charged with developing NIBCO’s strategic plan and reengineering supply chain processes determined that company could not prosper with its current information systems. Gary Wilson hired as new head of IS department. Boston Consulting Group conducted strategic IT planning study. Recommended that NIBCO replace its legacy systems with integrated enterprise system on client-server platform over a 3- to 5-year timeframe Restructured corporation into cross-functional matrix organization. Scott Beutler, former VP of Operations–Residential Division, given responsibility for business system strategic planning, including selection of an ERP package. Committee recommended purchase of SAP R/3 and “Big Bang” implementation. Approved by Executive Leadership Team and Board of Directors. Contracts signed with SAP for R/3 modules and IBM as implementation partner. Wilson, Beutler, and Davis form triad leadership team....