Volume 4 Issue 1 March 2006
An ERP Story: Background (A)
Case prepared by Professors Carmen BERNIER and Vital ROY, as well as Éric BRUNELLE
In 1950, when the general insurance company Aux Bons Soins (ABS) was in its early days, it offered a full range of general insurance products for individuals residing in the province of Quebec. Over the years, Canada has seen a consolidation of its general insurance industry. Three years ago, ABS acquired the insurance company General Maritime Protection, serving Eastern Canada. Last year, ABS seized an opportunity to conquer Western Canada’s market by acquiring Western General Insurance in Calgary. These acquisitions positioned ABS as a major panCanadian insurer. To date, these three companies have continued to function autonomously. Six months ago, management at ABS announced that it was bringing these three original companies under a single legal entity to form ABS Canada. Jean Roberge was appointed VicePresident of Information Technologies Management and was mandated to develop a strategic IT plan. During the annual strategic planning meeting of the management committee, held recently in Calgary, all of the committee members were pleased to see that the company and its two subsidiaries were in a good position to plan an aggressive strategy for sales growth. This is the context in which Jean Roberge recently presented a three-year strategic plan for the development of information systems and technologies. The plan, developed by a team of internal collaborators from the three original companies with the support of consultants, was officially presented and approved at the annual management meeting held in Calgary in March 2009. The main recommendation of the plan is to provide ABS Canada with an integrated management system and processes that could be shared by the three constituent entities for financial management, human resource management as well as sales and Copyright © HEC Montréal
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An ERP Story: Background (A)
marketing management. In particular, the team of experts that worked on the IT plan recommend the acquisition of the ABC software package – specifically, the modules for finance and accounting, human resources and sales.
Current Systems and Processes
Since the reorganization of the three original companies under the new company ABS Canada, each company has continued to operate with its own information processes and systems. Gradually, the controllers and vice-presidents of finance of each entity began to consider how they could consolidate the accounting aspects and financial statements of ABS Canada. Similarly, the vice-presidents of human resources met several times to begin harmonizing human resource management policies and practices. Currently, a great deal of manual work is required to extract information from the systems of the various companies and to prepare consolidated management reports that provide an accurate picture of the financial and human resources of the new ABS entity. As for sales and marketing, efforts to consolidate data have proved very difficult due to the diversity and quantity of information available in the respective systems of the three original companies. The development of a strategic IT plan led to an analysis of the current situation and a discussion of the desired situation for the new ABS Canada entity. In terms of information systems, the following observations were made: Element Applications Current problem Incompatible in terms of
Identical functionalities for all
functionality and architecture: no possibility of data exchange between systems; Redundant applications and nonoptimal maintenance of various systems based on different technologies.
ABS components and integrated applications that enable data exchange; Simplification of system maintenance and...