Tektronix, Inc.

: Global ERP Implementation

Decision sheet prepared by: Johnsey Roy (2227327)

Introduction:

Tektronix, Inc. was established in 1946 and specialized in manufacturing electronic

test equipment. The company was headquartered in the United States and had a global
presence in almost 60 countries, leading the market in oscilloscopes, television test,
measurement and monitoring equipment, and workgroup color printers. After 50 years
of success, by 1993, the company faced heightened global competition, prompting the
appointment of Carl Neun as the CFO, who aimed to streamline and restructure the
company's operations. Bob Vance, a technology manager who had previously worked
with Neun, provided support in this effort.

The company’s current operations are divided into 3 main areas:

i) Measurement Business Division (MBD)
ii) Color Printing & Imaging Division (CPID)
iii) Video & Networking Division (VND)

The challenges faced by Tektronix are:


 Hampered by a 50 year old legacy- Limited flexibility and opportunities 
 Financial performance of the company was suffering
 Lack of integration in management and information systems
 Unstandardised systems with a presence of 460 systems globally
 No visibility of the inventory once products are shipped
 Multiple sales entry because of the order cycle which slowed processing and
customer service
 Lack of accurate information on performance
 Multiple charts of accounts
 Closing the books each month took weeks
 Doubt on profitability of specific products
 Need for better information to cut costs and find efficiency
 Difficulties in divesting- data stuck in big mainframe systems
 Needed clear information to be able to sell off businesses and integrate new
acquisitions

Moving towards Enterprise Resource Planning (ERP)

Neun’s vision:
 Seperability of Vision
 Leveraging of Shared Services
 Staying “plain vanilla” as much as possible

Planning for ERP

 Selecting Software
 Worldwide Business Model
 Project Organization and management - The infrastructure was built upon key
roles like program manager, user leader, global leader, functional experts, power
users, functional sub teams and test teams. It was possible through a combination
of technical and functional strength to resolve issues. The project was headed by
Carl Neun (CFO) – final arbiter and had complete authority on implementation.
He also established a set of fundamentals. Division presidents and Neun acted to
resolve major project management problems.
 Project Schedule- The implementation consisted of many “waves” which
delivered specific set of functionality for particular division or region. The waves
gave regular feedback, flexibility in scheduling, team morale, board’s support.

Implementation

Tektronix’s ERP implementation was split into five major subprojects. First was led
by Gary Allen, IT Director – Finance and HR Systems, two through four were led by
divisional IT Directors consisting of OMAR projects and the final was global rollout
led by Gordon. Financials were implemented in parallel with OMAR in CPID
division (first in US).
1) Financials
2) Order Management/Accounts Receivables (OMAR)
Implementing OMAR at CPID
Implementing OMAR at MBD
Implementing OMAR at VND
3) Global rollout

Results
 Improvement in measures such as Days Sales Outstanding and inventory levels
 Increase in same-day shipments in some divisions from 15% to 75%
 Visibility into business goods inventory regardless of location
 Improved inventory turnover ratio
 Increase in employee satisfaction
 Improvement in data integration leading to drilling down of detail to single
account
 Better position to expand business
 Increased flexibility to acquire new businesses
 Time spent on data collection reduced from 90% to 10% and time for analyzing.