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For anyone who believes that implementing ERP is a long, painful slog, think again. Faced with a tight deadline, one company implemented SAP Business ByDesign, an SMB ERP, in just five months. It took careful planning and tight coordination between several partners.
Cardinal Health, based in Dublin, Ohio, is a global company that provides products and services to improve the cost-effectiveness of health care. In early 2015, the company decided to acquire Cordis, a subsidiary of Johnson & Johnson that makes cardiology and endovascular devices. But for the deal to work financially, Cardinal needed to implement a cost accounting software system. Just to add an extra degree of difficulty, the system had to support Cordis' 18 locations around the world.
"We looked at the construct of the deal, the timing of having the deal close and our responsibilities of establishing these new processes in particular to the new financial system," said George Kuntz, Cardinal Health vice president of pharma IT and supply chain solutions. "We needed a system that could help us be very rapid and provide the type of implementation capability and control of the processes outside of the U.S. So that was the nucleus of what drove us to look to the BBD [Business ByDesign] solution to meet those business needs."
BBD is SAP's cloud-based SMB ERP, using a software as a service model. It includes functions for financials, human resources, sales, procurement, customer service and supply chain management. However, BBD was not the first thing Cardinal thought of when it considered the system the company needed. In fact, with a mature SAP system already in place, Cardinal considered integrating the 18 Cordis locations into that existing system. However, Kuntz said this was quickly deemed impractical due to the deadline and the disruptive effect it would have on the current system.
Grab your partner
Consulting partners Accenture, Deloitte and KPMG produced a technical and business review, and Cardinal considered other software, including NetSuite. However, BBD had the advantage of familiarity because Cardinal had considered it for another project two years previously. Kuntz explained that Cardinal hadn't fully understood the advantages of BBD at the time, but reconsidered it now that the clock was ticking.
"When the quarter challenge came to us, we went back and looked at what we had heard about the capabilities of BBD and got a good understanding of the depth and breadth of the solution," he said. "Then, when we looked at the investment necessary and the partner delivery system, we were comfortable in going with BBD to meet both the functional capabilities and the aspect of getting the system stood up and delivered on time."
So the choice was made to go with BBD, but that was just the start of the story, because Cardinal was now under the gun to have the system up and running in just a few months.
"This is why it was so critical. The deal was announced publicly on March 1, and both Johnson & Johnson and Cardinal had agreed to an August close date," Kuntz said. "We had five months from the announcement to the planned execution of the deal, and that was a big driver for us because Johnson & Johnson wanted to get the money we were offering them and we wanted to bring Cordis into Cardinal as soon as possible because of all the business benefits that they would bring."
Private cloud with individual tenants
The first task was to figure out the system's structural design, which was complicated by international requirements. Working with the SAP Business ByDesign business team, Cardinal decided to implement a private edition of BBD in each geographical region -- Latin America, EMEA and Asia Pacific -- and then stand up individual tenants in each country. This enabled Cardinal to focus on each country to address its localization needs and configuration requirements. To make the implementation move quickly, Cardinal brought in three partners, Accenture, L&T Infotech and Seidor, to divvy up the work. "We aggregated and put certain countries with each partner and then managed them as a joint team to then deliver each different country's individual configuration, testing and stand-up for production," Kuntz said.
Because Cardinal needed accounting expertise in each country, the company partnered with Netherlands-based TMF Group to configure the localization needs for chart of accounts, cost accounting, general ledger processing, batch reporting and more in each country's tenant system.
Kuntz explained that all the partners working together seamlessly was the key to delivering the project on time: the SAP BBD team setting up the technology; Accenture, L&T Infotech and Seidor configuring and developing each individual country tenant; and TMF Group providing end-user training and process creation for each country.
Overall, the project went smoothly from a technical perspective, Kuntz said. One of the biggest challenges was the complexity of localization requirements, he explained, and Cardinal needed to coordinate very closely with TMF Group to establish what they were expected to do and not do on the BBD system.
The cloud means speed and ease of management
The cloud-based nature of BBD was one of the main reasons the project was completed so quickly, and it also makes the system much easier to manage. "I honestly couldn't tell you what hardware we're on or what type environment BBD is being managed on," Kuntz said. "SAP is delivering on its commitments, and it's always up, and it works. So from a user perspective, I couldn't tell you much about what the technical stack is because it's a service, and it's been very easy to use."
Kuntz offered advice for anyone planning to embark on a similar project. Purchase the private edition of BBD, he said, which costs more but allowed Cardinal "the freedom to play in their own tenants." The public version, while less costly, is less flexible on configurations and how and when updates occur.
He also highly recommends reaching out to current BBD customers. Kuntz met with BBD teams from Skullcandy, Shell, Grainger and Stanley Black & Decker, who provided advice and best practices for the implementation. User summits and customer conferences were also valuable. "The connections to customers and the chance to participate in these conferences really helped Cardinal validate and take care of any lingering suspicions that we had about where BBD could be used and the need that we had for it," Kuntz said.
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