One food company's recent decision between Logility and SAP for supply chain management (SCM) software devolved...
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into a stalemate that reflected just how differently IT and business users can sometimes view technology decisions.
“It was a typical fight between IT and business,” said Bill McClure, vice president of business process management for Tate & Lyle, a worldwide manufacturer of food additives and ingredients. “Business really needs to be the one that’s making the decision. If they feel like IT is shoving something down their throat, it’s not very well accepted.”
Battle lines between business users and IT came down to a few basic issues. Business, familiar with Logility, preferred its ease of use and simplicity.
“Logility has a nice user interface, so it looks much cleaner and smoother, and probably user adoption would happen much quicker,” McClure said. “Since we knew we were introducing a lot of change in this area, user adoption was a big concern.”
IT wanted SAP because the company was already running SAP ERP. Integration would be easier, and the software would be more scalable.
“They were really pushing for SAP,” he said. “And nobody was backing down.”
The standoff lasted for months. McClure eventually called in Plan4Demand Solutions Inc., a Pittsburgh-based consulting firm that specializes in supply chain software, for help in selecting a winner. Because the firm is authorized to implement SAP as well as Logility -- the only firm of its kind -- it was able to offer objective guidance, McClure said.
In the end, IT and business were able to come to a unanimous decision with the help of a four-part matrix that Plan4Demand had suggested the company use as a way of gaining clarity on what it needed, McClure said.
“It turned into a more mathematical exercise, rather than an emotional one,” McClure said.
The problem with SCM software selection
Tate & Lyle, based in London but with locations throughout the U.S., has 30 production facilities throughout the world, a small network of research centers, roughly 20,000 customers and a complex supply chain to boot. What it didn’t have was a comprehensive supply chain system to run in conjunction with SAP ERP.
“We didn’t have one end-to-end solution in any region,” McClure said.
In the North America region, the company was using OM Partners, some in-house tools, Excel spreadsheets and Logility for demand planning to manage its supply chain. What leadership wanted was an end-to-end solution that encompassed demand planning, supply planning and plant scheduling as well as inventory optimization.
They had it narrowed down to two vendors that could do it all: Logility and SAP. And that’s where things got ugly.
Business vs. IT
Both companies were called in to do demos, McClure said, and that actually led to more confusion.
“Logility did a much better job than SAP did,” he said. “We had to bring SAP back in, which business didn’t really want to do. They thought that they had their fair chance.”
Yet IT was confident SAP was a better option than its demo indicated. Tate & Lyle made reference calls to customers who were using SAP supply chain software in order to alleviate some of the concerns.
Calling for help
That was not enough for the Logility backers, and McClure called in outside help. Plan4Demand introduced a four-part grid that divided decision criteria into four major components: risk, functionality, technology and cost during an eight-hour session with Tate & Lyle.
“They said, ‘This is how you basically want to look at this problem.’ Everything they were saying made sense. It was exactly what we had been doing, but we still had so much emotion involved,” McClure said.
In the end, McClure called a final meeting, at which a decision needed to be made. He also did something else: He only invited two IT representatives, compared with the five representing business.
“I didn’t want a lot of IT there, because I didn’t want it to look like IT drove the decision,” McClure said.
Both sides went through and developed subcategories for each group, as Plan4Demand had instructed. Risk, for example, got broken down into things that could help make or break future success, like scalability and data integration. Technology included issues like application integration. Functionality addressed features and ease-of-use issues. Numbers were assigned to each category, then added up. IT representatives largely kept quiet during the scoring phases, McClure said, allowing business to own the decision.
Both sides ended up on the same page in 30 minutes, agreeing that the overriding issues came down to integration and stability. “We were concerned if Logility could grow with Tate & Lyle’s business,” McClure said. Tate & Lyle now uses SAP demand planning (DP); production planning and detailed scheduling (PP/DS); supply network planning (SNP); and SAP partner SmartOpps’ inventory optimization application.
McClure said his team had discovered that a lot of companies using Logility needed multiple instances, one for each plant.
“That wasn’t within our strategy. Our strategy was to have one solution,” he said. “That was kind of the straw that broke the camel’s back.”
If he had to do it over again, McClure said he would have called in Plan4Demand earlier.
“They could have managed the whole process, RFP [request for proposal], the demo process, preparing for the demo, putting together scenarios that we wanted the vendors to run, as well as the whole selection process. It wouldn’t have been my problem anymore,” he said.
“It makes you look silly, but it’s true. Sometimes you spend too much time going over the things that aren’t important. It got emotional. There were tears shed through the process.”