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Enterprise resource planning. Case Study. Example. Penguin’s Global ERP Strategy. The Globalization of Supply Chain Systems Anne Naramore Vice President International Technology Strategy Pearson plc. 28 th International Supply Chain Specialist Meeting. Frankfurt Book Fair. Agenda
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Enterprise resource planning Case Study
Example Penguin’s Global ERP Strategy
The Globalization of Supply Chain Systems Anne Naramore Vice President International Technology Strategy Pearson plc 28th International Supply Chain Specialist Meeting Frankfurt Book Fair
Agenda • Pearson • Supply Chain Environment Today • Supply Chain Technology Strategy • Case Study: Asia • Summary
PEARSONA Good Read Pearson is a world leading education and information company, helping people of all ages to live and learn. 2005 Sales: £4,096M / $7,045M +9% 2005 Adjusted Operating Profit: £509M / $875M +22%
Main Businesses Geographic Businesses North America: 66% £2,717M / $4,673M Europe: 24% £963M / $1,656M Penguin:20% £804M / $1,383M School:32% £1,295M / $2,227M FT Group:15% £629M / $1,082M Asia Pacific: 7% £300M / $516M Rest of World: 3% £116M / $200M Professional:14% £589M / $1,013M Higher Education:19% £779M / $1,340M
Interesting Facts 18M U.S. school students learning English and Math with a Pearson programme 3.5M Professionals who qualified in our testing centres 250 New authors published by Penguin around the world
Interesting Facts 0.5BN People learning English with Longman materials 3.6M College students in America using a Pearson online service 4.5M Readers reached by the Financial Times in print and online
Supply Chain: Environment Today Pearson’s business strategy and organization culture has yielded a relatively diverse, decentralized portfolio of ERPs implemented at the region/operating company level. Business process standardization within Pearson occurs largely at the region/operating company level due to market demands. Consequently, Pearson has adopted a decentralized IT strategy, with implementations occurring at the region/operating company level. • Business processes: The life cycle of a product/title • Editorial & Production • Sales & Marketing • Inventory Management • Sales Order Processing • Financials • Distribution and Warehousing • eCommerce • Human Resources/Payroll • Business Intelligence (analysis and reporting)
Legend: Supported by ERP Not supported by ERP Complex Environment: North America
Legend: Supported by ERP Not supported by ERP Not in scope for business Complex Environment: Europe
Legend: Supported by ERP Not supported by ERP Complex Environment: Latin America
Legend: Supported by ERP Not supported by ERP Complex Environment: Pacific Rim
Exercise • What should Pearson do? • Identify three strategies • Identify business risks with each strategy
Supply Chain Technology: Strategy • Pearson has adopted a decentralized strategy, with implementations occurring at the region/operating company level. • While supporting all the operating companies from a single ERP is desirable, the cost to consolidate is high and difficult to justify, and the process standardization required could inhibit business performance. • Pearson’s Roadmap sets a course to: • Maintain a decentralized approach • Allow ‘scope’ to meet regional /operating company requirements • Upgrade as versions go end-of-life • Govern introduction of new systems • Consolidate and standardize when cost justified
Case Study: Asia • September 2004: Consolidate business units into a single ERP instance • NPV: $954.9K| IRR: 37% | Payback: 1.3years • Goals: • Standardize business processes & operating procedures across the region • Reduce long-term costs (IT, Customer Service, Finance) • Improve utilization of IT systems & resources • Provide standard system platform for operation • Scope (Locations): • Hong Kong, Taiwan, Korea, Japan, Singapore and Malaysia • Hong Kong hosting location and support center • MPLS connectivity for each country access
Case Study: Asia • Consolidate business units into a single ERP instance • Functionality: • Editorial & Production processing • Academic adoption management • Sales Order processing • Inventory management • Procurement • Distribution & warehousing • Financials (GL, AP, AR) • Royalty management • Business intelligence (analysis and reporting)
Case Study: Asia Consolidate business units into a single ERP instance Rollout Timeline: Malaysia Singapore Korea Taiwan(delayed 6 months) Japan Hong Kong 2006 2007
Case Study: Asia Consolidate business units into a single ERP instance Solution Provider: IBS Bookmaster • Build upon existing implementation in Singapore • Build upon existing relationship with vendor • Singapore and Malaysia • Pearson Australia • South Africa (MML) • Most cost effective solution • Met majority of functionality needs
Case Study: Asia • Consolidate business units into a single ERP instance • What We Learned: • Partnership with vendor • Strong executive sponsorship and project governance • Thorough functionality requirements • Functionality gaps always found – accept it and manage closely • Dedicated and skilled project managers (internal & vendor) • Contingency: money, time and resources • Don’t underestimate language barriers and cultural styles: slows process down • Replicate Success and Learnings: • Taking approach to Europe
Summary: Future environment Long-term strategy | Time, Money, and Strong Partners
Exercise • Could Reach (the Irish government SOA programme) have used an ERP? • Identify organisational and technical barriers. • What are the legal implications and can they be dealt with?