Logistics/Distribution – Strategy & Planning
External financial advisors had analyzed how a significant acquisition ($8.5Billion) would allow the combined company to dominate the transportation / logistics market, on paper. What was missing was real world advice about the probable and probably very expensive issues associated with deployment of corporate applications into the acquired company’s operations.
Client leadership’s initial thoughts were to ‘force fit’ corporate applications into the acquired company; thereby quickly achieving economies of scale and commonality.
TLIR laid out reasoning why the ‘force fit’ approach was not necessarily the wisest course in this particular case since ‘shoehorning’ unfamiliar systems and processes into foreign, potentially ‘hostile’ environments where legacy systems and processes were tried, tested and beloved by staff and customers could well prove extremely costly to execute.
Subsequently, TLIR recommended a ‘waves of change’ approach that would derive the same value over a slightly longer period with far less risk of cost overruns and customer dissatisfaction.
In this case (as in many other ERP initiatives) the full cost and time to achieve full, seamless and complete integration into the operating fabric of the organization was understated. The cost, time and effort necessary to re-engineer business processes to extract the real and worthwhile benefits of ERP functionality is usually so significant; vendors and parties who espouse ERP applications tend to downplay the non-technological costs with dire consequences.
As Phil Knight, CEO of Nike so eloquently stated… “Look what I got for $500 @#^%& Million! Nothing!”
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