Case Study:
Reverse Enterprise ERP Integration
Problem:
A very large pharmaceutical company acquired another, slightly smaller company, in order to accumulate key strategic capabilities. Both companies were very well established and entrenched in their respective corporate cultures, making the integration a significant, long term exercise. As is to be expected, the strategic direction was that the acquired entity would be absorbed into the acquiring entity’s organization, processes, systems, and methods.
However, the acquiring company was in a unique situation, being in the midst of a major, multi-year project to implement Oracle as their new ERP system. The acquired company had a well-established SAP footprint, which would need to be removed to accommodate Oracle; the parent company had a history of removing existing ERP/SAP solutions during acquisitions. The first step was to execute a detailed review of the acquisition’s SAP solution in order to understand the current gaps and establish a roadmap for transitioning them to Oracle.
Solution:
Endeavor was contracted to assist in the detailed assessment and system analysis of the acquisition company’s design. Endeavor had in fact architected a great deal of the existing SAP design (particularly in supply chain planning, execution, and logistics), and so were able to facilitate the sessions. The acquiring company was particularly interested in exploring the system gaps that their team had encountered in the Oracle design and blueprint, the largest and most significant being their Automated Tolling design.
Endeavor presented well-established automation that they had designed and built, which featured a direct use case and application to the parent company’s supply chain, showing clear governance. Thanks in large part to Endeavor’s design architecture and strong SAP documentation, for the first time in its history the acquiring company decided not to rip out the acquisition’s ERP solution. Instead, the multi-year project of the acquiring company was scrapped, and it was decided that the entire enterprise (including prior acquisitions) would inherit the new, Endeavor architected solution, as part of a new multi-year “reverse integration” ERP project.
Benefit:
There were very powerful political forces opposing the direction that was eventually taken, but the overwhelming number of business benefits ultimately turned the tide, and made the path forward clear. Not only was the parent company able to acquire a legally vetted, highly-automated Tolling solution — which would save them billions of dollars in profit management —, but they also inherited a large, well-oiled SAP footprint with extremely strong process, data, and organizational governance.
Extending these solutions to the parent company’s locations allowed them to inherit years of best practices and lessons learned from a strong group of business process and IT leaders. It accelerated the strategic business benefits that the parent company hoped to achieve faster and further than they could have possibly anticipated.