ERP Implementation at Maruti Suzuki India

LtdA secondary research based case study on

implementation of Oracle based ERP system

INTRODUCTION

Subsidiary of Suzuki Motor Corporation

Leader of market for 20+

years

Sales 1.13 million

9000+ employees

Largest sales and service

network in India

300 strong dealer network

scattered across India

Manufacturing and sale of motor vehicles and spare parts

Added finance, leasing, insurance and pre-owned car businesses to its portfolio

MARKET SHARE OF MAJOR PLAYERS IN PASSENGER CAR SEGMENT(2010-2011)

PRE ERP SCENARIO Deployed an extensive extranet to reach business

partners in 1990 Small application running on the dealers' PCs to

manage their daily activities Home-grown systems for managing various lines

of business Different divisions followed different workflows

preventing real-time access to critical statistics Reliance on rudimentary system and basic

spreadsheets to manage the process Used mismatched systems to manage expanding

workforce

GROWING NEEDS OF MARUTI Addition of four new business sectors in

2002 Operations across hundreds of locations

within India Disparate systems could not talk to each

other Various lines of business were using

homegrown systems Requirement to enter data multiple times Constant monitoring and human

intervention

GROWING NEEDS OF MARUTI

Lack of control over processes Poor information quality Huge turn-around time Collaborate with global teams Streamlining the process of vehicle

localization Enhancing quality and reliability

WHY ORACLE ERP

Already had Oracle

Database, Oracle

Application server

Used some of resource planning

modules of Oracle E-

Business Suite

Open architecture of

Oracle components

made simplified

integration with Suzuki’s

system possible

With Oracle the company would be able to standardize

the technology

used

IMPLEMENTATION: PHASED OR BIG BANG?

Maruti chose a phased approach to make a shift from the legacy systems to the new ERP

BIG BANG• No need for temporary

interfaces• Limited need to

maintain legacy• software• Cross-module

functionality• No going back• Lower cost if no

surprises

PHASED• Smoothing of resource

requirements• Able to focus on a

particular module• Legacy system fall back• Reduced risk• Knowledge gained with

each phase

IMPLEMENTATION – PHASE 1

Phase 1Project Organization

Project Governance

Project Team

Organization Readiness

Project Kickoff

IMPLEMENTATION – PHASE 2BUSINESS REQUIREMENT DOCUMENT

A business requirements document (BRD) details the business solution for a project including the documentation of

customer needs and expectations

Objectives :•To gain agreement with stakeholders•To provide a foundation to communicate to a technology service provider what the solution needs to do to satisfy the customer’s and business’ needs•To provide input into the next phase for this project•To describe what not how the customer/business needs will be met by the solution

Packaging the BRD:•Project charter information, scope, and objectives•Current environment assessment•Future process map•Process detail table•Overall project business rules and constraints•Impact assessment (fishbone for process functions)•Functional requirements •Schedule and budget•Approver information•Team information

IMPLEMENTATION – PHASE 3• Project Planning –Detailed implementation pla n, quality review plan, resource plan, financial plan prepared

• Design & Development • Based on analysis of the existing process, simplifying or

creating new ones where required• Configuration of the new systems, interfaces and

supporting legacy systems• Setting up of business rules along with approval matrix

• Controls – Regulatory, Statutory and Financial built into the system

• Methodology of Implementation – Single Instance with Phased approach of implementation followed region wise

IMPLEMENTATION – PHASE 3Data Migration

Identify the data

Collate the data

Consolidate

Clean & Verify

Condition

Create & Verify

Migrate & Verify

Unstructured Data

Excel Files

Ledgers

Word Documents

Legacy Systems

Manual Forms

• Identifying the owner of various data sources• Data collection and removal of redundant data• Checking for data integrity• Making suitable modifications to fit the standard format• Verification of data with original after migration

IMPLEMENTATION – PHASE 3Testing

Developing scenarios as test cases based on users previous experiences

Creation of testing team and development of the test environment

Define all business transactions or business processes that use the system

Define expected results for all testing scenarios

Build tools for comparing results in the parallel test phase to match the ERP to legacy system data

Unit Testing

Integration Testing

System Testing

UAT

Conference Room Testing

IMPLEMENTATION – PHASE 3Training

Comprehensive training provided to each stakeholder as per their usage of the system “Train the Trainer” program created to propagate the usage of the system and developing familiarity of

its features

Retraining of users after a period of 1 week to ensure that there are no gaps in understanding

of the system

Walkthrough

Scenarios

SimulationPilot

User Guides

Obtaining user feedback and improving upon any gaps in training process

Making users aware of the impact of their operation of the system on related functions

Scenarios cover Operational, Daily Activities, Monthly Activities, Strategi & Company Specific ones

Simple features such as ease of navigation to complex functionalities covered

CHANGE MANAGEMENT

Change management is a structured approach to transitioning individuals, teams and organizations from

an Existing Current State to a Desired Future State

• Goal – To provide a structure necessary to effectively prepare the Human Capital for Change

• Hard Facts which were considered at Maruti-• 42% Leadership Issues• 27% Cultural Issues• 23% Technology Issues

Create Urgency

Form a powerful coalition

Create a Vision

Communicate the Vision

Remove obstacles

Create short term wins

Build on the change

Institutionalize the change

Change Management

Model

RISK MITIGATION

Phased step-by-step

implementation approach

and not ‘Big-Bang’

approach

Training of users and

employees to uniform

standards

Developing adequate

Contingency plans

Reinforce• Celebrate success• Analyse feedback to

manage resistance

POST IMPLEMENTATION BENEFITS

Single, integrated, in-strata system

Smart and Process Oriented Workforce

Tight integration for real-time performance

Budget and credit checks completed online

Lowering support and maintenance costs

Easy upgrades for the future

Provide end-to-end visibility

WHY ERP PROVED SUSTAINABLE FOR MSIL

WHY ERP PROVED SUSTAINABLE FOR MSIL

WHY ERP PROVED SUSTAINABLE FOR MSIL

FUTURE DIRECTION

A video from Oracle consultancy: Maruti

Suzuki Drives Business Growth on a Full Oracle Stack.flv

Appraise Oracle Advanced Supply Chain

Management and Oracle Enterprise Asset

Management

Cloud ERP to make the company truly integrated

in the global sense

Suppliers to be adopting cloud

ERP

REFERENCES The official website of Maruti Suzuki India Limited Oracle Consulting case study, 2008, ”Maruti supports

business growth with scalable, high performing ERP system”

“Maruti Udyog Limited: A bumpy road ahead”, Vision- the journal of business perspective Vol 10,January 2006

S. K. Majumdar, M.P. Gupta, 2001 “E business strategy of car industry”

Maruti Suzuki case study, oppapers.com Leon , Alexis, (2008), ERP Demystified, 2nd Edition Hammer,M., Champy.J., (1993), Reengineering The

Corporation: A Manifesto For Business Revolution., Harper Collins, London

Ford, Jeffery D. and Ford, Laurie W. (April 2009), Managing Yourself: Decoding Resistance to Change, Harvard Business Review

THANK YOU