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Case Study

 

For Westinghouse Electric, Future Success = Global Standard Processes

by Dave Hannon | insiderPROFILES

January 2, 2012

For over 10 years, the nuclear energy industry changed very little, and Westinghouse Electric Company continued to operate successfully using SAP software that was implemented back in 1999. But in recent years, the nuclear industry has expanded quickly, and to meet new demands, Westinghouse Electric launched a transformation program that included a complete reimplementation of its SAP environment.
 

Westinghouse

John Flynn, Senior Organizational Development Consultant (L) and Dave Wasil, Director of Enterprise Resource Planning (R)

The secret to risk management is surprisingly simple: Put a plan in place to address risks before they become issues. Predictive risk management is the most effective kind of management to ensure successful projects. Additionally, companies must determine where the most dramatic changes will occur and prepare users in those areas for the changes ahead of time.

That’s the recommendation from a team uniquely qualified to provide such advice — the SAP project team at nuclear energy leader Westinghouse Electric Company. After originally implementing SAP software in 1999, Westinghouse chose to reimplement its entire SAP landscape in 2010 to support a broader business transformation project. Westinghouse hired a team of specialists, including experts in the areas of testing, training, integration, and change management, to identify and address the biggest areas of risk early on, before they became major stumbling blocks in the project.

The result was a smooth go-live for its recent SAP reimplementation, which is now providing the foundation — and building end-user confidence — required to execute a broader business transformation project.

ERP as a Platform for Growth

For much of the 1990s and into the 2000s, the nuclear energy industry didn’t experience great change. Westinghouse continued to supply its nuclear equipment and services to plants around the world at a steady, consistent pace. Therefore, the SAP system that Westinghouse implemented in 1999 didn’t require many functional additions or extensions to suit the company’s needs, only some technical upgrades to continue doing its job behind the scenes.

“But in the last several years, the growth curve for the nuclear industry has expanded substantially, and our opportunities within the industry have expanded as well,” says Dave Wasil, ERP Director for Westinghouse. “We realized that our existing SAP implementation — which was based on 1999 processes, configuration, and functionality — wasn’t going to support an organization that was preparing to possibly quadruple in size, and a business environment that is very different than it was in 1999.”

To meet those demands and capitalize on the new growth opportunities, Westinghouse launched a multi-year business transformation program called Synergy, which consisted of more than 40 different projects. One of the largest of those projects was a complete reimplementation of its SAP environment — appropriately dubbed the Cornerstone project.

According to Wasil, during the roadmapping for the broader Synergy project, it became clear that the company would need to extend its existing SAP system to support all of its other transformation goals. Rather than embark on a series of complicated technical and functional upgrades across its application landscape, Westinghouse decided to reimplement a newer version of SAP ERP from the ground up.

“We decided not to do a technical upgrade on the existing SAP ERP 4.7 system to bring it forward,” he says. “Instead, we wanted to start with a clean core SAP environment, reconfigure everything we would need, and convert the data we wanted into that environment.”

In addition to reimplementing its long list of existing SAP solutions, Westinghouse planned to add new functionality to its landscape, including a new general ledger, a new enterprise reporting environment based on SAP BW and SAP BusinessObjects solutions, and new implementations of SAP Customer Relationship Management (SAP CRM) and SAP BusinessObjects solutions for governance, risk, and compliance (GRC).

 Rick Gabbianelli    

“The Cornerstone project was ambitious from an IT perspective, but all of the pieces of the project had specific business drivers behind them to support the new business strategies required to capitalize on the global growth in the nuclear industry.”

— Rick Gabbianelli, Senior Vice President of Strategy, Westinghouse Electric


Big Bang, Big Change

According to Rick Gabbianelli, Senior Vice President of the Strategy organization for Westinghouse, “The Cornerstone project was ambitious from an IT perspective, but all of the pieces of the project had specific business drivers behind them to support the new business strategies required to capitalize on the global growth in the nuclear industry.” For example, the SAP CRM implementation supported Westinghouse’s goal to realign into three operational regions (in addition to its existing product lines) in order to provide a single face in every customer location. And the reimplementation of SAP ERP Human Capital Management and the introduction of SAP NetWeaver Portal supported the company’s plan to increase hiring globally.

While the driver for undertaking each project may have differed, a detailed cost analysis of all the SAP projects in the queue, combined with feedback from internal users and business leaders, led the Cornerstone project team to one conclusion: The most effective way to get all of the new technology into SAP users’ hands would be a big-bang implementation approach.

“We determined that a three-year rollout in a phased approach would definitely cost more and provide a longer path to return on investment than a big-bang approach,” says Wasil. “And with the business growing so fast, a lot of our business users were already stretched very thin within their daily jobs, and we would be asking them to do additional work to help us implement the system. We felt if we dragged that out for too long, we would lose focus on the objective.”

Big Change Requires Big Change Management

With so much change bombarding users across the organization, the leaders of the Synergy initiative knew the success of the projects hinged on users’ ability to embrace the new solutions and processes being introduced. They also knew, based on past experience, that change management often gets overlooked in large and complicated transformation projects.

To ensure the change was managed most effectively, Westinghouse sought external expertise and hired change management specialist John Flynn in late 2009 to become part of the Synergy and Cornerstone teams. Flynn had a background in change management consulting at several business consulting firms as well as experience with SAP software in large organizations.

The first thing Flynn did when he came onboard was initiate a change impact and risk assessment study at Westinghouse to identify business areas that were likely to see the most change and would need to be addressed proactively. For example, he determined that Westinghouse’s supply chain organization would be dramatically affected and would require a more detailed change management strategy than other areas. Users here would need more lead time and training on the new solutions and processes, so he assigned a lead to develop a strategy for that specific area.

“We met with the supply chain staff members on several occasions about what they needed to do to prepare for the Cornerstone project,” Flynn says. “On a big project with a tight deadline, it can be tempting for the full-time project workers to stay heads down in the configuration, documenting business processes and not addressing users’ questions or concerns. We got the supply chain users and the project team together to discuss what the project entailed and how it might affect the users. This got everyone on the same page sooner.”

As a result of the meetings, the project team began recruiting power users from the supply chain organization and talking to business unit leads about specific project details. Those meetings also helped gain support from supply chain executives who could better understand the link between the IT project and the business goals, and then articulate this connection to the users.

The Best Go-Live Is a Quiet One

The cutover phase — just before go-live when the organization is transitioning from the old system to the new system — is the time at which changes actually affect users most. Flynn knew this would be a particularly challenging time for Westinghouse’s users, so with the support of the Westinghouse senior staff, he worked with business leaders to recruit coordinators for every site in the organization. Each site coordinator had a list of responsibilities and a checklist to complete prior to go-live to ensure each site was ready when the switch was flipped.

At cutover, Westinghouse established an automatic call distribution system and a parallel email system with people available across all time zones to ensure users had quick access to assistance. This system served as a temporary help desk just for the go-live period to answer questions in expected problem areas such as password resets and access issues. It handled more than 2,000 inquiries in the first three weeks of the implementation. “Users could dial in and be transferred to someone who knew how to handle a specific problem,” Wasil says. “We made sure we had extra staff on board specifically for questions regarding time entry and purchase requisition management, because we knew those would be big areas of concern.”

Leading up to the July 2011 go-live, the team also set up a blog to share tips and best practices. “If we found something that was creating problems or discovered a workaround, we would post that on the blog,” Flynn explains. “So users could go there for answers without having to bother the help desk in many cases. We took a lot of load off the help desk folks by doing that.” The blog got more than 3,500 hits the month before go-live and more than 2,700 hits the month after go-live.

Westinghouse plans to revive the blog in January of 2012 as the main communications vehicle for ongoing support and new Synergy projects.

 Dan Lipman    

“Global standard processes are the foundation for the future success of Westinghouse, and the Cornerstone project was a key to making that possible.”

— Dan Lipman, Senior Vice President of Operations Support and Core Process Innovation, Westinghouse Electric


The Road from Here

For Westinghouse, the Cornerstone project was the beginning of a journey that will deliver functionality for years to come. For example, the reporting environment will be worked into the business processes more gradually than some of the reimplemented modules. But with the solid base of an updated SAP platform, rolling out the additional functionality is expected to go smoothly.

With strong leadership support, a strong alliance with SAP, and well-managed risk and change, the Synergy team successfully delivered the new, updated platform. Concurrently, the team also deployed better business processes, increased user involvement, and became a more capable project team. The result is an overall environment prepared to meet the expectations of sponsors and business leaders. This success was best summarized by Dan Lipman, Senior Vice President of Operations Support and Core Process Innovation for Westinghouse, when he said, “Global standard processes are the foundation for the future success of Westinghouse, and the Cornerstone project was a key to making that possible.”

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