NIBCOs Big

Bang
An SAP Implementation

Nibcos Profile
- A midsize company who produce valve and pipe fitting used in plumbing,
heating, air conditioning, and irrigation.
- Has headquarter in Elkhart, Indiana USA
- Have 10 factory in AS, Mexico, and Poland
- In 1996, had more than 3.000 employees and Annual Revenue $461
million

The Problems
- NIBCOs Legacy Systems Each department had diferent system which
is not integrated, redundant function, and waste of resource
- There was dissatisfaction with the functionality of the legacy environment
and data
- There was some unneeded process in the system
- In 1995, Boston Consulting Group (BCG) suggested to cut loose the old
system and implement ERP
- Management decided to implement ERP with SAP R/3 system through
Big Bang Project

Big Bang Project Milestone

Early 1995
Nibco cross functional teams decided to redesign supply chain process.
Gary Wilson become the head of department
Aug - Dec 1995
BCG recommended Nibco to replace the legacy systems with integrated
enterprise system on client - server platform over a 3 - 5 years timeframe
July 1996
Committee recommended purchase of SAP R/3 and Big Bang
implementation
Aug 1996
Contracts signed with SAP R/3 modules and IBM as implementation
partner

Big Bang Project Milestone

Dec 1996
Final project scope and resource estimates presented to Executive
Leadership Team and Boards with Go-Live date on Monday, Nov 29th 1997
Apr 1997
Installation of PCs for customer service associates has completed. Weekly
newsletter via email initiated
Summer 1997
Maintenance of legacy systems discontinued except for emergency repairs
Sept 1997
User training begins at Nibcos Headquarter and remote sites.
Dec 30th 1997
Go Live without consultant

Nibcos Objectives
- Implementing SAP R/3 at all 10 plants and 4 new distribution centers in
USA at the same time
- Budgeted $17 million and expected to complete the project in 15 months
- Get more informations to assist business decision making
- Better meet customer need
- Facilitate the companys growth and become more global
- Improve all-overs organizational performance through better IT support
- Reduced redundancy and improved process efficiency through integration

Implementation
1. TIGER TRIAD (Total Information Generating Exceptional Result)
2. Selecting Implementation Partner (two candidates: IBM and Cap Gemini)
choose IBM
3. Selecting team composition (Sales Distribution team; Finance Controlling
team; Material Management Production Planning team)

Implementation Problem
- Implementation team was put in one location Headquarter near to
NIBCO Senior Manager
- IBM Consultant Change management approach was not ERP-specific
- Implementation has over budget by 30% due to high cost on
management, trainings, technology infrastructure.
- All team member are work full time on project
- Go Live delay 1 month due to delayed Distribution Center
Consolidation, takes 17 - 18 days to upload master data

NIBCOs Big Bang Approach

The approach was called Big Bang because it involved complete or full
implementation in all of the firms facilities at the same time. In some firms,
the SAP ERP system is implemented using a staggered or gradual approach,
one department at a time. NIBCOs Big Bang approach required implementing
the SAP ERP system throughout the company at the same time.

What Should be Consider

a.

Risk
Big Bang are more riskier; Difficulties to revert to the old system; A failure
have knock-on efect

b.

Multiple Business Units

Complexity may occurs; Starting with pilot site is generally make sense

c.

Temporary Interface
Link between 2 systems in a short-term basis; Occur in phased
implementation

d.

Time
Phased implementation takes longer time

e.

Impact
Implementation strategy can give diferent impact to the
organization wide

f.

Cost
Phased will take longer time; Caused additional external & internal cost
and temporary interface cost

ERP Implementation Strategy:

Gradually

BIG BANG

Has smaller risk because the

implementation is only partial in a
given timeframe
May pushes workers in a Gradual
Approach manner into the race to
the winning group
Reduces output & release
employment more gradually
Is more costly
Has larger porssibility of
production inefficiencies

has greater risk for SAP ERP

system because the entire system
is implemented throughout the
firm right away.
it has potential effects.
it requires a more experienced
project management team.
it requires more intensive
technical support for users during
and immediately after
implementation.
is cheaper

Pros / Cons of NIBCOs BIG

BANG ApproachCons
Pros
Shortened duration of the project.
Less time-based resources, such as employees
needed to man the project.
The company was able to reduce project
management and implementation costs of the SAP
ERP system.
The pros/benefits of the Big Bang approach also
include the reduced disruption on the business. Any
IT implementation can disrupt business operations.
Because the Big Bang approach in NIBCOs SAP
ERP system was shorter in duration, it created less
disruption.

The cons/disadvantages of the Big Bang approach

include the greater risk and its potential effects.
The risk is much bigger for NIBCO because the entire
system is implemented throughout the firm right
away.
The cons/disadvantages also include the requirement
for a more experienced project management team.
Requires more intensive technical support for users
during and immediately after implementation.
Must has a larger organization-wide coverage
throughout NIBCO, thereby imposing greater
pressure for management and technical support for
the SAP ERP system.

Additional Research: Empirical

Study of ERP Implementation
According to the results conducted
on 45
Strategies
(Madkan,
2014)
organizations, the big bang, and the phased
rollout, or a combination of the two
strategies were implemented by 89% of users
40 out of 45 ERP implementations were
successful. The 5 that were not successful
reported to have been because of
miscellaneous reasons.

Analysis of the Issues

1.

NIBCOs SAP ERP implementation was successful in part because they had an executive
sponsor, and a centralized management structure of three co-leads.

2.

Employees had to work very long hours. Not every firm wishing to make the same change might
have the same compliance.

3.

Attendance at trainings was very high. This allowed for participants to be more ready the switch
on the Go Live date.

4.

There were incentives that motivated top management to strive against all odds.

5.

The budget was not planned out, but the improvements made proved to be detrimental to the
success of the ERP implementation.

6.

The implementation of the ERP was extremely important since it helps companies manage the
efective use of resources by providing an integrated solution for the firms informationprocessing needs.

SAP Implementation Key

Key success factor => 3 NIBCOs strategic actions :
Success Factor

1. Business Responsibilities : Sales distribution, Finance controlling, Material

Management, Production planning, Business review.
2. Technical Responsibilities : Building new technology, Network management, Running
R/3, Manage master data.
3. Change Management Responsibilities: Identifying categories of key changes, Internal
communication planning, User training before go-live.
-.

Identifying Key Changes : Automation old work, simple job desk (elimination of related
activities), movement of work from one group to another.

-.

Internal Communication Plan : TIGERS focus group, Project team, other NIBCOs
Associations

Extended Recommendation :
Accelerated SAP (ASAP)

Accelerated SAP Methodology

Definition :
Accelerated SAP methodology is proven, repeatable and successful approach to
implement SAP solutions across industries and customer environments.
Goals :
Provide efective, efficient, and optimum results especially in terms of time,
cost, quality, compliance with requirements, and resources utilization.

Accelerated SAP Methodology

Business
Blueprint

Phase
Project
Preparation

Activities

Scoping,
staffing, team
training,
process fit

Final
Preparation

Go Live
and
Support

Realization

Enterprise
modeling/
business
process design

Configuration
&
Customizatio
n/interfacing

continuous
improvement

Data
migration,
End user
training

Cut-Over
Support

Why Should NIBCO Implement

Accelerated SAP ?

The success and

congruency to the
business needs

Source :
Doane. (2006). The Five Basic Phases of ASAP in Ylmaz, Edwards. 2011. Implementing ERP
Systems with Accelerated ERP More Efficient and Quickly : A Best Practice.
South Carolina Enterprise Information System,
http://www.sceis.sc.gov/faq-category.aspx?id=4, retrieved on 3 December 2015