IT alignment pays off for Orica

Introduction of the SAP R/3 enterprise management system was always going to be a big deal for Orica Consumer Products (OCP). Five years following its release, plans set in place back at the launch have paid big dividends after OCP recently updated its SAP environment. It was a major project that ran smoothly thanks to careful business-IT alignment.
OCP is the 2200-employee division of petrochemical giant Orica that produces consumer paint, fertiliser, and plastics brands including Dulux, Berger, Selleys, Yates, Thrive, and a range of powder coatings, woodcare, and related products. In 2000, the company migrated to SAP -- a process that made the company realise the importance of aligning its business to capitalise upon the capabilities of the platform. These lessons were still fresh in mind when Orica last year updated its critical SAP Warehouse Management module, which runs its five distribution centres, from version 4.5b to 4.7.

Impetus for the upgrade came from business managers, who assembled a business case based around what national distribution manager Neale Rodgerson calls "deliverable numbers based on what we had expected and designed into the system". The AU$1.8 million budget was significant enough that the proposal had to undergo careful evaluation before ultimately winning the support of IT, business managers, and the company board.

"That's a very good process to go through, because once you've done that you know everyone is aligned," says Rodgerson.
"From the start, business objectives were set. But historically, we've found that if [a project is] driven by IT, it's driven to find a solution that suits the IT platform rather than the business. Unless you have business ownership in that process of identifying the changes you want to put in place to improve something, you get that misalignment."
Establishment of a project team for the upgrade came immediately after a needs assessment confirmed an SAP upgrade was the best approach for the company.
Diversity was a key design principle in selecting team members, with individuals including business users, IT groups, consulting principals, hardware suppliers, and members of SAP implementation partner Consulting Principles. Liaison between individual business lines and the IT team was managed by a number of IT business analysts, who had been added to the company in 2001 to help with SAP implementation.
Despite the support for the project, the project team underwent a four-month planning study that resulted in a comprehensive project blueprint that outlined expected changes to business processes. Training modules were developed and delivered where necessary; a staged rollout across the five sites was planned; and the timetable was set by the business.
"We have discussions about business-IT issues up front so we don't get trapped," says Rodgerson, "and as we talk about trying to improve a business process, we have the ability to go back and look at what functionality we have in SAP. Having the document and doing work upfront ensured that there were no surprises going through the implementation. Because the business owned the project, we drove the timetables so it wasn't an IT driven timetable that said we had to deliver on such and such a date. It was more about [going live] when we were ready to go live."
This article was first published in Technology & Business magazine.
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