Reinventing your business doesn't happen overnight, but three years after a major systems overhaul, this construction giant has found the benefits are there to be had. David Braue explains.
A part of Leighton Holdings, Thiess provides capabilities in building, civil engineering, mining, process, environmental services, utilities services, facilities operations and maintenance. It is currently managing more than AU$9 billion of work throughout Australia, New Zealand, Indonesia, China, Hong Kong, India and Papua New Guinea
FY2004-5: Revenues of AU$4.3 billion
Construction, engineering and mining services
Its core business may revolve around building things, but AU$4.3 billion construction, mining and services provider, Thiess, has found its most beneficial construction yet in the changes wrought since bedding down a major new enterprise resource planning (ERP) system three years ago.
The AU$15 million implementation, based around JD Edwards' OneWorld ERP platform, was initially intended as an upgrade to a struggling decade-old internal system that was poorly integrated and couldn't support the fast-growing business. In 2002, Thiess began the two-year implementation of OneWorld that began with confidence and was punctuated by ambiguity as Oracle's Herculean takeover effort eventually saw it subsume the ERP platform.
Three years ago, PeopleSoft acquired JD Edwards for more than US$1.7 billion. In 2004, Oracle nabbed PeopleSoft for US$10 billion.
Despite initial uncertainty, however, Thiess has been happy with Oracle's stewardship of JDE, which ERP applications manager Nikki Evans says has already helped drive major technological and process improvements throughout the company.
-In the past, people would use different plant maintenance, accounting, site management and other systems and Excel spreadsheets throughout the company," she explains. -Paper was being filed everywhere, and snail-mailed around the country. We were looking to replace that with a fully integrated system that would reduce data entry and provide more transparency of our information."
A strong foundation
Implementing a flexible ERP system was always critical to match Thiess's business activities, which involve frequent joint ventures and the associated need for isolated, tightly controlled procurement, inventory, plant maintenance and other processes.
-Going from an in-house developed system, we wanted a system that was developed by a large software company where we can utilise their R&D for enhancements. The new system allows us to have these processes in a template solution."
Template-driven processes have, over time, helped keep ongoing administrative costs down and significantly improved consistency throughout Thiess's operations. In some cases, for example, purchases were being approved three times because paperwork was being repeatedly handled by employees in different parts of the 15,000-strong company.
With a single system in place, Evans says, -the processes have now been standardised. We now have consistent data and one version of the truth, as opposed to having many different systems across the company. We can drill down to the detail in the system, which has huge benefits in being able to give management the kind of information they require."
Turning a major enterprise into a template-based business was never going to be completely smooth sailing, however. Since the system went live, a number of bolt-on additions have tweaked the system's functionality to suit specific requirements. A number of users, for example, wanted to use the plant maintenance module in a certain way and refused to change their processes to suit JDE; Thiess eventually shaped the system to suit their requirements.
Another major modification was the need to write tax code for the payroll system at the company's Indonesian operation, which wasn't catered for by out-of-the-box functionality.
Building a change culture
The JDE implementation forced Thiess to face up to the usual complexities of large systems implementations, including technological challenge and efforts to engender user buy-in. This last issue was resolved through the appointment of "superusers" who led training throughout the company's business side. This approach helped foster the feeling that the change was being driven from within the company as well as down from above.
Although getting user buy-in is never easy, three years on Evans says the company is counting the rewards the system has provided above and beyond simple process standardisation. Most importantly amongst these is the complete change in user mindset compared with that of two years ago: users have become accustomed to asking questions and using the system's reporting capabilities to think more laterally than in the past.
"Three years post implementation, I've seen that the use of the information in the system has changed," says Evans. -In the beginning, people were just focused on getting data into the system. Now they're starting to think at a more strategic level, and looking at more sophisticated uses for the information. It's good to see that people themselves are now driving the change."
The JD Edwards platform faces almost certain destruction if ever Oracle decides to discontinue support for the one-time rival, but for the near term Thiess is focusing its efforts on more immediate issues.
One major additional change has been the introduction of the Stellent IBPM document management platform, which has allowed Thiess to rework many of its long-entrenched paper handling processes with a fully digital workflow that is further improving the efficiency of accounts payable and procurement processes. Adding document management to the robust JDE framework will provide another major step forward in user capabilities, says Evans, as well as a planned upgrade to the latest, Oracle-produced version of JDE scheduled to begin in the first half of 2007.
Despite the ongoing challenges the system has presented, the new system's template-based business processes and user empowerment have helped it deliver on the company's original expectations for the project. And, with Thiess growing at 40 percent in the last 12 months, Evans says the system has provided a path forward where there just wasn't one with the previous in-house system.
-We've had this incredible growth," she says, -and that has been a challenge to keep up with. We could never have coped with that without JDE, and would never have been able to meet that. Without a doubt, the old system would have just crashed."