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SPX Board Meeting IT Discussion

SPX Board Meeting IT Discussion. Current IT Situation Key IT Issues/Direction Current Projects Strategic Initiatives Oracle Migration eCommerce. Current IT Situation Business Environment. Complex business environment Number of customers – 2,500/6,000 locations

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SPX Board Meeting IT Discussion

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  1. SPX Board MeetingIT Discussion • Current IT Situation • Key IT Issues/Direction • Current Projects • Strategic Initiatives • Oracle Migration • eCommerce

  2. Current IT SituationBusiness Environment • Complex business environment • Number of customers – 2,500/6,000 locations • Number of products – 6,000 ABC; 30,000 K; • Number of custom (configured) products – 6,500 in 2006 • Daily Sales (average): • Orders – 1000/day • Order Lines – 7,500/day • Order $$ -- $2.0M/day • 21 (mostly small) locations • HQ – 1 • manufacturing facilities – 15 • distribution centers – 5 • Number of employees – 2,200

  3. Current IT SituationSystem Environment • U.S. and Mexico current business applications – AS/400 based, fifteen plus years old, heavily modified, off support • Mexico plant on local G/L, payroll • EGS/Canada uses a local package for all commercial functions supported by a local consulting company. • ATX/France uses MAPICS and is self supporting. • U.S. eCommerce (web strategy/public sites) dated • All EGS (including Canada and France) Infrastructure – network, computer administration, Firewalls, E-Mail – are Emerson compliant • IT spending ~ 1% of sales

  4. Issue No HR system, payroll system outdated No consolidated/integrated sales information Current business applications at end of life Customer expectations/needs are changing -- current applications cannot support new requirements. Canada and ATX on separate systems eCommerce/web sites inadequate Direction Oracle HRIS/Payroll/Kronos Create Sales Data Warehouse Oracle Applications Oracle Applications Oracle Applications New eCommerce Strategy Key Issues/Direction

  5. Current Projects – Configuration Software ($230K) • Status: In process • Externally hosted, web based configurator will be available to sales force, customers, and end users get accurate information up front • Back office processes will be re-engineered for configured products • Automate pricing (interact with Vendavo) • Time line: • Lighting products – 2/07 • Control stations – 3/07 • Sola transformers – TBD Objective: improve customer service for configured products

  6. Current Projects – Vendavo Upgrade ($400K) • Status: In process • New functionality … • New index calculation • Manage list prices • Improved workflow • New module: Price Console • Timeline: • Started 12/4/06 • Technical Conversion – 2/07 • Enhancements – 4/07 • Price Console – 6/07 Objective: Improve operational reliability, Profit Analyzer module, new functionality

  7. Current Projects – Kronos ($185K) • Status: Approved • Implement Kronos time and attendance system in six key manufacturing locations • Preparatory step for Oracle Payroll System implementation • Timeline: • A/R approved – 1/07 • Finalize approach and begin project – 1/07 • Go Live – July 07 Objective: Replace current unreliable plant systems (seven locations)

  8. Current Projects – Oracle HRIS/Payroll System ($183K) • Status: Approved • implement the Oracle HR and Payroll modules • EGS has no HR system today • Payroll system obsolete • Application hosted and supported by Emerson • Timeline: • Needs analysis – 3/07 • Begin project – 6/07 • Go Live – 1/08 Objective: Implement Oracle Human Resources and Payroll modules in U.S. operations

  9. Current Projects – Sales Data Warehouse • Status: Analysis/feasibility study • Concept: • Collect detailed sales data on a daily basis from all EGS operations and consolidate into a single data base for reporting • Objectives: • Measure business on a daily basis • Sales rep performance and compensation • Communicate summarized data to field sales via extranet site • Cost target: < $500K Objective: Develop/implement a sales data repository for all EGS operations

  10. Strategic Initiatives • Business Strategy • Operate as a single company and grow business organically and through acquisitions • IT Initiatives to Meet Business Strategy • Common systems to support global company • Common ERP solution • Robust eCommerce strategy eventually integrated with ERP EGS Critical need Order Management & Distribution

  11. Oracle Implementation Strategy Customers “Supply chain” approach Order Management Order Entry F/G Inventory Mgt Distribution Invoicing Sales Reporting General Ledger Accounts Receivable Accounts Payable Cost Accounting Phase I Manufacturing S&OP Production Planning Capacity Planning Shop floor Control Purchasing Phase II Suppliers

  12. Oracle Alternatives • “Oracle in a Box” • Join existing EPT environment – start with Oracle Finance and Nomad • Join EPT environment – start with Oracle Financials and Order Management • Implement a stand-alone EGS instance of Oracle

  13. Timeline • Complete OIB Evaluation • EPT Oracle/Nomad, Oracle/Oracle, New EGS Instance Discovery – January/February 2007 • Selection of Approach – March 2007 • Oracle high level feasibility study – April 2007 • Target to present approach high level plan at next profit review. Evaluation Completed -- Option Eliminated

  14. E-Commerce Number One Strategic Initiative

  15. Pricing Services • IDW2 • Trade Service • Material Express • Customer Service & Tech Support • Distributors & End-Users • Catalogs & Website Speed Reliability Eliminate Redundancy Development of a Product Information Database Enables EGS to Upgrade Its Electronic Capabilities • Over 40,000 Cataloged Products • Preliminary work has begun on Sola & Appleton (domestic) products • Our competitors, through system conversions, have invested in the technology • Cooper C-H • Hubbell • T&B • Rockwell • Schneider Electric Square D • Eaton Electrical • Multi-year project requiring significant investment, software & internal resources

  16. Data Transfer Handled Electronically Through IDEA, NEMA & the NAED are Aligned on E-Business Priorities “NEMA Data Supply Program” • Presented at July NEMA session • 20 NEMA Members agree by end of CY06 to work with 40 IDEA distributors populate IDW2 with: • Enhanced product data • Net stock price files • Benchmark product data with 2 of the 40 accounts • Data Synchronization (832, 845, IDW2, Flat File) • Product & price file updates • Customer specific contract pricing (SPA) • Rebate filing (844 & 849) • Request for rebate • Response for request for rebate

  17. Our Competitors are Responding Requirements of the Channel Necessitate EGS Participate “The 20/40 Program” Participants Sales 2006: $180M (46%) Strategic Accounts: $160M ECM: $140M Sola: $20M

  18. $45M $25M $30M $383M Heating Cable EGS Canada ATX Appleton & O-Z Sola Curlee Firestop Allocation of Adjustments: Credits, Rebates, POS Sales Data Warehouse Consolidates the Metrics of EGS’ Multiple Business Systems • Today’s data resides in 4 silos that are not consolidated – getting to the number is an arduous task requiring time & effort that is prone to error Consolidated Sales Data • Measure business on daily basis – morning report • Sales rep performance & compensation • Appropriate allocation of adjustments • Communication of metrics via sales reporting tool through extranet

  19. Sales Analytics Quotation Tool Policies $ AS400 Vendavo Upgrade Provides the Tools to Implement More Sophisticated Pricing Tactics • Project Overview to migrate from V4.3 to V6.6 • Total cost estimated at: $400K • Project kick-off: December 2006 • Project completion: May 2007 • Benefits • System stability – 80% of EGS custom code is now standard in V6.6 • Transfer manual BPCS processes to automated Vendavo system • List price increases • Quotation take report analysis • Price list & quotation publishing • Process improvements • Workflow triggered on quote changes • Simplify mass edits of quotes • Alarm notification of non-conformance quotes • Enhancements • “True” price measurement metric • Improved price level indexing • Quote & price rules comparator & modification tool

  20. Project Overview Total cost estimated at: $250K Project kick-off: July 2006 Project completion: March 2007 Provides customers with ability to select, price, & order product Lighting – Phase 1 Control Stations – Phase 1 Transformers – Phase 2 Other products – Future Reliable repeatable holistic process Select, price, order Part number – build it and load it on the system Quote it on Vendavo Plan and Manufacture it – Bill of Material Report it – Sales Reports Big Machines Product Configurator – Replaces Engineering System to Create Bill of Materials for Specials and….

  21. Our Websites Require Updating and Consolidation to a Common Technology & Platform • Current Situation • 13 Public and 1 Extranet Site • Housed on multiple servers • Limited functionality • No common platform • Extranet site services only ECM (domestic) and Sola Businesses • Order Status • Shipment Tracking • Invoice View • Inventory Availability • Order Entry • Stock/Job Pricing • Project Registration (SHD only) • File Download • Return Request • Literature Request • Technology • Static HTML pages • Modifications require a Developer • Annual investment: • $50-75K/year • 1 IT resource • ½ Marketing

  22. Extranet Extranet Vendavo Sales Reports CRM Big Machines Product Database Product Catalog EGS Branded Websites Enhanced ERP Branded Sites Consolidated Technology Serve as Portal to the EGS Tool Set • Multiple Branded Sites with Similar Consistent Look/Feel • Leverage Technology Investment Across Divisions & Departments • Functionality • Enhanced product selection • Attributed product data • CSP pricing & RFQ • Transactional data • Order entry & tracking • Content Management System • Site content managed by functional departments • Developer/Programmer not required

  23. Strategic Initiatives – eCommerce Strategy Solicit Help To Conduct Needs Analysis And Develop Strategy Select Service Providers Proposal to: Plan to Proceed Integrated Systems Management Laurus Technologies One Other • Conduct Needs Analysis: • Competition • Strategy • Timeline • Technology • Budget Cost Estimates Needs Analysis $75 – $100K Implement Plan $1.5 – $3.0M (over 2+ years) Selection made by January 31 Plan completed by mid-March

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