Published on 19-Jul-2012
"IBM was selected as the implementation partner due to its track record of enabling corporate transformation for organizations aiming to become global corporations. Global integration of business process and the rollout within Japan were achieved successfully by the implementation method established using vast experience and project management support." - Shinichi Kimura, CIO, Allied Telesis Holdings K.K.
Data Warehouse, Enterprise Resource Planning, Information Integration, Information Management Foundation, Small & Medium Business
IBM Business Partner:
Founded in Japan, Allied Telesis Holdings K.K. (described hereafter as Allied Telesis), which celebrates its 25th anniversary in 2012, is a global manufacturer of networking equipment, that has contributed to progression of the information society.
Allied Telesis Holdings K.K. maintains 38 group companies in 23 countries worldwide, and supports R&D headquarters in nine countries spanning from Asia, New Zealand, and North America, two manufacturing plants in Singapore and China, and sales and support service footholds are spread out around the globe, all focused on meeting the challenge of becoming the corporation that leads the network evolution around the world.
Allied Telesis selected SAP® ERP for the system integration because it possesses significant market share around the globe, as well as a high level of system robustness. IBM, with its global track record, was selected as the partner to support the implementation. Creation of the global template was performed as a joint operation between IBM and Allied Telesis. The system will feature the IBM platform constructed on the Allied Telesis network platform, and rollout will be conducted by securing the safety and robustness of the network.
As the rollout to all group companies progresses toward 2013, it is assumed that global integration of the IT base will be realized and operations will be standardized. It should be possible to perform account processing earlier, achieving faster and earlier disclosure of the consolidated accounting process. Also, streamlining the inventory will be promoted by implementing the Plan-Do-Check-Act (PDCA) cycle more frequently by checking daily information.
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Strongly promoting global business by integrating the business process
At Allied Telesis, maintaining the business process globally and pursuing global optimization by integrating the system are considered very important for designing a future business strategy. Also, Allied Telesis has, from the beginning, prepared a consolidated accounting base to support the coming International Financial Reporting Standards (IFRS). This goal comes along with the drive to enhance competitiveness by understanding the global management status early and making appropriate decisions.
To effectively pursue this goal, Allied Telesis has decided to globally integrate its mission- critical system. Allied Telesis CIO, Mr. Shinichi Kimura, emphasized that the purpose is, “To create a single Allied Telesis in the world,” and explained that, “The background of integrating the existing system is the strong will of the top management regarding ‘the need to get it done now’ to set a course that keeps the business of Allied Telesis evolving in the future.”
Allied Telesis will further expand its business to provide managed service for optimal IT system platform, combining the design and development expertise amassed over a long period of time. Therefore, this project of globally integrating the mission-critical system utilizing the Allied Telesis network foundation will have significance as a reference model for various service businesses.
Expectation for global performance and project management support of IBM
In April of 2010, Allied Telesis, aiming to integrate the systems at its 38 companies spanning the globe, has selected IBM as an implementation partner and SAP ERP as the ERP package. Mr. Kimura mentioned its global implementation history as the reason Allied Telesis selected IBM.
“There is no doubt that one determining factor was the strong IBM reputation, a company with unparalleled name recognition and a history of results globally. We also had an expectation of IBM continuing its own history of orchestrating corporation transformation of companies aiming to become global corporations, and IBM’s experience of offering the skills and knowledge it has earned as the ‘IBM Global One’ service to numerous corporations.”
SAP ERP was evaluated based on its strong global market share, unwavering quality, and future support structure. Also, the SAP ERP implementation template “Real Model” by YOURSOFT has been selected due to its scalability to deploy globally in a short period of time.
For the global deployment, a policy was set to first standardize the business process, then construct a global template, and then to expand by incorporating the requirements of each country. The rollout will first take place in Japan, and then expand to deployment in key overseas footholds based on the results.
Adopting a top-down implementation policy
The implementation project was strongly pursued based on a top-down policy. Objection from the field was expected due to the forced updating of a system that is already optimized at global footholds. However, top management strongly considered the system to be critical for the future, and asked for understanding at all the locations footholds.
“With the standardization of the business process, we had difficulties categorizing status quo (AsIs) vs. modification (ToBe), but it went very smoothly with the helpful advice and project management support of IBM.” (Mr. Kimura)
Allied Telesis, which constructed the global template based on the implementation template (Real Model), started rollout to Japanese footholds in August 2010. The Company has continued the implementation with a strict policy to eliminate add-ons.
The challenging point in system construction was the data linkage with the SAP ERP and peripheral system. In Japan, linkage with ten systems such as the production management system, CRM system, and EDI system, etc., were required.
Mr. Kimura reflected, “In our case, there were many clients, and the price table was different for each client. Therefore, price changes for a few hundred companies were generated every time a new product was introduced, and those needed to be input into the SAP ERP. Advice from IBM regarding these linkages with the CRM system was also essential.”
The accounting module started operating in January 2011, and the sales module in July 2011 for the rollout to the Japanese footholds. Mr. Keiichi Shimazu, Operating Officer for The Allied Telesis Finance Department/Accounting Department, explained the early operation of the accounting module as follows.
“It is true that we were bewildered by the requirement that the accounting team understand new information, such as sales management, due to streamlining of the data from sales to accounting with implementation of the SAP ERP. However, the process went smoothly because the global standardization of the accounting system was started earlier within the group.”
Realizing inventory optimization and construction of internal control basis through “visualization”
The footholds that completed rollout by December 2011 were only in Japan, so the project has only passed the midpoint, considering the original purpose of achieving global deployment. However, there is no doubt that positive results will be realized with progression of the rollout. Mr. Shimazu said, “It will be possible for the headquarters to grasp all the information, such as the general ledgers from each group company, by visualizing the accounting information of each group company. It should realize shortened time for summarizing and the early disclosure of the consolidated accounting. Inventory Reduction and enhanced inventory turnover rate are expected for the inventory management, as well.”
Individual positive results have been showing up in Japan since the implementation was completed. One example is optimization of inventory management. The allocation process that had been performed manually was automated, which resulted in a vastly advanced, streamlined process.
“The products manufactured at an overseas factory are shipped out after performing an inspection process, which is a unique process for the Japanese foothold focusing on quality management. Therefore, it took considerable time to report the delivery time to sales using the conventional environment, but quicker reporting of delivery time was realized by visualizing the inventory flow.” (Mr. Kimura)
Securing traceability was one of the accomplishments in accounting management. “With the conventional environment of using the dedicated accounting system, data was dispersed and multiple data for the same purpose had existed. But by unifying the data by implementing the SAP ERP, internal control by IT is realized.” (Mr. Shimazu)
Continuing deployment to 38 companies in 23 countries to accelerate new service business
Allied Telesis will continue the rollout to overseas footholds, planning to begin operations at all 38 group companies by the end of 2013.
“We will prioritize the implementation to the group companies comprising the cores of America, Europe, and Asia, and plan to complete the global implementation before the application of the International Financial Reporting Standards (IFRS) starts.” (Mr. Kimura)
On the other hand, it is expected to take substantial time for the efficiency of the business to improve at the field level, since it is so soon after switching to SAP ERP from the preferred legacy system. Mr. Shimazu said, “Prior to the implementation, SAP ERP was recognized as an executive-oriented system, and implementation was proceeded with in a top-down manner. Hence, it is important for the top executives to streamline the adoption of management by the SAP ERP.”
The business value Allied Telesis has acquired through the implementation project was not small. Mr. Kimura concluded, “To drive forward the network service, the biggest value is to have the infrastructure constructed by IBM to run on our Allied Telesis network platform equipped with a traffic control function, security function, and authentication function, etc., with the SAP ERP application operating resiliently. Based on that experience, Allied Telesis—also a solution partner of IBM—has acquired expertise that allows us to propose services to our customers with confidence. We will continue to provide feedback to the global business of Allied Telesis, utilizing the knowledge we have acquired from the project shared with IBM.”
Products and services used
IBM products and services that were used in this case study.
Power 520 Express, Power 750, Storage, Storage: DS5020
IBM Japan, Ltd., 19-21 Nihonbashi Hakozakicho, Chuo-ku, Tokyo 103-8510. 01-12 Printed in Japan http://www.ibm.com/jp/. IBM, IBM logo, ibm.com, Power, System Storage DS, DB2, InfoSphere, and DataStage are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product name and service name might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” (www.ibm.com/legal/copytrade.shtml). Please contact the sales representative of Allied Telesis or IBM business partner regarding the details of the product or service. This case study illustrates how one IBM customer uses IBM and/or IBM Business Partner technologies/services. Many factors have contributed to the results and benefits described. IBM does not guarantee comparable results. All information contained herein was provided by the featured customer and/or IBM Business Partner. IBM does not attest to its accuracy. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. This publication is for general guidance only. Photographs may show design models. © Copyright IBM Corp. 2012. All rights reserved.