Dow Chemical ERP Training Importance of Scheduling Hahki [1998]; Schaaf [1999]

Dow Chemical ERP Adopted SAP R/2 mainframe system in early 1990s Merged with Union Carbide Migrated to SAP R/3 Supply-chain Performance management E-commerce

Dow Chemical ERP history Adopted PeopleSoft HR & Payroll modules in Europe Large outsourcing contract with Andersen Consulting in 1996 550 Andersen & Dow IT personnel to support application development

Business Process Reengineering BPR needed for ERP led to retraining needs In late 1990s adopted training program 50 thousand employees 900 sites around the world 80% delivered on-line over 3 years Payback expected in 17 months

BPR Transition Elements Preliminary design Pilot projects Full-scale implementation Interrelated activities Project scheduling

Dow Chemical Training Program What needed to be done Designed program to accomplish it Measures against objectives at every stage Measurement continued through operation of the training program Rolling computer technology upgrades Firm able to deliver enterprise-wide training

Owens Corning ERP Implementation Koch [1999] Hammer & Stanton [1999]

History 1992 – massive reengineering effort 1997 ERP installation encountered problems March 1997 major SAP installation applied over a weekend Folded 16 customer service centers into 1 Rest of 1997 spent rebuilding system Repairing damaged customer relations

Need for Integrated Processes Departmental & regional managers retained power Didn’t cooperate with ERP Rejected ERP or tailored for local needs Top executives responded Reorganized company into cross-functional teams headed by process owners Standardized order fulfillment processes Motivated acceptance of ERP

Benefits Inventory turns increased 50% Administrative costs reduced 20% Logistic savings $50 million/year

Learning 7% of original budget allocated for training Turned out to cost 13% of final ERP budget Common to underestimate training