It is a case study on the NIBCO where they have followed a big bang approach for the technology transfer through out their organisation. It includes the disadvantages and some suggestions and opnions on the theory

1. NIBCO’s “BIG
BANG” CASE
STUDY
BY
KOPPURAVURU ANANTHA NAGA RAJU

2. NIBCO’S “BIG BANG” Case study
Table of Contents
1. Introduction and Company’s History
2
2. Milestones
2
3. Functioning of NIBCO system
3
4. Information Systems at NIBCO
3
5. ERP Project team
4
6. Selecting Implementation Partner
5
7. The BIG BANG
5
(i)Big Bang approach
5
(ii) Work Den
5
(iii)Final Project
5
(iv)Training
6
8. Observations
7
9. References
9
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3. NIBCO’S “BIG BANG” Case study
1. Introduction and Company’s History
Until the „Go Live‟ date of December 30, 1997, NIBCO has been a private held mid-sized
manufacturer of valves and pipe fittings which is headquartered in Elkhart, Indiana. It had 3000
employees initially with annual revenue of about $461 million. Many of the consultants who
they had interviewed didn‟t suggest going for Big Bang approach. The Big Bang approach‟s plan
is to convert to Sap R/3 at all ten plants and the four new North American distribution centers at
the same time.This will support the order entry, manufacturing, distribution, and accounting
functions. The time and cost of this project are estimated to be 15-months and $17 million
respectively. Quarter of the company‟s senior staff is committed for the project with the
leadership triad of VP for operations, the Information Services director and a former quality
management director.
After a significant strategic planning effort, about three years earlier, NIBCO‟s journey to
Go Live date had begun. The main goal was to re-engineer the company‟s supply chainprocesses
for better customer satisfaction. After many discussions the responsibility of developing the
company‟s strategic plan was given to Boston Consulting Group (BCG) in August 1995. This
project, for the company, is the biggest invested project made over five years earlier.
2. Milestones
The first milestone for the company had been the one where Cross-functional teams
developed NIBCO‟s strategic plan and reengineering supply chain processes followed by many
other milestones which include restructured corporation, completion of project team selection,
signed contracts, Final project scope and resource estimates presentation division to consolidate
warehouse, business review, maintenance of legacy systems, user training and finally Go Live on
December 30, 1997. “They told us „you really need to look at integration as a major factor in
yourthought processes—the ability to have common systems with commoncommunication for
the manufacturing area, the distribution area, across the enterprise.” Says Scott Beutler(Project
Co-Lead, Business Process)
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4. NIBCO’S “BIG BANG” Case study
3. Functioning of NIBCO system:
NIBCON : For buying the product
ORBIT: For Billing process
MAN MAN MFG: Manufacturing information
FACTORY LABOUR: For workers details
PAY ROLE,HUMAN RESOURCES: For salary details and pay hours
LEDGER: For accounts
SALES MARKETING DATA WAREHOUSE: Data about Sales or purchases and customs.
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5. NIBCO’S “BIG BANG” Case study
4. Information Systems at NIBCO
In May 1995, Gary Wilson was hired as the new head of the IS department. He inherited
an IS department of about 30 NIBCO IS specialists. These also include specialist who run
mainframe applications on HP3000 and IBM/MVS platforms.
NIBCO has four major legacy systems that supported order entry, manufacturing,
distribution and accounting functions but, none of them are connected. In order to ease the
existing problems with the systems, they were maintained by 30 IT associates. About one-half
were COBOL programmers that spent most of their time developing custom interfaces between
the systems and trying to resolve the “disconnects”. The systems often “blew-up” because of the
ad hoc changes for which IT department was not given enough priority.
5. ERP Project team
Early in 1996, Beutler worked to set up a cross functional team (TRIAD) in order to
select an ERP package. TIGER TRIAD involves Gary Wilson, Scott Buetler, and Jim Davis.
Scott Buetler was in NIBCO from 1990. Later he became VP of operations. Jim Davis led reengineering team and gave recommendations to Executive Leadership Team (ELT). Chief
Financial Officer (CFO) Parker was the key person and sponsor along with eight others. The
board reviewed the purchase of R/3 and implementation of BIG BANG and declared that BIG
BANG is at high risk. Hence Buetler focused on implementation of R/3. The Board of Regents
was known as Tiger Triad as Wilson is known for Technology, Buetler for Coordination and
Davis for change management.
NIBCO used its top management and the best members with suitable ability and
experience for the ERP implementation team. The team included 7 NIBCO‟s directors involved
full time in the project. The CEO of NIBCO, Rex Martin, was both a project champion and a
sponsor, which helped clear all the roadblocks in the way of the project. Rex Martin was another
prominent person in the company. He‟s the executive sponsor in the team. Rex Martin was
responsible for TIGER DEN. TIGER DEN is the remodeled office of NIBCO which contained a
“war room”. The room has no closed doors and no private offices. It almost had white boards on
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6. NIBCO’S “BIG BANG” Case study
every wall in order to conduct meetings and conferences. There was also a U shaped work
stations available in the office for the conferences.
6. Selecting Implementation Partner
Although the company decided to go with the project at any circumstance, the selection
procedure had been a very crucial part of the project for them.NIBCO team that selected the
vendor for ERP software was responsible for selecting the implementation partner too. So, after
careful considerations of several consulting firms, IBM and CAP GEMINI were chosen as
finalists taking into account their different strengths. From hardware point of view, NIBCO was
already partnering with IBM but they saw that Cap Gemini had a superior change management
program. Hence they decided to go with the IBM as their implementation partner.
7. The BIG BANG
(i)
Big Bang approach
Although Big Bang approach has high risk factor, the involvement of the best resources
from CEO to consultants, their confidence to make aggressive strategies, and their dedication,
was bound to do wonders for the company. To minimize the complexity SAP was used in its
purest form as it also had enough functionality to accomplish NIBCO‟s goals.
(ii)
Work Den
TIGER den was a location where all the team members, including directors were housed
with no privacy and no telephone. The den fueled the interactions between the team members,
brought the best out of them, and succeeded in being a productive work environment. NIBCO
also established an incentive pay bonus to enhance every individual‟s output.
(iii)
Final Project
Phases in the project are as follows: Preparation, analysis, Design and Implementation.
Preparation includes preparing scope and estimate about costs associated with the project.
Business Analysis is also done. Analysis includes analyzing the gap between “TO-BE” and R/3
processes. This also suggests improvements and changes in the process. Design includes
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7. NIBCO’S “BIG BANG” Case study
configuring with R/3 and also development of document specifications and training materials.
Implementation includes four tactic teams that work on risky areas. The teams are Master Data
Team, Customization Team, Implementation Infrastructure Team, and Help Desk Team.
Two IBM consultants worked on controlling module (CO) and the other on the
profitability analysis (PA). The second associate also worked on Profit Center Accounting
(PCA). There was also a sales/distribution team re-designed the ware house operations which
were not good before the implementation of SAP and Materials Management/Production
Planning Teams that worked with the project. There was a lot of stress included with the project
i.e. multiple R/3 systems were run in the company. Some included development, some of them
production oriented, some training systems and some testing systems. Implementation of
multiple R/3 is also one of the issues that created heck with the GO LIVE DATE. Data
conversion has become a major problem in the project.
IBM team members who are assigned to each of the five project teams helps for smart
decision making on R/3 options besides supporting with their technical knowledge with the
knowledge transfer to NIBCO core team. The Extended Team Members will help with making
note of the gaps between old and new business processes and helping with master data loads and
testing.
Most of the Issues in the project were generated on change management issues. IBM
management team gave an idea about how to implement the ERP. But the specifications did not
suit the company‟s environment. Only few members in the company were working on change
management they faced a lot of trouble in taking the project in terms of change management.
Change management was made in to a number of categories say some eight of them. They are
New, Automate, Eliminate, Transfer, Risk, Difficulty, Relationships and Others. Each of them
explains various phases of work. There was also a communication plan that has communication
between project team members and other NIBCO associates. This plan would help project in
terms of change management issues as they help the project in terms the team doesn‟t understand
the issues. Face to Face sessions were also run in the company in order to remove the barriers
between the team members and rectify the problems that aroused in the company.
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8. NIBCO’S “BIG BANG” Case study
Team members also conducted many visits to on site and many face to face meetings in
order to rectify the problems that arise in the project. At each visit individual work and
commitment for the project are observed. During these visits the team came to know that some
of the distribution centers were lagging behind.
(iv)
Training
There was training for 4 months that also includes practice transactions or scenarios before the
go Live for 8 to 68 hours on the new processes depending on the job role.
There are some deviations in the project with respect to budget and scope at the end.
1. Final budget is increased by 30% due to change management cost,technology
infrastructure costs, team costs and the education and training.
2. Confining the project only to North America.
3. At the 17 Distributing centers are formed and may increase in future, but these can be
easily consolidated using SAP to half the count.
Throughout the process the major risks that were involved are with integrating, employees
incentives and as the company have invested more human power in this project, the other
company initiatives are put “on hold”.
8. Observations:
1. Even though the analysis stated that Big Bang is risky company took the job.
2. Improper analysis have created a risk and the budget went high.
3. Use of generalized system that can handle the future problem (here, it is SAP for
consolidating).
Consolidating the above report, as the project was delivered within time (including grace
period) it can be considered a success.
But as we have various metrics for the project to be success, considering the Budget we
have 30% deviation in the budget, due to involvement of large number people in the same
project there is also a loose for the company on the whole.
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9. NIBCO’S “BIG BANG” Case study
People are made to work for long hours and the financial condition of the project had an
effect on their incentives.
But considering on the whole as the project is deployed successfully, it can be treated as a
success.
But in the process there are many problems that faced that includes both technological
and managerial. A proper brainstorming before the implementation of project would have
resulted better results.
Also the rigidity of the methodology had caused many problems which have some out of
scope elements at last which should be considered.
But with this experience the success rate might be high in the future and in the long run it
is going to fetch the company. The usage of grace period effectively is one of the point to
be noted. And at last even though the project went to Go Live without consultants they
have managed to get it done.
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10. NIBCO’S “BIG BANG” Case study
References
1. http://condor.depaul.edu/nsutcli1/IS%20450%20Change%20Mgt%20Readings/caisNIBCOsBigBangHTML_files/article.html
2.
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