Harley Davidson Case Study Harley-Davidson is an American motorcycle manufacturer with a rich history and cultural tradition. It was founded in 1903 in Milwaukee, WI. Around mid-1980’s, the company was facing problems with product quality and enlarged global presence, hence the management realized the need for an integrated management system that will not only improve the company’s processes but also fit within its budget and enhance its profits. This caused the start of the process to identify the most appropriate information management system for Harley Davidson Motor Company.
The process was largely reliant on teamwork, which played a leading role in structuring of the IS function. The organization, rather than having a Chief Information Officer, had a team of three directors to offer leadership on information systems integration. The three officers were given the responsibility to play internal consultant roles to the team engaged in identification of the appropriate software to meet the needs of the organization. Additionally, they provided direction regarding how well the technology will fit into the organization’s undertaking to create efficient business practices.
The group had liberty to make technological investment decisions for the benefit of the organization. The group was considered to have more exposure to the needs of the business considering their day to day interaction with it. The case took place in the period from 1997-1999. The purpose of the case was to analyze the process of selecting a modular Enterprise Resource Planning (ERP) system to support supply chain management for this large manufacturing company.
Recognizing that the purchasing process for obtaining materials and parts was out of control, management coordinated a project to understand its purchasing process and activities, solicit feedback from the 800 people who would be affected by the new system, and create a complete transformation in thinking and action regarding the procurement and management of incoming supplies. In addition, management wanted to move the company from a short-term transaction purchasing basis to a long-term relationship with suppliers.
Application of Information Technology helps in achieving better standardization and integration. Considering the technical aspect involved in integrating the software into business operations, purchasing team was structured to work closely with the engineering department . The case is a good example of an all-inclusive Purchasing operations groups, which operated on location at their manufacturing plants and facilities. It highlights the importance of having all stakeholders on board to ensure that the process is all-inclusive and addresses the needs of all the quarters of the organization’s operations.
They also developed additional standards before commencing on the ERP selection process, as they disqualified one vendor’s product due to “architectural incompatibility” suggesting platform standardization. Scalability of the purchasing system must also be considered while making such decisions. They had a basis to work from for future growth and development. In addition to selecting an ERP system, Harley Davidson was interested in developing supplier relationships with key vendors. They wanted the new system to facilitate this development.
The management understood importance of supply management across all the company’s production sites to enhance internal operating efficiency. They developed Supplier Information Link (SiL’K) to define their needs and extended requests for proposals (RFPs), for which they received eight responses. The SiL’K team already had determined that Harley Davidson was in need of modified ERP. ”The SiL’K team was explicit about not seeking a full ERP solution, ….. the we expected them to check us as well” P. G. 9. The company’s architecture Integrations group reviewed all possibilities to ensure compatibility with existing system.
Of the eight potential suppliers responded to RFP, the company narrowed down its choices to three providers. None of them were a perfect fit, but one came close. In assigning weights to identified factors, it was clear that provider1 was the best choice for the company specifications. The three finalist were evaluated based on their understanding of Harley Davidson‘s current and future requirements, their ability to provide implementation and ongoing technical support, and mutually beneficial long-term relationship. Below is the matrix which was used to evaluate the three providers based on a number of qualitative criteria.
I tried assigning weight to each provider along with weights assigned to them for ranking purpose for more detailed evaluation. Based on evaluation of above matrix and details discussed below for each providers, I would have chosen Provider1 as software provider for the company. The selection process is based on five important factors Culture, Functionality, Cost, Training/Support, and Experience. Provider 1 Provider1’s “representatives asked appropriate questions, they understood Harley-Davidson’s values, and were comfortable with the casual but competent Harley-Davidson style”.
Provider1 addressed every issue raised in RFQ, and altered their solution perfectly to match Harley Davidson’s requirements. They provided perfect culture match for the company. Also, they were providing training processes. Provider1 did not offer the highest form of functionality, and did not offer “web enablement directly but its team proposed integrating a partner solution”. They seemed flexible and comfortable with the change management issues. Provider2 Provider2 was a major ERP supplier in the industry and also was leading in the initial selection process.
They offered a higher functionality score. Its team also was quite formal and in that regard did not “fit” with Harley Davidson, and it also maintained a consultant attitude. Further, Provider2 did not “emphasize methods or processes for assessing organizational needs and preparing people for change”. Also, they were costlier compared to Provider1 and were not providing training processes after the change. Provider3 Provider3 was also a major ERP supplier and recently had worked with Harley Davidson in another area.
They were not as costly as Provider2 but Provider3 team was unprofessional to the point of being disrespectful, but it did score high on functionality. Even so, the SiL’K team believed that they could offer “potential political and economic advantages”. To summarize these points, I would say choosing provider1 will be beneficial in a lot of ways as they have more pros than cons as compared to other two providers. Provider1 was not selected solely based on matrix score. They were perfect culture match, understood management change needs, supported training processes but was lagging in functionality in providing web enablement.
They could still provide web enablement through third party partner. Irrespective of scoring higher on functionality, provider 2’s team’s ‘too formal’ attitude is a cultural mismatch with that of Harley Davidson. Provider 3 is not a better fit either, based on its team’s unprofessional attitude. This case highlights few weakness and strengths in Harley Davidson’s software selection process. Weaknesses One of the biggest weaknesses was the time spent by Harley Davidson on the initial phase of the project was way longer and it took them nearly two years.
Second, there were faults in the research methods and bias of the data while choosing software vendors. The software vendors were allowed to rate themselves quantitatively on functional variables. The fault with this approach was that the providers would not rate themselves lower at the risk of losing the customer. It would be a hindrance in fairly assessing their own capabilities and potential fit for that organization. The qualitative scale of generic attributes (low, medium, high) was perhaps useful to the selection team, but again, held rater bias. Strengths
Even though the process took over two years, Harley Davidson managers did a complete job of selecting the ERP solution. It appears that the SiL’K team did a good job preparing for the project exhibited by the careful mapping of the “as is” process and of the “to be” process. Details in planning generally pay dividends in the form of reduced implementation time and lower risk while changing over to a new system. Poor planning can lead to huge cost over runs and delays in system implementation. More serious problems can occur if the system cannot deliver on promises made in initial project justification.
Apart from detailed planning, Harley Davidson culture played very important role in implementation of ERP system. Their culture is exposed in the style of management and the approach to the project and the selection process. Their use of their internal business integration (BI) of process, people and technology was consistent. Their process of temporarily allocating full time employees to the project from Tuesday through Thursday was interesting. This is contrary to our experience of Monday through Friday being full time. The reason they gave does have merit.
Full time members can lose track of the day-to-day business and not realize the impact of pending changes. I think the entire process could have been more efficient if external consultants could have helped with the initial assessments. This may have helped to get a broader picture of the purchasing organization and allowed for the use of best practices from other industries. First, I could have researched on what types of problems organizations would face when we try to implement an ERP system in a highly inflexible environment as there was enough research and case analysis available to do this.
While Harley Davidson team were clearly aware of potential change resistance and the need to get all stakeholders involved, the amount of time their search and selection process required was not reasonable in today’s business environment. The recommendations from some purchasing expertise would have helped in fixing purchasing process, which was out of control, before selecting software system to help organize the process.
Second, I would have researched if there were any standard, off-the-shelf systems available in market. With off-the-shelf system, less customization of any ERP system is required which leads to lower costs and quicker implementation schedules as a standard system is easier to upgrade also. More complicated businesses benefit from a combination of re-engineering and ERP customization, which ensure systems meeting companies’ requirement, when implementing an ERP system.