ES&ITS Presentation on case study-Celanese Recentralizes with a New Enterprise System

Submitted By: Ambarish Nigam 20135005Amit Kumar - 20135006

Introduction• A global chemical company

• HQ- Texas, United States

• Five main businesses:

1. Chemicals and its Intermediaries- Acetyl products and Specialty chemicals

2. Celanese Acetate Products- to manufacture cellulose acetate filaments and tow

3. Ticona Technical Polymers- use to make chemical products for electronics, telecomm, automotive and medical industries

4. Performance Products- ingredients for food products like sweeteners

5. Celanese Ventures- specializing in R&D

• 30 facilities in 11 countries on 6 continents

• They largely focused on decentralizations during 1980-90s.

• Each independent units implemented separate customized SAP systems as per their own requirements

• They grow inorganically by acquiring small companies having their own enterprise systems

• By 2000, world economy weakens and their sales declined and forced them to reduce the expenses

• To reduce expenses: best available option was centralization

• How centralization help to reduce cost??

- To use the same version of SAP by all units

- It reduces the no. of IT staff

- It reduces financial irregularities

- Use of SAP features like SCEM

- Opportunity to cross-sell and up-sell customers between business units

• To recentralize the company: Karl Wachs, new global CIO; Task- to reduce company’s costs by integrating its information system

• Started project OneSAP

• Took 11 months and total cost of $60 million

• Challenges:

- Technical: to install new SAP software so that every unit could use it

- Organizational Culture

- Clear and absolute order from top management

How they did it??

- Divided project into seven tracks: Finance, Supply chain, manufacturing, order to cash, Business intelligence, technology, and change management

- Each track has several functional stakeholders to track progress and one person for working at higher level

- Followed six sigma philosophy- “TQM” which means every person was responsible for quality

The problems project faced:

- Unavailability of SCEM software at the time of implementation

- To include new company they purchased from clariant in early 2003

- Cleaning and integrating data from various existing SAP systems into OneSAP

Answer-1

• Bargaining power of customer is low

• Bargaining power of supplier is high

• Threat for supplier is low

• Entry barrier is high

• Competition is high

Answer-2

• to cut the cost

• Acquisition of smaller firms in other product portfolio in same business.

Answer-3

• Challenges:

- Technical: to install new SAP software so that every unit could use it

- Organizational Culture

- Clear and absolute order from top management.

- Organization Culture is the most difficult challenge .

Answer-4

• Earlier the company was trying to adapt the software to the business but now the company would have to adaot the business to software.

- Divided project into seven tracks: Finance, Supply chain, manufacturing, order to cash, Business intelligence, technology, and change management

- Each track has several functional stakeholders to track progress and one person for working at higher level

- Followed six sigma philosophy- “TQM” which means every person was responsible for quality

THANK YOU