TektronicsTektronics

Ken PeffersUNLV

November 2004

Ken PeffersUNLV

November 2004

Management ProblemsManagement Problems

• How should Tektronix manage its ERP project?

• Should IT be used to force technological change?

• How should Tektronix manage its ERP project?

• Should IT be used to force technological change?

Tektronix, IncTektronix, Inc

• Three very different businesses– Printers: made to stock high volume– Made to order: video processing– High product diversity: measurement

instruments

• Three very different businesses– Printers: made to stock high volume– Made to order: video processing– High product diversity: measurement

instruments

Tektronic’s ProblemsUnintegrated systemsTektronic’s ProblemsUnintegrated systems

• Problems– Decades of uncoordinated evolution of

systems– No global standards or systems– Relics from a time when the company

had 26 divisions

• Problems– Decades of uncoordinated evolution of

systems– No global standards or systems– Relics from a time when the company

had 26 divisions

Business implicationsBusiness implications

• No inventory visibility beyond Beaverton• Couldn’t ship immediately or on Saturday• Orders entered multiple times—lots of errors• manual expediting: “Five calls does it all.”• Takes weeks to close books• Lack of good info for decision making• Can’t tell which divisions or products are profitable• Difficult to manage customer accounts• Can’t tell customers their total cost at order time.

• No inventory visibility beyond Beaverton• Couldn’t ship immediately or on Saturday• Orders entered multiple times—lots of errors• manual expediting: “Five calls does it all.”• Takes weeks to close books• Lack of good info for decision making• Can’t tell which divisions or products are profitable• Difficult to manage customer accounts• Can’t tell customers their total cost at order time.

Old TechnologyOld Technology

• Problems– 1970’s vintage– proprietary– Mainframe based

• Business implications– Not Internet ready– Expensive– Hard to interface with partners

• Problems– 1970’s vintage– proprietary– Mainframe based

• Business implications– Not Internet ready– Expensive– Hard to interface with partners

Non standard business processes

Non standard business processes

• Problems– Different all over the world

• Business implications– Lost efficiencies

• Problems– Different all over the world

• Business implications– Lost efficiencies

How did Tektronix manage its mega project?

How did Tektronix manage its mega project?

• Coherent guiding vision– Frankfurt is Orlando– 3 components

• Waves approach– Learning from experience– Decentralized approach to implementation details—div.

chose own partners• Single vendor• Rapid vendor selection• Neun as final arbiter of disputes

• Coherent guiding vision– Frankfurt is Orlando– 3 components

• Waves approach– Learning from experience– Decentralized approach to implementation details—div.

chose own partners• Single vendor• Rapid vendor selection• Neun as final arbiter of disputes

How did Tektronix manage its mega project?

How did Tektronix manage its mega project?

• Visible Sr Mgr support• Steering committee

– Global bus model– Best practice changes– Use of code wrappers

• Schedule more important than budget• Structure of the architecture

– Derives from guiding vision– Common financials, separate order management

• Best people

• Visible Sr Mgr support• Steering committee

– Global bus model– Best practice changes– Use of code wrappers

• Schedule more important than budget• Structure of the architecture

– Derives from guiding vision– Common financials, separate order management

• Best people

Coherent Guiding VisionCoherent Guiding Vision

• Separability of the businesses– Requirements of one div not drive the busi of the other– Businesses of the three divisions very different

• Leveraged shared services– Need performance measure comparability– Consolidate common functions

• Staying as plain vanilla as possible– Minimize changes in ERP software– Change the business process, not software, unless

absolutely nec

• Separability of the businesses– Requirements of one div not drive the busi of the other– Businesses of the three divisions very different

• Leveraged shared services– Need performance measure comparability– Consolidate common functions

• Staying as plain vanilla as possible– Minimize changes in ERP software– Change the business process, not software, unless

absolutely nec

Perceived Need To Customize

Perceived Need To Customize

• Distinguish between needs from practice and needs from regulation etc.

• Use of code wrappers

• Distinguish between needs from practice and needs from regulation etc.

• Use of code wrappers

Waves Approach vs the Big Bang

Waves Approach vs the Big Bang

– Pluses: opportunities to learn from experience, good fit with Tek’s complexity, problems contained when they occur

– Minuses: Relatively slow, can become a never ending project.

– Pluses: opportunities to learn from experience, good fit with Tek’s complexity, problems contained when they occur

– Minuses: Relatively slow, can become a never ending project.

Adaptive Project Management Methods

Adaptive Project Management Methods

• Iterative. Implementation occurs in increments that result from each iteration so that outcomes and interactions can be tested and understood as they appear.

• Fast cycles and delivery of some value so that iterative doesn’t mean slow

• Deliver functionality early so that feedback incorporated into learning and improving cycles

• Highly skilled personnel capable of learning• Resist use of ROI that assume predictability of

outcomes

• Iterative. Implementation occurs in increments that result from each iteration so that outcomes and interactions can be tested and understood as they appear.

• Fast cycles and delivery of some value so that iterative doesn’t mean slow

• Deliver functionality early so that feedback incorporated into learning and improving cycles

• Highly skilled personnel capable of learning• Resist use of ROI that assume predictability of

outcomes

Compare to 1998 revenue ofabout $ 2 billion.

Tektronix sold two divisions.