ABB simplified manufacturing with SAP ERP plan

No matter where you are reading this article and whether it is in print or online, you are highly likely to be sitting near a piece of electrical equipment manufactured b ABB. Cables, switches, the transformers that allow your electric train to speed you to work as well as the robots used to build cars such as Jaguars are manufactured by ABB, the largest manufacturer of electrical parts and machinery. With customers in every country and a manufacturing presence across Europe it is a complex business. To reduce the complexity it recently completed the standardisation of its business processes and IT onto SAP. CIO of ABB UK and Ireland John Ellis-Braithwaite explained his role as simplifier of the ABB world in Britain. “ABB is a leader in power automation technology, for example we are the people that provided the power systems for the west coast mainline upgrade and whose distribution switchgear keeps the lights on at Arsenal Football Club,” John Ellis-Braithwaite explains of the company’s market position and its leading role in powering the train that has just whisked me to his Warrington office. In the UK ABB manufactures low volt switch gear and instrumentation and is the service and back up provider to its robotics users in the car manufacturing sector, Tata owned Jaguar Land Rover being their major customer. ABB also manufacturers transformers, power systems, sub-station equipment and the cables that connect it all together. We meet Ellis-Braithwaite in the technology centre of the Cheshire HQ and are amazed by the array of industrial and electrical equipment on display, it’s a sparkies dream. Globally ABB has operations in 100 countries and employs 111,000 people. “Our global footprint means that we have some factories based in the UK which we call global focused feeder factories, manufacturing products for the global market,” he explains of the globalised nature of manufacturing electrical power systems. In the UK ABB employs 2,500 people in 12 locations across the country. The company is divided into five divisions: power systems, power products, automation products, process automation and robotics, the latter even had a starring role in the recent Terminator film. The company then breaks down globally into regions and then countries. Ellis-Braithwaite is CIO for the UK and Ireland. “ABB was commonly used as a text book example of matrix management,” he smiles. Each of the five divisions are present in the UK.

View the CIO slide show of how ABB simplified their business using SAP here “ABB’s range of products and services is very diverse, from small low voltage products sold in high volumes through to multi-million pound projects.” As a result ABB has a large mobile workforce of engineers visiting client’s sites or even based permanently at the client site. Which means being a CIO at ABB is not about ensuring that the PCs have the latest Windows installed, it’s about using technology to bring such a diverse company together. In his 11 year career with ABB; that has been the central plinth of Ellis-Braithwaite’s platform as CIO. Lotus Notes was one of the first systems to help them centralise. “In the late 90s it brought a lot of the company together. We are still a Notes house; it has been a large investment over the 12 years. Email is one the most important systems. We also use it for workflow, it is a platform for the business.” Ellis-Braithwaite joined ABB in 1998 and arrived to find a company made up of many subsidiaries, each with their own different IT environments. At the time there were 20 different business units. Aware of this on a global scale in 2006 ABB launched One Simple ABB a standardisation programme of business processes with the focus on finance, HR and enterprise resource planning (ERP). Ellis-Braithwaite and the UK ABB management team realised as they carried out Y2K preparations that there was a need to centralise IT. From 2000 to 2003 this process began with the formation of a single IS division and a central helpdesk. This led to the outsourcing of infrastructure services to IBM in 2003. By 2003 the company had a standard IT infrastructure in place, but a very diverse application landscape.

“We began looking at the ERP and that coincided with the launch of the One ABB plan in 2006. One ABB had three main areas to standardise, finance, human resources and IS.” Under the One ABB plan Finance was looking for a single financial systems and single shared service with a single process and single accounts across the group. HR was to become a single central HR department in the UK and IS had to standardise on a single ERP system, with senior ABB management stating there must be one ERP system per country. At the time the UK had eight different ERP systems, none of which were SAP, the group then decided that every nation should standardise on SAP. “Moving data from eight ERPs to SAP was challenging,” Ellis-Braithwaite understates. From the beginning he set out to ensure that moving the data onto SAP was not purely technical, because by following that route, the data changes ownership and belongs to IT then. He sought high levels of business involvement from the beginning. To make the task more agreeable, Ellis-Braithwaite set out a plan of multiple iterations and rehearsals for data migration. An SAP data migration system was set up with multiple SAP clients, allowing an iterative cycle of checks and data quality improvements. His team were able to load data, look at the results themselves, then feed it back to the relevant businesses for them to assess and provide their own feedback. Cut over to the final system was also rehearsed as a complete process, including reconciliations and checks in a copy of the SAP production system. Ellis-Braithwaite, fellow CIOs and business managers in the ABB empire remained in constant contact throughout the process using teleconferences, events and sharing of experiences. “One of the key ways we set out to do it was to re-use knowledge which can be redeployed. Communications had been key at all levels,” he says. A project of this size is not something a CIO and his team can take on alone, and ABB partnered with the Tata consultancy division TCS. “The group had a short list of three partners to work with and asked each country to select one. We approached all three, explained our vision so that we could engage with them before an RFP was drawn up, which made selection much easier.” An RFP was issued in April 2006 and ABB had a scoring model for the selection drawn up by both IT and the business. “One of the key things we were really looking at was their ability to understand our requirements and ability to deliver. Part of the criteria was that 50 per cent of the integration was to be carried out offshore.” He felt that this target ensured that ABB was using “appropriately skilled resources, deployed both locally and in India, the cost effectiveness of this arrangement made the business case.

Read more about ABB: The CIO Questionairreand read John Ellis-Braithwaite’s views on alignment

“We ended up with more than 50 per cent being done offshore. We organised our UK SAP project office with the TCS functional leads was sitting side by side with the full time ABB functional leads. This meant that the TCS people got to learn a lot about the processes of ABB and also facilitated good SAP knowledge transfer to the ABB team.

“For project governance we set up weekly project committee sessions to discuss priorities both for ABB and TCS, ensuring regular follow up of the many project activities. There were monthly programme committee meetings of the senior teams from ABB and TCS, and a  quarterly steering committee of Executive management from both organisations. Through this model we achieved engagement of all levels and from all sides. “To build the offshore relationship at the beginning of the project we went out to India to meet the TCS team, some would work on the project based in India and other would be based in the UK. This allowed TCS to understand what their customer wanted and learn more about our business at an early stage. We had subsequent visits and management reviews in India. What that led to was good engagement of both onshore and offshore teams.” Ellis-Braithwaite says the level of business involvement was one of the major success factors in this project. “If you do it as an IT project without sponsorship you are not likely to succeed. We were able to get key people from senior roles at various divisions become full time resources on the project. ABB UK completed the One ABB programme at the close of 2008, it was a three year campaign. “It sounds like a long time, but it was a very big challenge” he says. “ABB is now focussing on its costs and growth. In its annual review it has announced a commitment to costs cutting programmes and in IS we are looking at where we can use IS to aid cost reduction. “To say I’ve finished SAP integration and now need a bigger challenge is wrong; it is the start of something new. We have to look at the capacity of what it can do, how its benefits can be fully achieved.” Ellis-Braithwaite started his career in the finance department of an engineering company. But as a finance person he was involved in implementations early on. “My first day at work was in-front of one of the first IBM computers and from that day I realised I like IT and what it can do and made that transition,” he says. But the finance foundations have given him his business perspective: “This gave me a better preparation to ensure you get the most from the business. If you look from a technology perspective you get a good technology solution, not one for the business.” He did a post-grad course in business information technology. “Knowledge of the business has got to be a key element. If it’s not you are just fixing PCs. “On the applications side of SAP, you have to understand all the business processes; you have to be able to get close the business to make sure SAP is configured correctly for them.” Ellis-Braithwaite has been with ABB 11 years, a long tenure in the CIO premiership, but as he shows you the plans of efficiencies achieved in the switch to SAP and his evident interest and enthusiasm for engineering and ABB you can see that he still has plenty of interest ahead of him at ABB.