526 Part Four Building and Managing Systems INTERACTIVE SESSION: ORGANIZATIONS BURTON SNOWBOARDS SPEEDS AHEAD WITH NIMBLE BUSINESS PROCESSES When we hear "snowboarding", we tend to think SAP Enterprise Resource Planning (ERP) software. of snow-covered slopes, acrobatic jumps, and Rather than buying new software to solve IT prob- high-flying entertainment. We don't usually think lems, Burton decided that it would explore basic of improving business process efficiency. But functionalities of SAP ERP software that it had not snowboarding is business for Burton Snowboards, used yet. Often, Burton could resolve problems this an industry pioneer and market leader. Founded in way without adding new layers of complexity to its 1977 by Jake Burton Carpenter and headquartered IT infrastructure, and the company gained profi- in Burlington, Vermont, Burton designs, manu- ciency with SAP enterprise software in the process. factures, and markets equipment, clothing, and Burton aims for a standard, traditional version of related accessories for snowboarders. Today, Burton software whenever possible, realizing that with is a global enterprise that serves customers in 27 more bells and whistles comes increased mainte- countries and has offices in Japan, Austria, and nance costs and steeper learning curves to under- throughout the United States. standing the software. At its peak, Burton controlled over 40 percent SAP analysts helped Burton identify the top of the U.S. snowboarding market, and it remains five transactions that were the most critical to its the market leader amidst a growing number of business operations and that needed optimization competitors. Now, as Burton continues to expand from a systems standpoint. Burton had to identify into a global company, it has a new set of prob- unnecessarily complicated processes, back- lems: improving its systems for inventory, supply logs, and design gaps in the flow of its business chain, purchasing, and customer service. processes. For example, the available-to-promise Stocking and managing inventory is a difficult process was taking hours to complete. (Available problem for Burton, whose inventory changes dra- to promise, in response to customer order inqui- matically depend on product line updates and the ries, reports on available quantities of a requested time of the year, Burton takes feedback from its product and delivery due dates.) Burton wanted to customers very seriously, and will move quickly speed up this process so that its dealers and retail to meet their needs. For instance, if a rider tests customers would have more precise information a jacket and recommends repositioning a zipper, about the availability of products not currently Burton's production line must be able to make this in stock. Completing this process now takes 20 modification quickly and easily. Being dynamic minutes. and adaptable is a competitive necessity. Other processes in need of improvement Burton has implemented and currently main- included the order-to-cash process receiving tains SAP enterprise software, an Oracle data- and processing customer sales, including order base, a SUSE Linux enterprise server, and com- entry, fulfillment, distribution, and payment); modity hardware. That's a long way from a lone the handling of overdue purchase orders in the woodworking shop in Vermont. Before making procure-to-pay process, which consists of all the these upgrades, Burton's information systems steps from purchasing goods from a supplier to were a hodgepodge of inconsistently implemented paying the supplier; and the electronic data inter- and underutilized software. The company had to change (EDI) inventory feed extract transaction. manually allocate product to customers and orders. Burton has an assortment of warehouses that pass In 1997, Burton first deployed SAP to begin upgrad- inventory data to one another automatically using ing its IT landscape, and the company has contin- EDI systems. Thousands of items are moving from ued to use SAP since that time. But Burton needed warehouse to warehouse and thousands of transac- to do more with its systems. tions occur each day at each warehouse. Burton Two of Burton's IT goals, established by CIO found that the process of reporting inventory was Kevin Ubert, are to "strengthen the foundation," inefficient, and both suppliers and customers and keep their systems simple, standard, (and) could not easily determine up-to-date information supportable. The foundation Ubert referred to is on which items were in stock at which warehouse. Chapter 13 Building Information Systems 527 SAP and Burton worked together to improve communication between warehouses and supply chain efficiency A management dashboard developed with the help of SAP shows how smoothly a critical process is running at a certain point in time. Information from the dashboard helps Burton's key users discover inconsistencies, gaps, or other areas that they should be monitoring more closely. All of these process improvements proved especially valuable during what Burton calls its "reorder season. Burton's dealers place orders to stock their stores well before winter sets in. As consumers start buying the merchandise, the dealers reorder with Burton to replenish their stock or to buy new products. Now they are able to see more timely product availability data, and receive orders more rapidly. Sources: Lauren Bonneau, "How Burton Snowboards Remains as Nimble as Its Riders, "SAP Insider PROFILES, April-June 2011; "The Burton Corporation Company Profile," Yahoo! Finance, accessed August 27, 2012, and www.burton.com, accessed August 27, 2012. CASE STUDY QUESTIONS 1. Analyze Burton using the value chain and competitive forces models. 2. Why are the business processes described in this case such an important source of competitive advantage for Burton? 3. Explain exactly how these process improvements enhance Burton's operational performance and decision making