H eadquartered in Providence, Rhode Island, Textron started out in 1923 as a small New England...

   

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H eadquartered in Providence, Rhode Island, Textron started out in 1923 as a small New England textile business. It has grown into a Fortune 500 company, with subsidiaries and operat- ing companies spanning many industries. Leading products include aircraft, helicopters, armored ve- hicles, electrical vehicles, and automotive systems, including Cessna and Beechcraft aircraft lines, COMMANDO Elite armored vehicles, Bell vertical lift products, and E-Z-GO golf carts. Textron now has 35,000 employees, facilities in 25 countries, and revenues (in 2019) of $13.6 billion. For over 20 years, Textron has billed itself as the world's oldest conglomerate. Throughout its history, Textron has been the source of ground-breaking technologies and numer- ous industry-firsts. Many major steps in the evolu- tion of aircraft, rotorcraft, armored vehicles, electri- cal vehicles, and automotive systems have emerged from its product development labs. Textron has been consistently growing, with am- bitious plans to expand further internationally in Central and Eastern Europe, India, China, the Middle East, and Central and South America. Until recently, however, the company had been constrained by aging systems, including a 25-year-old ERP system based on Infor and Lawson Software, that was highly customized with company-specific features and had an antiquated IT infrastructure. These systems did not provide enough flexibility and up-to-the-minute information for the company to grow its business and coordinate an enterprise that spanned many in- dustries and locations. The company tried to upgrade its existing systems, but these systems had too many customizations that would have to be made again whenever these systems were upgraded. Textron business and IT specialists both agreed that this level of customization was unnecessary. For ex- ample, the old ERP system had been heavily modified and customized, even though the company was using standard software modules for accounts payable, gen- eral ledger, cash management, and fixed assets. Continually planning, installing, and testing soft- ware upgrades and patches required large capital expenditures because all the customized parts of the software had to be identified, tested, and rein- stalled. Such extra work tied up IT staff and resources 1 9 t 1 3 that could be better allocated to more productive work. Kelli Gudz, Textron's Senior Finance Systems Manager, wanted a system where her team would not have to work on remediating the vulnerabilities of the company's on-premises systems every few months. Textron selected Oracle Enterprise Resource Planning Cloud (including general ledger, accounts payable, and fixed assets modules) in combination with Oracle Integration Cloud Services, and Oracle Transactional Business Intelligence as the best solu- tion that had the requisite functionality to meet its information requirements, ease of use, and the flex- ibility to support future growth. Switching to cloud software services would also avoid the large capital expenditures required by constant software upgrades and patches. Planning, installing, and testing up- grades every few months had taken away time and resources the IT staff could have otherwise spent on projects to help grow the business. Oracle Enterprise Resource Planning Cloud is a cloud-based software application suite that manages enterprise functions such as accounting, financial management, project management, and procure- ment and runs in Oracle's cloud computing centers. Oracle ERP Cloud is accessible through both public and private cloud versions and supports hybrid cloud deployments as well. Oracle Integration Cloud Services is a tool for achieving simple, lightweight integrations between SaaS applications that do not require much com- plexity. Oracle Transactional Business Intelligence (OTBI) provides a flexible and easy-to-use analysis tool that helps business users gain real-time insight into transactional data and understand data patterns. This tool has capabilities for robust ad hoc reporting, role-based dashboards, data visualization, and self- service information delivery. Textron had been experimenting with cloud com- puting for a while and had started to use cloud SaaS for some of its nonessential systems. Textron had chosen to keep more critical applications, including ERP and finance, on premises, because of the regu- latory limitations it faced as a global company and hesitation to entrust core applications to cloud soft- ware providers. Textron's financial professionals who are heavy users of these systems were also reluctant to embrace change. 524 Part Four Building and Managing Systems Textron spent 2016 and 2017 preparing for its move to cloud ERP and financials and hoping to put a new system in place by the end of 2017. Its project team defined information requirements, determined. how to optimize processes, and provided a detailed set of system specifications. Solution objectives included finding a modern alternative to Textron's aging systems, providing better analytics for decision. support, replacing labor-intensive manual processes with automated ones incorporating best practices, and ensuring users could tailor operational reports to their specific requirements. Textron also wanted some means of integrating with the external systems of suppliers and other business partners. Textron went live on Oracle ERP Financials Cloud on January 1, 2018. Textron's cloud ERP project was completed on time and under budget within 14 months, much less than management had antici- pated. Moreover, Textron was able to maintain its normal course of business despite this ambitious system implementation schedule. But there were challenges. Finance users initially resisted the new system, arguing that the numbers wouldn't change regardless of technology and that they relied on the same reports they had always gotten. Mike Skibo, who was Textron's CIO at that time, eventually con- vinced them of the need for change, and promised that they would no longer need to contend with the disruption of major ERP upgrades every few years. Oracle also released version 13 of its ERP Cloud less than one month after Textron had gone live on release 12, requiring additional work. Fortunately, the transition was relatively easy for Textron, but the timing could have been better. Textron underestimated the amount of additional work required to convert the data from its old sys- tem to its new cloud-based system. The old Infor- Lawson system and the new Oracle ERP system had different data models depicting the data flow and interrelationships among different data elements. Transforming the data structure from the old system to the structure in Oracle ERP Cloud was very dif- ficult (see Chapter 6). Gudz recommended that any organization moving to the Oracle ERP Cloud look closely at how information in the ERP Cloud maps to its information in existing systems. Textron was able to use Oracle Consulting Services to deal with these problems as well as help with sys- tem configurations and learning how to use the sys- tem's new cloud-based functionality. Oracle consult- ing provided configuration specialists who focused on the conversion and initial setup of the software environment, technical specialists who developed Oracle Business Intelligence Publisher reports, and Oracle Integration Cloud Service development re- sources, who provided guidance on tax and fixed asset setups. Textron project team members were thus able to start with a new set of processes to test and review. Oracle Consulting spent time learning about Textron's business processes and information re- quirements, including unique customer reporting. The consultants provided guidance to help Textron's team adopt the modern best business practices to use in its new system and also to tailor out-of-the-box re- ports. Working with Oracle Consultants, Textron was able to roll out a reliable system that has been widely accepted. Involving business users at every step of the mi- gration to the new system was cal to ensuring users would understand the new SaaS ERP system and do more with the information provided by the system on their own without depending so heavily on the IT department. User adoption and accep- tance of the system has occurred at a healthy rate. Implementing Oracle ERP Cloud has made it pos- sible for Textron to eliminate costly upgrades and see more reliable real-time data flowing through the company. The system will be able to support future growth. Sources: Lauren Bossers, "Textron Hits Cruising Altitude with Oracle Consulting," Oracle.com, accessed February 7, 2020; www. textron.com, accessed January 3, 2020; www.oracle.com, ac- cessed January 4, 2020; Jurgen Lindner, "Textron Soars High in the Oracle Cloud," www.oracle.com, accessed February 7 2020; Margaret Lindquist, "Flying High," Profit Magazine, Fall 2019; and Tony Kontzer, "Cautious About SaaS, Textron Came Around to Oracle ERP Cloud," SearchERP.com, October 25, 2018. CASE STUDY QUESTIONS 13-14 What problem was the company facing? What management, organization, and technology factors contributed to the problem? What was the business impact of this problem? 13-15 List and describe the major information re- quirements for Textron's new ERP system. 13-16 Was Oracle Enterprise Cloud a good solution for Textron? Explain your answer. 13-17 13-18 What were the benefits of the new ERP sys- tem? How did it change operations and deci- sion making? What steps did Textron take to make sure its new ERP system was successful? H eadquartered in Providence, Rhode Island, Textron started out in 1923 as a small New England textile business. It has grown into a Fortune 500 company, with subsidiaries and operat- ing companies spanning many industries. Leading products include aircraft, helicopters, armored ve- hicles, electrical vehicles, and automotive systems, including Cessna and Beechcraft aircraft lines, COMMANDO Elite armored vehicles, Bell vertical lift products, and E-Z-GO golf carts. Textron now has 35,000 employees, facilities in 25 countries, and revenues (in 2019) of $13.6 billion. For over 20 years, Textron has billed itself as the world's oldest conglomerate. Throughout its history, Textron has been the source of ground-breaking technologies and numer- ous industry-firsts. Many major steps in the evolu- tion of aircraft, rotorcraft, armored vehicles, electri- cal vehicles, and automotive systems have emerged from its product development labs. Textron has been consistently growing, with am- bitious plans to expand further internationally in Central and Eastern Europe, India, China, the Middle East, and Central and South America. Until recently, however, the company had been constrained by aging systems, including a 25-year-old ERP system based on Infor and Lawson Software, that was highly customized with company-specific features and had an antiquated IT infrastructure. These systems did not provide enough flexibility and up-to-the-minute information for the company to grow its business and coordinate an enterprise that spanned many in- dustries and locations. The company tried to upgrade its existing systems, but these systems had too many customizations that would have to be made again whenever these systems were upgraded. Textron business and IT specialists both agreed that this level of customization was unnecessary. For ex- ample, the old ERP system had been heavily modified and customized, even though the company was using standard software modules for accounts payable, gen- eral ledger, cash management, and fixed assets. Continually planning, installing, and testing soft- ware upgrades and patches required large capital expenditures because all the customized parts of the software had to be identified, tested, and rein- stalled. Such extra work tied up IT staff and resources 1 9 t 1 3 that could be better allocated to more productive work. Kelli Gudz, Textron's Senior Finance Systems Manager, wanted a system where her team would not have to work on remediating the vulnerabilities of the company's on-premises systems every few months. Textron selected Oracle Enterprise Resource Planning Cloud (including general ledger, accounts payable, and fixed assets modules) in combination with Oracle Integration Cloud Services, and Oracle Transactional Business Intelligence as the best solu- tion that had the requisite functionality to meet its information requirements, ease of use, and the flex- ibility to support future growth. Switching to cloud software services would also avoid the large capital expenditures required by constant software upgrades and patches. Planning, installing, and testing up- grades every few months had taken away time and resources the IT staff could have otherwise spent on projects to help grow the business. Oracle Enterprise Resource Planning Cloud is a cloud-based software application suite that manages enterprise functions such as accounting, financial management, project management, and procure- ment and runs in Oracle's cloud computing centers. Oracle ERP Cloud is accessible through both public and private cloud versions and supports hybrid cloud deployments as well. Oracle Integration Cloud Services is a tool for achieving simple, lightweight integrations between SaaS applications that do not require much com- plexity. Oracle Transactional Business Intelligence (OTBI) provides a flexible and easy-to-use analysis tool that helps business users gain real-time insight into transactional data and understand data patterns. This tool has capabilities for robust ad hoc reporting, role-based dashboards, data visualization, and self- service information delivery. Textron had been experimenting with cloud com- puting for a while and had started to use cloud SaaS for some of its nonessential systems. Textron had chosen to keep more critical applications, including ERP and finance, on premises, because of the regu- latory limitations it faced as a global company and hesitation to entrust core applications to cloud soft- ware providers. Textron's financial professionals who are heavy users of these systems were also reluctant to embrace change. 524 Part Four Building and Managing Systems Textron spent 2016 and 2017 preparing for its move to cloud ERP and financials and hoping to put a new system in place by the end of 2017. Its project team defined information requirements, determined. how to optimize processes, and provided a detailed set of system specifications. Solution objectives included finding a modern alternative to Textron's aging systems, providing better analytics for decision. support, replacing labor-intensive manual processes with automated ones incorporating best practices, and ensuring users could tailor operational reports to their specific requirements. Textron also wanted some means of integrating with the external systems of suppliers and other business partners. Textron went live on Oracle ERP Financials Cloud on January 1, 2018. Textron's cloud ERP project was completed on time and under budget within 14 months, much less than management had antici- pated. Moreover, Textron was able to maintain its normal course of business despite this ambitious system implementation schedule. But there were challenges. Finance users initially resisted the new system, arguing that the numbers wouldn't change regardless of technology and that they relied on the same reports they had always gotten. Mike Skibo, who was Textron's CIO at that time, eventually con- vinced them of the need for change, and promised that they would no longer need to contend with the disruption of major ERP upgrades every few years. Oracle also released version 13 of its ERP Cloud less than one month after Textron had gone live on release 12, requiring additional work. Fortunately, the transition was relatively easy for Textron, but the timing could have been better. Textron underestimated the amount of additional work required to convert the data from its old sys- tem to its new cloud-based system. The old Infor- Lawson system and the new Oracle ERP system had different data models depicting the data flow and interrelationships among different data elements. Transforming the data structure from the old system to the structure in Oracle ERP Cloud was very dif- ficult (see Chapter 6). Gudz recommended that any organization moving to the Oracle ERP Cloud look closely at how information in the ERP Cloud maps to its information in existing systems. Textron was able to use Oracle Consulting Services to deal with these problems as well as help with sys- tem configurations and learning how to use the sys- tem's new cloud-based functionality. Oracle consult- ing provided configuration specialists who focused on the conversion and initial setup of the software environment, technical specialists who developed Oracle Business Intelligence Publisher reports, and Oracle Integration Cloud Service development re- sources, who provided guidance on tax and fixed asset setups. Textron project team members were thus able to start with a new set of processes to test and review. Oracle Consulting spent time learning about Textron's business processes and information re- quirements, including unique customer reporting. The consultants provided guidance to help Textron's team adopt the modern best business practices to use in its new system and also to tailor out-of-the-box re- ports. Working with Oracle Consultants, Textron was able to roll out a reliable system that has been widely accepted. Involving business users at every step of the mi- gration to the new system was cal to ensuring users would understand the new SaaS ERP system and do more with the information provided by the system on their own without depending so heavily on the IT department. User adoption and accep- tance of the system has occurred at a healthy rate. Implementing Oracle ERP Cloud has made it pos- sible for Textron to eliminate costly upgrades and see more reliable real-time data flowing through the company. The system will be able to support future growth. Sources: Lauren Bossers, "Textron Hits Cruising Altitude with Oracle Consulting," Oracle.com, accessed February 7, 2020; www. textron.com, accessed January 3, 2020; www.oracle.com, ac- cessed January 4, 2020; Jurgen Lindner, "Textron Soars High in the Oracle Cloud," www.oracle.com, accessed February 7 2020; Margaret Lindquist, "Flying High," Profit Magazine, Fall 2019; and Tony Kontzer, "Cautious About SaaS, Textron Came Around to Oracle ERP Cloud," SearchERP.com, October 25, 2018. CASE STUDY QUESTIONS 13-14 What problem was the company facing? What management, organization, and technology factors contributed to the problem? What was the business impact of this problem? 13-15 List and describe the major information re- quirements for Textron's new ERP system. 13-16 Was Oracle Enterprise Cloud a good solution for Textron? Explain your answer. 13-17 13-18 What were the benefits of the new ERP sys- tem? How did it change operations and deci- sion making? What steps did Textron take to make sure its new ERP system was successful?

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13 14 The company was facing an aging IT infrastructure with an ER P system that was 25 years old and too heavily customized with company specific fea... View the full answer