Information Technology Harley Davidson Motor

Information Technology

Harley Davidson Motor Company: Enterprise Software Selection

Harley-Davidson Motor Company was founded in 1903 when William Harley and Arthur Davidson began working on taking the work out of bicycling. By 1920 they had become the leading motorcycle manufacturer in the world. Most of the company's revenue and income can from motorcycles and related products. Headquartered in Milwaukee, Wisconsin, the company had manufacturing plants in Wisconsin, Pennsylvania and Missouri and wholly owned subsidiaries in Germany, UK, Benelux, France and Japan. Over the course of its 95 years, the Harley brand has acquired a very mystical power. Many people are willing to wait up to tow years for a motorcycle. Harley-Davidson bikers are traditionally perceived as young, reckless and born to be wild.

Harley-Davidson values both participation and teamwork in the running of its company. They apply self-directed teams from the factory floor to the executive level. Instead of employing a functionally separate hierarchy, the organizational structure consisted of three circles: Create Demand (CDC), Produce Products Group (PPG) and Provide Support (PSC). CDC is responsible for sales and marketing. PPG handles development and manufacturing and PSC is responsible for legal, financial, human resources and communications. A Leadership and Strategy Council which is comprised of executives from each of these groups have been set up to provide oversight and to ensure that an integrated vision of corporate direction is being maintained.

The structure of the IS department is also one based on teamwork. Instead of a Chief Information Officer they have an Office of the CIO which consists of three directors that provide IS leadership. In order to guide IS results, each Circle of Leadership has an Information Technology Circles that are made up of pairs of senior IS people and end users from each site and function. The goal of the ITC was understand group processes and interactions and then to decide from a business perspective where technology efforts should be focused.

In 1995 when Garry Berryman joined the company he worked to develop purchasing's role within the corporate vision. His initial assessment was that the supplier relationship that existed wasn't viewed as a strategic opportunity to speed time to market, reduce costs and improve product quality. Purchased parts make up 55-60% of the motorcycle's value the thought was that if the purchasing organization could initially influence cost, then everything else would follow. Berryman began a corporate wide Supply Management Strategy in 1996. The goal was to make sure that the company provided the right product, at the right time, with the best quality, for the lowest possible price.

In order to make the Supply Management Strategy work the company had to completely re-evaluate their current Information Systems. They needed new systems and process and there was a large degree of dissatisfaction with the existing systems along with a mismatch with the SMS. They came to the conclusion that there was a tremendous need for significant changes in terms of people, processes and technology. The focus became finding a software system that would help them to address their issue of reducing purchasing costs while continuing to carry out their Supply Management Strategy.

The first step that the company took was to form a project team. This team consisted of part-time resources from each of the procurement organizations. This gave them influential people who were familiar with the current processes and who could help them sell the product in the end and something that was definitely needed. The used the Supply Management Strategy as a starting point and defined the requirements that would be needed in order to realize their strategic vision. The team created an enterprise wide process map of procurement in order to determine where there were currently so that they could figure out a plan on how to get to were they wanted to be. They indentified many commonalities that existed across the different sites.

The next step that they took was to carry out survey of stakeholders. Although many people on the team thought that they already knew what the issues were the survey was conducted so that they could be sure that they were identifying the right requirements that were needed by purchasing. They conducted two different surveys. The first was directed at all purchasing representatives in the company. The goal was to discover exactly what purchasing did on a day-to-day basis. The second survey was given to key stakeholders such as Accounts Payable, Human Resources and Logistics all of which are key departments that interact with Purchasing. The survey revealed that employees were spending an exuberant amount of time doing non-strategic activities.

The project team decided that only having part-time resources available from the different purchasing areas was not enough. The obtained permission to add some full time resources that would spend the majority of their time working on this project but yet would attempt to stay connected to their departments. The purpose was so that they would not loose touch with what was happening on the front line. They didn't want to end up with a software system that provided for things that were not relevant on the front line anymore.

The team then began the process of defining the scope for their project. This was a critical step in order to have a successful project. In one of the exercises that they had undertaken earlier they had discovered that there a number of other functions within the company that the purchasing department had interaction with. Each of these activities was divided into sub-activities and key stakeholders were identified. Once the stakeholders were identified the team was able to determine to what extent purchasing should be involved. It was from this that they could determine exactly what they needed the new software to do.

Identification of potential software vendors began when the team sent a document that described the company's SMS goals to an industry research organization. They provided Harley-Davidson with a list of six names. The company added several more to the list based on incumbency issues and other information. Those companies who wished to bid were requested to notify Harley-Davidson of their intent to bid. Eight suppliers submitted an RFQ and a completed self-evaluation checklist. The team used the checklist as a quantitative measure of an initial functionality fit. Each supplier made their pitch to the team. In addition to the core team members there were two additional participants in these presentations. These were the systems manager for the Produce Products Group and the Manager of Architecture Integration. Their role was to review each package's architectural requirements and to identify any interface issues that might be likely to occur.

After the list was narrowed to three contenders site visits were set up so that there could be an extended demonstration of their software package. As part of the next round, the team developed ten scenarios, based on process and technology requirements from the functional specification that the providers used in order to demonstrate how their product worked. Two entire days were spent with each candidate in order to try and get a better understanding of the package and the organization. And from this and all the rest of the information that they had gathered a decision had to be made.

At one point in time or another every organization faces the prospect of selecting new software tools in order to enhance their business processes. Most organizations see the selection process as a frustrating and dreaded task. The success or failure of the project will most likely have a remarkable impact on the organization. Selecting the correct software tool is one of the most important decisions that managers can make. Having a systematic and validated software selection approach sets an organization on the right path to selecting the right software tool. Despite of the size of the organization, selecting new software must be treated as an important project. Many times organizations start without a clear understanding of the vision and business needs that are driving the need for new software. Before beginning the process, managers can raise the level of the project's importance by establishing and documenting six critical things.

1. Set up a committee that oversees the entire selection and eventual implementation of the software.

2. Define the immediate business needs along with any long-term goals that the software system will be supporting.

3. Create a software selection and implementation budget based upon future organizational goals, rather than where the organization is right now.

4. Form a selection team that embodies the interests of the entire organization and empower the team members to make the actual selection.

5. Assign end users to participate in product demonstrations, assist in the evaluation process, and influence the selection team.

6. Establish a review method prior to starting the process, involving the steering committee to address issues and resolve differences (How to choose software: six steps to better selection, 1999).

A company must identify their project's drivers as the most important aspect of the entire selection process. This consists of defining the critical business requirements and project success factors that establish an organization's objectives. Once this is defined the organization will be ready to begin the process of evaluating software alternatives and administering the entire selection project. Evaluating software tools without defined business requirements leads to duplicate efforts and ultimately a solution that could delay the selection and implementation process (How to choose software: six steps to better selection, 1999).

If a company's purchasing strategy doesn't include the newest information technology, they are likely to trail competitors that leverage these latest methods. But they must be careful before jumping into new state-of-the-art purchasing software. Improperly implementing new supply-chain programs, or failing to process-map a business before starting, can waste lots of money (Harris, 2010). This was an area in which Harley-Davidson did well in their strategy to implement new purchasing software. They did a process map of the entire company so that they could figure out where they were and then determine how they were going to get to where they wanted to be. This is an excellent way to take a snap shot of all the processes that occur within a company. This process also helps to identify and eliminate any waste that is happening.

The basic overall process that Harley-Davidson used to acquire their new purchasing software was good. There were though a couple of things that they could have done differently in order to ensure that the project was a successful one. The worst thing that a company can to is to buy software that doesn't meet their needs and is not useful in the end. This ends up being nothing but a waste of time and effort. A good process must be established from the beginning and followed throughout the entire procedure in order to ensure success.