Case L&T

A BOLDLY DIFFERENT ERP PROJECT – ”NOT AN IT ENDEAVOUR, BUT A BUSINESS TRANSFORMATION”

L&T Environmental Services has recently been taking adventurous steps in creating new business, and so the company wanted to find an ERP solution that would not hinder future innovations. To guide them in choosing a solution that would support and enable new business, L&T decided to employ Sofigate’s unique Business Technology Design method which brings business benefits to the core of IT projects.

The Challenge

How to replace an old ERP system with a new solution that helps create and support entirely new business?

The Solution

Traditionally 70% of ERP projects fail to reach their goals. Business Technology Design minimises the risk of failure by putting business into the core of an IT project. Innovative working methods empower and engage management and staff to become change agents.

The Outcome

An informative capabilities map and strategy projection help the executive management team to focus on the right aspects of business transformation. This clarity makes it easy to choose the right technology to support the change.

In Finland, practically the whole population is familiar with L&T as trustworthy waste collectors, but in recent years the company has expanded its business into entirely new areas. At times these novel innovations can even cannibalise its traditional business.

”A great example of this is our Hävikkimestari waste management service that we offer to restaurants. The Hävikkimestari mobile application combined with expert consultation has already helped more than two hundred restaurants reduce their food waste by almost a third. So, in the short term we might have less waste to collect, but in the bigger picture we promote the idea of circular economy and are able to move up in the service hierarchy,” says Petri Salermo, Senior Vice President of L&T Envinronmental Services.

Developing non-traditional services such as Hävikkimestari requires an agile, experimental culture and leadership by data. Together with his team, Salermo realised that L&T’s existing ERP solution had become a hindrance to progress.

”The old ERP logic does not fit into the modern business world. What a company like us requires most of all is business leadership that is based on correct information. To access that information, interfaces need to function in an agile manner. We wanted to be certain that our next ERP would produce these benefits that our business demands. But because we know that an estimated seventy per cent of ERP projects do not reach their goals, we decided to conduct our project in a different way,” Salermo says.

CHANGE LEADERSHIP, NOT AN IT PROJECT

To begin the process of renewing its ERP and other core systems, L&T Environmental Services decided to employ the Business Technology Design method developed by Sofigate. The idea of the method is to keep a firm focus on business goals and map out the competences required by the company’s strategy. These competences in turn lead to the technology solutions that will enable the strategy to succeed.

”The way Sofigate facilitates a project is not how a traditional IT consultant would do it. Their model forces one to see technology through the eyes of business. The practical outcomes of the Business Technology Design work, such as the competences map and the ’strategy worm’, managed to lay out the changes needed by our business in a smart and unconvoluted way. This fired up the imaginations of our senior management and helped them to realise that an ERP project is not an IT endeavour, but a business transformation that touches the entire company”, Salermo says. The Business Technology Design work engaged L&T’s entire 14-strong senior management team in a series of workshops. At a later stage, 74 additional staff members took part in the development work through the digital Roundtable environment.

”When people work towards business transformation together, they commit to a shared vision and evolve into change leaders and agents. The Business Technology Design method helps simplify the sometimes cryptic world of IT and pushes the business owners to take ownership of the project. Ownership has to be in the hands of those people around whose business the system is being constructed. And ownership is not about keeping track of reports and approving budgets, but about a real desire to lead the transformation towards its goal,” says Salermo.

SOUNDING OUT THE FIELD

In addition to promoting a sense of ownership, the success of an ERP project hinges on the commitment of the endusers. On top of clarifying L&T Environmental Services’ strategy and facilitating transformation, Sofigate wanted to ensure the project was in touch with the everyday work of L&T’s staff such as drivers and facility workers. A series of visits to recycling plants in various cities engaged these end-users to have their say on the development work.

”Ultimately, decisions about ERP solutions are not made to benefit us at the corporate headquarters, but to help the daily work of our staff on the field. They need the right tools to succeed in their work and to enjoy it. An external partner such as Sofigate is essential when sounding out the field. Sofigate challenged us in just the right way and knew how to ask our staff just the right questions regarding ERP functionalities”, says Salermo.

EARLY BENEFITS BEFORE FINAL ERP OVERHAUL

At the end of the Business Technology Design work, L&T Environmental Services had a clear roadmap and plan that will help them to select an ERP solution that best benefits their business. But the Business Technology Design method produced concrete results even before the moment of choosing the ERP itself.

”Sofigate’s method is very clever because it makes iterative progress possible. The competences map made it clear to us that we were not in a rush to change everything at once. This insight enabled us to prioritise development. For example we saw a need to focus on optimising our logistics, and now we were able to initiate a new vehicle routing system even though we have not chosen our next ERP yet,” Salermo says.

By conducting their ERP project in a non-traditional manner, L&T Environmental Services ensured that the project had a much higher possibility of success than a traditional, techology-focused approach.

”When we eventually get to the implementation phase of our new ERP, the risk of failure will be considerably lower because we have been able to implement systems that support the ERP already in advance. Also, now our different functions speak to each other: they no longer look at the transformation from their own silos, but comprehend its effects on our entire business”, Salermo says.

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