Double-take: Pragmatism underpins valve manufacturer’s twin-strand ERP strategy
Concluding a three-year project, one of the world’s leading valve manufacturers is standardizing on a common global business template for its manufacturing operations. In the process, the company also took a second look at the future of the Oracle enterprise application suite that underpins its sizeable European operations.
Headquartered in Paris, the European Industrial Valves & Controls arm of Princeton, N.J.-based Tyco Flow Control employs 3,500 people across Europe, and has sales revenues exceeding (U.S.) $1 billion. Tyco’s industrial devices business has 17 European factories spread across six countries, says European president Gilbert Villa-Massone.
Each operating unit, Villa-Massone adds, tends to be associated with specific brands within the Tyco Flow Control portfolio—names such as Anderson Greenwood, Crosby, Fasani, FCT, Keystone and Vanessa.
“Over the years we’ve bought a lot of good companies, and gained some very demanding customers,” he notes. “Key to our success is the ability to leverage the combination of our people’s skills and the marketplace requirements.”
|Gilbert Villa-Massone, European president, Tyco Flow Control, says historically, the company had a “hands-off” approach on how operating divisions ran their IT affairs, a situation that eventually brought about a host of attendant problems due to lack of support, and maintenance and duplication costs.|
In particular, of course, that leveraging calls for suitable IT systems—systems that are robust, powerful, and with features and functionality appropriate for a business on Tyco Flow Control’s global scale. But that’s a relatively recent discovery, says Klaus Lammertz, the business’s European IT director.
Up until four years ago, he explains, Tyco took a somewhat “hands-off” approach to how its major operating divisions ran their IT affairs—especially regionally. “When we acquired a new business, we hooked it up to the network and our email systems so that we could communicate with them, but otherwise didn’t insist on enterprise application standardization,” Lammertz notes.
The result was an enterprise architecture that had the 14 largest European units on Oracle, with SAP also strongly represented—but largely outside Europe. The remainder of the Tyco Flow Control operating units were running a diverse collection of bespoke or legacy systems—some bought from vendors no longer in business. “Overall, there are nearly 20 systems across the business, and that’s clearly far too many.”
The creation of a central IT group back in 2004 brought about a process of addressing this, culminating in a decision to move operating units onto SAP. Put in place only as highly localized instances, another significant decision was taken: establish a truly global business template, delivering one enterprisewide set of standard business processes about which multi-operating unit instances of SAP could be created.
In the meantime, development and rollout of the Oracle applications could continue, including creation of a seamless cross-platform link so that when Tyco businesses trade with each other, the creation of a purchase order on, for example, an Oracle system will automatically create a matching sales order on the equivalent SAP system.
“Three to five years out, every Tyco Flow Control site will be on either SAP or Oracle,” says Lammertz. “All the old legacy systems will be gone.”
Already the first European Tyco Flow Control site, Tyco’s Saint Juery, France-based FCT business, goes live on SAP—using the new global business template—on October 1, 2008. Others will then follow.
One option under consideration, Lammertz concedes, is to standardize completely on SAP. But there are no firm plans to do so, he insists.
“It’s a possibility, but no more than that,” says Lammertz. “It isn’t something we’re focused on certainly for the next three to five years. What we are focused on is something far more important: dealing with sites that today aren’t on either Oracle or SAP, and all the attendant problems this causes us: lack of support, Sarbanes-Oxley compliance, maintenance and duplication costs, and so on.”
It’s a pragmatic approach that Villa-Massone both thoroughly endorses and believes in 100 percent—consistent with what he terms “The Tyco approach.”
Concludes Villa-Massone, “Globally, Tyco Flow Control has a culture where entrepreneurial flair, innovation, and customer service are blended in equal measure—and where what matters are results.”