Tektronix, Inc.

: Global ERP
Implementation

History
The case revolves around the company called Tektronix, Inc. which was founded in 1946
and after 50 years of success, in 1993, the high tech producer of electronic equipments was facing
increased global competition. During the same time, Carl Nuen starts with his new position as the
company CFO. The biggest threat for the company was not from the external environment but
from within as they lacked integrated Management Information System and suffered from
decades of uncoordinated evolution.
As the company struggles to find itself in middle of the 5 year recovery program to
solidify its competitive footing, Carl Nuen focuses on simplifying his companys operations and
restructure them thus increase visibility in operations.
The company plans to incorporate Oracles ERP solution in their current operations
which has been divided into 3 main areas spread across 60 countries around the world
i)

Measurement Business Division (MBD)

ii)

Color Printing & Imaging Division (CPID)

iii)

Video & Networking Division (VND)

Executive Summary
The company was founded in 1946 as a maker of Electronics test equipments and grows
up to be $1.3 billion manufacturer of electronic tools and devices.
The company has a global presence with offices in 60 countries with worldwide
leadership in Oscilloscopes with a market share that is twice its immediate competitor.
Additionally it is also a market leader in Television Sets and measurement and monitoring
equipments as well as of color printers.
Tektronix, in spite of being the world leader in most of the businesses that it was catering
to, was limited in terms of flexibility of its operations and growth opportunities. In order to
overcome these limitations the top management felt that the organization had to be restructured
starting with Information Technology (IT) infrastructure.

The biggest hurdle that the company was facing was related to its IT Infrastructure. The
company had different application systems and technologies around the world for its different
divisions and operations with different chart of accounts and financials of each of its divisions.
This led to the following problems:
i) Global competition was increasing
ii) Financial performance was suffering
iii) Lack of integration and presence of incoordination of IT system
iv) The company was not able to ship up to the minute or on a Saturday
v) Sales Order had to be created multiple times in different systems as its made its way through
the order cycle due to its patchy legacy system
vi) The slow order process and services led to delays and created opportunities for errors to
creep into the system
vii) Company didnt had accurate information on performance
viii) Company didnt had capacity to effectively manage customer accounts and credit on global
basis
ix) The financial system was not integrated. Closing the book entries each month took 2 weeks
x) Profitability of products and divisions was hard to realize

Data Analysis
Carl Nuens vision gave a major impetus to the project to enforce ERP solution however
it was the CPID division that had been considering changing the legacy software to an integrated
platform since long as the division had outgrown so as to be supported by the legacy systems.
The management knew that involving into such big project would result in heavy cost but the
operational cost would go down significantly.
Once the picture was clear for CPID division, other divisions followed the suite to have a
common ERP provider to keep a common platform for the entire organization. The vision
comprised of 3 elements
i) Seperability of Vision
ii) Leveraging of Shared Services
iii) Staying plain vanilla as much as possible

The 3 elements were extremely critical considering the each division had its own instance
of the system that managed its customer fulfillment process and separate vision would ensure
that requirements of one organization should not drive the practices of other.
Leveraging shared services involved keeping the entire operations which requires a
common input/output from all divisions to be kept integrated so as to have a common platform.
It would also result in cost reduction as it avoids redundancy e.g. by consolidating financial
functions e.g. Accounts payables, Charts of Accounts, General Ledger etc
Plain Vanilla approached ensured that the company would presume minimal
modifications to the standard software which will subsequently reduce the maintenance cost, up
gradation cost and ensure integrity of the software was maintained.
The company decides to opt for a third party software instead of developing it in floor
was Carl Nuen feels that they dont have vast expertise in developing the code & neither it is
their core competency and hence they will be able to leverage their R&D investment over
thousands and thousands of users who have implement the same software.
The company already has a ERP software for its Manufacturing division and hence opts
for a new software albeit the Manufacturing Division but ensures that the new service provider is
able to built up connectivity with the existing solution. The company finally decides to go with
Oracle!

ERP Implementation
The company begins the ERP implementation with FINANCIALS first in order to ensure
single view of all financial information worldwide. This involved making drastic changes in the
organization model and also on processes.
The company first eliminates the Country Managers. Then the company decides on
English as the common language across all locations. The company transforms each country
from profit centre to commission center Office Managers replace Country managers albeit
supervisory or managerial duties. The Financial Transaction process is also changed by
eliminating the back offices in each country to continents.
Additionally, the company also includes financial consultancy firm Aris to ensure the
best practices are followed as their management lacked necessary expertise and faced stiff

opposition from the workers and management staff for pursuing a change. For roles that required
less functional and more business expertise, the company brought in technical consultants to
develop programs and routines to support functional process.
There are benefits of using ERP some of this are:

The team felt the time, effort and cost associated with the project was worth every penny
The company had finished goods inventory visibility regardless of its presence in the world
Improved data integration allowed financial analysts to drill down to several levels of detail

in a single account
Enhanced visibility in Sales trend and internal performance
Closing book of accounts at the end of every period was accelerated substantially
Standardization of business processes resulted in better decision making end users were also
pleased with the results. They felt more effective and satisfied in their jobs.

Conclusion
Successful ERP Implementation at Tektronix clearly shows that it is all about sound
management and problem solving. The most difficult challenge for any management initiating
ERP implementation is not about acquiring and installing a new software, it is about making sure
that the entire organization-up, down, across-develops a new mindset and leaves the old,
ineffective ways behind. It is here that leadership skill becomes important.