Mr. Potato Head Meets New Markets in the Wake of Hasbro’s SAP Upgrade
When Hasbro, Inc. first implemented SAP software in the late 1990s, it boldly chose a “big-bang” approach. The company rolled out a full suite of solutions to various global business units after an acquisition-driven growth spurt that brought even more brands and divisions onto Hasbro’s rapidly expanding SAP environment.
From an IT perspective, the initial big-bang implementation was impressive — but from a business perspective, some unexpected inefficiencies surfaced. “Initially, we were proud that we rolled out our SAP software to 27 different markets,” says Dan Ratigan, Vice President of Global IT Partnership Delivery at Hasbro. “But eventually we realized that what we were doing was implementing SAP software 27 different ways.”
Instead of helping to drive common business processes and shared services across a growing organization, Hasbro’s moderately customized SAP instances were limiting the company’s ability to centralize and standardize processes. According to Ratigan, implementing new functionality was getting more difficult with every IT project.
In 2007, Hasbro management set a goal to move to a more centralized, shared-services business model, harmonizing the SAP landscape and driving more common processes across an increasingly global business. According to Denise Clark, CIO and Senior Vice President at Hasbro, the strategic direction for the company is to continue to move the business into new regions of the world — Korea, Russia, China, and Latin America, for example. “We need to bring up these emerging markets on the core SAP software quickly to ensure that each local office has the necessary tools to successfully run its business,” says Clark.
“We need to bring up our emerging markets on the core SAP software quickly to ensure that each local office has the necessary tools to successfully run its business.”
— Denise Clark, CIO and Senior Vice President, Hasbro
In response, the IT team put a plan in place that would upgrade the company’s SAP systems and create one harmonized environment that could be seamlessly replicated in the markets. “We recognized the role IT could play — to standardize processes for efficiency while still providing the information required to support local efforts,” says Ratigan. “Our senior management team fully supported our premise and helped us develop a broader transformation project that leveraged our SAP systems to further standardize business procedures.”
Determining the Way to Work
This broader transformation effort to harmonize global processes — known as the Way to Work initiative — was a business-driven, IT-supported project that combined a variety of elements, including:
- Upgrading from SAP R/3 to SAP ERP 6.0
- Standardizing global business processes within the core ERP system
- Incorporating a custom Hasbro master data management solution focused on material master data
- Implementing a global demand and supply planning solution
- Standardizing on a single global business intelligence (BI) solution
- Moving to a centralized shared-services model
“This ambitious initiative was designed to rebuild the technology foundation at Hasbro, and also improve the efficiency and profitability of our core business by putting in place a consistent set of tools and processes around the globe,” says Ratigan.
One of the first tasks Hasbro’s project team undertook was to meet with business process leaders to define their current processes. Those meetings confirmed that many Hasbro businesses were performing similar processes, with only slight modifications. There was great opportunity for standardizing in many areas, using SAP systems as the blueprint.
For example, according to Ratigan, when the order-to-cash process owners at various Hasbro businesses met with the project team, they identified many different terminologies for similar processes while also uncovering numerous extraneous tasks. “People realized they didn’t need 10 different order types in a certain area, and each unit didn’t need its own way of invoicing customers,” says Ratigan. “One standardized process made far more sense.”
The same in-person meeting strategy was used to set standards in other facets of the project, including BI and data management. “Those meetings incited a passion to drive for consistency, which led to a dramatic reduction in the complexity of our system design,” says Ratigan.
Agile Development Accelerated the Project
Given the breadth of the project, the IT organization set a fairly aggressive timeline for implementation and employed an agile development methodology. Because the business committed strong buy-in on the project, the IT organization did not want to take a traditional waterfall approach to development. Instead, the IT team decided on 30-day development cycles, handing off its work every month to a test team that coordinated with business staff to test and validate the solution in its current state.
“We knew that we had a fairly short implementation timeframe, so rather than spend a lot of front-end time on requirements and back-end time on training, we decided to deliver something to the users every month,” says Clark. “Each month, the users immediately became engaged in the new functionality and were able to provide real-time feedback. This rollout proved to be very effective and allowed the users to learn the new system quickly and efficiently.”
“Putting in place a consistent set of tools and processes around the globe is designed to improve the efficiency and profitability of our core business.”
— Dan Ratigan, Vice President of Global IT Partnership Delivery, Hasbro
Making Reporting Global
A primary goal of the Way to Work initiative was to standardize Hasbro’s reporting and BI platform. Historically, the company’s reporting was done locally, with various business units and geographies using their own preferred reporting tools, including Cognos, Business Objects, Microsoft Access, and Microsoft Excel. This process led to inefficiencies.
“If someone came up with a new reporting solution in one business unit and we built it to that unit’s individual specifications, we couldn’t reuse that solution in other businesses,” says Ratigan. “We wanted to ensure the BI system that we were standardizing on would leverage our existing IT infrastructure and integrate with our current business planning processes and systems.”
After analyzing the various reporting solutions in place at the company, the IT organization decided to standardize with the SAP BusinessObjects solution set, specifically for its BI capabilities. Hasbro wanted to develop stronger BI capabilities globally and found that SAP BusinessObjects solutions offered the deepest and most user-friendly BI functionality and stream-lined integration.
“We began holding workshops with stakeholders across the business to explore how these new SAP BusinessObjects solutions could help us leverage our data more effectively,” says Clark. “We aimed to use the solutions for reporting as well as for deep analysis and trending. For example, we wanted to get to know our consumers and customers better by using our point-of-sale data.”
Expanding the Reach with SAP Business One
Hasbro’s continuing global expansion was a major driver for the Way to Work initiative. As Clark explains, the company’s ratio of North American to global revenues is changing. In the past, 60% of Hasbro’s revenues came from the US and 40% from the rest of the world. But in the next several years, the majority of Hasbro’s revenue is expected to come from outside of the US. Since 2007, Hasbro has opened new offices in Brazil, Russia, Czech Republic, Romania, China, Peru, Korea, and Colombia — most of which are sales and marketing offices.
“We need to be able to get these global offices ramped up quickly so they can start invoicing our system and gain the revenue available in that market,” says Clark. “We want to bring these markets up on our SAP environment in three to four months.”
To achieve this goal, when Hasbro enters a new region either by establishing a new office or acquiring a new business, that region is initially brought up on SAP Business One. So far, Hasbro has used this strategy in its expansion into Peru, Columbia, and South Korea. “The benefit to us is that it is a common solution we can use across multiple markets,” says Ratigan. “It requires minimal IT time to get smaller markets up and running because we don’t have all the bells and whistles that we might for larger, more complicated markets.” SAP Business One provides an interim solution until the market grows large enough to move to the core SAP solution.
Success So Far
With all the pieces in place, Hasbro opted for a regional approach to rolling out its Way to Work initiative. It started with successful rollouts in the US and Canada in 2009 and then progressed to Europe in 2011. In 2012, Way to Work will deploy in the Latin American and Mexican business units and then move to the Far East and Asia Pacific.
The results so far have exceeded the company’s expectations both in terms of schedule and business impact. The 30-day development strategy has proven to be an effective method for both solution development and training. In most instances, the development cycle results in a deep bench of power users who are ready to train other users when issues arise.
According to Ratigan and Clark, the Way to Work initiative also:
- Provided one view forward for Hasbro’s planning teams
- Improved data consistency across functions by using a common data warehouse (an SQL Server database with SAP BusinessObjects solutions on top)
- Enabled the business to move to a shared-services model in Europe
- Implemented a global workflow process for accounts payable
- Deployed a number of efficiency enhancements (and most importantly leveraged them across all markets)
Clark sums up the success so far by saying, “I’m really proud of the efforts our team has set forth in powerfully demonstrating how IT adds value to the company in a very tangible way.”
January 02, 2012