Recommendations
We encouraged our client to begin implementation of a new ERP platform (NewSystem) for their facilities. At the beginning of the case, every member of the management team was convinced this was not the right answer, but the business case and process Bain facilitated persuaded them to begin pilots and pursue implementation. The expected annual run-rate benefits are 2% of revenue.
A range of other benefits were realized as part of the project. These include a $4 million one-time inventory reduction, $3 million in savings from generic product selection, improved customer service/retention and risk reduction, leading to fewer regulatory issues. Furthermore, operating efficiency was increased
The Results
- Create IT Steering and Operations Committees to serve as the connective tissue between IT and the rest of the organization
- Develop prioritization schemes to align IT projects with business priorities
- Utilize business and IT project plans to manage and track the economic benefit from IT investment
- Selectively use outsourcing to reduce costs, improve outcomes and accelerate the closing of IT functionality gaps
