Timberjack Parts Packaged Software Selection Project Case Study See the attach file ( Project.pdf ), it has all information and the instructions you need t

Timberjack Parts Packaged Software Selection Project Case Study See the attach file ( Project.pdf ), it has all information and the instructions you need to know.

Use just the case study file I give it to you ( Case Study.pdf ) and the file ( Chapter 2 & Chapter5.pdf ) as source.

Do not use any other source.

I have 4 questions to answer (in red color) on file ( Project ), Read them carefully.

Be attention:

-Use the questions as headings and an outline to work.

-Begin each question on a new page.

– (1.5) Line spacing

Each question should contain of:

Introduction: A paragraph that tells me what you’re going to tell me, it’s about the answer.

Body paragraph: you write about the answer.

Conclusion: A paragraph that tells me what’s the most important things about your answer. For the exclusive use of R. THOMPSON, 2020.
Harvard Business School
9-398-085
Rev. February 25, 1998
Timberjack Parts:
Packaged Software Selection Project
On the morning of December 15, 1995, Jim Utting, general manager−Parts at Timberjack
Corp. in Atlanta, pondered the decision that he and his project team were about to make. The project
team, which included three members from Atlanta and three from a sister parts operation in Sweden,
had been given the task of selecting the same packaged software to be used on both sides of the
Atlantic. While both operations were very similar in terms of sales volume and number of personnel,
Utting couldn’t help but recognize the differences in opinion with regard to software requirements.
While Utting had overall responsibility for the selection process and was in a position to make a final
decision, he felt that his project team should come to consensus.
Clearly a consensus would be reached only by compromise, and the group had already made
so many to get this far. While selecting software used by excellent distribution or wholesale
companies was the goal at the outset, the requirements of strong local support on both sides of the
Atlantic, as well as a UNIX platform forced the list to include mainly enterprise requirements
planning software companies which specialized in manufacturing software. Sahlqvist, president of
Timberjack Parts AB, frequently asked during demonstrations, “Do we have to start manufacturing
to use this system?”
While Utting and Sahlqvist tried hard to form a single team, geography−and to a lesser
extent, culture−had worked against this. As Utting explained: “When the Swedish group came over
here, and we went out on site visits together, and spent time together, by the end of the week we
would be one team. After a few weeks on our own, we would quickly drift apart.”
Industry Background
Timberjack was the world’s leading manufacturer of heavy equipment for the professional
logger, with an overall market share of roughly 25%. Its owner was Rauma Oy, a Finnish
conglomerate that was listed on both the NYSE and the Finnish stock exchange. In 1995, Timberjack
had sales of 627 million USD, net profits of 88 million USD, and roughly 1,600 employees.
Timberjack and a few other large competitors such as John Deere, Blount, Caterpillar, and Valmet,
had maintained the dominant share of the market over the long term. Many smaller firms also
Research Associate Darryl Romanow and Associate Professor Mark Keil of Georgia State University and Professor F.
Warren McFarlan of the Harvard Business School prepared this case as the basis for class discussion rather than to illustrate
either effective or ineffective handling of an administrative situation.
Copyright © 1998 by the President and Fellows of Harvard College. To order copies or request permission to
reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to
http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system,
used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying,
recording, or otherwise—without the permission of Harvard Business School.
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Timberjack Parts: Packaged Software Selection Project
participated with specialized equipment that met a niche market. The Timberjack group was formed
through a number of acquisitions during the 1980s and 1990s, as outlined in Exhibit 1.
The evolution of logging equipment had dramatically changed the way that logging was
done worldwide. While felling trees with chain saws and using animals to haul felled trees was still
practiced, these methods were disappearing. In North America, trees were cut down using machines
called feller bunchers, then dragged to the roadside by skidders, where they were trimmed by
delimbers, and then lifted on to log trucks using log loaders. In Scandinavia, harvesters would cut
and delimb trees in the forest, and then a forwarder would carry the logs to the roadside. This
method allowed the logger to selectively harvest the forest rather than clear cutting. Exhibit 2 shows
an overview of the Timberjack product line.
The industry was extremely cyclical, as it was directly tied to the prices of pulp and lumber,
which were in turn highly dependent on the overall strength of the economy. During severe
downturns in wholesale pulp and lumber prices, annualized machine sales could fall by 75% with
very little advance warning. A typical downturn lasted one to two years, and often many of the
leveraged dealers, contractors, and manufacturers would not be able to weather the storm. For this
reason, many capital projects were completed during the prosperous years.
Timberjack Parts Operations
Timberjack operated two service parts operations to service its equipment worldwide; one in
Marsta, Sweden, which was located just outside of Stockholm, and one in Atlanta, Georgia. Both
facilities were opened in 1994 and involved the relocation of personnel from other locations. In 1995,
each facility had approximately 35 employees and sales of roughly 35 million USD. The European
operation sold most of its parts directly to company-owned retail stores in Scandinavia; in North
America, Timberjack sold exclusively to third-party heavy equipment dealers. In Scandinavia,
Timberjack’s parts operation relied on a software system known as DAIM which was acquired in
1987 and ran on an AS400 platform. Timberjack in Atlanta relied on Hewlett-Packard’s MM3000
software designed to run on HP3000 hardware. This system, originally acquired in 1981, included a
custom-coded dealer module developed in the early 1990s. The dealer module allowed dealers dialup access to electronically transmit orders and inquire on the price and availability of parts using a
PC acting as a dumb terminal. Roughly 80% of all Timberjack North American orders were placed
on the dealer system.
The Need for New Software
In early 1995, Sahlqvist and the Marsta group were actively investigating the acquisition of
new computer software to run their parts operations. The main impetus behind the decision was the
instability of their existing systems. Heavy modifications of their source code over the years had led
to frequent system failures. As a result, the users could not always rely on the data that was
presented to them. For these reasons, Sahlqvist actively sought a new computer system, with the
intent of installing the system by early 1996 at the latest.
At the same time, at the Timberjack North American headquarters in Woodstock, Ontario,
Canada, Coopers & Lybrand was helping top management outline a future information systems
strategy. This project included the integration of manufacturing, the dealer network, as well as parts
and service. While Woodstock was in no hurry to replace all of its systems, it did face the year 2000
problem; more importantly, Hewlett-Packard had notified customers that it would no longer be
supporting its aging MM3000 software. After several months on site in Woodstock, Coopers &
Lybrand prepared a strategic IS plan. The strategy concluded that Timberjack would benefit by
selecting best-of-breed software to run the various units within the North American operations.
Rather than relying on one package to run manufacturing, parts, and service, it was proposed that a
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Timberjack Parts: Packaged Software Selection Project
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strong “distribution company package” would best serve parts, and a separate manufacturing
system would best suit the factory.
The Coopers & Lybrand recommendations to the North American headquarters were
subsequently presented to the board of directors in Helsinki, Finland. Mikko Rysaa, president of
Timberjack Group, concluded that a more global software strategy would be beneficial to Timberjack.
The headquarters office in Helsinki continually struggled to compare financial results of the various
units, with only marginal success. One financials package would help solve this problem. Integrated
systems implemented worldwide would also make it easier to send employees overseas for a few
years, as there would be no need for them to learn new computer software. Global selection would
also add leverage to negotiations with software and hardware vendors. For these reasons, Rysaa felt
that Timberjack should embark on a global software strategy.
The service parts organizations were subsequently given the task of selecting one system to
run the parts businesses in Atlanta and in Marsta. Rysaa appointed Utting to head up the project,
and instructed Sahlqvist to halt the process of choosing new software independently. Instructions to
Utting were fairly clear; he was to gain consensus on one package for both sites, and he was told
“There will be no disasters.” If the two groups failed to reach consensus, then the Timberjack board
would decide. Rysaa had warned Utting in his usual dry humor, “The intelligence level does not
always go up when the decision is made by the board.”
Over the next week, Utting and Sahlqvist decided on project team members, as well as a
rough timetable. On April 17, 1995, the joint project team had its first meeting in Woodstock,
Ontario. The team members present were Christine Smedjer, IS manager in Marsta, Jorma Nikkinen,
materials manager in Marsta, Mark Gonzalez, information services coordinator for service parts,
Darryl Romanow, materials manager in Atlanta, as well as Utting and Sahlqvist. Exhibits 3 and 4
show Timberjack organization charts for the Atlanta and Marsta parts operations. Coopers &
Lybrand appointed Ilya Bahar to the project, although Timberjack had not yet decided on the extent
of the Coopers & Lybrand involvement.
Both organizations were in considerable transition at the time the project began. In April
1995, the team members were at various stages of relocation to the new parts facilities, in Atlanta and
Marsta. Utting, Romanow, and Gonzalez lived near the Woodstock, Ontario factory. Utting was to
relocate to Atlanta in May; Romanow was moving at the end of June; while Gonzalez had not yet
decided whether he was going to move to Atlanta. While the new parts facility in Atlanta was
opened in February 1994, it consisted of the distribution center staff, one buyer, and three accounting
staff, all of whom were new to Timberjack. Marsta was in a similar situation, as Timberjack had
closed its parts operations in Tampere, Finland, and Alfta, Sweden, and combined the facilities into
one in Marsta. While Smedjer was recently hired from the Marsta area, Nikkinen continued to
commute on weekends from Tampere (central Finland), and Sahlqvist commuted from Gotenborg, a
three-hour drive from Marsta.
In the spring of 1995, the North American operation had the core group of parts buyers,
customer service, and accounting staff still working in Woodstock. Although most were offered
positions in Atlanta, very few were contemplating the move. Most members of the group were
actively searching for new positions in the factory operation. Utting felt that he had a narrow
window of opportunity to gain input from this group of people who averaged 20 years’ seniority.
Utting’s primary concern was that the commitment to the project might be limited as many of the
people would be leaving the parts department.
At the end of the first meeting, it was decided that Bahar would be invited to bid on the
software selection contract and that the requirements definition would be done in Woodstock, with a
sign-off in Marsta. Romanow and Gonzalez would work with Bahar during May and June, with a
request for proposal (RFP) to be mailed to vendors in late August 1995. In order to free up time for
Romanow to work on the project, Utting decided that an interim supervisor, reporting to Romanow,
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Timberjack Parts: Packaged Software Selection Project
would remove him somewhat from the day-to-day activities. Jim McGregor, a 40-year employee and
a senior buyer in the parts department, was given the task. McGregor had already decided that he
was not moving to Atlanta and that he would likely retire at the end of the project.
RFP Process
In early May, Utting received a quotation from Bahar, which included the services to be
offered and a fee schedule. The bid covered the RFP creation, list of potential vendors, vendor and
site visits, consultation on the final selection decision, as well as advice on negotiation of the contract.
The bulk of the work would be during the RFP creation, as a number of Coopers & Lybrand
specialists would be involved in the process. Bahar guaranteed that the fees, including travel costs
would not exceed $100,000 CDN (75,000 USD) which would then be split between Marsta and
Atlanta. While Utting and Sahlqvist thought that this fee was high, both realized that the team could
use the expertise as well as the resources necessary to choose the right software. Utting signed the
contract, and work started soon after.
Bahar, Romanow, and Gonzalez put together a schedule of meeting dates to complete the
majority of the work on the RFP prior to the middle of June. Sessions were to be scheduled with
several members of each functional area within the parts department. The sessions were scheduled
to take a half-day for the initial meeting, a half-day to review procedures from the first session and to
develop a comprehensive requirements list, and a series of short follow-up meetings to finalize
requirements and gain approvals. The final draft of the RFP was to be ready by mid-August, with a
final review set for the week of August 25, 1995.
During the first meeting, three or four functional representatives would outline all the
business processes used at Timberjack within their area. One Coopers & Lybrand expert would be
the facilitator, and an alternate kept notes. Gonzalez and Romanow, who attended all of the sessions,
would work with the group to try and ensure that all processes were covered in enough detail that
formal requirements could be drafted. Special attention was paid to the most important processes at
Timberjack, regardless of whether or not the functionality existed in standard packaged software.
Each group, and its manager, was also asked to consider any additional software functionality that
would improve the efficiency of their area.
After each session, Coopers & Lybrand would prepare the minutes for review at the next
stage. At the second meeting, each business process was broken into a number of abbreviated
requirements statements in the form of a question, such as “Does your package support EDI?” or
“Does your package calculate forecasts automatically?” Once all the Timberjack requirements were
determined, Coopers & Lybrand presented an exhaustive list of requirements that they and other
clients had developed over the years. This list was compared to the existing Timberjack list, and
occasionally new items from the Coopers & Lybrand list were added to Timberjack’s list of
requirements.
Sessions were held for accounting, finance, purchasing/planning, customer service, pricing,
distribution, as well as information systems. All of the meetings were completed prior to the middle
of June, and the preliminary lists of requirements were sent to Marsta for review. Members of the
Swedish team were not present during the RFP meetings in Woodstock. Marsta approved the
requirements lists quickly and added requirements related to multilanguage capability, electronic
funds transfer for payments to suppliers, and Intrastat reporting, which was used in Europe to track
the movement of goods.
A benefits review was also started in Woodstock. This benefits analysis was an attempt to tie
potential improvements in software functionality to savings in operating costs or improved customer
service. In Woodstock, all capital expenditures required a capital appropriation, and approval was
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Timberjack Parts: Packaged Software Selection Project
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based on expected return on investment. In the European operations, capital expenditures were not
as formalized. Romanow explained the rationale for the benefits analysis:
We recognized that from a project approval standpoint, the benefits analysis
wasn’t necessary; we had been asked by the head office to implement the new
system. We were doing the benefits analysis to weight the potential functionality
improvements. This would help us decide which software had the most potential to
improve our operations.
To complete the RFP, Romanow and Nikkinen gathered basic business statistics such as the
number of part numbers, number of sales orders processed daily, and the number of customers.
Gonzalez and Smedjer outlined the number of users, and the preferred hardware and operating
systems. Gonzalez included a description of the North American dealer system, which linked
dealers directly to Timberjack’s legacy system via modem. By the end of June, most of the work was
done, but final approvals were not completed until the middle of August. Summer vacations, as well
as Romanow’s relocation to Atlanta, slowed the approval process. The final document was 200 pages
in length. It included over a thousand requirements, copies of standard reports, and instructions to
vendors on the bidding process. Exhibit 5 shows an excerpt of the Timberjack RFP. Each
requirement was listed as critical or noncritical, and space was available for vendors to indicate if
their software would comply, comply with minor modification, or require a major modification. A
minor modification was defined as having an estimated cost of $2,500 or less. Fifty hard copies were
produced, and the RFP was also copied in electronic format to allow the vendors to respond as
expeditiously as possible.
At this stage in the project, it was clear that there were opposing views on the approach
taken on the RFP. The Swedish team was very much in a hurry to select and install a new system.
Smedjer explained:
If the RFP were done in Sweden it would have been roughly five pages. Not
at all as specific, just mentioning the functions that are required, and not anything of
how it should be done or what it should look like. In the end the document was a lot
of work for the suppliers to answer all these questions on such a detailed level.
The North American group was committed to following the Coopers & Lybrand
methodology. Utting defended the RFP process:
The strength of the RFP process was that we ended up with a clear idea of
what we wanted in detail. The second benefit was that we got a lot of people
involved. We created some buy-in, not perfect, but some buy-in due to the fact that
people were involved. This avoided the problem of people saying afterwards “No
one asked me about that,” so I think the RFP established a form of consensus.
By the end of the RFP process, the Swedish side was quite frustrated with the time required
to put the RFP together. While Utting felt there was value in the RFP, he recognized that in the end it
had created a wedge between the groups in Sweden and Atlanta. Sahlqvist commented:
The RFP process was far too long for us, as we were much more squeezed
than the other guys. We had a system that didn’t work properly, so we were very
anxious for a quick process. And Atlanta was quite satisfied with its system, and
was more thrust into the project to have a common system. It didn’t make
compromises to shorten the process; it didn’t think about every…
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