Spring 2007: To SAP or not to SAP …..

Organizational Drivers
In the previous posts we described Colmobil's reasons to engage in the challenge of replacing its main business applications from the IT situation perspective. But a dramatic decision such as this must be driven equally from the business perspective of understanding that it needs different tools to meet the challenges ahead, or that it needs a different remedy for existing organizational handicaps. As part of their decision process Colmobil identified both types of drivers.

In 1963 Colmobil started importing Mercedes-Benz brand vehicles to Israel, in 1988 Mitsubishi was added to the portfolio, and finally in 1994 Hyundai joined the family. Each brand was operated as a separate company with fully independent management and, in addition, there were 2 more companies operating 4 garages. All of these companies operated under Colmobil Group LTD. Colmobil LTD ran some shared service operations – mainly the logistics center which stored and distributed vehicle spare parts for all three brands and pre-delivery inspection (PDI) facilities.

In 2003, Zvika Pollak became president and CEO of Colmobil Group and initiated a process of merging all the companies. As a result, by 2007 Colmobil Corporation emerged as a unified entity.

Each separate company brought with it different management practices and business languages. And, of course, to support the differences each company brought different flavors of computerized processes. All those processes were delivered from the same server and same software, but each company had different processes, variations on processes, different computer programs with modified functionality, and worst of all different business metrics.

This Tower of Babel made managing the new corporation a living hell for the CFO and CEO; they were laboring endlessly to create unified management tools that would bring all the pieces of this jigsaw puzzle into a comprehensive coherent business picture. The supporting IT systems could not be part of the efforts to create a unified business language as they were designed to support different processes. Evolution appeared to be too slow, too expensive and with little probability of success.