“A few members of the family that founded Simplon were the only ones who knew how everything at the company worked. We were essentially dependent on them,” explains Markus Geiger, director and CFO at Simplon.
This statement highlights just how much of a journey Simplon had to go on to bring its technology up to date – which makes the speed at which it did it even more impressive. But let’s not skip to the end of the story.
This is the second part in a four-part series about business management using a cloud enterprise resource planning (ERP) solution and the opportunities this creates. Here, we look at Simplon’s original IT setup and its decision to implement SAP Business ByDesign. Read the other parts of the series:
From the customer’s perspective, the processes at Simplon, a bike manufacturer based on the shores of Lake Constance in Austria, were state-of-the-art before the project started. The existing ERP solution already enabled them to configure bikes online. But the processes behind the configuration tool were extremely arduous and complex because of multiple disconnects between the interfaces. These processes incorporated an array of solutions that, at best, were only partly integrated with each other – a lot was controlled manually rather than digitally.
From Excel to SAP Business ByDesign
The old ERP system could only record orders and process billing documents, and it had to be rebuilt every year because the data was stored in different places. The back end was an SQL database and Microsoft Access served as the front end. The only way to import purchase order data into the system was through a separate interface. The resource planning and accounting systems were not integrated either, so data had to be laboriously transferred using interfaces, too.
Microsoft Excel was like a second ERP system, used for procurement and costing. “And because the data was stored in more than one place, there were times when we didn’t have a component in stock. This meant that assembling a bike often took longer than we wanted it to,” explains Geiger. On the other hand, it would not have made sense for the company to stockpile parts in its warehouse – first because of the high cost this entails and second because the business is seasonal. For example, this year’s Shimano gear sets are different to last year’s ones.
Because of this setup, Simplon was not just limited when it came to the number of parts it could stock. It was also restricted by how much it could expand its portfolio and was unable to tap into new markets – it would not have been able to stay on top of the changes that were necessary; the warehousing risk would have been too high.
Geiger admits that he had been “quite shocked” by the processes when he joined the company three years ago. “We would not have been able to grow if we had not implemented SAP.”
In the End, There Were Three Options
Everyone at Simplon agreed that the company needed a single, integrated ERP system. The question was which one? Integrating the online bike configuration tool was one of the main requirements of the new system. The logic behind this tool is quite complex: If the customer changes a bike’s suspension fork, the bike’s brake system might have to be changed as well, which would then mean that the guard would also need changing and so on. “We quickly realized that few systems would be able to handle this,” says Geiger. In the end, three options were left – and two of them were SAP products.
The company chose SAP Business ByDesign firstly because, although it was cheaper than the other systems, it was still capable of supporting and keeping up with the growth that Simplon had forecast for the coming years. And secondly, the solution provided everything that the business required on a day-to-day basis: server capacity, backups, security, data protection tools, and so on. Geiger thinks that a large, on-premise solution would have been too much for Simplon: “We don’t want to employ two people just to look after the server. We want to build bikes.”
In SAP’s solution for medium-sized companies, Simplon had found the right ERP package for its needs. But when it comes to projects like these, finding a suitable implementation partner is just as important as choosing the software.
Next week, we look at why Simplon picked B4B Solutions, a subsidiary of the All for One Steeb Group, and why the new solution had to go live after only 13 months – whatever the cost.
This story originally appeared on the German SAP News Center.
Top image via Simplon