A Common ERP System Drives Integration at BAE Systems

Consistent Processes Are Key to Business Integration

When BAE Systems’ Global Combat Systems (GCS) division integrated its UK and Swedish Vehicles businesses, it expected the process of integrating the new business to be time-consuming and fraught with challenges, as business integrations often are. But with CSC’s experience on hand, the company was able to harmonize key operational processes quickly and smoothly through a common ERP system implementation — and without the resistance from employees that such change often creates.

Having acquired Swedish military vehicles business Hägglunds, the overriding priority for BAE Systems was to align the Swedish business with the operating model of its GCS UK vehicles business. The success of the acquisition hinged on driving consistent ways of working and laying the foundations for an integrated approach to future business opportunities.

Integrating the new business depended to a large extent on implementing common processes and systems, including a common enterprise resource planning (ERP) system. The UK business was already using an SAP solution for ERP, hosted and supported by CSC. This system was supporting the whole of the UK GCS division for critical business functions such as finance, project scheduling and costing, sales, procurement, warehouse management and manufacturing operations on the shop floor.

So BAE Systems asked CSC to step in and help it implement an extension to the UK SAP system as swiftly and cost-effectively as possible to serve the Swedish business.

Standardization and Collaboration Accelerate Timelines

“We know how good CSC is at executing and running big projects,” says Häken Sundell, Head of Information Management & Technology for GCS at BAE Systems. “It’s a major strength of theirs, and one that was vital to the success of this key business acquisition.”

A smooth project was critical because BAE Systems had a tight implementation timeframe of one year: it wanted the UK and Swedish organizations to be ready and able to collaborate on joint projects as quickly as possible; and to limit spending on the Swedish organization’s existing ERP system.

Although the schedule was tight, CSC was confident of meeting it. For the sake of speed, efficiency and cost control, the intention was to reuse as much of the UK SAP configuration as possible in the Swedish solution. Customizations would also be kept to a minimum — which would have the added benefit of simplifying future updates. In addition, the Swedish organization had started planning an update to its existing ERP system, so already had a statement of requirements.

Among the project’s key success factors Sundell cites the sustained joint effort that went into the scoping and design phase, the fact that senior stakeholders from BAE Systems and CSC were behind the project, and the close collaboration between the two companies, underpinned by a strong governance framework.

Security Taken in Stride

Operating in the defense sector, BAE Systems is subject to stringent country-specific security requirements. It was important for CSC to ensure that each country’s SAP data was kept separate and could be accessed only by employees from the relevant country business. The infrastructure originally supporting the SAP system was accessible from within the UK only, so a key aspect of the project involved CSC physically moving the SAP system onto a new collaboration infrastructure that would allow secure, compliant, segregated access by users in both the UK and Sweden.

Engage Users Early On to Manage Change Effectively

Sundell expected that the changeover to the new ERP system would meet with a certain amount of resistance from the teams in Sweden. “An old system is never as popular as when you’re about to decommission it,” he points out.

To counter potential resistance, the joint CSC–BAE Systems project team was careful to involve business users early on in the project, trusting them to take ownership of the SAP processes for their own areas and to test and validate the capabilities being delivered.

Thanks to these efforts, Sundell reports, Swedish users adopted the SAP system willingly. They can see what works better compared with the old ERP system, and are sufficiently confident and engaged to put forward useful suggestions for modifications.

Consolidation and Automation Drive Efficiency and Accuracy

The new SAP system went live for the Swedish organization schedule, and was immediately put to work handling all ERP-related tasks for the final quarter of that year, which went without a hitch.

SAP’s built-in business terminology is becoming the standard, enhancing communication between the UK and Swedish teams and helping improve knowledge and skills transfer throughout the combined organization. Consolidated financial reporting across the UK and Swedish vehicles operations — and for the GCS division as a whole — is straightforward to produce from a single system.

On top of that, the Swedish organization has a raft of new capabilities that are streamlining everyday processes. In the warehouse, for example, stock control is now much more automated. In the past, employees did stock-taking on paper, transferring their handwritten notes into the ERP system when they returned to their desks. Now, items are bar-coded and employees use handheld scanners to check and record stock levels, automatically updating SAP and making stock control more efficient and accurate. SAP’s manufacturing portal is delivering similar improvements on the shop floor, providing staff with a simple, easy-to-use view of the information they need to do their jobs.

Another part of the business that has seen major efficiency improvements is the ‘spares and repairs’ area that services and maintains the military and armored vehicles produced by the company. These vehicles have a long lifespan, typically around 30 years, making spares and repairs a major part of the business, but one for which there was previously no ERP system support. New capabilities available with SAP include component repairs, fleet, warranty and spare parts management.

“Everything is now well coordinated and runs more efficiently, enabling us to serve customers better,” says Sundell. “We have much more intelligence about what needs delivering, where and when, and about the overall health of the supply chain; and we’ve gained a level of oversight of the whole business area that simply wasn’t possible before.”

A Fully Aligned Platform for Future Cooperation and Growth

The common SAP environment gives GCS a foundation for integrated business processes and a platform for growth.

“We’re now working with CSC to deploy into the UK the modules and capabilities, such as the SAP manufacturing portal, that were implemented for the first time in Sweden,” Sundell explains. “As a result, we expect to see even closer convergence of the UK and Swedish organizations, and we’ll be able to maximize the return on our investment in the original project.”