Breaking Down Global Silos (Part 1): Did Rio Ruin Houston’s New ERP Launch?

Editor’s note: This is part of a new Spend Matters series of personal tales from the procurement trenches. Know someone with a great procurement story? Send us a note.

I sat in front of a camera that appeared to pan around the office — even though it was powered down.

As I tinkered with three remote controls, attempting to connect our virtual conference room to one in the southern hemisphere, I could not suppress my most paranoid instinct that perhaps our headquarters in Rio de Janeiro bugged our equipment to allow them to monitor the movements and voices of their North American employees.

My supply chain counterparts in the Brazilian corporate headquarters of one of the world’s largest oil and gas exploration companies called an ominously last-minute conference on a particularly sweltering spring day, which was already packed with activities for our impending ERP “go live.”

Free Download: 'ERP vs. Best-of-Breed' Decision Guide — 3 Recommendations to Kill the Debate

As I worked to connect the equipment, the four supply chain leaders of North American operations filed into a conference room on the twentieth floor of a gold-tinted office tower overlooking Houston’s Toyota Center. Below, two-story retail outlets, which were disproportionately occupied by mattress showrooms, flanked multi-lane freeways.

Eleventh-hour conferences with unspecified agendas were not infrequent in a corporate environment. Especially not this one, mainly characterized by a highly matrixed network of fiefdoms feuding as much over soccer team allegiances as they did over headcount and budget allotments. Today’s conference came during the final stages of testing and training for a global ERP implementation project costing close to $1 billion, for which I served as the leader of North American procure-to-pay functions.

After I finally accessed both audio and visual, the panorama of LCD panels suddenly came to life, revealing a gray windowless conference room in Rio with no sign of its subtropical location aside from the dark tanned faces on the screen. Our global procurement leadership sat in order of rank — three similarly broad-shouldered gentlemen, Luiz, Marcio and João, who looked slightly too coiffed for their drab office background. More fit, perhaps, for a 1990s Univision-style daytime TV drama.

Bom dia meus amigos. Tudo bem?” Luiz began with a bombastic greeting while focusing on his laptop to project a PowerPoint slide on our remote desktop. As regular travelers to our corporate headquarters, those of us sitting in our perch above the Toyota Center responded in unison, “Tudo bem.”

Luiz continued, “We have preponed this meeting to discuss changes to our material master data landscape and the globow effort for….” After pausing slightly, struggling to call to mind a direct translation from Portuguese, Luiz turned and leaned slightly in Marcio’s direction, whispering “Como se diz desduplicação?”

As Marcio uttered the first syllable, Luiz jumped from his chair, drowning out Marcio’s response. “Sim. Yes, deduplication!”

For the next hour, Luiz and team extolled the virtues of a globally consolidated material master database free of the kinds of duplications and redundancies that make reporting of category spend difficult in a large enterprise.

They projected the results of analysis showing that tens of thousands of records across Brazil, West Africa and the U.S. were simply not needed and cost the company millions of dollars in licensing fees and bandwidth expenses annually. Comparisons of our company’s material master landscape to industry peers had led this team of global executives in Rio to conclude that the highest priority for 2013 was reduction of the global material master database into a consolidated taxonomy that would establish parent-child relationships between items deemed to be replacements in order to minimize overall complexity.

Check back later this week for Part 2 of Jonas’ tale, on the conflict that inevitably arose between a siloed executive leadership and a regional division — and lessons learned from it all.

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