Case Analysis: Read the case several times carefully and take notes about important events andfacts mentioned in the case. Use these facts and events (“case data”) and concepts from therelevant chapters from your textbook to answer all discussion questions. This should not be asummary of your reading.A well thought out and complete response to each case question applies concepts from the textwoven in with case data to fully support the analysis. Expected length for responses is 1-2complete paragraphs per question.Professional Caliber Writing: All written case analyses must be clearly written, in professionalcaliber language, and fully proofread.Case Questions:1. Appropriateness of project:a. What are the current challenges faced by Bombardier?b. To what extent is Bombardier an integrated company?c. What are the challenges associated with integration?d. What are the benefits expected from integration?2. Post-mortem of the first phase:a. What were the strong points in implementation process for the Mirabell roll-out and whatpoints needed improvement?b. How the project team was managed and is the project team’s pace sustainable in the longrun?c. Vision:i. How were the new processes defined to ensure a global vision?ii. How should a vision be communicated?iii. How were the new roles defined? Communicated? Understood?3. Post-mortem of the second phase:a. What were the strong points in the second implementation process and what areas neededimprovement?b. What was the main difference between two phases with respect to the definition of userroles?c. What was the role of plant manager?d. What were the challenges faced by project team?4. The success of IT Project: How can we assess whether a project is a success or a failure?
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Volume 10
Issue 1
February 2012
Successfully Navigating the Turbulent Skies of a Large-Scale ERP
Implementation 1
Case prepared by Professor Benoit A. AUBERT, 2 Simon BOURDEAU 3 and Brett WALKER 4
This case presents two phases of a large business transformation project involving the
implementation of an ERP system with the aim of creating an integrated company. The case
illustrates some of the challenges associated with integration. It also presents the obstacles facing
companies that undertake projects involving large information technology projects.
Bombardier and Its Environment
Joseph-Armand Bombardier was 15 years old when he built his first snowmobile by propelling a
farm sleigh across snow with the engine from a Model T Ford (CBC Archives). From these
humble beginnings, Bombardier went on to become a key player in the transportation industry. It
entered the rail transportation market in 1974, with a contract to produce 423 subway cars for the
City of Montreal. A contract to supply New York City with 825 subway cars followed eight years
later (CanadianBusiness.com). Bombardier’s desire to diversify led it to enter the aerospace
industry in 1986, when it purchased Canadair, the leading Canadian aircraft manufacturer.
Bombardier acquired Short Brothers plc, a manufacturer of civil and military aircraft based in
Northern Ireland, in 1989, and Lear Jet Corporation in 1990 (Koselka, 1992). Bombardier made
its final major acquisition in the aerospace industry in 1992, with the purchase of the de
Havilland Company from Boeing (a timeline is provided in Appendix 1).
For the year ending January 31, 2007, Bombardier Limited reported revenues of $14.8 billion.
The Aerospace and Transportation divisions contribute fairly equally to total revenues.
1
The authors would like to thank all the people at Bombardier who participated in the case study, with special thanks to Souad
El Mallem and Robert Proulx for their exceptional contribution. The authors would also like to thank Nicolas Perreault and
Alexander Schnepel for their help in conducting this study.
This research was supported by the CEFRIO.
2
Benoit A. Aubert is a Professor in Governance and Information Technologies at HEC Montréal.
3
Simon Bourdeau is a Ph.D. candidate at HEC Montréal.
4
Brett Walker is a Business Information Manager at Astellas Pharma Europe Ltd.
© HEC Montréal 2012
All rights reserved for all countries. Any translation or alteration in any form whatsoever is prohibited.
The International Journal of Case Studies in Management is published on-line (www.hec.ca/revuedecas/en), ISSN 1911-2599.
This case is intended to be used as the framework for an educational discussion and does not imply any judgement on the
administrative situation presented. Deposited under number 9 65 2012 001 with the HEC Montréal Case Centre, 3000, chemin de
la Côte-Sainte-Catherine, Montréal (Québec) Canada H3T 2A7.
Successfully Navigating the Turbulent Skies of a Large-Scale ERP Implementation
Bombardier Transportation posted revenues of $6.6 billion for the period ending January 31,
2007. This represented 45% of Bombardier Limited’s revenues. Bombardier Aerospace reported
revenues of $8.2 billion for the same period, or 55% of total revenues.
Bombardier Aerospace
Bombardier Aerospace is now the third largest designer and manufacturer of commercial aircraft
in the world, after Boeing and Airbus, and the leading producer of regional aircraft. It is one of
the two largest manufacturers of business aircraft in the world (Hoovers Online), with the widest
range of business jets in the market (Canadian Business Resource).
The Montreal-headquartered Aerospace division employs more than 27,130 people across
13 facilities worldwide (Bombardier – About Us). Six facilities are located in Canada, six in the
United States, and one in Northern Ireland (Bombardier – About Us). The division’s management
and administration employees are predominantly based in Montreal, Canada. Bombardier
Aerospace’s various plants have specific roles in the completion of different aircraft. These roles
include component manufacturing, component assembly, final assembly, painting and interior
completion, and pre-flight testing and delivery.
[See Appendix 2 for a list of Bombardier’s various facilities, their locations, and roles.]
Bombardier Aerospace’s products
Bombardier Aerospace is organized into four product and service lines: business aircraft, regional
aircraft, amphibious aircraft and defence services. Within each of these lines, there are different
families of aircraft, each with several aircraft programs (an aircraft program involves the design
and production of one version of aircraft). The company has introduced 15 new aircraft programs
in 15 years, and it certified a new aircraft every year from 1992 to 2000. Additionally,
Bombardier Aerospace offers services such as aircraft charter, fractional ownership of business
jets, aircraft maintenance and pilot and maintenance training.
Bombardier Regional Aircraft consists of the CRJ Series of regional jets (which seat between 50
and 86 passengers) and the Q-Series of regional turboprops (which seat between 37 and
78 passengers). There are four aircraft programs within the CRJ Series and three aircraft
programs within the Q-Series. Based on order intake, Bombardier’s regional aircraft held 50% of
the market share for the 20-90 seat segment of the regional aircraft market in 2005.
Bombardier Aerospace firmly believes that a larger regional jet is necessary to compete with the
range of 100-seat planes that its nearest rival Embraer is introducing to the market. The C-Series
was launched during the Farnborough Air Show in July 2008. These highly fuel efficient jets will
carry between 110 and 130 passengers and will have the ability to fly transcontinental routes.
Bombardier’s competition
Bombardier’s closest competitor is Brazilian-based Embraer, the next largest aircraft
manufacturer after Bombardier. Embraer focuses on regional aircraft, but also produces military
© HEC Montréal
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Successfully Navigating the Turbulent Skies of a Large-Scale ERP Implementation
aircraft and one corporate model. Its range of 8 regional aircraft consists of both turbo-prop and
regional aircraft. The Brazilian government owns more than 20% of Embraer (Hoovers Online).
Boeing and Airbus occupy the top tier of aerospace manufacturers. Their focus is on the
production of large commercial jets. The passenger capacity of Boeing and Airbus jets generally
ranges from 110 to 400 passengers. In addition to producing commercial aircraft, Boeing is also
one of the world’s largest defence contractors. Gulfstream is Bombardier’s main competitor in
the market for business aircraft. The American-based company had revenues of $3.4 billion in
2005. Gulfstream offers seven models of business aircraft as well as operating a fractionalownership program similar to the service offered by Bombardier Aerospace.
Conditions in the aerospace industry
The willingness of the public to purchase airline travel is subject to economic conditions and the
socio-political climate. This, in turn, directly impacts the performance of airline carriers and the
aerospace manufacturers that supply them with aircrafts. The terrorist attacks of September 11,
2001 had an adverse effect on the airline industry. The detrimental impact of 9/11 was worsened
by the outbreak of Severe Acute Respiratory Syndrome (SARS) and the war in Iraq (Federal
Aviation Association, 2004). The combination of these events led to reductions in passenger
numbers for large carriers.
Continuing a trend that has been ongoing for several years, regional and low-cost carriers grew
much faster than their legacy carrier counterparts. In 2005, the domestic market share for these
carriers increased 2.2 points to 45%, up from a 30% share in 2000 (Federal Aviation Association,
2006). For this reason, the focus on regional aircraft means that Bombardier is well positioned to
survive the adjustments occurring in the airline industry.
Business problems
While it now has a comprehensive range of aircraft and a global presence, the company’s strategy
of growth by acquisition has generated some challenges. A senior project manager at Bombardier
Aerospace commented that the organization has become a ‘textbook silo organization’ as a result
of its acquisition strategy. Bombardier Aerospace inherited the data, processes and systems of
each company it acquired. This created problems and inefficiencies, as systems did not
communicate with each other effectively. It was difficult to share data between manufacturing
facilities, labour mobility suffered due to the fact that the skills required to operate information
systems were not transferable between facilities, and the cost of information systems ownership
was multiplied by the number of systems maintained.
Several problems related to the operation of the Aerospace division were beginning to concern
management. These included process delays, sequential activities, low inventory turns, supplier
proliferation and price inconsistency, and multiple bills of material. Bombardier Aerospace
believed the biggest problem it faced was low visibility of inventory and lack of integration
between its legacy systems.
© HEC Montréal
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Successfully Navigating the Turbulent Skies of a Large-Scale ERP Implementation
Legacy information systems
The group of information technology applications that had been supporting Bombardier
Aerospace’s manufacturing activities since the early 1990s was known as the Bombardier
Manufacturing System (BMS). It was based on a MACPAC platform. This system had served the
company well, but it had not evolved to cope with the changes the business had undergone and
with the challenges it was now facing. Among other things, the BMS was struggling to cope with
increasing inter-site dependencies, persistent pressures on costs, the rapid introduction of new
products and a greater need for integration with business partners. According to the VicePresident of Operations and Project Sponsor, “MACPAC was showing a great deal of ageing. It
was becoming increasingly difficult to operate, the data accuracy was appalling, and, indeed, the
future development of the Company was being impaired by the system.”
The BMS capabilities had become limited and the future development of the company would
have been constrained if manufacturing systems had not been updated. According to the VicePresident of Operations, the production of the 90-seat CRJ900 aircraft would not have been
possible using the company’s legacy platform.
Employees had created a proliferation of stand-alone, user-developed databases throughout the
company which were being used to maintain data on operations specific to their function. This
fostered a culture where employees were unaware of the implications of data errors or omissions
on the rest of the organization. Poor data management could hinder future initiatives such as the
planned business-to-business procurement portal.
For the past 12 years, Bombardier Aerospace had been trying to align the operations of its
acquired companies by implementing common roles and responsibilities and common company
values, and by introducing Six Sigma tools for the evaluation of processes. The Vice-President of
Operations and Project Sponsor was acutely aware of the challenges and created a vision for
Bombardier Aerospace that he termed ‘One Company.’ The desired outcome of this vision was
an integrated organization in which employees would seamlessly share common data across sites
and products using a single set of unified systems and processes. However, the project was more
of a business transformation than a mere technology implementation, and it was critical that the
project be grounded in a strong business foundation. He realized from the outset that altering
decades of tradition was going to be an enormous challenge.
The BMIS Project
An Enterprise Resource Planning (ERP) system was considered by Bombardier Aerospace as the
best way to realize the strategic vision. It was well aware of the risks associated with
implementing an ERP system. A first ERP implementation at Bombardier Aerospace was
discontinued mid-project in 2000 after $130 million had been spent. Various factors were
subsequently identified by the company as having contributed to its failure. They included
focusing the implementation on inappropriate business processes, an outdated company vision, a
weak sponsorship model and insufficient involvement of internal employees.
© HEC Montréal
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Successfully Navigating the Turbulent Skies of a Large-Scale ERP Implementation
In 2001, the process of establishing the need for a new integrated manufacturing system was
headed by a group of senior managers from Bombardier Aerospace’s Irish facilities. The Senior
Project Manager authored a project charter for the Bombardier Manufacturing Information
System (BMIS) in October 2001. This document outlined the motivation for the project and a
proposed plan for realizing project goals. The detailed analysis presented in the charter was used
to secure ongoing approval and funding for the project.
A BMIS steering committee chaired by the Project Sponsor was put in place in order to focus the
project within the wider context of the business. At monthly meetings, the committee would
make decisions on the direction of the project, review the status of the implementation and
resolve issues that had been brought to its attention.
BMIS was the first project launched to realize a wider ERP strategy and a vision of an integrated
organization (One Company). This system was intended to support Bombardier Aerospace’s
operations; it would focus on the processes that support manufacturing, procurement, finance and
the engineering data required to support these processes.
The amount budgeted to implement the BMIS across all facilities was $363 million. Once
completed, it would support 9,500 users over seven sites. Its development required 400 people.
The SAP enterprise system was selected. It would have to interface with 63 other systems, some
of which were developed during the project. Bombardier Aerospace estimated that the successful
implementation would result in savings of $1.171 billion, including a one-time reduction in
material inventory of $219 million.
Creating a vision
The Project Sponsor mandated the establishment of a series of functional councils early in the
project. These councils consisted of senior employees who represented the core functions at each
of the company’s main production facilities across the world. These councils were to determine
the role and direction of their respective functions within the proposed organization, participate in
the review of processes and make rapid decisions on issues that affected their functions. Five
functional councils were established: Methods, Quality, Production, Work and Material Planning,
and Procurement. The Sponsor required the councils to formally report to him on a monthly basis
throughout the project.
Functional councils were an important means of achieving what the Project Sponsor termed
‘inclusivity.’ This entailed a large commitment by management and ample opportunity for all of
Bombardier’s facilities to express their opinions and ideas. Other opportunities for site
involvement included participation on the BMIS project team and sign-off on visioning and
process documentation. As the Vice-President Operations and Project Sponsor explains:
One of the big issues I had was inclusivity. I wanted most of the sites to be involved, because I
wanted the ability to roll it out without a “not invented here” or a “Montreal-only” solution. I talked a
lot about inclusivity to make sure all the sites were putting their views and their opinions forward and
were involved in the definition of the processes.
Once the project had received approval, the Senior Project Manager asked each of the functional
councils to undertake a visioning process in which the different functions could propose their
© HEC Montréal
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Successfully Navigating the Turbulent Skies of a Large-Scale ERP Implementation
prospective form in an ERP environment and outline the benefits they expected from the BMIS
implementation. The output of this process was a visioning document that defined a model
organization and that identified the key performance indicators required to successfully run the
business and the skill set required for the functions to realize their proposed vision.
Visioning workshops were conducted with the functions to facilitate this visioning process. The
value management lead facilitated workshops and coached Business Project Managers (BPMs)
on how to develop business cases, what benefits to expect and how to assess those benefits.
BPMs acted as process owners and were responsible for decisions regarding processes.
A small team consisting of the champion and senior project directors reviewed the outputs of the
visioning process to ensure that it was aligned with the overall project vision. They examined
how the functional organizations proposed by the functions would interact together and
discovered that the proposed visions and key performance measures were misaligned. This
resulted in the review team challenging the nature of the organization. For example, Procurement
would practise strategic sourcing and evaluate purchasing decisions based on total acquisition
cost. Quality conformance processes would be pushed to all stages in the manufacturing process,
rather than in a final inspection. Finance would have the ability to track the cost of each aircraft
manufactured.
One of the primary objectives of the BMIS implementation was to reduce the clerical tasks
performed by Bombardier Aerospace’s employees. It was anticipated that the automation of
manual tasks would give their jobs a more analytical focus. It was also expected that an
automated and highly integrated system would dramatically reduce the amount of paper used, the
ultimate goal being a paperless workplace.
The Vice-President of Operations and Project Sponsor was considered by Senior Managers to be
an influential figure. He continued to show strong support for the project even as aerospace
manufacturers were facing an uncertain environment. According to the BMIS Project Manager:
He is a very ardent supporter of what he calls the One-Company approach. He was an ardent
supporter that we all have a pay cheque that says the word Bombardier on it and we shouldn’t forget
that. It is true in everything he did. He felt very passionately about it. How successful was he in
creating change in the business? I think as successful as any human being could be without taking a
baseball bat to everybody.
The Sponsor began to communicate the overall vision for BMIS via a number of ‘road-show’
presentations at the company’s various facilities. These presentations also explained how the
implementation of the BMIS would impact the everyday lives of employees. Even if the
information was considered high level, it was perceived to be a very effective way of informing
users. Messages promoting the One-Company vision were also included in company newsletters,
broadcast in emails and posted on the company’s Intranet.
All levels of management were responsible for passing on to their staff information regarding the
project vision and progress. The Senior Project Manager emphasized to the Business Process
Managers that communication was 80% of their job during the implementation. Managers used
different means to communicate project information to their employees. Some managers held
© HEC Montréal
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Successfully Navigating the Turbulent Skies of a Large-Scale ERP Implementation
regular meetings with their staff, some forwarded presentations and some made no specific effort
to ensur …
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