Kevin Parlette considers himself something of a lifer at Dana Holding, the auto supplier known for making axles and driveshafts for light, commercial, and off-road vehicles. He joined the company in 1992, shortly after graduating from the University of Toledo, and it’s the only professional place he’s ever worked.
“I started twenty-three years ago as a plant accountant and spent twenty years moving up the finance chain, including positions such as plant controller, division controller, and North American vice president,” he says.
With more than two decades working on the finance and operations side of the business, Parlette took a fortuitous turn three years ago, when he agreed to become Dana Holding’s new CIO and vice president of information technology.
“I was asked if I was interested in doing something different and getting out of the finance ranks because the company wasn’t happy with the direction of IT, as it had migrated into its own little silo,” he says. “I think they envisioned me in the role because I know this business, I live this business, and they wanted a savvy business leader in IT.”
How to tell your company is on ERP overload
In a report for TechTarget on consolidating ERP systems, author Lauren Gibbons Paul outlines five signs that your organization may need to bring disparate systems under one roof:
1. The company has multiple databases and servers.
2. You can’t take advantage of volume-buying discounts.
3. Making changes takes too much time.
4. Internal audit controls are overly complicated and difficult.
5. Company data is different depending on the system and location.
Rather than just ease into his new position, Parlette made his first order of business to consolidate forty separate ERP systems (located throughout nearly one hundred global locations) down to what he expects will be five or less within the next five years. The diverse ERP platforms created a great deal of disconnect throughout the company’s IT structure, and he knew that Dana Holding’s systems needed to transition into a twenty-first century way of thinking.
“I approached it as a failing business and set goals to get the right people in the right seats with the right focus,” he says. “When IT was born in the late seventies, Dana was a decentralized division-based company. Everyone built their own stuff. There was a buying spree in the nineties, followed by a downturn without much spending. Now, we’re sitting with out-of-date software and infrastructure, most without maintenance, and these forty ERP systems as a result.”
Among his first goals were getting key software back on maintenance and upgrading a vast majority of the tech structure—including going full-blown Microsoft 365, replacing 10,000 new PCs, and upgrading the network—without spending drastically more than in past years.
Consolidating the ERPs is not a quick project, but it’s one on which Parlette has placed the utmost importance.
“A lot of the ERPs are out of date, some thirty years old, and we have a system where there’s one individual left who knows the code—that’s a business risk,” he says. “We are heavily focused on getting the ERP program going. We have gone live on eleven locations in the last two years and still have about fifty to go. We are implementing a template-based approach with SAP, rather than the traditional white board and significant customization.”
Parlette understands that it’s a mammoth project, and while he would love to eventually consolidate down to a single ERP, he believes a goal of around five is more realistic.
“We currently run Oracle and an instance of SAP, and we have some newer applications. Part of the philosophy is we have a current, functioning Oracle system; let’s just leave them alone and go focus on locations that have twenty-five-year-old unsupported systems, which don’t have people who know how to run the custom code,” he says. “Let’s go focus there and not get hung up on how to trade out Oracle for SAP.”
Currently, approximately 20 percent of Dana Holding locations operate on “end-state systems” like Oracle and SAP, and the rest of the company runs on other systems. Parlette has started to map out and prioritize the path for all of the company’s locations.
“Two of our businesses in Europe will be on Oracle and SAP, and all of our businesses in India will be on SAP, by the end of 2016,” he says. “We’re building a global SAP instance in the United States and we chose a niche solution integrator that focuses only on a template-based approach, and we validated through a pilot implementation at two different locations. We are changing our business processes to adapt to the system.”
The main challenge, he says, is that the average salaried worker tenure at these plants is roughly the same as the age of the system and, in many cases, is the only thing these people know.
Instead of employing a big-bang approach, Parlette is going more step-by-step. For example, Dana Holding ran Lotus Notes mail for about fifteen years, and was using an out-of-date version at that. Parlette flipped some 10,000 users to Microsoft 365 so everyone would be on the cloud. But before going company-wide with the change, he tested it out in the Toledo-area offices only, to work out kinks. It’s the same approach he’s taking with the ERP upgrades.
“We’ve proven it works. We are live and switching into two plants right now, and planning into 2016 going after another seven,” he says. “We went through the pilot, proved we could do it, and are taking a different approach with SAP and heading into full launch mode. I know the business, the people, and the challenges. At the end of the day, it’s worked for us.”