Article

An ERP story: Five years, three vendors and big lessons

Todd R. Weiss, Senior Writer

When he arrived in November 2000 as the first-ever CIO at Keystone Automotive Industries Inc., Jesus Arriaga was faced with a troubled enterprise resource planning (ERP) project that began five years earlier and was nowhere near completion.

After spending another year trying to make the existing pieces work, Keystone and Arriaga finally gave up on the ill-fated project and started from scratch.

Last month the long-delayed ERP project was completed, linking 130 Keystone warehouses and offices with some 2,000 workers across the U.S. It was a long time coming -- and it wasn't easy to get there. But the project is paying off, and Keystone executives now think about technology projects as business benefit, not potential land mines.

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"When I walked in [to the job], I could tell that technology was seen as a necessary evil," Arriaga said. "They really didn't invest a lot in keeping up with technology." Some users still had Microsoft Windows 3.1 on their PCs at the time, he said.

"Technology is now a strategic tool for the company," he said. "Today, all roads lead to IT. We are the center of the universe."

Keystone, a Pomona, Calif.-based company that sells replacement auto body parts and remanufactured wheels and bumpers to auto body shops, has been in business for 58 years. It has grown through acquisitions over the years, and the company's IT systems became a hodgepodge of about 13 legacy systems as a result. When the first ERP plans were laid in the mid-'90s, the company embarked on a project using PeopleSoft Inc. applications. When it didn't appear to be a good match, Keystone purchased an ERP product from Irista Inc., formerly known as FourGen.

At that time, some 300 Keystone workers and outside consultants were working on the project. Factions had formed and territorial lines had been drawn. "It was almost like a family feud," Arriaga said.

Then Irista closed its shop -- and Arriaga put a stop to the current project.

With pressing deadlines, Arriaga evaluated 20 ERP packages within 60 days, looking for one that was focused on distribution, including financials, purchasing, warehouse order processing and inventory management modules.

"It wasn't one of those things where we could take a year to find something," Arriaga said. "This was the second time that the company had abandoned a package."

New infrastructure, mindset at Keystone

The previous ERP efforts looked at the company business processes and tried to make the software fit the processes. With Arriaga at the helm, the process was reversed, and Keystone began making changes to the company's processes so it could fit more easily with vendor applications.

After reviewing all the ERP packages, Arriaga and his team selected the Advanced Distribution System from Prelude Systems Inc. of Plano, Texas, and got to work on rolling it out in January 2002. Prelude Systems was very responsive for requests for improvements and eventually adopted many of Keystone's requests into the company's software as standard features.

The final rollout, No. 18, went live the end of January.

As part of the new ERP system, Keystone has an entirely new infrastructure, featuring IBM servers, IBM's AIX Unix operating system, storage from EMC Corp., thin client PCs from Neoware Systems Inc. and thin client software from Citrix Systems Inc. Providing IT infrastructure outsourcing for the project is (i)Structure, a managed hosting vendor. Keystone manages the ERP apps, while (i) Structure keeps the hardware operating in its own data center.

Now gigabytes of new customer data are arriving at Keystone through the ERP applications, and that helps provide a more detailed look at operations. "Our biggest problem now is how we can use this data," Arriaga said. To do that, the company is now starting a business intelligence project to store the new information in a data warehouse for analytical purposes.

To make it all work successfully, the project was seen inside Keystone as a company-wide effort, not just as an IT endeavor, Arriaga said. "I just happened to be in charge of it," he said.

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