The adidas-Salomon brand of footwear, apparel and sports
hardware is recognised world-wide. The company also owns the
Salomon, Bonfire, Mavic, Arc‘Teryx, TaylorMade and Maxfli brands
and manufactures winter sports gear, cycle components, outdoor
products and golf equipment.
Its mission is clear and challenging: to become the global
leader in the sporting goods industry. In recent years adidas has
posted sales of €6.3bn and record earnings of €260m in 2003.
When Stein Tumert joined adidas-Salomon to help improve the IT
services, he recognised there was a lack of transparency for the IT
demand across the business. Informed business decision-making and
prioritising was hindered because the hard data of demand and
delivery was lost in organisational silos. "There were so many
cooks doing so many things that the system was inevitably working
sub-optimally," Tumert explains. A related issue has to do with the
provision of IT services.
Although the company did not always provide IT services, because
of its complex supply chain, it did have to manage them. And this
arrangement tended to compromise elements such as quality. "IT
needed to think of itself as, and then become, a service provider
to other parts of the organisation, which means having a
centralised and strategic approach to management," says Tumert.
"Our vision was to build a single global IT organisation that
delivers integrated services focused on end-to-end processes, with
full knowledge of development, implementation and management
budgeting and costs – a very different philosophy to the one
inherited. In the end it boils down to being a customer-focused,
service-based, efficient and effective IT operation,"he adds.
A program was devised called TopIT. Within its remit a range of
issues are addressed including IT alignment, sourcing strategy,
sourcing management skills, consolidation of infrastructure,
applications and organisation, best practice processes, people
development, certification and resources and financial
management.
Cultural change within the organisation is also key. And
underpinning it all is Governance (ITG). "ITG is the most prominent
of the initiatives to date. It is the foundation upon which all
other changes take place," says Tumert.
Finding an ITG system that fitted adidas’ needs was not
straightforward. Over several years, the company had looked at
various products but none lived up to expectations. "We must have
looked at virtually every product in the marketplace but none
matched up to our vision. They were either too niche or
specialist," Tumert says.
ON the suggestion of an Accenture consultant, there began a long
process of assessment to ensure that all adidas senior executives
concerned were on board, and culminated in a decision to implement
Mercury IT Governance Centre.
The implementation of Mercury IT Governance Centre began with a
change management pilot. "We had paper-based change management
systems in place which, although providing us with a set of
processes, had all the limitations of paper systems, such as no
workflow and lack of visibility," says Tumert. "Within one month of
automating the system we got excellent results." Mercury Change
Management was rapidly extended to cover over 50 applications, from
planning and forecasting to product development and enterprise
resource planning [ERP]. Over time it will include every
application the company runs. The next step was initiated in
January 2004 with the implementation of Mercury Demand and Mercury
Portfolio Management – another radical change.
"We had been using spreadsheets to manage project requests,
development and implementation, but our vision clearly required
near-real-time information right across the enterprise, which had
been difficult to get," Tumert explains.
"We can now go to the repository and retrieve all the
information we need and be sure that it accurately represents what
is happening on the ground. Our ability, together with business
executives, to make decisions that reflect demand, supply capacity
and enterprise priorities has been improved."
He adds that this is not just about automating a paper-based
demand system. It enables a shift in the focus on cost to full
consideration of benefits and risks. Ideas and scenarios can even
be tested and run during executive meetings. "This is what business
visibility means", he says.
Tumert reports colleagues saying that they can now see all the
projects in the queue for the first time. Alternatively, they can
now standardise working practices across the supply chain. Others
have said that the system’s ability to manage demand by increasing
visibility is better than anything they have seen before. And all
agree it was easy to implement.
adidas now deploys IT Governance Centre capability to all
projects. "There are simply no good ways of doing what we want to
do other than with Mercury", Tumert concludes. "Working with
Mercury has been great for us. We now have what all large
businesses must want – ERP for IT."