Disney overcomes problems with finance and payroll data by getting users on board. The Walt Disney Corporation has just completed a major update of its UK back-office business systems. The upgrade marked the halfway point of a global £240m IT consolidation programme that is set to deliver £78m a year in ongoing savings. Disney,...
which has a $25bn a year turnover, operates in 40 countries and is made up of more than 700 separate companies, launched Project Tomorrowland in 2001 to consolidate more than 400 back-end systems to a SAP platform. Projects on this scale will be increasingly common, according to Nigel Montgomery, an analyst at AMR Research. "A lot of companies across Europe are looking to do this sort of consolidation. They recognise that unless they do so, they will not get the full benefits of their enterprise software systems." In the past, he added, ERP systems did not scale sufficiently to deliver the sort of savings that companies such as Disney were looking for. The result was a proliferation of packages and iterations of packages across multinationals. "Now they do scale," Montgomery said. The Tomorrowland team, with consultancy Pricewaterhouse-Coopers, has been able to create a series of common business processes across the group and take strides towards developing a group-wide shared services model for business processes. However, at a critical point in the project they were still hit by the standard ERP roll-out challenges of data cleansing and winning end-user buy-in and ownership. Charged with such an enormous consolidation programme, the Tomorrowland team could not even agree on a common platform at first. "We had multiple implementations of SAP, PeopleSoft and Oracle," Tom Stauffer, vice-president of Disney's Project Tomorrowland, told the SAP Sapphire conference in Orlando earlier this month. The choice of platform on which to consolidate "was a typical religious war within Disney", he said. "On the finance side some groups had Oracle already and Oracle 11i was going to save the universe. "Others had SAP and felt SAP was the superior technology. In human resources we had PeopleSoft and the staff loved PeopleSoft. We could not reach an agreement and the final call was with the chief financial officer and top executives." SAP won out, said Stauffer, whose background was in running PeopleSoft in Disney. The first phase of the implementation, covering corporate offices in the US, went live exactly a year ago, followed three months later by the second wave, which covered the Disneyland theme park. The initial installation was on time and to budget, but serious problems emerged last October. The upgrade exposed a major bug in an internally developed accounting software package, rather than in the SAP system itself, said Stauffer. The programme glitch threatened to prevent Disney closing its book on the financial year. The project team also received reports of significant problems with the payroll, and senior executives at Disneyland found themselves unable to access key reports. Swat teams worked round the clock to identify and fix the problems before they could cause lasting financial damage. With preparations for the third wave of the roll-out well underway, some hasty lessons were drawn from the experience. The payroll problems were simply down to poor quality data being brought into the new system. "The project team did not know what was wrong with the data and we did not engage the payroll staff in the upgrade," Stauffer said. A second problem emerged at Disneyland. "The company was already on SAP," said Stauffer. "As a result they and we were lulled into a false sense of confidence." Both the global implementation teams and the onsite Disneyland team underestimated the difference between an enterprise-wide implementation and a business unit one, he said. As a result, key reports were not mapped onto the new system. Having dealt with immediate problems, the Tomorrowland team made a series of changes to their project methodology for the third wave. This was to take in Disney UK, its European headquarters, and Walt Disney World, the company's largest site with 60,000 employees who are paid weekly. Innovations included getting local site executives, rather than the Tomorrowland team, to report to global headquarters on the progress towards implementation. "Local executives tended to pay more attention when they were making the reports," said Stauffer. The formal sign-off process before the upgrade went live was also beefed up in an effort to emphasise local responsibility for the success of the project. "We had a sign-off process but we had some really junior people doing it. There was not any local executive ownership," said Stauffer. In addition to getting local executives to take more responsibility for the upgrade, the Tomorrowland team attempted to involve more people from each site earlier in the upgrade process. The Tomorrowland team also planned to leave more of its members on site after the third wave upgrade for longer to deal with any immediate problems. After all the difficulties, wave three, the biggest roll-out of the project, looked set to be a "trial by fire", said Stauffer. But he also said it proved to be the smoothest yet with minimal start-up problems and few payroll issues. When Project Tomorrowland is completed next year it will have cost about £240m, but Disney would have spent that much in the next three to five years on simply maintaining and upgrading legacy systems, according to Stauffer. It is already delivering tangible benefits to the balance sheet. "Our chief financial officer said the project has the same effect on the bottom line as having a Lion King [Disney's most successful film] every year," he said. Project revamp To get the project back on track, the Project Tomorrowland team revamped their project management approach:
- Site executives reported to senior corporate executives each week in the three months before the system went live
- Site representatives signed off all data conversion and test results
- Site executives were given oversight and enforcement powers on data transfer processes
- More site staff were involved in mapping and testing activities
- Post-implementation resources were increased
- Methodology was modified to incorporate more thorough report-mapping processes to ensure key information needs were met.
How Disney did it
- Top management sponsorship and support
- Careful project scoping
- Change control board to say "no" to scope creep
- Design once, implement multiple times
- Rapid roll-out
- Repeatable methodology (with learn and improve mechanism)
- Common communications and training materials (but localised for each site's culture and style)
- Benefits realisation embedded into the project.