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."