Major software overhaul strikes delays

By ADAM GIFFORD

A major project to install JD Edwards' enterprise resource planning (ERP) software within companies in the New Zealand Business Supplies group has hit turbulence, as the product falls short of expectations.

The group, which includes Hollands, OTC Office Supplies, Whitcoulls, Blue Star and General Packaging, was bought in October by US company Boise Cascade Office Products.

Project manager Kevin McMenamin said that where it had been put in, the JD Edwards system was "okay without being brilliant - there were significant performance issues to start with which have taken some tweaking."

The full JD Edwards financial suite and some distribution modules are now in place in Hollands and OTC, while Blue Star and Whitcoulls are running the general ledger and accounts payable. General Packaging is sticking with its CBA 2000 accounting software.

Mr McMenamin said the full rollout of the software into Blue Star and Whitcoulls had been delayed until problems in the other companies were resolved.

He said many of the problems came down to organisational readiness rather than the software.

"There was a high degree of staff turnover in the call centre. That left them struggling."

Business Herald sources say one of the aims of the project was to improve the efficiency of Hollands' sales process. Because Hollands does free delivery of orders, it wants to use past sales information gleaned from the system to allow telesales staff to call customers when reordering is likely.

The idea was firms would end up making a few large orders rather than many small ones. Business Herald sources say this has not happened. The sources also say the cost of the project has climbed from about $7 million to $13 million.

Hollands chief executive Bruce Roberts said not all the cost could be attributed to the JD Edwards project, and some came from the cost of putting in distribution centres.

"You could also argue Boise Cascade buying us mid-stream slowed us down," Mr Roberts said.

He said the call centre problems meant during some stages of the project it had taken up to 15 minutes for calls to be answered. "That's like the IRD. It's not fun running a business like that," he said.

Bill Gruber, Boise Cascade's New Zealand managing director, said he could not confirm the project's cost.

"Like any large ERP system, there are certainly issues we are working through to bring the benefits we would like," Mr Gruber said.

"Like any start-up, there are changes and new invoices and new order processing methods which might be different to what people were used to.

"Most customers have been understanding, they understand with any new ERP system there will be problems."

JD Edwards New Zealand manager David Batkin said the 1999 sale was for a 450-user licence system, to be implemented by JD Edwards working with the company.

"From our perspective it's business as usual.

"We have encountered the normal implementation issues."

He said the Boise Cascade acquisition would affect the roll out.

"Any acquisition causes major procedural issues."