Complex International ERP Integration
Semiconductor Corporation engages in the design, manufacturing, and marketing of high performance analog and mixed-signal integrated circuits and high-reliability semiconductors. The principal end markets that it serves are in the fields of Defense & Security, Aerospace, Enterprise & Commercial, and Industrial & Alternative Energy.
The Company operates in the global semiconductor & electronic parts manufacturing industry with a combined annual revenue of about $676 billion (as of FY 2012). There are a number of barriers to entry facing companies in the industry, including but not limited to:
● The level of research and development required to enter the market may be high.
● Existing companies may have access to latest technology and have a technological advantage compared to those entering.
● There is often a need to obtain skilled employees.
● There are economies of scale available in this industry.
● The levels of research and development investment required to enter.
● Existing companies may have previously developed strong relationships with customers.
● Strict adherence to Governmental regulations and laws, if applicable.
● Capital intensity is high.
The industry depends highly on demand from the computer industry and makers of telecommunications products, such as cell phones, which can vary sharply from year to year. The company also depends largely on the defence industry and government spending on such programs. Companies within the industry can be successful by producing standard parts at low cost, or by focusing in the production of highly specialized components. However, smaller companies can still compete effectively with larger ones by also focusing on producing specialized products, or innovating by developing new applications for integrated circuits and semiconductors.
Although there are many competitive companies within the Semi-Conductor/Integrated Circuit industry, outlining the Company’s competition depends on the end markets served. Sometimes, there is stiff competition (such as the low end segment) and competition occurs based on price and reliability. Other times, the Company is the sole source within the market for some of the products it offers. According to the Company’s 2012 Form 10-K, they consider some of its current competitors to be: Aeroflex Holding Corporation; Altera Corporation; Fairchild Semiconductor International, Inc.; Freescale Semiconductor, Inc.; Texas Instruments, Inc.; Integrated Device Technology, Inc.; International Rectifier Corp.; Linear Technology Corp.; M/A COM.
In consideration of the challenges within the regulatory and competitive environment, the Company has adopted a growth by acquisition strategy wherein the Company has acquired 14 organizations worldwide in a span of 6 years. As a consequence to this growth, the Company is faced with a challenging IT infrastructure with various large scale and complex Enterprise Resource Planning (ERP) applications across 5 major business units, including Dynamics AX (system of record), MFGPro, JDE Enterprise, JDE World, and SAP.
Based on a recent evaluation of the business processes and its use of technology, it was identified that the organization should be able to integrate some of its ERP to eliminate manual data processing and reliance on the batch processing of financial and inventory related data. As a part of this long 5 year plan, the Company integrated the SAP application with the Dynamics AX.
This paper will act as a post-implementation review and examine the phases of the integration of the ERPs and management’s evaluation and monitoring of the success of the integration with the newly designed business processes that were implemented within the 5 year plan.