Order From Chaos

Imagine 20 different enterprise-resource-planning systems running in 50 locations around the world. Some of the systems aren't even connected to the company network. And imagine these systems are the underlying technology supporting a $1 billion-a-year company that sells products in more than 120 countries.

That's the scenario Lani Spund faced when he took on the job of CIO last year at Esselte Corp., a global office-products company that makes such products as Pendaflex file folders. Spund was brought on to reengineer Esselte's IT after the company was bought by J.W. Childs Associates LP in mid-2002. "I have four years to turn this into a very efficient, well-organized and orchestrated business using technology," Spund says.

	The IT effort will organize the business, Spund says.

The first year, he and his team focused on picking the infrastructure, working through E-mail security and data-center reliability, and implementing a robust, high-speed network. With that job three-quarters of the way done, Spund is focusing on implementing consistent business systems and reengineering the company's business processes.

The company had to address two issues: All divisions were run as individual companies, and few resources were directed toward IT operations. The budget was only about 1.3% of Esselte's sales, and the IT staff was "lean, lean, lean," Spund says.

Esselte has hired Aston Business Solutions and Columbus IT Partner--both partners of prime integrator Microsoft Business Solutions--to implement Microsoft's Axapta ERP system (which it got when it acquired Navision) across four continents. The Axapta ERP system will be combined with a lean manufacturing module developed by eBECS Ltd. A data warehouse will integrate information from Axapta and an SAP R/3 system Esselte runs in some European operations.

The IT overhaul will cost tens of millions of dollars, but Spund says the efficiencies gained will make up for it. For example, by moving to a lean management system that bases manufacturing runs and procurement on what it sells, Esselte expects to reduce work-in-process inventory by 50% or more, and ultimately turn over finished goods inventory every month.