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Harley-Davidson: Enterprise Software Selection

*History*
William Harley and Arthur Davidson founded the Harley-Davidson Motor
Company in 1903. By 1920, Harley-Davidson was the largest motorcycle
manufacturer in the world. The company survived quality problems and
financial issues in the mid 1980 s and remains the largest motorcycle
manufacturer in the US. Through the years, the Harley brand had
developed into a spirit of youthfulness, independence, and
recklessness. However these ideals are accompanied by a strong sense of
community. The company structure captures this unique culture by
utilizing self-directed work teams in an organizational structure of
three interlocking circles Produce Product (PPG), Create Demand (CDC),
and Provide Support (PSC).

Consistent with this culture, through the years, Harley-Davidson

encouraged site independence. However, when Gerry Berryman joined
Harley-Davidson in 1995 as VP Materials Management, he recognized the
strategic opportunity that existed in optimizing supplier relationships
throughout the company. Therefore, in 1996, Harley-Davidson began the
development of a corporate Supply Management Strategy (SMS) intended to
move the company from a site-specific, transactional mentality to a
long-term focus on supplier relationships. By July 1997, the initial
planning meeting was held for an integrated procurement system, the
supplier information link (SiL K).

Harley-Davidson followed a very thorough and rigorous process in

implementing SiL K to allow the organization time to become comfortable
with this new philosophy and to ensure engagement and enthusiasm for
SMS. By November 1997, momentum had built to the point that procurement
managers were will to provide several part-time resources to the SiL K
project team. Their goal was to move the project from strategy to
action. The next four months were spent mapping existing procurement
processes to find commonalities across business units. Starting in
April 1998, a reduced core team consisting of a smaller number of
full-time resources started developing the desired future state ( to-be
processes). This team also began work on the detailed specifications
and actively managed expectations through frequent communications with
the stakeholders. By the end of September 1998, the team had completed
a functional specification for the SiL K system and distributed an RFQ
to key stakeholders for review.

On October 16, 1998, the RFQ was sent to a short list of potential
providers. These companies were invited to a provider conference held
on November 5^th to review the RFQ. Eight suppliers submitted proposals
along with a self-evaluation checklist. After this, seven formally
presented their proposals to the SiL K team at Harley headquarters in

early December. At this time the list of suppliers was narrowed to

three. The final evaluation step occurred in mid January as the SiL K
team traveled to each of the three software providers locations for an
extended demonstration of the software processing ten scenarios provided
by the Harley-Davison team.

At the conclusion of this case on January 30, 1999, the SiL K team
sought to make a final decision on the selection of a software vendor
for their integrated procurement system.

Problems and Opportunities

Opportunity: Select the integrated procurement software provider who is
best able to help Harley-Davidson reach their SMS strategic sourcing goals.

The SiL K team has the opportunity to direct the future of

Harley-Davidson s supplier relationships through the selection of the
best software provider for their integrated procurement system. In
making the selection, the team must balance how well the software
functionality meets the needs of the business processes with how well
the provider team fits the culture of Harley-Davidson. This
implementation is a crucial element in bringing about the culture change
desired by Berryman. As procurement practices are centralized, it is
important that the balance of independence and team spirit that makes
the Harley brand and culture so unique not be changed. All Harley IS
projects utilize the Business Integration (BI) model as a guide. The
model is comprised of three elements
processes, people, and
technology. Each must be considered as the SiL K team makes its decision.

Recommendations
Recommendation #1: Select Provider 1 for this project.

According to the SiL K strategic road map, the supply management

strategy is driven 50-75% by people, 20-40% by process and 5-10% by
technology. Let this be the guiding principle in selecting the
integrated procurement system provider. Each potential supplier offers
advantages and disadvantages. However, Provider 1 clearly paid the most
attention to Harley values and represented the best cultural fit for
Harley-Davidson. This will be absolutely critical for a successful
implementation, training, roll-out, and adoption throughout
Harley-Davidson. Provider 1 s only drawback is that they could only
meet all of the desired functionality by using a partner solution for
web enablement. Provider 2 offered the best functionality with a 98.69%
fit, but presented a very formal, consultant attitude that did not mesh
well with Harley s culture. Provider 3 offers a potential technology
advantage since they are engaged in another Harley-Davidson project at
this time. However, their boilerplate functionality was unimpressive,

and the team was very poor at recognizing the social culture at Harley
Davidson.

Recommendation #2: Keep the SiL K team intact with the existing members
dedicating 100% of their time to the project through the implementation
of the software.

I believe it is critical that the SiL K team continue the efforts

underway to communicate with the stakeholders and manage the
expectations and perceptions regarding the project. The team provides
the vital link between the Harley-Davidson stakeholders and the software
provider s team. The team can monitor the company pulse and alert the
provider to emerging issues. At the same time, as the designers of the
new business processes, they are in the best position to explain the
value of the process change, train the stakeholders in the new
processes, and explain how the new software enables the new process flow.