CaseStudy/Enterprise Architecture

CaseStudy/Enterprise Architecture
Order Description
The attached is document for case study (for Enterprise Architecture course) requirement is to analyze the document to outline THE ISSUES the company are facing and the general direction of the company the analysis should outlines all facts in the documents and provide a personal opinion page and include what suggestion to the company and what septs the company should take to achieve its goals. –will upload a details file
R E V : J A NUAR Y 2 2 , 2 0 0 3
Doctoral Candidate Deborah Sole and Postdoctoral Reseach Fellow Mark J. Cotteleer prepared this case under the supervision of P rofessor
Robert D. Austin. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsem ents, sources of
primary data, or illustrations of eective or ineective management.
Copyright © 1999 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechani cal,
photocopying, recording, or otherwise—without the permission of Harvard Business School.
Harley Davidson Motor Company: Enterprise
Software Selection
We were in McDonald’s having our initial SiL’K planning meeting when a gunght
erupted in the parking lot. Bullets started ying through the restaurant. Someone said,
‘Everyone down, lock the doors’. We all hid under the table. I’m lying on the oor looking at
Dave and Pat—I’m thinking, Holy Smokes, this is unreal. It was just incredible—a real
bonding experience!
—Garry Berryman, Vice President, Materials Management
David Cotteleer, Information Systems (IS) Manager of the Supplier Information Link (SiL’K)
project, smiled as he recalled the terror and subsequent camaraderie that had grown out of that
unusual beginning. It had set the tone for the partnership that developed between Berryman, Pat
Davidson, Manager of Purchasing, Planning and Control, and himself, as they worked
collaboratively to develop the specications for an integrated procurement system to support the
new Supply Management Strategy (SMS).
Now he and the SiL’K project team were gathered in their “war room” on the top oor of the
Harley-Davidson Corporate Headquarters to face another critical moment in the project’s history.
After three hectic months of meeting potential software suppliers, reviewing documentation, and
evaluating software packages, the SiL’K team had to make a decision. Who should they choose as
their supplier and partner in implementing an enterprise-wide procurement and supplier
management system? On what criteria should that decision be based? And had they done everything
possible to enable them to make the right decision?
The Harley-Davidson Motor Company
Harley-Davidson Motor Company was founded in a shed in 1903, when young William
Harley and Arthur Davidson began experiments on “taking the work out of bicycling.” 1 By 1920 the
company had become the largest motorcycle manufacturer in the world, with production of over
1 Harley-Davidson website at
600-006 H arley Davidson Motor Company: Enterprise Software Selection
28,000 motorcycles per year and dealers in 67 countries. In 1998, Harley-Davidson shipped 150,818
motorcycles, a 14 percent increase over 1997, and a step closer to its ambitious Plan 2003 – the vision
to dramatically increase production capacity by the company’s 100 th anniversary.
Most of the company’s revenues and income were derived from motorcycles and related
products ( Exhibit 1 ). Harley-Davidson employed approximately 6,000 people and supported over
600 independently owned US dealerships. Headquartered in Milwaukee, Wisconsin, the company
had manufacturing facilities in Wisconsin, Pennsylvania and Missouri ( Exhibit 2a ), and wholly
owned subsidiaries in Germany, UK, Benelux, France, and Japan.
Harley-Davidson competed primarily in the heavyweight (>651cc) motorcycle market against
the likes of Honda, Yamaha, Suzuki, and Kawasaki. Strong Japanese competition, coupled with
Harley-Davidson’s rapidly expanding production and accompanying quality problems, had brought
the company to the brink of bankruptcy in the mid 1980s. The crisis had prompted a management
buy-out, followed by a renewed focus on quality and, subsequently, Harley-Davidson’s successful
IPO in 1986. Worldwide retail registration data through October/November 1998 showed that
Harley-Davidson’s target market grew by 13.8 percent over prior-year numbers. In that same time
Harley-Davidson had grown 14.3 percent. The company’s renaissance was viewed by some as a
symbolic reassertion of American manufacturing prowess, and proof that US industrial companies
could compete against foreign rivals.
Over the course of its 95 years, the Harley brand had acquired an almost mystical power.
Many customers were willing to wait up to two years for a motorcycle. Harley-Davidson bikers were
traditionally perceived as young, reckless and “born to be wild.” However, much of the recent
growth trend was fueled by riders in their forties with grown children no longer at home. These
customers were drawn to the dream of adventure and freedom that motorcycling oered—and had
the wherewithal to fund such recreation. Despite the gentrication of its customer prole, Harley-
Davidson continued to revel in its image of being, in the words of CEO Je Bleustein, “a little bit
special, a little bit mysterious, a little bit bad.” 2
Harley-Davidson valued both individual participation and teamwork. The company applied
the concept of self-directed teams from the factory oor to the executive level. Instead of employing a
functionally separated hierarchy, the organizational structure consisted of three interlocking
“circles”: Create Demand (CDC), Produce Products Group (PPG), and Provide Support (PSC). CDC
was responsible for sales and marketing issues. PPG handled development and manufacturing. PSC
fullled legal, nancial, human resources, and communications needs. Circles were headed by
standing committees or “Circles of Leadership,” as they were known. A Leadership and Strategy
Council, comprised of executives from each group, provided oversight of the circles to ensure that an
integrated vision of corporate direction was maintained ( Exhibit 2b ).
The Information Systems Organization
Teamwork also played a role in the structure of the IS function at Harley-Davidson. Instead
of a Chief Information Ocer (CIO), Harley-Davidson had an “Oce of the CIO” in which three
“Directors” lled the role of providing IS leadership. Cory Mason, Director of Information Systems
for PPG, maintained “in the collaborative culture of this organization it is acceptable to share
leadership.” He elaborated on the need to have three people share CIO responsibility:
2 Gina Imperato, “Harley shifts gears” FastCompany, no. 9 (June 1997): 104.
H arley Davidson Motor Company: Enterprise Software Selection 600-006
Senior management looks to the CIO to be their internal consultant; to give them guidance
and direction regarding technology’s ability to create business value. The problem is that it’s
too much ground for one person to cover eectively. Instead, each IS Director is tightly
integrated in the business decisions of a circle and together, with the VP of Strategic Planning
and Information Services, they are able to craft well-aligned business and enterprise-wide IS
To guide IS results, each Circle of Leadership had an Information Technology Circle (ITC), made
up of pairs of senior IS people and end users representing each site and function. The role of the ITC
was to understand group processes and interactions, and to decide, from a business perspective,
where the group should focus its technology eorts. In PPG, the ITC was fully empowered to make
technology investment decisions. Management considered the ITC to be in the best position to
understand the needs of the business, since they were closer to the action.
The Purchasing Organization
As part of PPG, the purchasing organization was tightly integrated with the engineering and
manufacturing operations. A purchasing development group was collocated with the engineering
community at Harley-Davidson’s Product Development Center (PDC). Purchasing operations
groups were located with their manufacturing counterparts at plants and facilities. A centralized
purchasing planning and control group was located at corporate headquarters in Milwaukee.
Leadership for the purchasing function was provided by the Purchasing Unity Group (PUG) which
was comprised of purchasing managers representing the dierent Harley-Davidson sites. The PUG
also included members representing the company’s Maintenance, Repair, and Operations (MRO),
Original Equipment (OE), Parts and Accessories (P&A), and General Merchandising (GM)
purchasing activities. 3
Over the years, site independence had been encouraged, resulting in dierent methods for
handling procurement, including the acquisition and/or development of dierent information
systems for Purchasing. Not only were there separate systems for MRO and OE but systems
provided by the same supplier had been modied to meet specic needs at local sites. For example,
the OE system at Harley-Davidson’s York, Pennsylvania site was dierent from the OE system in
Kansas City, and both diered from the OE systems at Powertrain sites. 4
Supply Management Strategy: Setting the Stage
When Garry Berryman joined Harley-Davidson in 1995, he became an important force for
change in the purchasing organization. Drawing on prior experiences at John Deere and Honda he
sought opportunities to develop purchasing’s role within the corporate vision of Plan 2003.
Berryman’s assessment was that the supplier relationship “wasn’t viewed as a strategic opportunity
to speed time to market, reduce costs, and improve product quality.” Since purchased parts
comprised 55-60 percent of a motorcycle’s value, Berryman was convinced that if the purchasing
organization could initially inuence cost, everything else would follow in terms of the internal
3 MRO deals with items to be consumed during manufacturing, e.g. machine tool components; cleaning equipment. OE
concerns components to be included in the product, i.e. bought-in motorcycle parts. P&A deals with after market accessories
and service parts, and GM concerns H-D clothing, collectibles and other licensed products.
4 “Powertrain” refers to the motorcycle engine and transmission components.
600-006 H arley Davidson Motor Company: Enterprise Software Selection
support needed to change the way the company interacted with its supplier community. Berryman
envisaged the purchasing organization becoming a common enterprise-wide point of contact with
suppliers who would be real partners in Harley-Davidson’s business.
Under Berryman’s direction, the purchasing organization began development of a corporate
wide Supply Management Strategy (SMS) in 1996. The goal of SMS was “to ensure that Harley-
Davidson is provided with the right product, at the right time, with the best quality, for the lowest
possible cost.” 5 A key element was articulating the distinction between a “vendor” and a “supplier.”
Berryman elaborated on the dierence:
A vendor is what you’ll nd on a street corner. You’re simply going to get the product that
you see, you’re not going to get anything behind that product – in terms of innovation,
creativity, and commitment to your business success. A supplier is an extension; is an
opportunity to extend our primary business within organizations that can bring a competency
to product development and innovation.
Throughout 1996, Berryman and the PUG engaged other functions and Harley-Davidson
supplier organizations, articulating the SMS vision and enlisting participation in the renement of the
strategy. When it was published at the end of 1996, Berryman was condent that it truly incorporated
the contributions of all stakeholders.
At the heart of SMS was the need to shift the organization from a short-term transaction
mentality to a long-term focus on supplier relationships. Collocation of suppliers with production
facilities and their integration into Harley-Davidson’s development process was an important part of
long-term relationship development, but it could not be achieved by Purchasing alone. Berryman
remarked how platform teams 6 developing new products slowly became aware that Purchasing
could not leverage supplier resources single-handedly, and that they themselves were responsible for
developing a work plan to convince suppliers of the value of collocation.
Harley-Davidson’s values and willingness to experiment were instrumental in facilitating the
shift to the supplier relationship perspective. Berryman acknowledged that being an equal player,
with Engineering and Manufacturing, was also key to achieving the vision of a new role for supply
management. Finally, the involvement of each functional area was essential in selling the strategy.
Berryman commented:
It’s simply having a presence in each one of the major segments of the company, so you’ve
got a voice there and people don’t forget about the role of supply management. You’ve got to
have a strong voice in every major forum and discussion that goes on around the company to
make certain [the strategy] isn’t forgotten.
Berryman argued that a slow and steady approach was necessary to build the necessary trust,
enthusiasm and engagement in SMS. He insisted that the new way of thinking become
institutionalized, before process and technology changes were addressed. He emphasized his point,
quoting from his pocket copy of The Art of War: 7
5 SiL’K Newsletter 1998, no.1.
6 A Platform team is a multifunctional new model development team, which includes representatives from engineering,
manufacturing, purchasing, and marketing.
7 Sun Tzu (BC2500) The Art of War, English Translation by Penguin Classics (1974), p. 10.
H arley Davidson Motor Company: Enterprise Software Selection 600-006
“When your strategy is deep and far reaching, what you gain by your calculations is much.
So you can win before you ght.” And I think that’s what we are driving home. Too many
times, we do just the opposite. “When your strategic thinking is shallow and near-sighted,
what you gain by your calculations is little. So you lose before you even do battle.” We can
aord to take the time to do it right. You’re better o being a little slow, a little deliberate to
make certain you get it right because you don’t have a second chance. For me, the key is
building a depth of understanding around the strategy.
Time for Transformational Thinking: Let’s Get Wild!
After a year of indoctrination and a couple of revisions, we nally said this thing is rock solid. We started to
hear across the company people talking about the supply management strategy as their own. We knew then it
was time to begin to create a change in our process and the tool sets that we had to manage that process.
—Garry Berryman
Mason foresaw two main hurdles to introducing changes into purchasing processes and
systems. The rst was Harley-Davidson’s absolutely overriding concern with unmet demand and a
resulting wariness of any change that might impact production. He commented:
We have people that are passionate about making sure the lines continue to run. When
you’ve got that kind of “I’m not going to bring the line down” attitude, there are some really
interesting barriers that you’re going to have to go through when you are trying to convince
somebody to, in some cases, radically, change their processes and procedures.
Mason’s second hurdle, a common problem faced by project teams, was the company’s
“natural proclivity to continuously improve, rather than to transform business functions.”
Davidson explained why change did not come easy to the company:
We’re rooted in our heritage. I think part of it is the way our product line has evolved.
We’ve got these big long life cycles on our products. 8 They don’t change frequently. We always
have continuous improvement, but larger scale, sweeping changes haven’t occurred unless
signicant events presented reason to change.
The combination of huge potential value and the change eort likely to be incurred made IS
management wary of this strategic initiative gravitating towards a continuous improvement project.
Given Harley-Davidson’s historic functional autonomy, Mason knew that if transformational change
was to take place, it was imperative to get Purchasing leadership excited and committed before
asking them to provide resources for a major systems project. In an eort to get the organization to
“think out of the box,” Mason took the PUG osite for a brainstorming session and encouraged them
to “get wild” in thinking about radical changes to their procurement processes. Reecting on the
results of the day, Mason commented “That discussion with the procurement leadership was a good
foundation to start getting them to really think about procurement dierently.”
8 For example, the design of the original V-twin engine, rst produced in 1909, is still used in motorcycles produced today. It
should be emphasized that Harley-Davidson product evolution is strongly inuenced by enduring customer loyalty and
attachment to tradition.
600-006 H arley Davidson Motor Company: Enterprise Software Selection
Supplier Information Link (SiL’K)
While Berryman and Mason were building commitment to SMS among Harley-Davidson’s
leadership, Cotteleer and Davidson started investigating the possibilities for new systems and
processes. There was a high degree of dissatisfaction with the existing systems, as well as a mismatch
with the SMS, which depended on people having the skills, resources, and time to focus on building
supplier relationships. In October 1997 the pair made a presentation to the PUG that laid out a “value
proposition” for instigating signicant changes in terms of people, processes, and technology. 9
Elements of the value proposition included estimated purchasing cost reductions over ve years on
the order of $34 million, as well as a number of intangible benets ( Exhibit 3 ).
Forming a Project Team
At the PUG presentation, Cotteleer and Davidson asked for part-time resources from each of
the procurement organizations to pursue the project. With Berryman’s endorsement, they were able
to handpick inuential players from across the PPG ( Exhibit 4 ). Cotteleer explained their selection:
We wanted the best person. Someone who would be thought of as an opinion leader in
their organization, someone who was intimate with the existing processes, and who would be
a tough customer during implementation should we get that far. We wanted to know that
when we were nished, we had the hard sell done already, that these people would be able to
inuence their organizations to say “Hey, you know this is what we need to do.”
Using SMS as a starting point, the SiL’K team tried to move from “strategy to action” to dene the
requirements and capabilities necessary to realize the strategic vision. The team met three to four
days a month between November 1997 and April 1998. Chuck Braunschweig, from Harley-
Davidson’s Process Innovation group, joined the team in January 1998 and acted as a driver of two
important activities: mapping the “as is” procurement processes and conducting a stakeholder
Mapping “as is” Processes
We really started gaining momentum as a team when we started trying to talk about the process ow. We
had at least three dierent central processes, but we kept driving it home saying that we want to think about
this in terms of why are we more similar than we are dierent. And if we can think about it in terms of common
practices and common processes, then we may be able to get to a common system.
—Chuck Braunschweig
Using recently developed maps of the MRO and OE processes from each site, the Sil’K team
created an enterprise-wide process map of procurement, sequentially incorporating the procedures of
the P&A, MRO, and OE purchasing units. Despite the diversity of their processes, the team was able
to identify many commonalities across sites through this exercise.
9 All Harley IS projects were framed around these three elements – Processes, People, and Technology—which comprised its
Business Integration (BI) model.
H arley Davidson Motor Company: Enterprise Software Selection 600-006
Stakeholder Survey
Although many team members felt that they already knew the main problems and that they
should push forward developing system requirements, Braunschweig persuaded them that a
stakeholder survey was important to accurately identify the purchasing organization’s requirements.
One survey sought to discover exactly what purchasing did on a day-to-day basis and was
distributed to all purchasing representatives within the company. A second survey targeted key
stakeholders such as Accounts Payable, Human Resources, and Logistics, who interacted with
Purchasing. Although there were only about 200 individuals in the purchasing organization, more
than 2000 individuals generated purchase order requests.
The survey results were sobering ( Exhibit 5 ). In contrast to the SMS goal of having personnel
spend at least 70 percent of their time on supplier management activities, 10 results indicated that a
huge proportion (85%) of time was being spent on non-strategic activities such as reviewing
inventory, expediting and data entry. As Braunschweig described it: “[the survey] became a battle cry
for the sponsors of the team. The PUG was blown away.”
Mapping “to be” Processes
Near the end of March 1998 the team started developing the “to be” process that represented
a future vision for purchasing at Harley-Davidson. Shortly thereafter the team concluded that parttime
involvement was inadequate. Team members resolved to request a few full-time resources who
would be empowered by the rest of the team to dene the future processes.
In early April, Cotteleer went to the PUG with a recommendation for full-time resources
from OE, MRO, and Product Development. Again, Berryman’s support was indispensable in
retaining access to key people. A reduced core team continued to work full-time while original team
members stayed loosely connected to the project through videoconferences and occasional meetings.
For the purposes of the project, “full-time” meant Tuesday to Thursday – on Mondays and Fridays the
three purchasing team members returned to their respective sites or organizations. Cotteleer
explained the importance of keeping these team members plugged into their organizations:
If we were to take those three out of their jobs full-time, they’d start becoming disconnected
from what’s happening day to day. We didn’t want that to happen because we knew that it
was going to be a long-term project. We knew that we needed to keep in contact with the sites
so that we wouldn’t wind up designing something that met requirements that didn’t exist
Despite external pressure for visible activity by the team, Cotteleer was determined to be
systematic about identifying processes so as to ensure appropriate software selection and a smooth
implementation. By May 1998, having mapped the existing enterprise-wide process, and completed
the stakeholder surveys, the core team started rening the “to be” process into requirements for
Harley-Davidson’s new purchasing information systems.
10 Strategic Supplier Management Activities at Harley were seen to include Supplier Relationship Development, Supplier
Performance Management, and Improvement of Quality, Cost and Timing measures.
600-006 H arley Davidson Motor Company: Enterprise Software Selection
People, Processes, and Technology
Similar to other systems projects, the SiL’K team used Harley-Davidson’s Business
Integration model, which highlighted People, Process, and Technology when considering change
initiatives. Under SMS the “People” element had been restructured from a decentralized to a hybrid
organization, 11 and a group of purchasing managers had been assigned to redene roles and
responsibilities. “Technology” decisions had been deferred to Harley’s Architecture Integration
group (AI). 12 AI was made responsible for ensuring that the technical solutions dened by the Sil’K
team would be compatible with the existing IS architecture in place at Harley-Davidson. The Sil’K
team then turned its focus to the “Process” element of the project.
A critical step in early process development was dening project scope. The “as is” process
ow developed by the Sil’K team had identied a number of interfaces with other functions. By
viewing product development as a progression from idea to obsolescence, the team was able to
identify a series of broad activities in which Purchasing was involved. Each of these activities
disaggregated into sub-activities, with associated stakeholder groups (e.g. purchasing, engineering,
manufacturing, nance, suppliers). Once stakeholders were identied, the team was able to decide
whether Purchasing should be owner and driver, or merely a participant in an activity ( Exhibit 6a ).
The team then clustered project activities into three implementation phases ( Exhibit 6b ).
Throughout this process the team focused on managing expectations. There was frequent
communication between the team and the target internal audience of approximately 800 people – 200
within procurement and 600 in related functions. Team-led communication updates regarding the
project status were held at each site on a quarterly basis. Cotteleer gave monthly updates to the PUG
and quarterly updates to Harley-Davidson’s Supplier Advisory Council. 13 Julie Anding, the team’s
Change Management representative, was responsible for regular project newsletters that
communicated objectives, activities and progress to the community at large.
The team’s shared vision of new processes and activities simplied the task of completing a
jointly written functional specication or Request for Quote (RFQ). On September 30 th, 1998 a draft
copy of the RFQ was circulated through the Purchasing organization to give internal stakeholders a
chance to review it and oer feedback. Internal acceptance and validation of the RFQ was prompt
and positive. The supplier selection process began to pick up speed (see Exhibit 7 ).
Supplier Selection
On October 16, 1998 the RFQ for new systems to support SMS was submitted to a short list of
potential suppliers. Identication of candidates had begun months earlier when Cotteleer sent a
document that described Harley-Davidson’s SMS goals to a well-recognized industry research
organization, requesting recommendations for potential software suppliers. To the six names the
research organization oered, Harley-Davidson added several more based on incumbency issues
11 Harley-Davidson’s organization is neither fully centralized nor fully decentralized. Some activity and decision making
occurs at a corporate or central level (e.g. all product development activity), and some happens at the operational or site lev el
(e.g. on-going operations support).
12 AI is responsible for dening the strategic direction of IT at Harley-Davidson. This group sets standards for hardware and
software conguration.
13 The Supplier Advisory Council comprises 16 of Harley’s strategic suppliers who meet on a quarterly basis to discuss supply
management issues.
H arley Davidson Motor Company: Enterprise Software Selection 600-006
(i.e., the presence of the potential suppliers’ products within Harley-Davidson) and other information
to which the team had access. Potential suppliers were requested to notify Harley-Davidson of their
intent to bid by October 25 th.
The Provider Conference
I think we shocked a lot of people in that room. Here we were, a bunch of purchasing people, a project
manager, a change management person, and a process reengineering person, really no executives in the room,
no high level decision makers. Here’s this team of worker bees who is ultimately going to make a decision about
the software. I don’t think they were ready to deal with that.
—Julie Anding
The provider conference was the suppliers’ rst exposure to the team who would make the
selection decision. Davidson started the session by providing background to Harley-Davidson’s
purchasing organization. Chuck Carter, a Senior MRO buyer, took the stage next with a strong
statement of the Harley-Davidson values and the team’s expectations of the process. Carter
emphasized that Harley-Davidson considered its values sacred (see Exhibit 8 ). One supplier
representative described his impressions:
What Carter said struck me as fascinating—he said: “We sell an image and we sell fun. Our
products are cool! The stu you guys sell is boring. OK, it’s bits and bytes and it’s like the
necessary evil. We’re really sorry but that’s the way it is.” In terms of them telling us what their
values were, it was very clear that this was their culture, their company and they were looking
for partners who had the functionality and could adapt to their culture.
Next, Cotteleer explained the link between the supply management strategy, operational
requirements, and capabilities (see Exhibit 9 ), and emphasized Harley-Davidson’s “ground rules” for
the process. The SiL’K team was explicit about not seeking a full ERP solution, 14 that the scope was
well dened, and that suppliers shouldn’t waste time pitching additional functionality. Cotteleer
stressed two-way accountability, adding “we expected them to hold us accountable, so if they
thought at any time that we are not dealing fairly then we expected them to check us as well.”
The supplier representative commented afterwards: “We walked out of there very condent that
this was a company that knew what they were doing and had a process in place. We knew that the
team was the decision-maker.”
Proposals and Presentations
Eight suppliers submitted both a response to the RFQ and a completed self-evaluation
checklist. The team used the checklist as a quantitative measure of the initial functionality t (see
Exhibit 10 ). From this functionality checklist, two groups immediately emerged – those that rated
themselves 90-plus percent t and those that were less than 90 percent t.
Although the team had planned to allocate review responsibility to pairs of team members, in
the end there was sucient time for each member to view all proposals. Questions were submitted to
14 ERP or “Enterprise Resource Planning” refers to a class of software packages that seeks to integrate nearly all of the interna l
functions of the organization. See HBS Technology Note No. 699-020 “Enterprise Resource Planning (ERP)” for more
information on these types of packages.
600-006 H arley Davidson Motor Company: Enterprise Software Selection
the company teams in advance of a three-hour presentation scheduled for each. To assist in the
evaluation, the team developed a booklet in which they could document the supplier’s proposal for
each section of the specication, record weaknesses and strengths, and check o critical
In addition to the SiL’K team, IT specialists including Tom Cullen, Systems Manager for PPG,
and Karen Kaminski, Manager of Architecture Integration, attended the provider presentations. Their
role was to review each package’s architectural requirements and to identify likely interface issues
with existing Harley-Davidson systems and IT initiatives in progress. In all, seven presentations were
completed within a week. 15 The team then settled down to seriously evaluate what they’d seen and
read, and to eliminate unsuitable candidate proposals.
Narrowing the eld
We didn’t just say: “hey, everybody, vote for your top three and we will go.” Even though some people
wanted to do that. I wanted to make sure that we were focusing on the process and the functionality and the
pluses and minuses. So we went through each company and we did a pro and con list.
—David Cotteleer
In attempting to narrow the eld of potential suppliers, the team evaluated a combination of
written proposal, presentation, and notes from each member. Suppliers who had self-rated their
ability to meet the specication at less than 90% (three were in the 70% range) were unlikely
candidates. However, the presentations did create some surprises for the team. One supplier with
“great functionality” was eliminated on the basis of architectural incompatibility with Harley-
Davidson’s current and planned infrastructure standards. Another supplier, specializing in
purchasing systems, charmed the team with their “sweet package.” However, the company was
ultimately eliminated after an objective consideration of its small size and potential ability to meet
future support needs. The team consciously chose to focus on functionality and to avoid
consideration of economic (cost) factors at this stage. After intensive discussions, the team reached
consensus on three nalists.
The next step involved setting up visits to these three suppliers’ sites where an extended
demonstration of their software package was to be conducted. In this next round, the SiL’K team
created ten scenarios, based on process and technology requirements from the functional
specication, that providers used to demonstrate their products. During January 1999, two full days
were spent with each nalist in an eort to develop a deeper understanding of both the package and
the organization. Again, the entire SiL’K team was involved in these visits, and both qualitative and
quantitative methods were used to evaluate the nalists’ proposed solutions. See Exhibit 10 for
decision criteria and evaluations, and Exhibit 11 for a selection of team member impressions.
Three Final Contenders
Right from the start, Provider1 distinguished itself. Its representatives asked appropriate
questions, they clearly acknowledged Harley-Davidson’s values, and seemed comfortable with the
15After the conference, two suppliers had declined to bid, and an additional contender dropped out after submitting a
H arley Davidson Motor Company: Enterprise Software Selection 600-006
casual but competent Harley-Davidson style. The written proposal from the Provider1 team was
precisely tailored to the requirements documented in the RFQ, and clearly addressed each of the
SiL’K team’s issues. On the self-evaluation checklist, Provider1 scored 93.4 percent. During the initial
presentation the SiL’K team felt a natural anity to its representatives who seemed to have a similar
company culture. At the provider conference they had stood out in the SiL’K team’s eyes, by buying
Harley-Davidson gear for their whole team. During the company visits in January, the SiL’K team felt
extremely comfortable with the broader Provider1 team who might become potential teammates.
In terms of functionality, Provider1 was not the leader, although none of the three nalists oered
a perfect t to the specications. Its package did not provide “web-enablement” directly but its team
proposed integrating a partner solution to achieve this. On the organizational side, however,
Provider1 was very aware of change management issues, and change management and training
processes were an integral part of its implementation methodology.
Provider2 was also one of the early leaders in the selection process. It was a major ERP supplier
and was widely admired in the industry, although its products tended to be more expensive than
those of its competitors. The proposal documents submitted to the SiL’K team were comprehensive
and it achieved the highest scoring on the quantitative functionality checklist (98.7%). Provider2’s
representatives were extremely professional although perhaps somewhat more formal than Harley-
Davidson was used to. Their presentation was equally immaculate and comprehensive.
The company visit and demonstrations conrmed the superior functionality of Provider2,
including a seamless web-enabled interface. Although the supplier team provided a package for
writing training documentation, they didn’t emphasize methods or processes for assessing
organizational needs and preparing people for change. A few SiL’K members were also wary of the
heavy “consultant” attitude which prevailed.
Provider3 was a major ERP player and had recently been engaged by Harley-Davidson to provide
systems in a dierent functional area. The company had not initially distinguished itself. The
software proposal was considered “boilerplate stu” and some questioned whether the supplier had
even read the RFQ. The initial presentation was a disaster. The supplier representatives were late;
they hadn’t even met a representative from the company with whom they would be partnering; they
overran their time; and didn’t demonstrate much functionality. The Harley-Davidson team also felt
antagonized by the condescension of the supplier representatives. However, Provider3’s score on the
self-evaluation functionality checklist was very high (96.8%), and the team felt they could not dismiss
this company out of hand. After much discussion, the team had agreed to give Provider3 two more
hours to make its case. A subsequent presentation did indeed conrm the functional possibilities of
Provider3’s software.
Consistent with earlier signals, the company visit in January revealed solid functionality but a
weaker focus on social dimensions. The team was skeptical but could not overlook potential political
and economic advantages associated with Provider3.
600-006 H arley Davidson Motor Company: Enterprise Software Selection
Making the Decision
The SiL’K team had sought to include in their decision all factors that might substantially
inuence the ultimate implementation success of the procurement software project. Some of them
had very clear thoughts on the relative importance of dierent dimensions:
Braunschweig: “Functionality, I think, is the key thing that we were looking for. Even if there
are personality conicts we can work with those. All three of the providers have the
architecture. Cost is going to be added in there. I certainly hope that functionality is going to be
#1 in terms of what we get out of it. Because that’s what people are going to see, that’s what
they’re going to use day to day. And that’s what’s going to cause them pain or discomfort.”
Jarosz: “If all I had to do is say: ‘End user, here’s your functionality’, I’d be a fool not to select
Provider2. But I am very concerned that the change people are going to go through is going to
be ten times more dicult than software implementation. You can take a terrible product and,
if you get the people behind, you’ll succeed, and you can take a wonderful product and, if
everybody ghts it, you’ll fail. So we need to put some serious thought into the whole issue of
change management and the implementation.”
Anding: “We need to do the right thing, we need to pick the software that’s truly going to
provide the most functionality to the purchasing community and to the strategy and direction
that we want to move into for the future. I think the team is very conscious of that.”
Pues: “People like to do business with people they like. So a big part of this is looking at the
organizations that we see—Provider1, Provider2 and Provider 3. We need to understand the
personality of their organizations, and try to get a better understanding of the support that
they have behind it. Because implementation is when the real work starts and we have to be
comfortable with who we go with.”
Cotteleer: “Harley-Davidson is a very relational company. We are looking for partners. But we
really want to pick the best product for our process. If we need to, we can deal with
[personality conicts] for the implementation. . . . That is not as insurmountable as
implementation risk based on functionality that doesn’t exist.”
As the SiL’K team took their places at the table everyone looked around the war room at the
volumes of information they had gathered. The process had been long and the choice of a supplier
and partner still loomed. Cotteleer wondered whether Harley-Davidson’s approach linking the
software selection process to the overall Supplier Management Strategy had been appropriate?
Would all the steps they had taken during the selection process add value to their decision? How
should the team balance the various strengths and weaknesses of each supplier candidate in making
a nal selection? With these questions and others circulating in his mind, he turned his attention to
the team and opened the discussion.
H arley Davidson Motor Company: Enterprise Software Selection 600-006
Exhibit 1 Harley-Davidson Financial Highlights 16
1998 1997 1996 1995 1994
R evenues $2,063,956 $1,762,569 $1,531,227 $1,350,466 $1,158,887
H-D Motorcycles $1,595,415 $1,382,809 $1,199,163 $1,038,335 $890,578
Parts & Accessories $297,140 $241,940 $210,229 $192,093 $161,928
General Merchandise $114,484 $95,055 $90,713 $100,248 $94,383
Buell Motorcycles $53,527 $40,305 $24,380 $14,154 $5,791
Defense & Other $3,390 $2,460 $6,742 $5,636 $6,207
Domestic sales as a percent of
% 4 . 1 7 % 3 . 0 7 % 5 . 2 7 % 0 . 4 7 % 9 . 5 7 e u n e v e rI
nternational sales as a percent of
revenue 24.1% 26.0% 27.5% 29.7% 28.6%
Gross margin $690,670 $586,217 $490,094 $411,399 $358,339
Operating Expense—
Motorcycles $366,222 $320,731 $262,001 $226,923 $194,829
Operating Expense—
Corporate $11,043 $7,838 $7,448 $7,300 $9,948
Eaglemark income 17 $20,211 $12,355 $7,801 $3,620 —
Pretax Income $336,229 $276,302 $227,622 $175,989 $156,440
N et income $213,500 $174,070 $166,028 $112,480 $104,272
Earnings per common share
Basic $1.40 $1.15 $1,10 $0.75 $0.69
Diluted $1.38 $1.13 $1.09 $0.74 $0.68
Weighted-avg. common shares
Basic 152,227 151,650 150,683 149,972 150,440
Diluted 154,703 153,948 152,925 151,900 153,365
Dividends per share $0.155 $0.135 $0.11 $0.09 $0.07
Closing share price $47.38 $27.25 $23.50 $14.38 $14.00
Cash & cash equivalents $165,170 $147,462 $142,479 $31,462 $57,884
Total current assets $844,963 $704,021 $613,129 $331,983 $334,127
Total assets $1,920,209 $1,598,901 $1,299,985 $1,000,670 $676,663
Total current liabilities $468,515 $361,688 $251,098 $233,210 $154,769
Finance debt $280,000 $280,000 $250,000 $164,330 —
Other Liabilities $141,783 $130,545 $136,167 $108,561 $88,662
Total Liabilities $890,298 $772,233 $637,265 $506,101 $243,431
Total shareholders’ equity $1,029,911 $826,668 $662,720 $494,569 $433,232
16 Amounts are in thousands, except per share amounts and share price.
17 Eaglemark Financial Services, Inc., is a Harley-Davidson subsidiary that provides wholesale and retail nancing, insurance,
and credit card programs to Harley dealers and customers.
600-006 H arley Davidson Motor Company: Enterprise Software Selection
Exhibit 2a Company Sites and Functions
Milwaukee Corporate Headquarters;
Parts and Accessories;
General Merchandise;
Research and Development
Wauwatosa Product Development Center;
XL Engine & Transmission production
Menomonee Falls FL Engine & Transmission production
Franklin Parts and Accessories Distribution Center
Tomahawk Fiberglass parts production and painting
York Parts production;
Motorcycle nal assembly (custom & touring motorcycles)
Kansas City Parts production;
Motorcycle nal assembly (“Sportster” motorcycles)
Exhibit 2b Circles of Leadership
and Strategy
H arley Davidson Motor Company: Enterprise Software Selection 600-006
Exhibit 3 Envisaged Benets of SiL’K
People—Changes in behaviors that eect the way work is done.
Reduced non-strategic sta time and tasks
Error correction/resolution
Elimination of duplicate data entry
Increase in strategic procurement activities
Supplier development
Strategic sourcing
Process—Changes in methods used to get work done.
Reduced complexity through uniform procurement process across all sites
Enabling of the MRO strategy
Reduced procurement cycle time
Reduced manual activity
Reduced confusion in supply base caused by site specic processes
Increased supplier integration in procurement process
Achieve Quality, Cost & Timing (QCT) target for procurement related to new product launch
Technology—Changes in tools used to get work done.
Reduced complexity through common tools and systems
Reduced system maintenance and obsolescence costs
Data consolidation for decision making
Enterprise view of supply base activity and performance
Enterprise aggregation of demand to leverage suppliers and contracts (across sites and
Increased supplier access to quality, cost, timing and demand data
All of the benets listed above have direct impacts on the Harley-Davidson/Supplier relationship.
Best practice data from similar implementations demonstrate that these benets manifest themselves
as follows:
1) Lower material costs due to decreased labor and supply chain costs;
2) Decreased inventory costs due to more predictable demand and better visibility in the supply
3) Lower carrying costs due to less inventory in Harley-Davidson plants.
Source: Harley-Davidson internal document
600-006 H arley Davidson Motor Company: Enterprise Software Selection
Exhibit 4 SiL’K Team Composition and Team Member Proles
Garry Berryman (Purchasing)—VP of Materials Management
Dave Storm (IS)—VP of Planning and Information Services
Steering Committee:
Garry Berryman (Purchasing) —VP of Materials Management
Dave Storm (IS)—VP of Planning and Information Services
Tom Cullen (IS)—Systems Manager—Produce Products Group
Pat Davidson (Purchasing)—Manager—Purchasing Planning & Control
Cory Mason (IS)—CIO Produce Products Group
Project Team:
Julie Anding (IS) – Change Management representative
Chuck Braunschweig (PI) – Process Innovation representative
Chuck Carter (Purchasing/PDC) – Purchasing representative for product development with
experience as a senior MRO buyer in the Powertrain organization, and previously a member of
the MRO Best Practice Circle
Glenn Christianson (Purchasing/THK) – Materials Manager at Tomahawk with over thirty years
of Harley-Davidson experience
Dave Cotteleer (IS) – Project Manager
Eric Doman (Purchasing/GM)—Purchasing representative for General Merchandising
Eileen Jarosz (Purchasing/PDC)—Purchasing Engineer for product development with several
years’ experience as an OE buyer at York
Maxine Peissig (Purchasing/PTO)—Purchasing representative for the Powertrain organization
Rick Pues (Purchasing/KC)—Process Manager for Purchasing Planning & Control, also
representing the Kansas City production facility
Kerry Sarder (Purchasing/P&A)—Senior Buyer and purchasing representative for Parts &
Bob Walker (Purchasing/York)—Purchasing representative for York production facility, having
more than twenty years experience in materials management at Harley-Davidson
Blaine Webster (IS) – Systems Analyst
H arley Davidson Motor Company: Enterprise Software Selection 600-006
Exhibit 5 Breakdown of Purchasing and Materials Professionals Time by Activity
Developing Supplier
5% Supplier Evaluation 3%
External Correspondence
Expediting Invoices 10%
Replenishment Orders 3%
Requisition Requests 4%
Discrepancies 5%
Non-Purchasing Activities
Other Purchasing Activities 4%
Other Activities
10% Managing Supplier Performance
Internal Correspondence 16%
* Bolded Activities Goal = 70%
Approving Invoices 3%
Data Entry 8%
Source: Harley-Davidson internal document
600-006 H arley Davidson Motor Company: Enterprise Software Selection
Exhibit 6a SiL’K Project Scope
Development Order /
Scheduling Requirements Material
Logistics Receiving
Material Use /
Concept to
Production Part
Customer Orders &
Product Plan
MRP / DRP Requirements to
Supplier Shipment
Supplier Dock
to Harley Dock
Receiving to
Point of Use
Components to
Finished Goods
Finished Goods
to Customer
SiL’K will deliver process
or enable process to be defined
by another group
Not within SiL’K scope
Exhibit 6b SiL’K Implementation Phases
Phase1: Transaction Processes / Systems. These are processes and systems used to support the
execution of fundamental Purchasing activities including:
a) Requirements / Requisitions / Timing
b) Creating Purchase Documents (Ordering)
c) Receipts / Tracking
d) Invoice Processing
Phase 2: Supplier Information Processes / Systems. These are processes and systems used to manage
relationships and information exchange within the Supply web including:
a) Supplier Performance Reporting
b) Supplier Communication and Integration
c) Contact Management
Phase 3: Project Tracking Processes / Systems: These are processes and systems that support
Purchasing activities related to:
a) Concurrent Product & Process Delivery Methodology
b) Product Planning
c) Resources Allocation
d) Target Costing
e) Build and Launch Readiness
Source: Harley-Davidson internal document
H arley Davidson Motor Company: Enterprise Software Selection 600-006
Exhibit 7 Summary of SiL’K Project Activities and Milestones
January 1997
Supply Management Strategy rollout begins
July 1997 Initial SiL’K planning meeting at McDonalds
October 1997 Value presentation to Purchasing Leadership Group
Fall 1997 “Let’s get wild” brainstorming session
November 1997 Allocation of resources from Purchasing to form the SiL’K project team
November 1997–
March 1998
Mapping “as is” procurement process; identication of commonalities
across sites
April 1998—
September 1998
Developing “to-be” processes; systems team engaged
May 1998 – ongoing Change management communication to stakeholder community
September 30, 1998 Completion of Functional Specication (RFQ); Distribution to internal
stakeholders for review.
October 9, 1998 Feedback from internal stakeholders
October 16, 1998 Distribution of RFQ and invitation to bid to selected software providers
October 25, 1998 Software providers conrm intention to bid
November 5, 1998 Software Provider Conference
November 16, 1998 Proposals due from potential software providers
December 1-4, 1998 Formal presentation of proposals to Harley-Davidson
December 7-11,
Review of proposals and presentations
December 11, 1998 Shortlist selection of three potential providers
January 10-22, 1999
Two-day presentations and scripted demonstrations at shortlist
providers’ sites, and reference checks with installed customers
January 30, 1999 Finalist selection
600-006 H arley Davidson Motor Company: Enterprise Software Selection
Exhibit 8 Harley-Davidson Business Values and Issues
Business V alues Business I ssues
Tell the truth Quality
Be fair Participation
K eep your promises Productivity
Respect the individual Flexibility
Encourage intellectual curiosity. Cash Flow
Exhibit 9 SiL’K Strategic Roadmap—From Strategy to Action
Supply Management
Strategy Future State
Strategic Management
of Supply Base
Supplier Relationships
Quality, Cost, and
Timing Strategies
Supply Management
Strategy Operational
Capabilities Supply Management
Strategy People, Process
and Technology
Supply Management
Strategy Operational
Supply Management
Purchasing Activities Supply Management
Business Value
Supply Chain
Role of Purchasing
Win/Win Relationships
Open Communication
Managed Change
Optimization of
Human Capital
Proven Business
Cycle Time
Driven by People
Driven by Process
Driven by Technology
Supply Management
Activities 70%
(e.g. managing supplier
relationships, supplier
performance, facilitating
QCT improvements)
Other Activities 30%
(e.g. reviewing
inventory, expediting,
data entry)
Source: Harley-Davidson SiL’K newsletter, no.3.
H arley Davidson Motor Company: Enterprise Software Selection 600-006
Exhibit 10 Software Provider Selection—Decision Criteria and Evaluations
Each provider was evaluated using a quantitative and qualitative approach. The quantitative method
was based initially on each provider’s self-rated match to the technology and process requirements
outlined in the functional specication. Technology robustness and ease-of-use were also considered.
Provider1 Provider2 Provider3
Functional Criteria Value Pct. Fit Value Pct. Fit Value Pct. Fit
1. Design and Foundation 118 98.33% 120 100.00% 115 95.83%
2. Request Denition 232 92.06% 244 96.83% 247 98.02%
3. Documentation 140 89.74% 156 100.00% 156 100.00%
4. Receiving 150 93.75% 156 97.50% 142 88.75%
5. Supply Management 48.8 76.25% 64 100.00% 59.2 92.50%
6. Project Tracking 22.4 100.00% 22.4 100.00% 22.4 100.00%
7. Miscellaneous 236 93.65% 248 98.41% 248 98.41%
8. Interfaces 59 98.33% 60 100.00% 58 96.67%
9. Training 24 100.00% 24 100.00% 24 100.00%
10. Other 112 100.00% 112 100.00% 112 100.00%
Total Provider Score 1142.2 93.44% 1206.4 98.69% 1183.6 96.83%
The three nalists were also evaluated (L=Low; M=Medium; H=High) on a number of qualitative
criteria. These were chosen to highlight the potential providers’ understanding of Harley-Davidson’s
current and future requirements, their ability to provide implementation and ongoing technical
support, and the overall likelihood of a mutually benecial long-term relationship.
Provider1 Provider2 Provider3
Qual i tative C ri teria R ating R ating R ating
1. Long Term Relationship Potential H H MH
2. Research and Development MH H MH
3. Training A pproach H MH ML
4. Implementation / Education / Change
Management Methodology
5. Understanding Harley’s Requirements H MH M
6. Enabling the SMS MH H MH
7. Out of the box Fit MH H MH
8. Financial V iability MH H MH
9. Cost H L M
10. Technical Support Offerings H H M
11. Overall Functionality H H MH
12. Number of Partner Providers included in Solution
13. A rchitecture Compatibility H MH H
14. Platform Portability H M H
15. Web Functionality “ to go” M H ML
16. Manufacturing Experience H MH M
600-006 H arley Davidson Motor Company: Enterprise Software Selection
Exhibit 11 SiL’K Members Impressions of the Three Finalists
Cotteleer: “They did a dynamite job. They truly distinguished themselves as understanding what it
was we were trying to do. As we understand it our needs are fairly similar to [another Provider1
client]. Beyond that, they worked very hard and paid very specic attention to what we wanted.
They are a very attentive company and they have been extremely honest…I’m actually pretty
Christianson: “Out of the box, they were impressive. The people were the right group of people to
send. They knew the software. They knew what they wanted. When they came in for their
presentation, the entire team had Harley shirts on. It gives you the impression that they value being
here. When we went to them for the demos everybody had Provider1 shirts on. It gives you the idea
that there’s a big potential that the culture of that team matches with ours… I think that their goal
was to answer all of our questions and to try to meet with our culture and try to sell us the fact that
they really wanted to do this job at Harley-Davidson without being obnoxious, condescending, or
pushy or anything like that. I think they made a real good case. And the other thing was that their
[core] team exhibited the kind of cultural diversity important in today’s world.”
Carter: “I think it was very evident that they understood what I had said in the rst part of
November. The people involved in the demonstrations were passionate about their product, and they
understood what their product could do. They were also quick when there was something in our
demo script that didn’t match the functionality. They provided us with a work-around—“We can’t
do it this way, but this is how we can do it.” That shows that they read [the RFQ], and they
understand what their software can do. And to me that’s impressive.”
Anding: “Provider1 probably did the best job of paying attention to the people dynamics—in terms
of who had ownership or investment in certain pieces of the process. They were very, very good
about making sure that they engaged each of us on an individual level relating to where we t in on
the team. They focused their attention toward me when they talked about training and change
management issues, they focused attention toward the purchasing people when they were talking
about specic functionality.”
Jarosz: “Provider1 was very impressive. They stood out in all our minds because the enthusiasm of
those folks was just fabulous. It was also the most diverse group we had which was interesting. They
did an excellent presentation that addressed all areas. It was strong on the change management side
as well as functionality. From the people side they’ve been very, very strong. That, to me, appears to
be their strength right now.”
Jarosz: “ Provider2 was exactly as I had anticipated. They were on time and very formal. Very ‘shirtand-
tie’ approach, but that’s the kind of impression we’re getting of Provider2. They did a very nice
job on the demos—we got this vision of “Oh, this ows through beautifully.” They have a major
strength in their software product. It comes very close to the line by line detail that we had spelled
out in our specications in a lot of areas.”
Christianson: “Equally impressive. And they were impressive during the four-hour session. It would
appear that they had software that really had to be included in the nal round. In the demo visits,
they also provided work-arounds where they couldn’t meet what we actually were asking for. We
H arley Davidson Motor Company: Enterprise Software Selection 600-006
walked out of there with what we were looking for.”
Pues: “Provider2 was more classic. [The distinction] between the two is Provider1 was more laid
back, t the Harley mentality and personality a little bit more. Provider2 gave more of the traditional
sales pitch and you could see the hierarchical situation. You could see where they focused their
attention within the group, and you know they paid more attention to the people ‘higher up’ in the
group than others. However, the bottom line is they have a very, very nice package there.”
Cotteleer: “When we went through the plus and minus thing, our review, we were really left with a
dilemma with them, which was: strictly on a personality thing it’s easy for us to dismiss them, but as
far as functionality goes, we didn’t have enough information to dismiss them. They had a very high
score, but we also didn’t see enough of the product in the presentation. There is a third factor here—
that Harley-Davidson recently engaged Provider3 on a separate project. “
Webster: [explaining the rationale for the extra session] “We can’t discount or discard them because
they haven’t done anything to get selected. But if you look at all the publications out there, Provider3
does have some good press in terms of their overall ERP package, as well as their purchasing
Carter: “We’ve got to get past the people and the presentation, and see if there is any value to their
software. And we think there is, between the [partner] front end and their software—that’s why
they’re still in it. And we’re aware that Harley’s in the early stages of dealing with Provider3 on
another project. So for us to have the information that we needed in case there was some internal
pressure to go to Provider3, we felt that we had to take a little bit harder look at them. There may be
some economic benet in going to them.”
Jarosz: “I didn’t feel I could give them a grade on functionality, though I could certainly grade them
on timeliness and presentation skills. We hadn’t had a chance to see the actual software, which is a
big chunk of the functionality we need to understand. [During the extra session] we started to
recognize that the software was very competitive to everything else we had seen…. There’re probably
price advantages. There’re certainly integration advantages to staying with the same company if they
can provide the right solution “