Enterprise Resource Planning and Sap Software
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Part Three Key System Applications for the Digital Age
Border States Industries Fuels Rapid Growth with ERP
CASE STUDY
B
order States Industries Inc., also known as Border States Electric (BSE), is a wholesale distributor for the construction, industrial, utility, and data communications markets. The company is headquartered in Fargo, North Dakota, and has 57 sales offices in states along the U.S. borders with Canada and Mexico as well as in South Dakota, Wisconsin, Iowa, and Missouri. BSE has 1,400 employees and is wholly employee-owned through its employee stock ownership plan. For the fiscal year ending March 31, 2008, BSE earned revenues of over US $880 million. BSE’s goal is to provide customers with what they need whenever they need it, including providing custom services beyond delivery of products. Thus, the company is not only a wholesale distributor but also a provider of supply chain solutions, with extensive service operations such as logistics, job-site trailers, and kitting (packaging individually separate but related items together as one unit). BSE has distribution agreements with more than 9,000 product vendors. BSE had relied on its own legacy ERP system called Rigel since 1988 to support its core business processes. However, Rigel had been designed exclusively for electrical wholesalers, and by the mid-1990s, the system could not support BSE’s new lines of business and extensive growth. At that point, BSE’s management decided to implement a new ERP system and selected the enterprise software from SAP AG. The ERP solution included SAP’s modules for sales and distribution, materials management, financials and controlling, and human resources. BSE initially budgeted $6 million for the new system, with a start date of November 1, 1998. Senior management worked with IBM and SAP consulting to implement the system. Although close involvement of management was one key ingredient in the systems’ success, day-to-day operations suffered
Part Three Key System Applications for the Digital Age
Border States Industries Fuels Rapid Growth with ERP
CASE STUDY
B
order States Industries Inc., also known as Border States Electric (BSE), is a wholesale distributor for the construction, industrial, utility, and data communications markets. The company is headquartered in Fargo, North Dakota, and has 57 sales offices in states along the U.S. borders with Canada and Mexico as well as in South Dakota, Wisconsin, Iowa, and Missouri. BSE has 1,400 employees and is wholly employee-owned through its employee stock ownership plan. For the fiscal year ending March 31, 2008, BSE earned revenues of over US $880 million. BSE’s goal is to provide customers with what they need whenever they need it, including providing custom services beyond delivery of products. Thus, the company is not only a wholesale distributor but also a provider of supply chain solutions, with extensive service operations such as logistics, job-site trailers, and kitting (packaging individually separate but related items together as one unit). BSE has distribution agreements with more than 9,000 product vendors. BSE had relied on its own legacy ERP system called Rigel since 1988 to support its core business processes. However, Rigel had been designed exclusively for electrical wholesalers, and by the mid-1990s, the system could not support BSE’s new lines of business and extensive growth. At that point, BSE’s management decided to implement a new ERP system and selected the enterprise software from SAP AG. The ERP solution included SAP’s modules for sales and distribution, materials management, financials and controlling, and human resources. BSE initially budgeted $6 million for the new system, with a start date of November 1, 1998. Senior management worked with IBM and SAP consulting to implement the system. Although close involvement of management was one key ingredient in the systems’ success, day-to-day operations suffered