John Deere takes an agile approach to an ERP upgrade
Deere had invested heavily in a traditional ERP upgrade in Australia, with lackluster results. Dealers complained that the new system was too difficult to use and unintuitive. For example, a process that had 5 steps turned into 27. Data was inconsistent and often inaccurate, and the system often crashed.
But Deere’s management team felt like they were stuck in a pattern: When they needed better IT, they just bought After IT and costs were skyrocketing with diminishing returns. The decision to move to Agile felt more like a reset: let’s not spend more money, let’s spend it more efficiently.
Deere already had pockets of agile development across the organization, but no consistent methodology. When managers first announced the nimble pilot, more engineers raised their hands than the pilot needed. But when they explained the scale of change needed to implement agile development, some of those hands went down. Then, when the pilot programs started delivering these “thin slices” of functionality and customer testimonials started trickling through the organization, some hands went up. The new agile program had more support and better training than the pre-existing programs.
The move from Deere to Agile has yielded good results.
- Faster delivery of new features: According to some measures, the delivery time has been shortened by approximately 78%
- Value is difficult to measure across different functions. But when evaluating saved time and new features, Deere estimates that moving to agility created three times more value in some departments due to faster cycles.
- The development team was more satisfied with their own work and progress: the level of employee satisfaction (measured by eNPS) increased by 20 points.
- Deere was also able to cut most of its third-party support contracts, outsourcing that work instead. When he canceled an outsourced support contract and instead tasked his development team with support, the developers were initially suspicious as they thought it would interfere with their work. But closed-loop feedback between users and developers resulted in faster fixes and better functionality, which increased user and developer satisfaction.
Perhaps more importantly, the widespread adoption of ERP functions has made Deere’s system more scalable. The ability to provide thinly sliced functionality should prevent the system from becoming obsolete like a system upgraded once every few years might become. The closer connection between users and developers should allow Deere’s ERP to be more responsive to changes in its business. Together, these two qualities make an ERP system more resilient to change, better able to adapt to rapidly changing market conditions and business strategy.
Deere’s experience suggests some common elements industrial companies can follow to use agile to upgrade ERP.
Make agility part of the culture. Make sure the business and technology have clear lines of communication. Dedicated scrum masters and agile coaches reinforce the training.
Invest in technologies that facilitate agility. Reorganize technology teams around a product model and invest in cloud technologies to accelerate development.
Release the feature as soon as it’s ready. Even if users have to switch between the new and old system in the middle of a process, it’s better than waiting for the entire end-to-end process before publishing. Build the necessary interim interfaces (“disposable code”) to help bridge these incremental releases.
Adapt the budget. Move from big-budget, multi-year programs to funding persistent teams delivering regular feature enhancements.
Integrate teams capable of preparing for new problems. Ensure that when chaos is introduced into a system, critical components remain
Steve Berez is a Consulting Partner at Bain & Co. Ganesh Jayaram is Chief Information Officer at John Deere.
The authors would like to thank Florian Braun, management consultant at Bain and Daria Huang, senior practice manager at Bain, for their contributions to this article.