Denso ERP upgrade

DENSO Europe – Upgrades

DENSO Europe increases efficiency by updating to Oracle JD Edwards EnterpriseOne V9.0

DENSO is one of the largest businesses in the world that specialises in the development, production and sale of car parts. The business, which has 120,000 employees, over 200 branches worldwide and a turnover of nearly 30 billion euros per year (2011/2012 financial year), produces high-tech components for the automotive industry. These devices include electrical systems (such as management systems for diesel and petrol engines), climate systems (such as air conditioning and radiators) and information and safety systems (i.e. interactive navigation systems and pre-crash airbag systems). The headquarter of DENSO is established in Japan. Central management of European operations is conducted via the headquarters in the Netherlands and other branches in countries such as Belgium, Germany, Italy, France, Sweden and the UK.

Missing functionalities

Until now, DENSO Europe had used Oracle JD Edwards World by Oracle. However, DENSO Europe’s Finance & Accounting (F&A) Department experienced problems with this software. Oracle JD Edwards World did not sufficiently facilitate compliance with financial regulations, such as SOX and J-SOX. Furthermore, payments via SEPA – the payment system for European transactions – were not possible within this package. Pim de Groot, Director of F&A: “This was costing us lots of money in consultancy fees in order to make this functionality possible within our system.” Another problem that DENSO encountered was that IFRS, the new accounting standard for organisations’ annual financial statements, was not supported. De Groot: “This was a definite requirement for any new package. We also wanted to work faster, make more efficient usage of our software and we wanted a more user-friendly system.” DENSO had been using Oracle JD Edwards World since 1994. De Groot: “For years, it provided a solid base for operations. However, over the years, a lot of customizations have been done and other software programmes have been added to fill up missing functionalities that the need to switch systems became unavoidable.”

Purchasing process

De Groot continued: “Before the start of the project, we carried out a feasibility study in collaboration with the IT department and F&A of both DENSO Europe and the headquarters in Japan. As we would be the first DENSO division to switch from Oracle JD Edwards World to Oracle JD Edwards EnterpriseOne V9.0 (JD Edwards E1 V9.0), careful investigation was conducted into the functionality, and in particular, the interfaces with other DENSO systems. Oracle Japan and Cadran also provided input during this research. At the start of 2011, we were given the go-ahead, and the implementation took nine months in total. By 2012, all sales offices (the Netherlands, Germany, Belgium, Sweden, the UK, Italy and France) had gone live.

Collaboration with Cadran

For the implementation, DENSO worked together with Cadran. De Groot: “The collaboration with Cadran was of great importance, especially in the run-up to the implementation. During this process, a great deal of trade knowledge was necessary in order to ensure that DENSO Corporation and Denso Europe were on the same page. Cadran played an important role in this process. Furthermore, the collaboration during the implementation was extremely pleasant. They have a very hands-on mentality, they are extremely pragmatic, they have a flexible attitude and they speak to the clients on their level. We are very satisfied with the collaboration.”

Increased efficiency

DENSO Europe has greatly improved efficiency by implementing JD Edwards E1 V9.0. De Groot: “The most important benefit was the huge efficiency, as we have been able to automate a great deal of manual activities, such as processing bank statements. In the past, this had to be done manually. Now, once a payment comes in, the system can automatically recognise which invoices the payment is for and can automatically process it. This has improved the efficiency of the process by 70-80%. Another example is the creation of reports. Before, this was a time-consuming manual task. Now, we can create things like VAT reports at the touch of a button and convert them into any desired format. This has significally boosted the accessibility of information.”

Multiple functionalities

Rick Portenge, Assistant Application Manager for F&A Systems: “It is also a great benefit that we do not longer depend on external consultants because JD Edwards E1 V9.0 package offers more functionalities, such as the ability to support SOX and SEPA transactions. Furthermore, we now handle a lot of things ourselves. For example, all application management activities are now handled by F&A. This saves both time and money. One example of this is the security settings. In the past, everybody could gain access, and we couldn’t manage the settings ourselves. Now, the security settings are extremely strict, and we can maintain them ourselves. We have also been audited by Deloitte regarding the compliance. In addition, the user interface has significantly been improved. With JD Edwards E1 V9.0, you work in a normal Windows environment, which is more user-friendly for everyone.”

Training and testing

De Groot: “The implementation went very well. We stayed on budget and completed the process within the estimated time. There were some problems when we went live, as certain processes were not tested extensively enough. That required some problem-solving activities, but it turned out fine in the end. It taught us that when conducting test phases with users, you must make them as long and intensive as possible. We also devoted a great deal of attention to the training of our staff, as an implementation such as this represents a significant change. You also have to ensure that people understand and support the change. For this purpose, we arranged both group and one-on-one training and we arranged incentives connected to JD Edwards E1 V9.0. This helped everyone to get used to the system as quickly as possible.”

The future

DENSO Europe remains focused on increasing efficiency and reducing costs, which is of high importance in today’s automotive market. New developments are therefore closely followed and quickly adopted. De Groot: “We are currently setting up a system for electronic invoice handling, i.e. matching orders and incoming invoices in order to enable automatic processing. Furthermore, as the manufacturing factories still use JD Edwards World, we want to investigate the degree to which efficiency could be improved by switching to JD Edwards E1 V9.0. The implementation that we have conducted so far has more or less served as a pilot project within the organisation. Its success paves the way for further expansion within DENSO.”