By MARC L. SONGINI (February 01, 2002) After a three-year saga that included a $10.3 million hit from the failed installation of packaged applications, teddy bear maker Russ Berrie and Co. is taking another crack at retiring its legacy systems. The Oakland, N.J.-based distributor of toys and gifts this week finalized plans to roll out J.D. Edwards & Co.'s OneWorld Xe suite of enterprise resource planning (ERP), customer relationship management and financial applications. The multimillion-dollar project is scheduled to be done in phases during the next 18 months.

Russ Berrie CIO Michael Saunders said the company, which had sales of $225 million during the first nine months of last year, hopes that the OneWorld system will help it reach $1 billion in annual revenue by the end of the decade.

Within four months, he said, Russ Berrie expects to begin installing the applications one department at a time, starting with a stand-alone implementation in purchasing. "We're not going big bang," Saunders said. "We're trying to mitigate the risk."

The company has reason to be cautious. Three years ago, a Y2k-related migration from its homegrown distribution, financial and customer service systems to packaged ERP applications hit a brick wall. Saunders said the problems were severe enough for Russ Berrie to take many of the new applications off-line.

That forced the company to resurrect its aging Digital Equipment Corp. VAX systems and make them Y2k-compliant. "It was not a fun process," Saunders said. "It put a lot of extra strain not just on the technology [department] but the business as well." Credit: Russ Berrie and Co. Saunders wouldn't identify the software vendors that were involved in the failed implementation, but sources said that SAP AG's applications were part of the 1999 project.

A spokesman at SAP confirmed that Russ Berrie was one of its customers, but he declined to offer further details because of pending litigation between the two companies.

Installing high-end commercial order management systems can be especially difficult for consumer product group companies, said David Dobrin, an analyst at B2B Analysts in Cambridge, Mass. In fact, Kellogg Co. in Battle Creek, Mich., had such severe problems doing so it gave up.

"Going back to an old application is always tempting because it works better [than a packaged one]," Dobrin said.

Joshua Greenbaum, an analyst at Enterprise Applications Consulting in Daly City, Calif., said it sounds as though Russ Berrie "bit off more than they could chew" on the 1999 project. Companywide rollouts are especially risky for midsize businesses, Greenbaum said.

To try to protect itself the second time around, Saunders said, Russ Berrie hired a law firm with experience in the IT market. Washington-based Shaw Pittman LLP assisted the company during the software selection process.

Saunders wouldn't disclose the exact cost of the J.D. Edwards project. Some limited software customization work will be required, he said.

http://www.computerworld.com/storyba/0,4125,NAV47_STO67959,00.html

-- Anonymous, February 02, 2002