When glob­al pow­er solu­tions leader Cum­mins set out to mod­ern­ize its dis­tri­b­u­tion unit’s ERP sys­tem, the stakes couldn’t have been high­er. Pre­vi­ous attempts at mod­ern­iza­tion had fall­en short, leav­ing the unit run­ning on tech­nol­o­gy that pre­dat­ed many of its employees.

While the tech­ni­cal hur­dles were sig­nif­i­cant, the real chal­lenge lay in reshap­ing Cum­mins’ approach to major tech­nol­o­gy projects. ​“There have been numer­ous attempts to upgrade the ERP sys­tem of the dis­tri­b­u­tion busi­ness unit, but we’ve nev­er man­aged to make it stick,” said Mark Smith, who leads val­ue real­iza­tion for Cum­mins’ dis­tri­b­u­tion busi­ness unit.

The team chose the name ​‘Project Quan­tum’ — fit­ting for both the leap in tech­nol­o­gy and the scale of orga­ni­za­tion­al change ahead.

“With this pro­gram, there’s so much more focus from the top down on mak­ing sure that this is suc­cess­ful,” not­ed Smith. ​“We’ve brought in new capa­bil­i­ties that we’ve not used before, like val­ue real­iza­tion and change man­age­ment, to just throw every­thing at it and make sure that it’s successful.”

The Imper­a­tive for Change

Cum­mins’ dis­tri­b­u­tion unit faced a unique tech­no­log­i­cal chal­lenge with­in the orga­ni­za­tion. While man­u­fac­tur­ing, pow­er gen­er­a­tion, engine busi­ness, and com­po­nents divi­sions oper­at­ed on mod­ern Ora­cle sys­tems, dis­tri­b­u­tion had grown through acqui­si­tions across dif­fer­ent coun­tries, each bring­ing its own tech­no­log­i­cal complexities. 

“Up until now, we’re still run­ning our Inter­na­tion­al dis­tri­b­u­tion busi­ness pri­mar­i­ly on two sys­tems called MoveX and GOMS, which are based on source code that Cum­mins pur­chased before I was born,” said Smith. ​“It’s incred­i­bly dat­ed. No one can say we don’t get the most out of our investments.”

The sys­tems ran on Aval­on, a source code from the 1980s that gave users noth­ing more than green text on black screens. As Cum­mins grew world­wide, these out­dat­ed sys­tems became a big­ger prob­lem – they strug­gled to con­nect with mod­ern soft­ware, leav­ing dif­fer­ent parts of the busi­ness unable to share data effectively.

A pre­vi­ous imple­men­ta­tion attempt in Africa revealed the pit­falls of their ini­tial approach. ​“We didn’t ful­ly under­stand the link between val­ue deliv­ery and adopt­ing the stan­dard func­tion­al­i­ty,” said Smith, describ­ing ​“a mind­set of think­ing we were all unique and spe­cial and important.” 

“We tried to heav­i­ly tai­lor the sys­tem to align with what every­one was cur­rent­ly doing, and it didn’t work.”

Exces­sive cus­tomiza­tion fol­lowed: ​“We tried to heav­i­ly tai­lor the sys­tem to align with what every­one was cur­rent­ly doing, and it didn’t work. We end­ed up with a sys­tem that was so heav­i­ly mod­i­fied that you’d prob­a­bly nev­er be able to upgrade it properly.”

These ear­ly strug­gles led to a com­plete rethink. Rather than forc­ing SAP to work their way, they learned from SAP’s proven indus­try prac­tices and adjust­ed their oper­a­tions accordingly. 

“What we’re doing now is look­ing at SAP and say­ing this sys­tem has been devel­oped for indus­try best prac­tice, and there­fore, what we need to be doing is try­ing to align the way we work to how the sys­tem and the indus­try work,” explained Smith. By adapt­ing process­es to lever­age stan­dard capa­bil­i­ties, the team aimed to break their cycle of imple­men­ta­tion failures.

Select­ing SAP S/4HANA marked a deci­sive step for­ward, promis­ing mod­ern capa­bil­i­ties and inte­grat­ed func­tion­al­i­ty. Yet suc­cess would depend less on the tech­nol­o­gy and more on Cum­mins’ abil­i­ty to prove, mea­sure, and real­ize con­crete busi­ness val­ue through­out the transformation. 

To build momen­tum, they start­ed small – pilot­ing the sys­tem in two coun­tries to demon­strate ear­ly wins before expand­ing further.

Over­com­ing Skep­ti­cism Through Val­ue Realization

Senior lead­er­ship required more than promis­es of improved effi­cien­cy to approve anoth­er large-scale ERP imple­men­ta­tion. ​“We’re not approv­ing this unless you can prove to us that you know how to deliv­er val­ue,” said Smith while dis­cussing ini­tial hes­i­ta­tions. ​“That’s what start­ed the ball rolling.”

Past busi­ness cas­es had erod­ed con­fi­dence by rely­ing too heav­i­ly on spec­u­la­tive pro­jec­tions. ​“Our orig­i­nal busi­ness cas­es had too many ben­e­fits which were unprov­able, so prov­ing that the project had been a suc­cess essen­tial­ly became an act of faith,” explained Smith.

Meet­ing this chal­lenge, Cum­mins devel­oped a com­pre­hen­sive three-stage val­ue real­iza­tion process. Stage one involved tra­di­tion­al top-down assess­ment using indus­try bench­marks, which were nec­es­sary for ini­tial approval but no longer suf­fi­cient on their own. In stage two, ini­tia­tive plan­ning, the team worked along­side their sys­tem inte­gra­tion part­ner to exam­ine the ​“art of the pos­si­ble” in SAP’s capa­bil­i­ties while simul­ta­ne­ous­ly gath­er­ing pain points from busi­ness users.

Stage three focused on oper­a­tional­iza­tion, the crit­i­cal step of embed­ding val­ue deliv­ery into the project’s DNA. The team metic­u­lous­ly mapped sys­tem capa­bil­i­ties, required process changes, and affect­ed busi­ness areas against their orig­i­nal val­ue assump­tions, a detailed val­i­da­tion process that helped tran­si­tion deliv­ery own­er­ship from the project team to the busi­ness units that would ulti­mate­ly be respon­si­ble for real­iz­ing value.

Rec­og­niz­ing that finan­cial ben­e­fits typ­i­cal­ly lag 12 – 18 months behind imple­men­ta­tion, the team devel­oped a sophis­ti­cat­ed approach to mea­sur­ing progress. 

“We know that we’re not going to deliv­er finan­cial val­ue from our ini­tial pilots,” said Smith. ​“But if we can put it in place and find oper­a­tional lead­ing indi­ca­tors, like small process KPI met­rics, that we can prove to peo­ple are improv­ing, then that gives them the con­fi­dence to say, ​‘Okay, yep, do your next rollout.’”

Their mea­sure­ment frame­work accounts for mul­ti­ple time hori­zons: imme­di­ate post-go-live hyper­care, a sub­se­quent six-month peri­od of learn­ing and process embed­ding, and final­ly, the real­iza­tion of mea­sur­able finan­cial ben­e­fits. ​“The assump­tion, obvi­ous­ly, is that if you can improve all of your lead­ing KPIs, then the lag­ging KPIs should fol­low. If the lag­ging KPIs don’t move as expect­ed, you should have suf­fi­cient data to pin­point the rea­sons why and act accord­ing­ly,” not­ed Smith. This gave lead­er­ship a clear view of what to expect and when — from ear­ly signs of improve­ment to actu­al finan­cial returns.

Col­lab­o­ra­tion and Change Management

Ear­ly imple­men­ta­tions at Cum­mins suf­fered from a divide between IT and busi­ness func­tions. Tech­ni­cal solu­tions arrived with­out suf­fi­cient con­sid­er­a­tion for busi­ness adop­tion or val­ue creation. 

“In the past, the project team would cre­ate a project, hand it over to the busi­ness, and then dis­band after hyper­care. If busi­ness results didn’t improve there was very lit­tle own­er­ship, as the busi­ness could just point fin­gers at a project which no longer exist­ed,” said Smith. ​“Now we’re say­ing that whilst the project team is respon­si­ble for the design, they’re not respon­si­ble for deliv­er­ing val­ue — that has to come from the business.”

Estab­lish­ing a val­ue real­iza­tion office proved cru­cial in bridg­ing this gap, though the role itself is still in flux. ​“We’re fig­ur­ing out how we want the role to work and how we want to scale this type of val­ue focus across the rest of our orga­ni­za­tion,” not­ed Smith.

Build­ing these new capa­bil­i­ties demand­ed exten­sive col­lab­o­ra­tion. The team engaged reg­u­lar­ly with SAP experts and worked close­ly with Accen­ture dur­ing the program’s first three months to under­stand indus­try best prac­tices. ​“Inter­nal­ly with­in Cum­mins, we have very lit­tle work­ing knowl­edge of SAP,” said Smith. ​“We knew we had to bring in some­one else.”

Through ongo­ing cor­re­spon­dence with SAP spe­cial­ists and reg­u­lar knowl­edge-shar­ing ses­sions, the team grad­u­al­ly mold­ed their approach. ​“We’ve been hav­ing reg­u­lar cor­re­spon­dence back and forth, shar­ing ideas and run­ning things by each oth­er,” said Smith. ​“Bring­ing all of that togeth­er and exper­i­ment­ing with it has enabled us to slow­ly mold this process that we’re now doing.”

The team learned some cru­cial lessons along the way. Above all, they dis­cov­ered you can’t cre­ate val­ue with­out bring­ing peo­ple along for the ride. ​“There is a very strong link between val­ue real­iza­tion and change man­age­ment. The two real­ly work hand in hand to fig­ure out what needs to change in order to unlock val­ue, and then work­ing with the change man­age­ment group to ensure that dri­ve and end state is embed­ded in what they’re telling peo­ple about what is going to hap­pen,” explained Smith.

“You have to change, and you have to know where to change and how to change.”

“You have to change, and you have to know where to change and how to change. That’s what we’ve been help­ing to edu­cate peo­ple on,” said Smith. 

Val­ue Real­iza­tion Beyond ERP

While senior lead­er­ship advo­cates for broad­er adop­tion of val­ue-based IT deci­sion-mak­ing, the prac­ti­cal appli­ca­tion requires flex­i­bil­i­ty. ​“Obvi­ous­ly, the scale of the work that we’re doing for this project is not going to be the same as what you do for a quick four or five months IT imple­men­ta­tion,” not­ed Smith. Now, they’re fig­ur­ing out how to adapt these lessons for projects, both large and small.

By choos­ing SAP S/4HANA Cloud Pri­vate Edi­tion and con­nect­ing it with spe­cial­ized busi­ness apps, the dis­tri­b­u­tion unit is build­ing a foun­da­tion for long-term growth. Already proven suc­cess­ful else­where in Cum­mins, tools like SAP Ari­ba for pro­cure­ment and High­Ra­dius for finan­cial process­es are just the beginning. 

“It unlocks that pos­si­bil­i­ty of inte­grat­ing much more heav­i­ly with more advanced edge sys­tems that we haven’t been able to use in the past,” said Smith. With approx­i­mate­ly 30 edge appli­ca­tions tar­get­ed for inte­gra­tion, the team is think­ing big about future possibilities.

Senior leadership’s per­spec­tive has evolved dra­mat­i­cal­ly since the project’s incep­tion. ​“All of our senior lead­ers who have seen what we’ve been doing in action are eager to try to roll that out in oth­er areas of the busi­ness,” said Smith. 

The chal­lenge now lies in adapt­ing these meth­ods for dif­fer­ent scales of imple­men­ta­tion. ​“How do we take what we’ve done here and apply it to process­es and trans­for­ma­tion projects of all lev­els?” asked Smith. ​“We’re still work­ing on that scalability.”

What began as a soft­ware upgrade turned into a com­plete rethink­ing of how to make tech­nol­o­gy invest­ments pay off. By com­bin­ing robust tech­ni­cal solu­tions with care­ful atten­tion to adop­tion and val­ue cre­ation, Cum­mins has estab­lished a new mod­el for tech­nol­o­gy investment.

Their expe­ri­ence proves that suc­cess­ful trans­for­ma­tion requires more than select­ing the right tech­nol­o­gy — it demands a com­pre­hen­sive approach to val­ue real­iza­tion, change man­age­ment, and busi­ness engagement.

The impact reach­es far beyond this sin­gle project. Leadership’s ini­tial skep­ti­cism pushed the team to devel­op bet­ter ways to eval­u­ate and track suc­cess. Now, these meth­ods are reshap­ing how Cum­mins approach­es all its tech­nol­o­gy investments.

Cum­mins’ expe­ri­ence has reshaped its approach to tech­nol­o­gy invest­ments. ​“You can’t just buy and imple­ment a sys­tem and expect every­thing to be bet­ter,” not­ed Smith. ​“Val­ue isn’t just going to be some­thing that appears.”