Diversified manufacturer successfully transitions from legacy financial systems

Leggett & Platt may not be the most common household name, but the products it makes are found nearly everywhere. Since it began in 1883, the company has grown to 120 manufacturing facilities in 18 countries employing 22,000 people. Leggett & Platt is a leading U.S. manufacturer of:

•  Bedding components
• Automotive seat support and lumbar systems
• Components for home and work furniture
• Flooring underlayment
• Adjustable beds
• High-carbon drawn steel wire
• Bedding industry machinery

The company has a strong tradition of continuous improvement in products and services. This includes embracing new technology to increase financial-process efficiency. By 2015, Leggett & Platt had several legacy systems handling general ledger, purchasing, and reporting. The systems worked, but they didn’t all work seamlessly together so some manual processes were still required.

The company wanted to begin moving to a single financial-process system to increase efficiency, reduce maintenance, and provide a more consistent user experience. Microsoft Dynamics AX 2012 in Azure met those requirements. And, the user interface was compatible with Microsoft Office, which employees were already using. “On the IT maintenance side, we found that Dynamics AX would be much easier to maintain compared to more complicated back-end designs of other systems,” says Ben Burns, Vice President and Treasurer at Leggett & Platt.

From batch processing to real-time results

Even though the new system would have a familiar look for Leggett & Platt’s users, it would still involve significant changes in how they performed tasks. “Dynamics AX wouldn’t require all new business processes, but we would be going from a batch-based system to a more real-time system,” says Burns. “Some tasks would be the same but performed in a different system. However, many processes were going to be improved, and thus executed in a different manner.”

To add to the challenges, the transition would happen over a weekend so executive sponsorship, preparation, user training, and communication were critical. Leggett & Platt benefited from a very engaged Executive Steering Committee, a strong Project Management Office (PMO), and a talented group of IT and business process leaders. Microsoft Consulting was engaged for the technical side of the project and had a brief conversation with the Executive Steering Committee about Microsoft Adoption and Change Management (ACM) methodology. “From the beginning, we recognised that we needed a change management workstream for this project, but we decided to do it on our own at the early stage,” says Burns.

Burns was named project lead of the company’s transition management team, which included eight team members from operations and corporate shared services. Using a basic change management framework, the transition management team met weekly for several months to work through the process.

“As the project ramped up, we clearly understood our objectives, but we began to struggle with developing tactical plans to execute our strategy,” says Burns. “Our employees knew that system changes were coming and began to have a lot of questions. We needed to ramp up communications and develop our training plan. That is when we engaged Microsoft Adoption and Change Management Services.”

Mapping out the details

The first step in Leggett’s ACM journey was a conference call between the transition management team and Panos Papaioannou, the Microsoft ACM consultant. “We told Panos what we had accomplished so far, and he identified our need for a more detailed project plan,” says Burns. Papaioannou met with the transition management team at its headquarters in Carthage, Missouri, and spent three days taking them through the critical elements of change management: sponsorship, training, communications, coaching, resistance management, rewards and recognition, and adoption measurement.

“During that time, we put together a project plan with approximately 200 specific steps that detailed who was going to do what and when,” says Burns. “Panos told us, ‘I understand what you want to do, and here’s how you can do it,’ and that was the biggest value of the whole ACM engagement.”

Building a strong team

Following guidance from Panos, a team of Leggett & Platt “champions” was assembled, which included several key company executives and was led by Chief Financial Officer Matt Flanigan. “Panos and his ACM professionals came in and trained our team on what it means to be a champion in the context of change management, which was very helpful,” says Burns.

Once the champions were in place, the transition management team assembled two additional support groups referred to as “yellow vests” and “red vests.” The yellow vests came from user stakeholder groups. They had strong business process knowledge and understood what the project was about and what changes needed to be made. Their task was to facilitate communications, answer questions, and give feedback to the transition management team about managing adoption resistance and training concerns. The red vests were management employees who were charged with escalating issues as needed.

At the same time, the transition management team organised the overall plan into seven subplans representing the critical elements of change management and assigned a point person to each subplan. “Every week, the people responsible for each of those plans reported to our transition management team on their activities, challenges, and what decisions needed to be made,” says Burns. “Each person had 10 minutes to present, and Panos attended to give feedback.” Burns communicated the results of those meetings weekly to the Executive Steering Committee, so everyone was aware of concerns and could resolve them.

The entire ACM engagement lasted approximately 15 months. “After the initial project plan was developed, we used Microsoft ACM Services for about 10 hours per week in the first few months,” says Burns. “Once we understood the necessary steps for implementation, we took it from there and checked in with Panos as needed.”

Key lessons learned

One of the key facts the Leggett & Platt transition management team learned from the ACM engagement was that ACM general methodology is adaptable and scalable to the specific cultural and operational requirements of each company. “It took us a little time to realise that we didn’t have to do every specific ACM task exactly as suggested in their playbook,” says Burns. “We are manufacturers and accustomed to working with a bill of materials—when we get a list of things to do, we go do them. Panos explained that the ACM tasks are concepts, and we had to make them our own and do what works in the context of Leggett’s culture. After we personalised the methodology, it really took off and we became very effective.”

Another major factor in the success of the Dynamics AX change management project was a strong communications plan. “The challenge was the volume of information and the number of people who needed the information,” says Burns. “We needed to figure out how to communicate, what channel to use, and what level of detail to provide so as not to overwhelm everyone.”

With guidance from Panos, the transition management team identified all employees who would be affected by the new system. From there, Dynamics AX security roles were used to determine what information needed to be delivered to each user. Leggett’s SharePoint site and email blasts were used to target communications to these system users. For example, when people put in security requests for Dynamics AX, those changes automatically updated a change management database created by the company’s IT department. “That database really helped us more effectively target the communications,” says Burns.

In addition, the ACM team helped Leggett & Platt identify the training needs of the approximately 1,500 employees who would be using the new Dynamics AX system, and helped identify a Microsoft partner to develop, execute, and deliver a customised training plan.

Going live

The move to Dynamics AX happened over a weekend. “We went from about 1,500 people using our legacy systems on Friday to using Dynamics AX on Monday morning,” says Burns. “Certainly it was somewhat stressful for our users, but from a change management perspective, our communications and training strategies exceeded my expectations. And, from the operations view, our business processes worked—payments went out, cash receipts were applied. Things went very smoothly.”

During the first week after going live, the Leggett & Platt transition management team was busy identifying issues and used the ACM communications framework as a feedback mechanism. “The yellow vests and red vests out in the businesses and corporate departments communicated up the chain through the transition management team, who then took feedback to our IT professionals,” says Burns. “We had an entire system set up to identify critical issues, and then triage and resolve them.”

Many of the workstream leaders on the project team now work on business process improvement full time. “One of the great things that came out of this project is that we continue to benefit from the knowledge and experience our transition management team gained from the ACM process,” says Burns. “These are not all IT professionals; they also come from our Accounting, Purchasing, and Credit departments. Their job now is focusing on business process improvement to help us identify what we need to do to continue to refine our processes as we go forward.”