Which company owns products as varied as aircraft, space ships, land vehicles and medieval weaponry? It is also the world’s largest manufacturer of tyres by units.
The answer is, of course, LEGO. While the firm gears up its production in time for Christmas, LEGO’s CIO, Henrik Amsinck, took time out to give Computing an exclusive insight into his management strategy.
“Our philosophy is that best of suite beats best of breed, especially when the organisation is growing organically,” he says. “We have one brand, and we don’t buy or sell companies, so we operate one unified environment. We design our platform for longevity, with some services running for 20 years. We know that we’ll continue to grow organically, so unless some new disruptive technology comes out, some applications will live for many years.”
Amsinck adds that he likes to have what he describes as the “core” on one central platform. This core comprises customer, product, price, and employee data, all of which is contained in LEGO’s SAP estate.
“We wanted to exploit the fact that SAP has a persistent data model, so it’s easy to have consistent data overall. I used to work for the Danish incumbent telco, and it ran 250 different ERP [enterprise resource planning] systems, all with different data models. Of course they didn’t agree, and we needed all kinds of rules and lots of mediators to translate the data into another way of looking at things, and it became very messy.”
All the bricks in one basket
Discussing his experience as a SAP customer, Amsinck praises the ease of implementing changes to the business platform. There are many enhancements built into the software that can simply be switched on, he says, citing the in-house cash system to enable liquidity management as a good example.
“The in-house cash project is very valuable to us, we make millions of pounds of savings each year. So if I see a module offered on the SAP platform, then we just switch it on and get the business functionality. A large chunk of the budget on our IT projects goes into organising the LEGO organisation’s capabilities around the system, rather than implementing the system itself.”
But Amsinck is less complimentary about SAP’s pricing model, which he finds inflexible and overly complex. In fact, it’s clearly a major bone of contention, and one that he has raised with SAP.
“SAP has totally spoiled its own value proposition. In the old days I loved SAP because the price list could fit entirely on one A4 page. You just paid for light, medium and heavy users, it was very simple. But it has completely blown that away now and I’m so sad about it. It was a very transparent costing structure, but it’s now a hyper-market of applications.
“The price list is now over 300 pages, and it’s very hard to work out how to do something. It’s even harder to work out what it costs to run that number of applications. Even SAP sales people have a hard time telling you what you need.”
Amsinck has raised the issue with SAP’s local CEO in Den-mark, but he explains that even his powers are limited compared to the global might of the ERP vendor, or even compared to SAP’s pricing committee.
“The pricing committee long ago proved their commercial success, it’s just that SAP might not yet realise that some businesses will decide to leave them now because the pricing is too complex. And if you leave SAP, you will not be investing in SAP for a decade.”