Van maker BrightDrop builds ERP and business in parallel

Electric vehicles are sufficiently distinct from their gas-guzzling cousins that auto makers have the chance to toss out decades of legacy manufacturing systems. That can go for their IT infrastructure too. When General Motors named Namo Tiwari CIO of its internal startup BrightDrop, he decided to build an ERP from scratch rather than piggy-back on GM’s existing system.

GM set up BrightDrop in January 2021 to modernize first- and last-mile transport with an integrated ecosystem of electric vans and motorized pallets. By the time Tiwari arrived six months later, BrightDrop staff was already talking to parts suppliers and manufacturers, wanting to set up procurement processes.

“We were able to manage some of them through Excel and Word,” he says. “It was quite a handful, but one advantage we had was it wasn’t like we were dealing with millions or trillions of records in the first place.”

The race was on, though, to build the definitive system before those ad-hoc solutions took root. “We didn’t want to build a lot of ecosystem on Excel, Word and SharePoint because when you build the processes outside the tools then bring it back migrating historical data, it’s much more challenging,” he adds.

One of his first priorities, then, was to identify the key features the company required in an ERP system. In addition to the basics — the onboarding of suppliers, processing of invoices, and creating purchase orders already being done in Excel and Word — he needed something that could perform other important functions on his list, such as supply chain demand planning and financial forecasting.

Out-of-the-box thinking

“We were looking for something where we could leverage 90% or maybe 100% of out-of-box capability because we were just building the business processes,” he says. “Agility and speed is most important for us,” he says, emphasizing that he didn’t want to spend six months evaluating options either. So the process was short, but not cursory, he says.

The rest of GM runs on SAP, so although he evaluated other vendor offerings, this became the natural choice for Tiwari. But he wasn’t interested in using ECC, SAP’s legacy ERP offering. GM started the lengthy process of upgrading its ECC systems in June 2016, and by early 2019 had succeeded moving its global ledger to SAP S/4HANA for central finance.

He also wasn’t interested in having his small IT team — today the equivalent of 19 full-time staff serving almost 300 BrightDrop employees — manage racks of servers. “As soon as you hear about SAP ERP, it’s like, ‘Oh, it’s a gigantic elephant that requires tons of folks for IT operations,’” he says.

Instead, he chose to outsource these responsibilities, turning to SAP’s cloud-based offering. “With S/4HANA Cloud, and especially multi-tenant public cloud, you don’t have to deploy a lot of IT team to support this infrastructure,” he says.

That choice is in marked contrast to GM’s 2012 decision to insource IT operations wherever possible.

“I changed the whole dynamic here by going with the fully cloud solution,” he says.

Process implementation

BrightDrop’s status as a start-up also meant Tiwari could turn other things on their head too.

“Typically in IT,” he says, “you first map out all the business processes and then start implementing the tool, and for that you need to have people on the business side who will say, ‘This is how my business process works.’ In our case, we were hiring people and at the same time implementing.”

Choosing the public edition of S/4HANA Cloud means that BrightDrop gets the same version of the software as everyone else, and that configuration, rather than customization, is the key. That could have made his job difficult but, he says, because SAP already has so many customers in the auto industry, “SAP already knew that in automotive, this is how procurement happens,” and could offer an appropriate configuration right out of the box.

Internally, he had experience on his side too with product owners in the team with about 20 years of ERP or SAP experience —  people who know the technology and language to use when speaking with staff on the business side, and have seen SAP work in three or four other organizations before, giving them the confidence to put together a demo out of the box and tell users that’s how it’ll work.

“It wasn’t like a traditional ERP implementation where you’d write a bunch of documentation or business requirements, then go and build it,” he says. “It was kind of running parallel: building the processes while leveraging the out-of-box capability.”

That meant things could move quickly. “We started the project in the middle of last year, and then went live in February this year,” he says. That’s in stark comparison with the 30 months it took the parent company to migrate its global ledger.

Having the freedom to move at such speed is both liberating and terrifying. In one sense, he says, he felt empowered because he could move ahead without a lot of baggage. “But where I was a little bit nervous was that I didn’t know how the business processes might turn out,” he says. “People come and say, ‘This isn’t the way I’m used to. I want to do it this way,’ and that’s where your customization usually kicks in.”

In that scenario, many IT leaders are stuck with having to build a custom capability, adding to cost, but Tiwari’s approach was to look for other ways to match up workers’ desires with the out-of-the-box options available. So there was a lot of back and forth in the build process. “It was very interactive,” he says, with demos every week or so, rather than the IT team interviewing users about the requirements, then disappearing to return three months later with a solution that no longer met their needs.

Tiwari hasn’t built everything from scratch, though. For example, BrightDrop is still relying on GM’s central IT services for the HR management systems used to onboard staff and give them a email address.

“Once they have that email, the way I’ve deployed my infrastructure, they’ll be able to connect to all my ecosystems using that address,” he says.

But as deliveries of BrightDrop’s electric vans begin, Tiwari needs to build out connections with the company’s network of dealers. “Some of them still use mainframes on their side of the house, and then my side is like 50 years ahead in the technology, so that’s my biggest challenge right now.”

Cloud Management, ERP Systems, IT Leadership, SAP