ERP

1
ERP

• Speaker
• Gijs Houtzagers
• Date April, 13 2005
• Time 10.00 11.45
• Location Erasmus University, Rotterdam

2
Gijs Houtzagers

• At this moment Director competence center
  PeopleSoft at Holland Casino
• Before that international consultant, working
  for various consultancy companies, focused on the
  Human Resource component in information systems
  and ERP

3
Agenda

• Introduction on ERP systems
• What is ERP, who are the players
• Future of ERP systems
• What is the current situation at Holland Casino
  and how did we get there
• Case An ERP system is being take over by a
  competitor
• What are the consequences for the customer
• What must he do and what not

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Definition ERP

• Integrated, automated dispatch of logistic,
  administrative and financial processes.
• Purpose maximizing efficiency and economy.
• Ambition B2B or Extended ERP

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De essence of ERP
6
Porter
creation of Capacity
Reservation of Capacity
Allocation of Capacity
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Advantages of ERP

• Efficiency (data is put in once)
• Abstract of coherence de consequences of local
  decisions become visible for corporate level
• Speed (for instance for order data entry and
  handling)
• Cost saving (for instance better management of
  stock)
• insight in order conduct of customers and other
  marketing essentials

8
Disadvantages of ERP

• Integration results in dependence of package and
  supplier
• ERP is very critical the success of the
  implementation reflects directly in the success
  of the company (Atag)
• Errors have major impact, they are felt
  throughout the whole system
• inflexibility (you dont replace an ERP system
  very easily)
• (often) difficult integration issues with
  applications of other suppliers

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Parts of an ERP system

• Distribution
• Manufacturing, assemble to order engineer to
  order make to stock, process batch
• Project industries en services
• Service en maintenance
• Sales
• Procurement
• Finance
• HRM
• CRM

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Origin of ERP

• Most based on production (MRP), later accounting
  was added
• Human capital in mid 1990 seen as essential part
• Exception PeopleSoft had HRM as base. Finance,
  SCM and CRM were later added

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ERP systems in de 20th century

• 5 power players SAP, PeopleSoft, Oracle, Baan
  and JDEdwards
• Completely different architectures from open
  (PeopleSoft) to Closed (SAP)
• Propriety development tools
• Implementations expensive and tricky
• New implementation method business blueprint

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ERP systems in the 21th century

• 2 power players SAP en Oracle
• Strive after Services Oriented Architecture
  (integration)
• Development tools Java
• Implementation becomes easier by the use of
  migration tools
• Business blueprint remains starting point
• ASP, two models BPO and Safe Harbor

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ERP systems Future

• Battle for the mid market
• 2 strategies specific product or scalability
• Buying market share (recent take over of Retek
  (retail) by Oracle
• Simplification of application management and ASP
• Reduction in license fees

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2003
15
2003 en 2004
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2005 And further
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Status PeopleSoft at HC in September 2002

• Different PeopleSoft versions (7.5.2 en 7.5.0)
• PeopleSoft HR is used as an archive
• Numerous HR files and x-time data entry
• Inefficient HR processes
• Much customization in HR
• At HR en ICT very few PeopleSoft skills
• Different People Tools versions
• Different Oracle versions (8.0.1 en 8.1.1)
• Payroll process is not being managed by
  PeopleSoft en for 60 done by hand

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A mess of initiatives and projects
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Future vision HR 2002
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Future vision HR 2003 and 2004

• Strategy Integral application of HR instruments
  with a focus on business economics. HR must
  become the strategic partner for the board
• Policies Implementation of competence management
  and integrate it with the appraisal process
• Management of administration decentralisation of
  data entry, improving efficiency and increase of
  quality

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The PeopleSoft projects

• Finance, started on September, 1 2002, live
  April, 25 2003
• EPM/budgetting started on February, 1 2003, live
  on August, 4 2003
• HR, Started on December, 1 2002, phase 1 live on
  Jun, 16 2003, phase 2 (competence management, met
  360 feedback and Training management on
  November, 1 2003 and January, 1 2004
• PeopleSoft payroll process, started on October, 1
  2002, live for testing September, 20 2003, live
  on January, 1 2004

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Approach rerimplementation HR
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BPR
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BPR 2
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Workflow
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Letter generator
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Functionality PeopleSoft HCM 8
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Functionality PeopleSoft FSCM 8/ EPM 8
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Approach BPR HR processes (the Business Blueprint)

• Based on the existing processes reengineering by
  a small group of specialists
• Mapping against PeopleSoft business model
• Delegate informs HR management
• Implementation using workflow
• Offering of extra functionality for the users
• Ongoing training and workshops for the users

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Case

• The Oracle take over of PeopleSoft en the
  reaction of Holland Casino

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Oracle Strategy

• Roll out of PeopleSoft 8.9 in 2005
• Oracle e-business suite 12 in 2006 based on SOA
  (100 Java) PeopleSoft Enterprise 9 in 2006 (dead
  end)
• PeopleSoft EnterpriseOne 8.12 in 2006
• Components FUSION (data hubs en transaction dbs)
  in 2006. All 8.000 developers devoted to it
• FUSION applications available in 2007. These
  contain minimal the same functionality as the
  Oracle apps of version 12, combined with the
  functionality of PeopleSoft 8.9 (or 9.0)
• Migration in 2008, automated update

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Scenarios

• The rest assured scenario
• The take it or leave it scenario
• The Reality scenario

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Time frame
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Movements in the market

• Next PeopleSoft FIN out Coda in
• Medtronic PeopleSoft HR out SAP in
• Tabcorp PeopleSoft FIN out Oracle in
• Camelot has PeopleSoft Fin en HR selected, in 2e
  instance SAP FIN and HR
• State Delaware PeopleSoft HR out Lawson in

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Migration

• EPM Fusion
• HR Fusion
• Fin -

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What is the future offering?

• Possible the same we have now but probable not
• Other IT architecture
• Other company strategy
• Lot of risks (to early versions, lack of
  integration, no support for current
  customizations, knowledge of application can only
  be found with the product supplier)
• A lot of costs

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Is it possible to do nothing?

• From an application point of view yes, however
• Windows 2000 is supported until 2005
• Oracle 8.7.2 is supported until 2005
• PeopleSoft becomes divergent in the ICT
  department
• Problems with new rulings (Wet Walvis,
  levensloopregeling, zorgstelsel).
• Problems with interfaces with other applications

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Direct consequences

• No investments in PeopleSoft unless a necessity
  because of rulings.
• There is a time frame you cannot keep the
  business locked up for too long a period of time.

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Analyzing the environment

• Use the network
• Contacts with other customers, preferably in the
  US
• Contacts with Partners
• Give interviews
• Attend members associations
• Attend SAP EMEA (Sapphire)
• Benchmarking with experiences
• Consult Annalists (IDC, Gartner)
• Mapping of risks

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Consequences long term

• New user interface
• New functionality
• New processes
• Application development
• A lot of risks

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Routes

• Following PeopleSoft/Fusion Oracle version 13
• Oracle version 11.10/Fusion
• SAP
• Microsoft
• Local products
• Outsourcing risks (LogicaCMG, TomorrowNow)
• Primary starting point Prove interface with
  current payroll of payroll in company

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Next steps

• Initial scoping sessions
• Reduction of number of routes (4)
• Calculation of costs
• Fit-gap for functionality
• Choice before January, 1 2006
• Dependant of choice implementation in 2006 or
  2007

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Provisional analysis PeopleSoft 8.9- Fusion
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Provisional analysis Oracle 11.10- Fusion
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Provisional analysis SAP
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Provisional analysis local products
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Decision making

• Preparation by the competence center together
  with Purchasing
• Tuning with ICT
• Proposal to application owners (HR en FC)
• Tuning with steering committee ICT
• Proposal to the board

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Advice

• Make a decision, for your company, based on as
  many concrete elements as possible, include
  risks, functionality and costs
• Manage the most major risk and look for the most
  simple solution

49
Mapping of risks