Strategic Use of Enterprise Architecture (EA) with Enterprise Resource Planning (ERP) Systems For Federal Government Success Yeliz ESERYEL, MBA., MSc., PMP., CPIM. email@example.com
Why Am I Here? • As a Project Manager • To talk about Enterprise Resource Planning (ERP) Systems implementations for federal government. • As a supporter of Enterprise Architecture • US Department of Transportation (OAO Corp) • US Housing and Urban Development (Booz | Allen | Hamilton) • As a Syracuse University Adjunct Professor • IST 710 Managerial ERP Decisions for Federal Government • Washington, DC (focus: federal government) • IST 600 ERP Systems: Key Implementation Issues • Syracuse Campus (focus: private sector)
Who Are You? Assumption about the audience: • Work for or with Federal Government • Little or no knowledge of ERP systems • Good understanding of EA
Outline • What is an ERP system? • Why should you care? • ERP Implementations in Federal Government • WIIFM • Why implement ERP? • Why not implement it? • Challenges • A Case Study • A Real Life Case Study- Welch Allyn
Single Integrated Database Modular Structure Similar Interfaces Finance / Controlling Accounting Customer Service Sales / Marketing Human Resources Engineering What is an ERP system? • Enterprise Resource Planning System (ERP) • Complete Suite of Integrated Applications
Why Should You Care? • Navy • The Department of Veterans Affairs • Oracle- Financials and Federal Purchasing • Small Business Administration • Oracle contract • National Institute of Health • Oracle contract
Why Should You Care? WIIFM Question. • Federal-government spending on ERP is expected to grow 33 % to more than $7.7 billion by 2010 (Input Research, 2005) • Business involvement is necessary • After ERP, organizational dynamics change. • Knowledge is power. • After ERP, power dynamics change. • New Career Opportunities • Leadership roles within your agency or in other agencies, • Consulting/project management opportunities. • Unique expertise combination: EA & ERP. • It’s fun!!! • Challenging • Complex • Learning opportunities
Why implement an ERP system? • Single integrated database • Data integrity • Data sharing between applications • Easier data handling • Better management of resources across sub-agencies • Centralize the finance and human resources efforts across agencies. • Integrate key supply chain and other functionalities instead of maintaining many legacy systems. • The capabilities and processes enabled by different modules • Eg: Extensive reporting capability of Business Warehouse (BW) • Customer Relationship Management- to automate transactions with civilians and provide them with better service beyond automation.
Why Not Implement An ERP System? • Size • MS Excel, MS Access, Oracle • Mission • Resources • Financial • Human Resources- Expertise • Leadership Support for a Medium Period of Time • Environmental Dynamics
ORGANIZATIONAL TECHNOLOGY Challenges Related to ERP Implementations Functional silo’s Understanding organizational needs Managing change Run the business while implementing ERP at the same time (resource) Project management within ERP context Obtaining sustained leadership support • Integrating with other systems and ERP’s • Maintaining ERP • Support packs • Fixes • Upgrades • Customization RESOURCES Money!!!! Time Skills- Outsourcing? Developing internal skills? Hiring new people? Managing contractors
A Case Study • You are currently in charge of your organization’s EA. • Your agency’s CIO thinks that it’s time agency should get on the ERP bandwagon. • Your boss puts you on the committee to evaluate ERP decision and get the organization ready for ERP implementation. • You have plenty of IT & organizational experience. …but no ERP implementation experience What would you do? Which questions would you ask?
Key Question: EA & ERP • How are they different? • Will they work well together or will they compete? • How do you make them work well together?
EA and ERP - Similarities • Enterprise-wide initiatives • Strategic Initiatives • Change agents • Require Business Involvement • Require specific knowledge/expertise • Typically consultants/ external experts. • Need for ongoing maintenance
ENTERPRISE ARCHITECTURE Framework Includes strategic, human, technology components among others Helps you justify and decide on IT initiatives. ENTERPRISE RESOURCE PLANNING System Includes the functionality that you want it to include (modular nature) It is an IT initiative. (In fact it is a business initiative) EA and ERP Key Differences
Coming Back to Your Case… • Your boss put you on the committee to evaluate ERP decision and get the organization ready for ERP implementation. • You understand that EA and ERP are different things and that they are best employed together. • How will you make them work well together?
Some Key Questions to Ask • Is ERP a good fit for my agency’s mission and goals? • Cost-Benefit Analysis • What are the benefits of ERP? • What are our goals? • Is there a good match? • What are the costs in terms of time, people, money? • Can benefits justify the costs? • What is the expected ROI? • Which ERP system is appropriate for my agency? • SAP, Oracle, JD Edwards… • Define the criteria for best fit • Cost • Support • Interface
Some Key Questions to Ask • Can the agency handle the transition and support? • Network capability • Slow down of service delivery, potential issues, learning period. • People and resources for ongoing support, upgrades, etc. • How do I secure the key skills/resources for the implementation? • Business people to be involved • IT Skills • Hire? • How to Manage? • Outsource? • Which company? • What are the criteria to select the company?
Some Key Questions to Ask • What are the risks? • Environmental uncertainty (wars, etc.) • Leadership change? • Change in the staff? • What type of implementation is appropriate? • Big bang • Phased
How to Answer them Through EA Source: Bernard, S. A. (2005). An introduction to Enterprise Architecture (2nd ed.). Bloomington, IN: AuthorHouse.
One More Key Question & Answer • Can I get buy-in & support from the leaders? • Executive support • Middle management buy-in • Did you involve the leaders and the middle management in the EA implementation?
What Else Can You Think Of? • How can we use EA and ERP to support each other after ERP implementation? • How else can we use EA to support ERP or vice versa?
Resources and Questions Yeliz ESERYEL, MBA. MSc., PMP., CPIM Contact: firstname.lastname@example.org http://www.cafeart.org/yeliz Additional Resources: Eseryel, U. Y., & Wolf, N. (2005). Enterprise architecture as a context for ERP implementation. Journal of Enterprise Architecture, 1(2), 7-24. S.U. ERP Class Website: http://istclass.syr.edu/~ist600erp
Real Life Case Study: Welch Allyn’s SAP Journey • Started in 2002. • Outsourcing Decision • All IT people are hired by Cap Gemini • CIO & later Global IT Director • 5 Year Contract with Cap Gemini as our SAP Integrator • What are the benefits? • What are the disadvantages? • Gap in implementation • Big Bang Implementation • Roughly >$5M.
SAP Project Time Line Europe Go Live 11/14/2005 Canada Go Live 11/24/2003 U.S. Go Live 2/02/2004
MM/PP: Materials Management/Production Planning PLM: Product Lifecycle Management SD/CS: Sales, Distribution & Customer Service FI/CO: Financials and Controlling BW: Business Warehouse PM: Plant Maintenance SEM/EC-CS: Strategic Enterprise Management CRM: Customer Relationship Management ModulesImplemented
Why Did Welch Allyn Implement SAP? • Become more efficient with new consistent system tools. • A step towards better serving our customers. • Bring products to market faster. • Service our international customers better. • SAP handles service and manufacturing businesses. • Acquire and integrate other companies faster. • Become more efficient and profitable.
Sales & Marketing: Segment Customers by Value-Focus promotions Product Development: Common Platforms across the world, efficient processes Customer Care: Increase accuracy and efficiency. Operations: Incr. Efficiency, better inventory and data management Finance: Rapid integration of acquisitions, multiple currency Human Resources: Improve development of critical skills. Information Services: Lower costs- manage 1 system instead of 60 legacy systems. Summary of Benefits
Some of the Key Issues We Faced At Welch Allyn • Organizational Change Management • Securing resources for organizational change • Creating and delivering training—lots of it! • People to do those. • Managing project related documentation. • Knowledge management/transfer (Super Users) • Knowledge Management • In an outsourced implementation environment. (Consultant-business leads) • Turnover in consultants • Management of Relationships with Consultants. • Getting the right consultants • Managing the communication/coordination between the company and the SAP integrator. • Business Process Reengineering • During the implementation • After the implementation