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  1. 1. ERP Speaker Gijs Houtzagers Date: April, 13 2005 Time: 10.00 – 11.45 Location: Erasmus University, Rotterdam
  2. 2. Gijs Houtzagers <ul><li>At this moment Director competence center PeopleSoft at Holland Casino </li></ul><ul><li>Before that: international consultant, working for various consultancy companies, focused on the Human Resource component in information systems and ERP </li></ul>
  3. 3. Agenda <ul><li>Introduction on ERP systems </li></ul><ul><ul><li>What is ERP, who are the players </li></ul></ul><ul><ul><li>Future of ERP systems </li></ul></ul><ul><li>What is the current situation at Holland Casino and how did we get there </li></ul><ul><li>Case: An ERP system is being take over by a competitor: </li></ul><ul><ul><li>What are the consequences for the customer </li></ul></ul><ul><ul><li>What must he do and what not </li></ul></ul>
  4. 4. Definition ERP <ul><li>Integrated, automated dispatch of logistic, administrative and financial processes. </li></ul><ul><li>Purpose: maximizing efficiency and economy. </li></ul><ul><li>Ambition: B2B or Extended ERP </li></ul>
  5. 5. De essence of ERP
  6. 6. Porter creation of Capacity Reservation of Capacity Allocation of Capacity
  7. 7. Advantages of ERP <ul><li>Efficiency (data is put in once) </li></ul><ul><li>Abstract of coherence: de consequences of local decisions become visible for corporate level </li></ul><ul><li>Speed (for instance for order data entry and handling) </li></ul><ul><li>Cost saving (for instance better management of stock) </li></ul><ul><li>insight in order conduct of customers and other marketing essentials </li></ul>
  8. 8. Disadvantages of ERP <ul><li>Integration results in dependence of package and supplier </li></ul><ul><li>ERP is very critical: the success of the implementation reflects directly in the success of the company (Atag) </li></ul><ul><li>Errors have major impact, they are felt throughout the whole system </li></ul><ul><li>inflexibility (you don’t replace an ERP system very easily) </li></ul><ul><li>(often) difficult integration issues with applications of other suppliers </li></ul>
  9. 9. Parts of an ERP system <ul><li>Distribution </li></ul><ul><li>Manufacturing, assemble to order; engineer to order; make to stock, process batch </li></ul><ul><li>Project industries en services </li></ul><ul><li>Service en maintenance </li></ul><ul><li>Sales </li></ul><ul><li>Procurement </li></ul><ul><li>Finance </li></ul><ul><li>HRM </li></ul><ul><li>CRM </li></ul>
  10. 10. Origin of ERP <ul><li>Most based on production (MRP), later accounting was added </li></ul><ul><li>Human capital in mid 1990 seen as essential part </li></ul><ul><li>Exception: PeopleSoft had HRM as base. Finance, SCM and CRM were later added </li></ul>
  11. 11. ERP systems in de 20 th century <ul><li>5 power players: SAP, PeopleSoft, Oracle, Baan and JDEdwards </li></ul><ul><li>Completely different architectures from open (PeopleSoft) to Closed (SAP) </li></ul><ul><li>Propriety development tools </li></ul><ul><li>Implementations expensive and tricky </li></ul><ul><li>“ New” implementation method: business blueprint </li></ul>
  12. 12. ERP systems in the 21th century <ul><li>2 power players: SAP en Oracle </li></ul><ul><li>Strive after Services Oriented Architecture (integration) </li></ul><ul><li>Development tools: Java </li></ul><ul><li>Implementation becomes easier by the use of migration tools </li></ul><ul><li>Business blueprint remains starting point </li></ul><ul><li>ASP, two models: BPO and “Safe Harbor” </li></ul>
  13. 13. ERP systems: Future <ul><li>Battle for the mid market </li></ul><ul><ul><li>2 strategies: specific product or scalability </li></ul></ul><ul><ul><li>Buying market share (recent take over of Retek (retail) by Oracle </li></ul></ul><ul><ul><li>Simplification of application management and ASP </li></ul></ul><ul><ul><li>Reduction in license fees </li></ul></ul>
  14. 14. 2003
  15. 15. 2003 en 2004
  16. 16. 2005 And further
  17. 17. Status PeopleSoft at HC in September 2002 <ul><li>Different PeopleSoft versions (7.5.2 en 7.5.0) </li></ul><ul><li>PeopleSoft HR is used as an archive </li></ul><ul><li>Numerous HR files and x-time data entry </li></ul><ul><li>Inefficient HR processes </li></ul><ul><li>Much customization in HR </li></ul><ul><li>At HR en ICT very few PeopleSoft skills </li></ul><ul><li>Different People Tools versions </li></ul><ul><li>Different Oracle versions (8.0.1 en 8.1.1) </li></ul><ul><li>Payroll process is not being managed by PeopleSoft en for 60% done by hand </li></ul>
  18. 18. A mess of initiatives and projects
  19. 19. Future vision HR 2002
  20. 20. Future vision HR 2003 and 2004 <ul><li>Strategy: Integral application of HR instruments with a focus on business economics. HR must become the strategic partner for the board </li></ul><ul><li>Policies: Implementation of competence management and integrate it with the appraisal process </li></ul><ul><li>Management of administration: decentralisation of data entry, improving efficiency and increase of quality </li></ul>
  21. 21. The PeopleSoft projects <ul><li>Finance, started on September, 1 2002, live April, 25 2003 </li></ul><ul><li>EPM/budgetting started on February, 1 2003, live on August, 4 2003 </li></ul><ul><li>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 </li></ul><ul><li>PeopleSoft payroll process, started on October, 1 2002, live for testing September, 20 2003, live on January, 1 2004 </li></ul>
  22. 22. Approach rerimplementation HR
  23. 23. BPR
  24. 24. BPR 2
  25. 25. Workflow
  26. 26. Letter generator <ul><li>SQR  Startup Word (Server) </li></ul><ul><li>Open Word Template </li></ul><ul><li>Startup Word Macro </li></ul><ul><li>Merge Template </li></ul><ul><li>Outlook email Letter to User </li></ul>
  27. 27. Functionality PeopleSoft HCM 8
  28. 28. Functionality PeopleSoft FSCM 8/ EPM 8
  29. 29. Approach BPR HR processes (the Business Blueprint) <ul><li>Based on the existing processes reengineering by a small group of specialists </li></ul><ul><li>Mapping against PeopleSoft business model </li></ul><ul><li>Delegate informs HR management </li></ul><ul><li>Implementation using workflow </li></ul><ul><li>Offering of extra functionality for the users </li></ul><ul><li>Ongoing training and workshops for the users </li></ul>
  30. 30. Case <ul><li>The Oracle take over of PeopleSoft en the reaction of Holland Casino </li></ul>
  31. 31. Oracle Strategy <ul><li>Roll out of PeopleSoft 8.9 in 2005 </li></ul><ul><li>Oracle e-business suite 12 in 2006 based on SOA (100% Java) PeopleSoft Enterprise 9 in 2006 (dead end) </li></ul><ul><li>PeopleSoft EnterpriseOne 8.12 in 2006 </li></ul><ul><li>Components FUSION (data hubs en transaction db’s) in 2006. All 8.000 developers devoted to it </li></ul><ul><li>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) </li></ul><ul><li>Migration in 2008, automated update </li></ul>
  32. 32. Scenario’s <ul><li>The rest assured scenario </li></ul><ul><li>The take it or leave it scenario </li></ul><ul><li>The Reality scenario </li></ul>
  33. 33. Time frame 2008 2006 Yes 3 2007/2008 2006 Highest prio 2 Not sooner than 2008/2009 Not sooner than 2007 Yes not necessary in 2005 1 Migration Fusion Implementation 8.9 Fit/gap 8.9 in 2005 Scenario
  34. 34. Movements in the market <ul><li>Next PeopleSoft FIN out Coda in </li></ul><ul><li>Medtronic PeopleSoft HR out SAP in </li></ul><ul><li>Tabcorp PeopleSoft FIN out Oracle in </li></ul><ul><li>Camelot has PeopleSoft Fin en HR selected, in 2e instance SAP FIN and HR </li></ul><ul><li>State Delaware PeopleSoft HR out Lawson in </li></ul>
  35. 35. Migration <ul><li>EPM Fusion </li></ul><ul><li>HR Fusion </li></ul><ul><li>Fin - </li></ul>
  36. 36. What is the future offering? <ul><li>Possible the same we have now but probable not </li></ul><ul><li>Other IT architecture </li></ul><ul><li>Other company strategy </li></ul><ul><li>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) </li></ul><ul><li>A lot of costs </li></ul>
  37. 37. Is it possible to do nothing? <ul><li>From an application point of view: yes, however: </li></ul><ul><ul><li>Windows 2000 is supported until 2005 </li></ul></ul><ul><ul><li>Oracle 8.7.2 is supported until 2005 </li></ul></ul><ul><ul><li>PeopleSoft becomes divergent in the ICT department </li></ul></ul><ul><li>Problems with new rulings (Wet Walvis, levensloopregeling, zorgstelsel). </li></ul><ul><li>Problems with interfaces with other applications </li></ul>
  38. 38. Direct consequences <ul><li>No investments in PeopleSoft unless a necessity because of rulings. </li></ul><ul><li>There is a time frame: you cannot keep the business locked up for too long a period of time. </li></ul>
  39. 39. Analyzing the environment <ul><li>Use the network: </li></ul><ul><ul><li>Contacts with other customers, preferably in the US </li></ul></ul><ul><ul><li>Contacts with Partners </li></ul></ul><ul><ul><li>Give interviews </li></ul></ul><ul><ul><li>Attend members associations </li></ul></ul><ul><ul><li>Attend SAP EMEA (Sapphire) </li></ul></ul><ul><li>Benchmarking with experiences </li></ul><ul><li>Consult Annalists (IDC, Gartner) </li></ul><ul><li>Mapping of risks </li></ul>
  40. 40. Consequences long term <ul><li>New user interface </li></ul><ul><li>New functionality </li></ul><ul><li>New processes </li></ul><ul><li>Application development </li></ul><ul><li>A lot of risks </li></ul>
  41. 41. Routes <ul><li>Following PeopleSoft/Fusion = Oracle version 13 </li></ul><ul><li>Oracle version 11.10/Fusion </li></ul><ul><li>SAP </li></ul><ul><li>Microsoft </li></ul><ul><li>Local products </li></ul><ul><li>Outsourcing risks (LogicaCMG, TomorrowNow) </li></ul><ul><li>Primary starting point: Prove interface with current payroll of payroll in company </li></ul>
  42. 42. Next steps <ul><li>Initial scoping sessions </li></ul><ul><li>Reduction of number of routes (4) </li></ul><ul><li>Calculation of costs </li></ul><ul><li>Fit-gap for functionality </li></ul><ul><li>Choice before January, 1 2006 </li></ul><ul><li>Dependant of choice: implementation in 2006 or 2007 </li></ul>
  43. 43. Provisional analysis PeopleSoft 8.9- Fusion € 200 k, same as now € 1.25 mio, estimated <ul><li>What are we going to get </li></ul><ul><li>Know-ledge only with supplier </li></ul><ul><li>Payroll support </li></ul>PeopleSoft 8.9/Fusion Yearly support Project costs Oppor-tunities Risks Routes
  44. 44. Provisional analysis Oracle 11.10- Fusion € 200 k, same as now € 1.25 mio, estimate <ul><li>Possibly a more simple migration </li></ul><ul><li>Possible payroll in company </li></ul><ul><li>What are we going to get </li></ul><ul><li>Know-ledge only with supplier </li></ul><ul><li>Payroll support </li></ul>Oracle 11.10 - Fusion Yearly support Project costs Oppor-tunities Risks Routes
  45. 45. Provisional analysis SAP € 180 k, but € 125 K less because of payroll in company € 1.25 mio, estimate <ul><li>Know funct and IT </li></ul><ul><li>Knowledge in the market </li></ul><ul><li>Payroll in company </li></ul><ul><li>SAP has PSFT knowledge </li></ul>SAP Yearly suport Project costs Opportunities Risks Routes
  46. 46. Provisional analysis local products € 40 k but € 125 K less because of payroll in company € 0.5 mio, estimate <ul><li>Known funct. en IT </li></ul><ul><li>!00% Dutch legislation </li></ul><ul><li>Payroll in company </li></ul><ul><li>Insuf-ficient funct. </li></ul><ul><li>“ archaic” ICT architec-ture </li></ul>Local products Yearly support Project costs Oppor-tunities Risks Routes
  47. 47. Decision making <ul><li>Preparation by the competence center together with Purchasing </li></ul><ul><li>Tuning with ICT </li></ul><ul><li>Proposal to application owners (HR en F&C) </li></ul><ul><li>Tuning with steering committee ICT </li></ul><ul><li>Proposal to the board </li></ul>
  48. 48. Advice <ul><li>Make a decision, for your company, based on as many concrete elements as possible, include risks, functionality and costs </li></ul><ul><li>Manage the most major risk and look for the most simple solution </li></ul>
  49. 49. Mapping of risks