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  1. 1. Strategy & Action Plan for an ERP Program Iftikhar Nadeem Advisor, Information Strategy Office of the Supervisor for Financial & Administrative Affairs February 22, 2005
  2. 2. The ERP Program Committee <ul><li>Dr. Muhammad Al-Khaldi (Chair) </li></ul><ul><li>Dr. Salih O. Duffuaa </li></ul><ul><li>Dr. Talal Maghrabi </li></ul><ul><li>Dr. Ibrahim Al-Jabri </li></ul><ul><li>Dr. Abdulaziz Al-Mulhem </li></ul><ul><li>Mr. Iftikhar Nadeem </li></ul><ul><li>Formed on July 9, 2004 </li></ul><ul><li>Report submitted on January 10, 2005 </li></ul>
  3. 3. Agenda <ul><li>ERP Program Committee </li></ul><ul><li>Methodology </li></ul><ul><li>Business Processes and Systems </li></ul><ul><li>ERP Systems </li></ul><ul><li>ERP Program Cost </li></ul><ul><li>Mission, Vision, Objectives & CSFs </li></ul><ul><li>Program Organization </li></ul><ul><li>Implementation Roadmap </li></ul><ul><li>Change Management </li></ul><ul><li>Conclusions and Recommendations </li></ul>
  4. 4. Charges of ERP Program Committee <ul><li>Vision, mission, goals and objectives </li></ul><ul><li> Organization of the project with clear roles and responsibilities </li></ul><ul><li> Identification of the business processes </li></ul><ul><li> Review of current applications </li></ul><ul><li> Short-list ERP systems suitable for KFUPM </li></ul><ul><li> Implementation strategy </li></ul><ul><li> Scope of work including phases, if any </li></ul><ul><li> Project period </li></ul><ul><li> Costs estimates </li></ul><ul><li> Change management plan </li></ul>
  5. 5. Methodology
  6. 6. The ERP Program: Mission and Vision <ul><li>Mission </li></ul><ul><li>To improve, enable and integrate academic and administrative processes of the University </li></ul><ul><li>Vision </li></ul><ul><li>To adopt and sustain the best information technology enabled business processes in order to support the most productive environment for learning, innovation and research. </li></ul>
  7. 7. The ERP Program: Objectives <ul><li>Improve effectiveness and efficiency of academic and administrative processes </li></ul><ul><li> Improve support for decision making </li></ul><ul><li> Enhance availability and access to timely and reliable information </li></ul><ul><li> Enhance professional capabilities of the human resources </li></ul><ul><li> Improve the quality of services for all stakeholders </li></ul><ul><li> Enhance accountability of personnel, and integrity of processes and information </li></ul>Each Department must set its own goals for the ERP Program
  8. 8. The ERP Program: Critical Success Factors <ul><li>Ownership, commitment and involvement of the top management </li></ul><ul><li>Awareness, capability and motivation at all levels among all stakeholders </li></ul><ul><li>An effective change management strategy and plan </li></ul><ul><li>Necessary infrastructure for effective implementation of the systems </li></ul><ul><li>Minimum customization of the selected ERP system </li></ul><ul><li>Good planning and then rapid implementation to keep up the momentum </li></ul><ul><li>Motivation and training of end-users </li></ul>
  9. 9. Business Processes & Systems <ul><li>Academics Processes </li></ul><ul><li>Admission & registration </li></ul><ul><li>Student affairs </li></ul><ul><li>Research management </li></ul><ul><li>Administrative Processes </li></ul><ul><li>General ledger </li></ul><ul><li>Accounts Payables </li></ul><ul><li>Accounts Receivables </li></ul><ul><li>Cash Management </li></ul><ul><li>Fixed Assets </li></ul><ul><li>Costing & budgeting </li></ul><ul><li>Inventory management </li></ul><ul><li>Warehouse management </li></ul><ul><li>Purchasing </li></ul><ul><li>Project accounting </li></ul><ul><li>Maintenance management </li></ul><ul><li>Personnel administration </li></ul><ul><li>Payroll </li></ul><ul><li>Training </li></ul><ul><li>Support services </li></ul><ul><ul><li>Office and Housing Services </li></ul></ul><ul><ul><li>Medical Services </li></ul></ul><ul><ul><li>Food Services </li></ul></ul><ul><ul><li>Safety and Security Services </li></ul></ul><ul><ul><li>Transportation Services </li></ul></ul>1. Document management 2. University Portal 3. Business Intelligence
  10. 10. The ERP Program: Organization Executive Steering Committee Program Management Team Implementation Group 1 Implementation Group 2 Implementation Group n
  11. 11. The ERP Program: Organization Implementation Groups <ul><li>Business Process Owner (Chair) </li></ul><ul><li>Key Users </li></ul><ul><li>Application Developer </li></ul><ul><li>Functional consultants </li></ul><ul><li>Technical consultant s </li></ul>
  12. 12. ERP Systems (Short-listed) <ul><li>Oracle E-Business Suite </li></ul><ul><li>PeopleSoft </li></ul><ul><li>SAP </li></ul><ul><li>SunGard SCT </li></ul>
  13. 13. ERP Program: Cost Scenarios <ul><li>ERP* only scenario SR 7,580,000 </li></ul><ul><li>SunGard SCT Banner only SR 8,200,000 </li></ul><ul><li>ERP and Banner scenario SR 9,700,000 </li></ul>ERP* denotes Oracle, PeopleSoft or SAP
  14. 14. ERP Program Cost: ERP & Banner Scenario 9,700,000 Total 310,000 Contingency 6 150,000 Project setup 5 1,100,000 Change management 4 5,500,000 Consulting 3 440,000 Maintenance of ERP system software 2 2,200,000 ERP system software 1 Cost (SR) Item #
  15. 15. Projections of Annual Operating Cost of the ERP System 2,370,000 2,220,000 2,510,000 1,500,000 2,680,000 Total 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 Support personnel (9 persons) 3 x SR 200,000 & 6 x SR 150,000 Manpower 150,000 150,000 Application upgrades for better features or enhancements ERP system upgrade 100,000 100,000 100,000 150,000 200,000 Continuous training of key users of implemented modules Training 180,000 180,000 180,000 270,000 540,000 Functional consultants @ SR 30,000 per man-month External support 440,000 440,000 440,000 440,000 440,000 Maintenance cost @20% for license cost of SR 2.2 million ERP software Year 5 Year 4 Year 3 Year 2 YEAR 1 Description Item
  16. 16. Roadmap for Implementation Working Months Support users Cut-over and go-live Perform quality assurance Train and test Prepare & migrate data Configure & customize Prepare business blueprint Setup project environment Select ERP implementer Issue RFP for ERP implemtr. Prepare infrastructure Select ERP system Issue RFP for ERP system Prepare & implement CMP Document processes 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Major Task
  17. 17. Change Management <ul><li>Management commitment </li></ul><ul><li>Ownership </li></ul><ul><li>Effective communication </li></ul><ul><li>Sensitivity to users needs </li></ul><ul><li>Training </li></ul><ul><li>Flexibility </li></ul>
  18. 18. Conclusions and Recommendations <ul><li>The Committee, unanimously, recommends that an appropriate ERP system must be selected and implemented at the University </li></ul><ul><li>Form a project management team entrusted to develop a detailed ERP program </li></ul><ul><li>Develop a detailed ERP program with involvement of all stakeholders </li></ul><ul><li>Focus on enhancement of professional capabilities and motivation of users as well as concerned IT professionals prior to commencement of ERP implementation </li></ul><ul><li>Prefer a phased approach for implementation of various modules of the ERP system for effective management of the program and to reduce risks associated with large “big-bang” approach </li></ul><ul><li>Formulate and implement an effective change management strategy and plan. </li></ul>
  19. 19. Thank you