Pbs Erp Economy

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Research performed by IFS North America on the increasing role of project management as an executive discipline in manufacturing. Also covers the importance of project management in returning to full productivity after the economic recovery.

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Pbs Erp Economy

  1. 2. Introduction & Methodology <ul><li>This research was conducted by RBInteractive Research Group for IFSNorth America, the Americas subsidiary of a provider of enterprise resource planning (ERP), enterprise asset management (EAM) and other enterprise solutions. </li></ul><ul><li>The research was designed to better understand how project management applications are integrated with enterprise platforms. </li></ul><ul><li>Specific areas studied include : </li></ul><ul><ul><ul><li>Technologies used for project management </li></ul></ul></ul><ul><ul><ul><li>Integration of project management software with enterprise platforms </li></ul></ul></ul><ul><ul><ul><li>Integrated enterprise systems capabilities </li></ul></ul></ul><ul><ul><ul><li>Familiarity with Project Based Solutions </li></ul></ul></ul><ul><ul><ul><li>How project costs are estimated today </li></ul></ul></ul><ul><ul><ul><li>Interest in benefits from Project Based Solutions </li></ul></ul></ul><ul><ul><ul><li>Vendors offering benefit that can be achieved by a Project Based Solution </li></ul></ul></ul><ul><ul><ul><li>Level of risk management functionality from current project management system </li></ul></ul></ul><ul><ul><ul><li>Ability and satisfaction of enterprise solutions to manage large projects and mitigate project risks </li></ul></ul></ul><ul><ul><ul><li>Impact of economy on enterprise technology </li></ul></ul></ul><ul><li>During the month of March, 2010 surveys were sent out via email to past subscribers of Manufacturing Business Technology (MBT) magazine as well as current subscribers of Plant Engineering and Control Engineering . </li></ul><ul><li>Respondents were pre-qualified for: </li></ul><ul><ul><li>Involvement in the selection/specifying process for Enterprise Resource Planning, Enterprise Management and/or other types of Enterprise Systems and/or... </li></ul></ul><ul><ul><li>Involvement in managing projects of more than $250,000 a year </li></ul></ul><ul><ul><li>Individuals were further qualified for being employed in companies estimating 2009 revenues at $100 million or more in revenue </li></ul></ul><ul><ul><li>As an incentive, the first 200 respondents to the survey were offered a $10 Starbucks gift card. </li></ul></ul><ul><li>Results are based on 341 completed surveys. At a 95% confidence level, results are accurate within a margin of error of + or – 5%. </li></ul>April 2010
  2. 3. Is your business described as… April 2010 Project Centric: The success of our business depends heavily on our ability to manage large and complex projects. This would apply to manufacturing/ fabrication operations like shipbuilders, HVAC, equipment companies and others that rely heavily on successful project management. Project Enabled: Our business processes are enabled by project management. This would apply to engineer-to-order (ETO) manufacturing, industrial equipment manufacturers and others. Project Critical: We could not function as a business without detailed and well-documented project management function. This may apply to companies that manufacture expensive, complex, long lead-time items in heavily regulated industries like aerospace and defense nuclear power, etc. Project Potential: New efficiencies could be achieved through greater use of projects. This would apply to repetitive manufacturers that engineer or design their own products and could use projects to better manage the development, prototyping and other early stage processes. Non-Project: We do not run or use project management disciplines, and it does not make sense for us to use them.
  3. 4. What technology do you currently use for project management? April 2010
  4. 5. How integrated with your enterprise resources planning and financial software is your project management software? April 2010 Partial integration with specific fields in a project management solution modifying data in our ERP or other enterprise software Two systems are completely separate Complete integration and executives using our ERP system have complete, real-time visibility of project activities, costs and revenues Run a batch update so that project data can be used to update data in the ERP and vice versa Not applicable
  5. 6. Specifically, if you replied that your project management and ERP functions are integrated, does this system allow you to: April 2010
  6. 7. If your project management functions are integrated with your ERP system, what are some of the obstacles/roadblocks that you face? April 2010 *N= number of mentions <ul><li>“ The need to complete the integration and eliminate the manual double entry.” </li></ul><ul><li>“ Report generators are very crude and true integration requires significant manipulation of the input data to make the data compatible with accounting systems.” </li></ul><ul><li>“ Two different system architectures are hard to integrate without a lot of software work.” </li></ul><ul><li>“ Maybe total integration, if and when achieved, will turn out to be a good strategy. One thing we face right now is that re-allocating the resources meant for one project to another is not possible.” </li></ul>Integration difficulties (N=8) <ul><li>“ User familiarity, non-intuitive process steps and lack of overall understanding of the long term picture.” </li></ul><ul><li>“ Understanding the full capability of the SAP Enterprise System with regards to how to manage projects.” </li></ul><ul><li>“ Proper utilization of the program throughout all employee levels.” </li></ul>Understanding the ERP system (N=7) <ul><li>“ A lack of training company wide on the full use of the system.” </li></ul><ul><li>“ Effectively inputting new data/costs. Training and tailoring the software to match our companies needs.” </li></ul>Lack of training (N=7)
  7. 8. April 2010 Are you familiar with the term Project Based Solution, a new classification of enterprise solution for project-driven business process?
  8. 9. April 2010 How do you estimate project costs today? Excel/spreadsheets: (N=17) Manually: (N=13) Based on past experience: (N=11) Estimating professionals: (N=6) *N= number of mentions
  9. 10. How interested are you in the following benefits that can be achieved by a Project Based Solution (PBS) – ERP that is tightly integrated with project management functions? April 2010
  10. 11. Are there any other benefits that you desire from an integrated ERP system that will enhance your project management functions? If yes, what are they? April 2010 <ul><li>“ Ability to capture design data, procurement data, etc. and move it into work management areas for final owner/operator. Ability to better manage construction & commissioning costs and activities, and have that tied to the AP system.” </li></ul><ul><li>“ Ease of use. Single entry of data. Reporting tailored for each function, done automatically.” </li></ul><ul><li>“ Tracking of proposed change orders and extra work authorizations, both by customer and in house engineering.” </li></ul><ul><li>“ Financial forecasts” </li></ul><ul><li>“ Reduce labor required to populate the plan and keep it updated. Must be able to use output of very complex and proprietary costing models.” </li></ul><ul><li>“ We need to be able to interface maintenance tasks, asset management, equipment health, and personnel resources.” </li></ul><ul><li>“ Capturing history of past project “actuals” for future project estimating. Capturing actuals on present projects to measure against project approved amounts as project advances. Allow manipulation of data to provide varied formats of financial reporting.” </li></ul>
  11. 12. What level of risk management functionality does your current project management system offer? April 2010 Some: We can identify likely project risks. Thorough: We can identify risks, monetize/budget for them, create risk mitigation plans, etc. Integrated: We can perform all of the above functions and then ensure execution of risk mitigation plans directly in the ERP, where day-to-day activities are performed
  12. 13. In the next five years, how do you expect your reliance on projects to change? April 2010 Explain why? <ul><li>“ We continuously have projects. Better management of them will improve our ability to deliver & reduce cost excesses which will improve our companies position in our tight marketplace.” </li></ul><ul><li>“ With the Green, Sustainability and Reliability movements becoming more a part of every project, we will need better tracking capabilities.” </li></ul><ul><li>“ The nature of expanding demand for greater control of costs.” </li></ul><ul><li>“ Our business model relies on quick customer response times and the need for updated equipment and processes are critical.” </li></ul><ul><li>“ Business volume is expected to increase, projects will be more complex and riskier yet the skill level of management and execution personnel will be markedly lower (due to off-shoring and the attendant forced retirement of highly skill members of the teams.)” </li></ul><ul><li>“ Until the economy improves there will be no changes to our current procedures.” </li></ul><ul><li>“ We have a pretty level project load, which is currently dependent on and may vary due to tax collections.” </li></ul><ul><li>“ Hope to stay the same as we justify capital investment by our performance.” </li></ul><ul><li>“ Our business is part of the EPC and Design/Build lifecycle and will always be project based.” </li></ul><ul><li>“ Projects have been decreasing over the past 10 years due to funding, Federal government decrease in finances, and reduction in personnel. This appears to continue at least in the next couple of years.” </li></ul><ul><li>“ Site capital improvement cost stream to decrease as compliance driven needs diminish.” </li></ul>
  13. 14. April 2010 How satisfied are you with the ability of your enterprise system to manage large projects and mitigate project risk?
  14. 15. As the economy continues to recover will you… April 2010 As the economy continues to improve, could you envision using integrated ERP-project management technology to better handle:
  15. 16. How important do you think your enterprise software is to your success during the economic recovery? April 2010
  16. 17. What is your job title? April 2010
  17. 18. April 2010 Which of the following best descries the industry in which you are employed? % of respondents Chemicals 10% Food, Beverage, Tobacco 9% Automotive & Transportation 6% Pharmaceuticals 6% Aerospace, Defense 5% Industrial Machinery 5% Petroleum, Refining 5% Wood, Paper, Printing 5% Industrial Controls 3% Semiconductors, Electronics & Electrical Components 3% Computer Systems & Peripherals 2% Rubber & Plastics 2% Consumer Electronics/Appliances 2% Fabricated Metals 2% Communications Systems or Equipment 1% Medical Devices 1% Other Manufacturing 8% Utilities & Telecommunications 7% Government 4% Transportation/Warehouse Services 1% Other Non-manufacturing 11%

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