Not long ago, IT may have stood for Innovative Technology. Today's economic climate has caused a shift: budgets became constricted, dollars were redirected, and much of the collective investment that would have previously been thrown at innovation was thwarted by cost-cutting initiatives geared toward maintaining both existing enterprise applications as well as the status quo. As a result, the functionality of enterprise resource planning (ERP) systems such as Oracle's E-Business Suite (EBS) suffered due to management's focus on the present (time to results - regardless of the quality) rather than on the future (time to value). View the original Blog post: http://www.eprentise.com/blog/the-changing-enterprise/an-ebs-retirement-party-youre-uninvited/ Website: www.eprentise.com Twitter: @eprentise Google+: https://plus.google.com/u/0/+Eprentise/posts Facebook: https://www.facebook.com/eprentise

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An EBS Retirement Party –
You’re Uninvited
an eprentise white paper

2. An EBS Retirement Party – You’re Uninvited
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© 2014 eprentise, LLC. All rights reserved.
eprentise® is a registered trademark of eprentise, LLC.
FlexField Express and FlexField are registered trademarks of Sage Implementations, LLC.
Oracle, Oracle Applications, and E-Business Suite are registered trademarks of Oracle Corporation.
All other company or product names are used for identification only and may be trademarks of their respective owners.
Author: Helene Abrams
Published: April 09, 2011
www.eprentise.com

3. An EBS Retirement Party – You’re Uninvited
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IT = I’m Tired
Not long ago, IT may have stood for Innovative Technology. Today’s economic climate has caused a shift:
budgets became constricted, dollars were redirected, and much of the collective investment that would
have previously been thrown at innovation was thwarted by cost-cutting initiatives geared toward
maintaining both existing enterprise applications as well as the status quo. As a result, the functionality of
enterprise resource planning (ERP) systems such as Oracle’s E-Business Suite (EBS) suffered due to
management’s focus on the present (time to results – regardless of the quality) rather than on the future
(time to value). When initially implementing, there wasn’t time to plan for future requirements, and the
business world was more focused on performance of individual units rather than on enterprise
consistency. Quick fixes involving spreadsheets and custom code were preferred over lengthier, more
beneficial projects in light of the shorter time to results. Modernization took a logical back seat to
keeping businesses afloat; it was more of an instinctual operational change than a conscious executive
decision.
In a sense, such a stagnant outlook on business operations is right in line with the way E-Business Suite
was designed. After the original EBS implementation, there’s not much about the way it was initially
configured that the user is able to change in order to support ongoing business changes and
growth. That kind of rigidness almost coaxes IT professionals to opt for customizations or embarking on
major projects to implement new systems (i.e. data warehouse, business intelligence systems, or even
entirely new and different back office systems) in hopes of obtaining the results that the business needs, if
only for a short time. That being said, all EBS installations have a finite life regardless of how smart a
company is about integrating change with ERP, and recent studies show that CIOs may be turning back to
innovative thinking and recognizing the benefits of retiring ERP systems that simply no longer support
their business.
A new strategy
The applications that were implemented to streamline operations expire alongside their related business
processes, and a slew of inefficient applications that don’t support the current business turns a once-
golden ERP system into an expensive line item. Though not many companies are thinking of retiring their
ERP systems, they are viewing them as the sunk costs that need to be reduced by eliminating the number
of custom IT solutions that are deployed, standardizing their enterprise applications to promote scalable
business growth, and minimizing their investment in applications that have reached their end-of-life.
An effective lifecycle strategy for E-Business Suite applications and those of other ERP systems is
becoming a core component of today’s savvy CIOs by providing a mechanism for IT organizations to
continue to cut operational costs without hindering innovation and forward thinking. Dollars can be
spent on new projects that increase visibility and competitive advantage rather than on supporting and
maintaining workarounds that enterprises agree to be unnecessary, burdensome, and void of business
value. The top priority for CIOs in 2011 is to rationalize the application portfolio to increase productivity,
improve flexibility and adaptability, and better align IT with the business. [1]

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The ERP Lifecycle
There are 5 stages to an ERP Lifecycle:
 Initial Implementation: Basic decisions are made on how to configure the applications to meet the
current business requirements.
 Stabilized Operations: Business processes are designed to take advantage of the functionality of
the ERP system.
 Synthesized Organizational Components: The ERP system becomes the backbone of the
organization. Data is shared between the ERP system and other enterprise systems, and also across
different locations and business units.
 Pattern-Based Strategies: The ERP system contributes to initiating strategic changes. The
Applications provide a global view of the organization. Transactional data is used to predict future
patterns, drive results, and maintain a competitive advantage.
 3-Rs (Rationalization, Remodeling, and Retirement): The 3-R stage allows the organization to
continually realign their application portfolio to the ongoing needs and changes of the business.
Once EBS is implemented, it needs to continually go through the other stages in the ERP Lifecycle in order
to continue to add value. If EBS no longer supports the business, it becomes necessary to supplement the
functionality with customizations, spreadsheets, and other systems that add to the cost. Then comes the
hard part – either the CIO overestimates on the applications requirements and ends up paying way too
much for technology that sits on the shelf, or underestimates and gets the IT team wrapped up in multiple
staged rollouts, continually adding additional functionality. Either scenario results in extraneous spending
and a bad return on the entire EBS investment. In the rare case that the CIO gets it exactly right,
application relevance deteriorates shortly after the go-live as the business changes.
But is this the CIO’s fault? It can’t be – it is the nature of business. As a business grows, it
changes. Processes, requirements, and strategies change, and while computers are smart they can’t keep
up with human and organizational change and development. All the head of IT can do is react, and
reacting to enterprise needs involves surveying the current IT landscape, determining which functionality
is required by the business and adding new components to support the business changes. As changes
continue to occur and the number of spreadsheets, modifications, new applications, and inconsistent data
increases, it becomes harder to stage a project for terminating the organic growth and resulting chaos in
the organization. Lack of convincing business cases and coherent strategies, poorly defined architectural
alignment, and inconsistent and unreliable application intelligence can significantly hinder any effort to
bring order to chaos within the IT landscape. CIOs can apply multiple strategies to rationalize their
applications, including sustaining, extending, remediating, re-platforming, migrating, replacing,
consolidating, and retiring. The question is which strategy is the best for a given situation that results in
timely, realized ROI to support near-term business goals. [2]
Understanding the complexity
A collaborative research effort carried out by HP and Capgemini identified the following key reasons [3]
for IT application landscape complexity:

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1. Mergers and acquisitions result in many redundant systems with duplicate functionality.
2. Custom legacy applications are becoming obsolete and are difficult to maintain, support, and
integrate into the new, modern IT infrastructure.
3. Companies continue to support applications that no longer deliver full business value and do not
support current business processes.
4. Most organizations have a data-retention and archiving policy, but in reality the majority of
companies are not willing to archive application data for fear of violating industry and government
retention requirements.
Major business changes like mergers, acquisitions, and divestitures unavoidably bring with them systems
with duplicate functionality. After an acquisition, multiple systems are often maintained side-by-side for
years creating duplicated efforts and complicating data governance, stewardship, and standards. When
the acquired system differs from that used by the acquiring company, a strategic archiving and
decommissioning plan allows the retention and integration of at least partial transactional history, but
designing and implementing this kind of strategy is the exception, not the rule.
In the case of a merger between two companies that run E-Business Suite, there are now innovative
software tools from a third party that enable a total business consolidation of the two application
landscapes, resulting in a single instance of E-Business Suite that incorporates the unique functionality of
each system (while marrying the commonalities between them), eliminates any data duplication that is
present as a result of the union, and provides the business with a streamlined application landscape in
minimal time.
Tools are also available to remodel an existing instance of E-Business Suite, allowing changes to the
existing configuration to re-align the EBS to the changed business. The ability to change an existing ERP
system means that the enterprise can retire external applications, spreadsheets, and modifications that
were necessary to accommodate and support the changes in the business that have occurred since the
original implementation.
Why are the 3 Rs so hard?
Rationalizing, remodeling, and retiring an ERP system may be a major undertaking for an
organization. There are a number of obstacles and barriers that are difficult to overcome include:
 Budgetary constraints have pre-allocated capital for maintaining different systems, and there’s no
money left to fund a 3 R initiative.
 The ROI of each of the 3 Rs may not be realized immediately, so it may be easier to justify and get
buy-in for other expenditures that get results faster.
 Depending on a company’s ingrained culture, a 3 R project may be uncomfortable for the business
users who are accustomed to their spreadsheets, independent, supplemental applications, and
customizations and their perceived control over their data.
 Different departments may bring different requirements and specifications to the table extending the
length of the decision-making process.

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If the 3 Rs are not viewed as a priority to keep the ERP system agile enough to become a strategic asset to
a constantly changing business, nothing is likely to happen, and EBS may need to be retired and replaced
because it is no longer adding value.
Take-away
IT executives need to think about how to extend the life and value of the E-Business suite, making it a
strategic asset. Through Rationalizing external or redundant applications, Remodeling the existing E-
Business suite, and Retiring spreadsheets and customized applications, you can significantly reduce the
complexity of the IT landscape, extend the life of your ERP, and reduce the total cost of ownership of your
applications. Considering that the Application Lifecycle can add value to your E-Business Suite, make your
business agile by supporting it with systems that can be changed over time, and prepare your ERP for
future growth so that it doesn’t need to be retired along with your old legacy applications.
Curious?
For more information, please call eprentise at 1.888.943.5363 or visit www.eprentise.com.
About eprentise
eprentise provides transformation software products that allow growing companies to make their Oracle® E-Business
Suite (EBS) systems agile enough to support changing business requirements, avoid a reimplementation and lower the
total cost of ownership of enterprise resource planning (ERP). While enabling real-time access to complete, consistent
and correct data across the enterprise, eprentise software is able to consolidate multiple production instances, change
existing configurations such as charts of accounts and calendars, and merge, split or move sets of books, operating
units, legal entities, business groups and inventory organizations.