Paulreed: Created page with " In April 2006 Emirates Bank decided to revamp parts of its core banking system. After 12 months of planning, managers kicked oﬀ the project. They had two main objectives: t..."

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Created page with " In April 2006 Emirates Bank decided to revamp parts of its core banking system. After 12 months of planning, managers kicked oﬀ the project. They had two main objectives: t..."

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In April 2006 Emirates Bank decided to revamp parts of its core banking system. After 12 months of planning, managers kicked oﬀ the project. They had two main objectives: to avoid mission creep and to go live as soon as possible. During the summer of 2007, however, the bank announced a merger with the National Bank of Dubai, forming Emirates NBD. This immediately made the already-complex project much more daunting: The system now needed to work for both banks—and it had to be ready in 18 months. In addition, it was to be rolled out in a “big bang”: All the components—branch computers, ATMs, online banking, and call centers—would be switched to the new system simultaneously. The potential for going way over budget was all too real. But by the time the project was completed, in November 2009, the schedule had slipped by only 7%, and costs had exceeded the initial estimate by only 18%—even though the merger had doubled the project’s size. In a ﬁeld where massive overruns are common, that’s a spectacular achievement.
*1 Stuck to the schedule, despite the merger
*2 Resisted changes to the project’s scope
*3 Broke the project into discrete modules
*4 Assembled the right team, including IT experts from both companies, outside experts, and vendors
*5 Prevented turnover among team members
*6 Framed the initiative as a business endeavor, not a technical one
*7 Focused on a single target, “readiness to go live,” measuring every activity against it

==Black Swans==
Out of control ERP projects that go over budget, time or fail

*Hershey's SAP Project. ERP system did not adequately plan for Halloween
*Levi Strauss' $5m project lead to charge of $192m because they could not take orders
*Kmarts $1.4bn IT project led tp as system so highly customized it could not be maintained. A further $200m revamp of its supply chain led to its filing for bankruptcy

==Rolls Royce's Implementation of SAP==
Such IT-driven initiatives re-
quire change of the organisation’s socio-economic
system, which is intertwined with technology, task,
people, structure, and culture. Thus organisational
resistance to change is identified as a critical
success factor for ERP implementation (
Hong
and Kim, 2002
)

Many
companies that have installed ERP have claimed
to be more nimble within the marketplace than
their competitors with hard-to-change custom
made systems (
Latamore, 1999
).
ERP systems offer companies the following
three major benefits:
*
Business process automation.
*
Timely access to management information.
*
Improvement in the supply chain via the use of
E-communication and E-commerce

A vital task when implementing an ERP System
is to understand the difference between functions
and modules. Functions are defined as actual
physical tasks that are performed within a
company. Whilst modules can be considered as
pieces of software that help to provide the
functions,

ERP sys-
tems run into difficulty because the organisation is
not ready for integration and the various depart-
ments within it have their own agendas and
objectives that conflict with each other (
Langen-
walter, 2000
)

ERP implementations
involve, in truth, broad organisational transfor-
mation processes, with significant implications to
the organisation’s management model, organisa-
tion structure, management style and culture, and
particularly

One original motive for buying an ERP system
was to automate business processes, but the
modern view has shifted to the quick access of
up-to-date and timely management information
The majority of difficulties experienced by ERP
implementations have been the costly development
of additional software to help ‘bridge’ or retrieve
information from legacy systems.

SAP provides some of its customers with acceler-
ated SAP (ASAP). ASAP suggests the adoption of
a ‘big bang’ implementation. This programme opts
for a quick implementation that is specifically
designed for small and medium sized companies.
‘Big bang’ implementations offer lower costs and
generally use only a few of the software’s inter-
faces, however the risks are greatly increased, as
less time is spent on development and assessing
business needs

SAP R/3 applications are a range of software
modules. They can be used either alone or
combined to form business solutions. SAP state
that their R/3 applications offer comprehensive
functionality for all standard business needs within
an enterprise. SAP R/3 uses a programming
language called advanced business application
programming (ABAP)

Rolls-Royce used over 1500 systems before the
ERP project was started, many of which were
developed internally by Rolls-Royce over the last
two decades. These legacy systems were expensive
to operate and difficult to maintain and develop.
They did not provide accurate, consistent and
accessible data that was required for good and
timely decision-making and performance assess-
ment (e.g. delivery performance, quality metrics).

SAP R/3 requires a fairly rigid business struc-
ture for it in order to work successfully. The
participants of cross-functional workshops soon
understood that their working practices must be
adjusted in order to fit SAP, ultimately changing
the way Rolls-Royce does business

The main technical problems that Rolls-Royce
has encountered have been with the accuracy of
data. The new system requires the retrieval of old
data from the legacy systems that has to be
normalised, screened and stored in a sensible data
format within the new systems data repository

Rolls-Royce decided to adopt and utilise the
SAP solution offered for the aerospace and
defence industry

5.4.4. Phase 1 (strategy and direction)
The first phase of the project was a short
intensive study to set the scope of the project
and provide an outline plan and costing. A
steering committee was formed to administer the
financial guidance of the project and a ‘ERP Core
Team’ was formed to control and oversee the
actual implementation process.

5.4.7. Phase three (implementation)
This phase was too large to implement in one
go, and thus was divided into two ‘waves’. Both
waves were concerned with the physical imple-
mentation of the system and its architecture. The
waves were also concerned with changing working
practices within the company

5.4.5. Phase 2
During the second phase a detailed plan was
created and a prototype system was installed. An

Preliminary design review—developing a design
and implementation strategy, defining the scope
of the project, and developing the business
process model.
*
High level design review—analyse the enterprise
model, and develop ‘Vanilla’ prototype.
*
Critical design review—detailed design and
customisation of the prototype.
*
Implementation realisation—integration test-
ing.
*
Technical/operation review—user acceptance
testing.
*
Post implementation review—system deploy-
ment, systems conversion, user training before
the ‘Go Live’.

The possible failure or inability to align goals
through conflicting directions within the orga-
nisation.
*
The non-delivery or non-availability of reliable
IT hardware and infrastructure both before and
during implementation.
*
The possible failure of providing inadequate
and ongoing support after implementation,
from both Rolls-Royce and EDS.
*
The resistance of change to new process
methods by management and supervision.
*
Management and supervision may treat the
project as merely an IT implementation, rather
than change in process methods.
*
Inadequately educating the workforce to oper-
ate the new system properly.
*
Possible failure to cut over to the new system
through an inability to load data.
*
Possible failure to cut over to the new system
through the inappropriate systems testing of
volume, stress and data conversion.
*
Possible failure to give ERP adequate priority
due to the number of existing and ongoing
business improvements.
*
Maintenance difficulties may occur on bridged
legacy systems.
*
The project may impact on company interim
and end of year accounts.
*
The PDM project may not be sufficiently
positioned in time with the ERP project.
*
Possible changes to kitting demand during ‘go
live’ may stretch the new system and those
operating it on a learning curve beyond
capacity.

The decision to implement Wave 1 separately
from Suite 3 may fail to integrate the new
systems.
*
Airline Business After-sales may not be able to
analyse and manipulate inventory investment in
stock target groups (MERLIN functionality
which helps to control forecasting for
Airline Spares stock targets will be removed in Wave 1)

The
following list contains just some of the problems
encountered:
*
Matching the process to the software config-
uration.
*
Training people to accept change, and getting
them to do business in a totally new way.
*
Teaching employees to use modern IT equip-
ment.
*
Equipment not delivered on time, or delays in
technical equipment installation.
*
Data clean up has been particularly time
consuming as many legacy systems have been
involved.
*
Training the behaviour of SAP users such as
MRP Controllers and Capacity Owners

Many activities have taken place, which have
been vital to the overall success of the project, such
as:
*
Bridging the legacy systems and cleaning up
suspect data has given the company more trust
in its management of information.
*
Training senior management, particularly the
executive group, who are responsible for the
overall direction of the company and are not
technically orientated.
*
Managing effective relationships and leading
teams in both technical and non-computer
based environments.
*
Manufacture simulation exercises.
*
Transactional training.
*
Shop floor communication with line workers
was an exercise that occurred during the
implementation of suite 3. This required line
workers to attend workshops to learn new PC
skills in order to book work.

Managing ERP Projects - Revision history

Paulreed: Created page with " In April 2006 Emirates Bank decided to revamp parts of its core banking system. After 12 months of planning, managers kicked oﬀ the project. They had two main objectives: t..."