A|EA DC CHAPTER January 9, 2007 Strategic Use of Enterprise Architecture (EA) with Enterprise Resource Planning (ERP) Systems For Federal Government Success

A|EA DC CHAPTER January 9, 2007

Strategic Use of Enterprise Architecture (EA) with Enterprise Resource Planning (ERP) Systems For Federal Government

Success

Yeliz ESERYEL, MBA., MSc., PMP., [email protected]

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A|EA DC CHAPTER January 2007 [email protected]

Why Am I Here?

As a Project ManagerTo talk about Enterprise Resource Planning (ERP)

Systems implementations for federal government.

As a supporter of Enterprise ArchitectureUS Department of Transportation (OAO Corp)US Housing and Urban Development (Booz | Allen | Hamilton)

As a Syracuse University Adjunct ProfessorIST 710 Managerial ERP Decisions for Federal Government

Washington, DC (focus: federal government)

IST 600 ERP Systems: Key Implementation IssuesSyracuse Campus (focus: private sector)

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Who Are You?

Assumption about the audience: Work for or with Federal GovernmentLittle or no knowledge of ERP systemsGood understanding of EA

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Outline

What is an ERP system?Why should you care?

ERP Implementations in Federal GovernmentWIIFM

Why implement ERP?Why not implement it?Challenges

A Case StudyA Real Life Case Study- Welch Allyn

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What is an ERP system?

Enterprise Resource Planning System (ERP)

Complete Suite of Integrated Applications Finance / Controlling

Accounting

Customer Service

Sales / Marketing

Human Resources

Engineering

Single Integrated Database

Modular Structure

Similar Interfaces

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Why Should You Care?

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NavyThe Department of Veterans Affairs

Oracle- Financials and Federal Purchasing

Small Business AdministrationOracle contract

National Institute of HealthOracle contract

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Why Should You Care? WIIFM Question.

Federal-government spending on ERP is expected to grow 33 % to more than $7.7 billion by 2010 (Input Research, 2005)Business involvement is necessary

After ERP, organizational dynamics change.

Knowledge is power.After ERP, power dynamics change.

New Career OpportunitiesLeadership roles within your agency or in other agencies,Consulting/project management opportunities.

Unique expertise combination: EA & ERP.It’s fun!!!

ChallengingComplexLearning opportunities

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Why implement an ERP system?Single integrated database

Data integrity Data sharing between applicationsEasier data handling

Better management of resources across sub-agenciesCentralize the finance and human resources efforts across agencies.Integrate key supply chain and other functionalities instead of maintaining many legacy systems.

The capabilities and processes enabled by different modules

Eg: Extensive reporting capability of Business Warehouse (BW)Customer Relationship Management- to automate transactions with civilians and provide them with better service beyond automation.

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Why Not Implement An ERP System?

SizeMS Excel, MS Access, Oracle

Mission Resources

FinancialHuman Resources- Expertise

Leadership Support for a Medium Period of TimeEnvironmental Dynamics

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Challenges Related to ERP ImplementationsORGANIZATIONAL

TECHNOLOGY

Money!!!!TimeSkills- Outsourcing? Developing internal skills? Hiring new people?Managing contractors

Functional silo’sUnderstanding organizational needsManaging changeRun the business while implementing ERP at the same time (resource)Project management within ERP contextObtaining sustained leadership support

RESOURCES

Integrating with other systems and ERP’sMaintaining ERP

Support packsFixesUpgradesCustomization

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A Case Study

You are currently in charge of your organization’s EA.Your agency’s CIO thinks that it’s time agency should get on the ERP bandwagon.Your boss puts you on the committee to evaluate ERP decision and get the organization ready for ERP implementation.You have plenty of IT & organizational experience.

…but no ERP implementation experience What would you do?

Which questions would you ask?

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Key Question: EA & ERP

How are they different?

Will they work well together or will they compete?

How do you make them work well together?

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EA and ERP - Similarities

Enterprise-wide initiativesStrategic InitiativesChange agentsRequire Business InvolvementRequire specific knowledge/expertise

Typically consultants/ external experts.

Need for ongoing maintenance

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EA and ERP Key Differences

ENTERPRISE ARCHITECTURE

Framework

Includes strategic, human, technology components among others

Helps you justify and decide on IT initiatives.

ENTERPRISE RESOURCE PLANNING

System

Includes the functionality that you want it to include (modular nature)

It is an IT initiative. (In fact it is a business

initiative)

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Coming Back to Your Case…

Your boss put you on the committee to evaluate ERP decision and get the organization ready for ERP implementation.You understand that EA and ERP are different things and that they are best employed together.How will you make them work well together?

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Some Key Questions to AskIs ERP a good fit for my agency’s mission and goals?

Cost-Benefit AnalysisWhat are the benefits of ERP?What are our goals?Is there a good match?What are the costs in terms of time, people, money?Can benefits justify the costs?What is the expected ROI?

Which ERP system is appropriate for my agency?SAP, Oracle, JD Edwards…

Define the criteria for best fitCostSupportInterface

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How To Answer Them Using EA

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Can the agency handle the transition and support?Network capabilitySlow down of service delivery, potential issues, learning period.People and resources for ongoing support, upgrades, etc.

How do I secure the key skills/resources for the implementation?

Business people to be involvedIT Skills

Hire?How to Manage?Outsource?

Which company? What are the criteria to select the company?

Some Key Questions to Ask

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Some Key Questions to Ask

What are the risks? Environmental uncertainty (wars, etc.)Leadership change?Change in the staff?

What type of implementation is appropriate?

Big bangPhased

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How to Answer them Through EA

Source: Bernard, S. A. (2005). An introduction to Enterprise Architecture (2nd ed.). Bloomington, IN: AuthorHouse.

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One More Key Question & Answer

Can I get buy-in & support from the leaders?

Executive supportMiddle management buy-in

Did you involve the leaders and the middle management in the EA implementation?

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What Else Can You Think Of?

How can we use EA and ERP to support each other after ERP implementation?How else can we use EA to support ERP or vice versa?

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Resources and Questions

Yeliz ESERYEL, MBA. MSc., PMP., CPIMContact: [email protected]

http://www.cafeart.org/yeliz

Additional Resources: Eseryel, U. Y., & Wolf, N. (2005). Enterprise architecture as a context for ERP implementation. Journal of Enterprise Architecture, 1(2), 7-24.

S.U. ERP Class Website: http://istclass.syr.edu/~ist600erp

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Real Life Case Study: Welch Allyn’s SAP Journey

Started in 2002.Outsourcing Decision

All IT people are hired by Cap GeminiCIO & later Global IT Director5 Year Contract with Cap Gemini as our SAP IntegratorWhat are the benefits?What are the disadvantages?

Gap in implementationBig Bang ImplementationRoughly >$5M.

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SAP Project Time Line

Canada Go Live 11/24/2003

U.S. Go Live 2/02/2004

Europe Go Live 1

1/14/2005

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MM/PP: Materials Management/Production PlanningPLM: Product Lifecycle ManagementSD/CS: Sales, Distribution & Customer ServiceFI/CO: Financials and ControllingBW: Business WarehousePM: Plant Maintenance

SEM/EC-CS: Strategic Enterprise ManagementCRM: Customer Relationship Management

Modules Implemented

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Why Did Welch Allyn Implement SAP?

Become more efficient with new consistent system tools.A step towards better serving our customers.Bring products to market faster.Service our international customers better.SAP handles service and manufacturing businesses.Acquire and integrate other companies faster.Become more efficient and profitable.

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Summary of Benefits

Sales & Marketing: Segment Customers by Value-Focus promotionsProduct Development: Common Platforms across the world, efficient processesCustomer Care: Increase accuracy and efficiency.Operations: Incr. Efficiency, better inventory and data managementFinance: Rapid integration of acquisitions, multiple currencyHuman Resources: Improve development of critical skills.Information Services: Lower costs- manage 1 system instead of 60 legacy systems.

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Some of the Key Issues We Faced At Welch Allyn

Organizational Change ManagementSecuring resources for organizational changeCreating and delivering training—lots of it!People to do those.Managing project related documentation.Knowledge management/transfer (Super Users)

Knowledge ManagementIn an outsourced implementation environment. (Consultant-business leads)Turnover in consultants

Management of Relationships with Consultants.Getting the right consultantsManaging the communication/coordination between the company and the SAP integrator.

Business Process ReengineeringDuring the implementationAfter the implementation

Documents

A|EA DC CHAPTER January 9, 2007 Strategic Use of Enterprise Architecture (EA) with Enterprise Resource Planning (ERP) Systems For Federal Government Success