Written by Helene Abrams Sunday, April 19 2009
The value of an ERP system lies in the promises of better information, consistent systems, and reduced operational costs. With an ERP system, the ability to share data across applications and among different business units translated into more clearly defined business processes. The promise and the value depended on consultants who defined the current state of the business and who had a crystal ball made up of their vast experience to anticipate the future state. Companies counted on their ERP systems to accommodate growth and business changes.
Alas, those crystal balls seem to be a bit cloudy, and not even the best consultants could predict the substantial changes that a company undergoes over the life span of an ERP system.
As companies approach 5, 10, and even 20 years running the same systems (albeit with numerous upgrades and additional functionality), they are deriving less value from the system that was originally implemented. The number of spreadsheets has multiplied, many are considering a re-implementation, and there are hundreds, if not thousands of interfaces to systems that perform similar functions, consolidate the data, or translate it so that it is useful to the ever-changing business requirements. The promise of reduced operating costs and consistent systems has resulted in a very high cost of ownership and a loss of business value.
The character of ERP systems also changed from supporting a business’ requirements to supporting regulatory and control compliance. Of course, as those requirements changed, there was a need to invest more capital and add more resources to support the ERP systems.
Further exacerbating the problem of a changing business is the growing complexity of the ERP systems. As the following chart illustrates, complexity of Oracle E-Business Suite has escalated with each new version release, resulting in a system that is extremely difficult to maintain. For example, Oracle E-Business Suite R12.0.6 contains over 2.6 million columns (about a 25% increase over the number of columns in R11.5.10.2), each of which could be related to any other, or could be part of a check constraint, or part of a unique or primary key. There are about 36% more constraints in R12.06 than in R11.5.10.2. Even relatively “simple” changes such as finding the impact of a chart of accounts change now affects several hundred more columns in R12.06. Thus, the complexity of changing a chart of accounts went up by more than a third between releases.
Obviously, the larger the ERP footprint, and the more complex those systems are, the greater the capital requirements for maintaining and changing them. The economics and the corresponding value of the ERP system has changed. To compensate for the higher costs, ERP systems must be able to be extensible and adaptable to changing requirements over a longer life span. ERPs must provide data consistency and process integrity in addition to system consistency across the enterprise, As Gartner states, ERP systems must support the “consistent and seamless capture, persistence, transformation and delivery of information throughout the enterprise. To create this infrastructure, enterprises must align their metadata, standards, information formats and technologies for persisting, accessing and delivering data. The demand for tools and approaches that manage data more effectively will grow.”
Transformation software that enables ERP systems to change rapidly can change the value of the ERP spend. Along with the need to manage the complexity of the business and the complexity of the ERP systems, the need to cut costs and realign IT strategies is driving successful companies to invest in changing their existing ERP resources.
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May Puzzle
David is often referred to as Rainman due to his peculiar ability to effortlessly figure out a certain date's day of the week. He recently displayed this talent when I asked him if there was a conflict with the upcoming Fuzzy Dice Conference and our weekly court-ordered community service. He asked the date of the convention. It was April 20th, 2012.
"Oh, that’s a Friday," he said, effortlessly. "And your sentences have you committed for the next few dozen Wednesdays so you'll be able to go." And of course he was right.
One day a few weeks ago I asked out loud in the office about the date June 5th. And of all people, my brother Tommy piped up and said "Oh, that's a Tuesday."
"That's right," said David.
Well how about Otcober 3rd?
"That's a Wednesday," said Tommy. Then I asked about Christmas Day 2012.
"Oh, that's a Tuesday." David nodded in agreement.
Do we now have two rainmen? Or had Tommy figured something out?
Solution
Here's what was going on. Tommy was using something called anchor dates. And these dates apply to each and every year. April 4th, or 4/4 we’ll call it from now on, June 6th or 6/6, 8/8, 10/10, 12/12, are all the same day of the week, each and every year.
So too are 5/9 and 9/5, May 9th and September 5th. So too are 7/11 and 11/7, and all the above dates are the same day of the week, as is the last day in February, Leap Year or not. And they’re all the same day as January 4th, it would otherwise be January 3rd, but this was a leap year, and that’s changes the anchor day from January 3rd to January 4th.
Tommy also knew that New Year's Day was a Sunday. He was sobered up by then. And he knew it was a Sunday because Christmas was a Sunday in 2011, so New Year's Day is a Sunday, so the Anchor Day for 2012, January 4th, has to be a Wednesday!
So if that's a Wednesday, then 4/4, 6/6, 8/8, 10/10, 12/12, 5/9, 9/5, 7/11, 11/7, and February 29th are all the same day of the week, and they're all Wednesdays. So when I ask for example, about October 3rd, he knew October 10th was a Wednesday, 10/10. So 10/3 must also be a Wednesday. 12/12 is a Wednesday in 2012, so it’s 12/26, which is two weeks later. So 12/25, or Christmas Day, must be a Tuesday.
Success Tips for Oracle Project Management
- Create a standard for documentation at the beginning of your project, and hold team members accountable for completing documentation requirements as well as keeping them at and above the standards required.
- Before promulgating user documentation or training, it’s also a good idea to choose a representative from the among the business users base to review materials first.
- If you are not sure about the resources and budget required, obtain several estimates from people that have experience with the same size and scope of your project.
- Be explicit, before beginning the project, what internal resources are required for execution. This includes people, infrastructure, hardware, and software.
- Help the project champion understand the impact your project will have on the organization and how its successful completion will make him or her an internal hero or heroine for supporting it.
- Break up your project into smaller projects (try for projects that can be completed in 4-6 months, especially early on) to get success and demonstrate momentum.
- Make sure that your testing includes reports, upstream and downstream interfaces, customizations, enhancements, and workflows.
- Ensure that comprehensive transition reports and meetings between departing and incoming personnel are completed.
- Instead of spending time and resources implementing third-party reporting, consider consolidating multiple instances, moving to a global chart of accounts (CoA), and/or standardizing on a consistent calendar.
- Include governance, risk, and compliance management as part of the project plan.
- Finally, celebrate the successes. Too many projects focus on defects, failures, or small cost over-runs without looking at the big picture and what was accomplished.
The Analyst Corner
John Van Decker, Research VP of Gartner, states:
"A single chart of accounts allows consistency in financial reporting across the enterprise by standardizing on common metrics and reporting structures, reduces dependencies on a separate financial consolidation system, and significantly reduces the costs incurred with ongoing, complex conversions and translations."
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