After spending enormous amounts of time and money, not to mention the tremendous emotional and social resources, it’s hard to imagine that conscientious parents wouldn’t be able to answer that question. But every so often it happens. Kids grow up, change, and become difficult to manage. The controls that were originally in place don’t apply, and as the children reach adulthood and some level of maturity, there is a need to develop new approaches for governance.
Similarly, companies have invested enormous resources in their ERP systems, nurturing them and adding to them over time as the needs of the business changed. The original Oracle E-Business Suite implementation, for example, was designed with the best of intentions.
The team, along with the busload of consultants, tried to build a system that would last the company for years and through generations of change. They provided each location the ability to govern its own system and configure it for flexibility to meet the operational needs of that entity. As with children, providing a good foundation prepares the organization for change, but it is difficult to predict the external factors that influence the adaptation and performance of the company over time.
Fast Forward into the Future
Before the internet and high speed connectivity, IT managers were in charge of local databases and were able to keep an eye on what was happening and to maintain IT controls to ensure application security and data integrity. The concept of an enterprise system existed only in the spreadsheets used to consolidate the company’s financial information. Fast forward a few years. Now, with thousands of systems upstream and downstream from the ERP system, with 24 x 7 accessibility requirements, and with a need to streamline costs and operations, maintaining controls over multiple systems is virtually impossible. In order to share data enterprise-wide, have consistent business practices, and have a global view of the business, it is necessary to re-think the underlying ERP architecture and the configurations that support a rapidly-changing business environment.
The changes are primarily reflected in the need to share data everywhere including having an integrated supply chain, having a seamless way of interacting with customers, and having global transparency in financial reporting to comply with IFRS standards. Cost-cutting measures also focus on the need to share data by centralizing operations within a shared services center and to foster growth by acquisitions and divestitures. Sharing data is difficult when there are disparate systems that only support a regional operation. Aligning operations with inconsistencies, different meanings of data, or even different patch levels requires a huge manual effort for reconciliation, translation, and maintenance.
In other words, it’s 11i. And your data is where, exactly? Many companies think that moving to R12 or to Fusion will solve many of the challenges they face with integrating their data and globalizing the systems that support the enterprise. However, it’s a long haul, and even small successes in getting R12 to work don’t mitigate the need for global standards, data quality, and control. In order to recognize the value of a technology upgrade the business needs to change, and in order to support a changing business there is a need for rapid reconfiguration of Oracle’s E-Business Suite.
Like Talking to Teenagers
Gingerly broaching the subject with business users elicits one big, long, collective groan or steadfast resistance. (Yes, it’s just like talking to a teenager). IT has been in charge of implementation projects that span multiple years and cost millions of dollars. I’ve been at companies that have taken 30 to 50 person-years to agree on a chart of accounts, and even then, allowed each part of the organization to have control of one or more segments. Another company that I’ve worked with has 1500+ systems that basically provide the same ERP functionality. It’s no wonder that the business users don’t want to have IT involved in another project to reimplement. This is a business problem and needs to be solved by the business users.
More than implementing a new technology, changing the business processes forces the enterprise to evaluate the value of each of its parts and to work together to develop synergies. Starting from the very basics – business groups, org units, and flexfields – decisions have to be made that will provide visibility on all aspects of the business to the C-level executives and yet provide efficiencies to operations. Many of those decisions require a global view of the enterprise and a local view of the business requirements. Changing to a Fusion or Services-Oriented Architecture does little to drive concurrence between different parts of the business. Implementing R12 by itself doesn’t force adoption of standards or facilitate sharing of data, just as giving your teenagers a cell phone doesn’t mean that you know where your children are.
In our disparate data example, you might be tempted to point to the data and say that it’s the data that’s the problem. If you do, you’re likely to solve this problem by throwing a bunch of warm bodies at it who will clean up reports, monitor access levels and permissions, and scrub, scrub, scrub away at the data endlessly. If instead you identify the disparate instances as the problem, you’ll get to the root cause, and now you’ll be able to take some more meaningful action.
Providing a set of standards and governance policies is a foundation for the communication and sharing of data. Embracing change is an enabler of enterprise growth, and transforming supporting ERP systems before considering a change to a new technology is the underpinning of success and of recognizing value in an earlier investment of millions of dollars and person-years of effort.
Do You Know Where Your Data Is?
Is there a single source of truth? Is the data reliable and consistent? And, do you know where your children are?