Strategy

Strategy & Action Planfor an ERP Program

Iftikhar NadeemAdvisor, Information Strategy

Office of the Supervisor for Financial & Administrative Affairs

February 22, 2005

The ERP Program Committee

1. Dr. Muhammad Al-Khaldi (Chair)

2. Dr. Salih O. Duffuaa

3. Dr. Talal Maghrabi

4. Dr. Ibrahim Al-Jabri

5. Dr. Abdulaziz Al-Mulhem

6. Mr. Iftikhar Nadeem

Formed on July 9, 2004

Report submitted on January 10, 2005

Agenda

• ERP Program Committee

• Methodology

• Business Processes and Systems

• ERP Systems

• ERP Program Cost

• Mission, Vision, Objectives & CSFs

• Program Organization

• Implementation Roadmap

• Change Management

• Conclusions and Recommendations

Charges of ERP Program Committee

• Vision, mission, goals and objectives

Organization of the project with clear roles and responsibilities

Identification of the business processes

Review of current applications

Short-list ERP systems suitable for KFUPM

Implementation strategy

Scope of work including phases, if any

Project period

Costs estimates

Change management plan

Methodology

D e v e lo p ER P Pro g ra m

S u b-C om m i tte e forC h an ge M an age m e n t

S u b-C om m i tte e forC os t/B e n e fi t An al ys i s

S u b-C om m i tte e forC u rre n t Appl i ca ti on s

Fo rm ER P Pro g ra m C o m m it te e

S tu dy a n d Prio rit ize Ta s k s

V is it R e fe re n ceS it e s (u n iv e rs it ie s )

Fo rmS u b-C o m m it te e s

M e e t Us e rD e pa rtm e n ts

O rg a n ize O pe nD is cu s s io n Fo ru m s

Pre pa re a n d S u bm it F in a l R e po rt

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urcesF ig u re 2 .1 M e th o do lo g y A do pte d by th e ER P Pro g ra m C o m m it te e

The ERP Program: Mission and Vision

MissionTo improve, enable and integrate academic and administrative

processes of the University

VisionTo adopt and sustain the best information technology enabled

business processes in order to support the most productive environment for learning, innovation and research.

The ERP Program: Objectives

• Improve effectiveness and efficiency of academic and administrative processes

Improve support for decision making

Enhance availability and access to timely and reliable information

Enhance professional capabilities of the human resources

Improve the quality of services for all stakeholders

Enhance accountability of personnel, and integrity of processes and information

Each Department must set its own goals for the

ERP Program

The ERP Program: Critical Success Factors

• Ownership, commitment and involvement of the top management

• Awareness, capability and motivation at all levels among all stakeholders

• An effective change management strategy and plan

• Necessary infrastructure for effective implementation of the systems

• Minimum customization of the selected ERP system

• Good planning and then rapid implementation to keep up the momentum

• Motivation and training of end-users

Business Processes & Systems

Academics Processes1. Admission & registration

2. Student affairs

3. Research management

Administrative Processes1. General ledger

2. Accounts Payables

3. Accounts Receivables

4. Cash Management

5. Fixed Assets

6. Costing & budgeting

7. Inventory management

8. Warehouse management

9. Purchasing

10.Project accounting

11.Maintenance management

12.Personnel administration

13.Payroll

14.Training

15.Support services

– Office and Housing Services

– Medical Services

– Food Services

– Safety and Security Services

– Transportation Services

1 .Document management2 .University Portal

3 .Business Intelligence

The ERP Program: Organization

Executive Steering Committee

ProgramManagement Team

ImplementationGroup 1

ImplementationGroup 2

ImplementationGroup n

The ERP Program: OrganizationImplementation Groups

• Business Process Owner (Chair)

• Key Users

• Application Developer

• Functional consultants

• Technical consultants

ERP Systems (Short-listed)

1. Oracle E-Business Suite

2. PeopleSoft

3. SAP

4. SunGard SCT

ERP Program: Cost Scenarios

1.ERP* only scenario SR 7,580,000

2.SunGard SCT Banner only SR 8,200,000

3.ERP and Banner scenario SR 9,700,000

ERP* denotes Oracle, PeopleSoft or SAP

ERP Program Cost: ERP & Banner Scenario

#ItemCost (SR)

1ERP system software2,200,000

2Maintenance of ERP system software440,000

3Consulting5,500,000

4Change management1,100,000

5Project setup150,000

6Contingency310,000

Total9,700,000

Projections of Annual Operating Cost of the ERP System

ItemDescriptionYEAR 1Year 2Year 3Year 4Year 5

ERP softwareMaintenance cost @20% for license cost of SR 2.2 million

440,000440,000440,000440,000440,000

External support

Functional consultants @

SR 30,000 per man-month540,000270,000180,000180,000180,000

TrainingContinuous training of key users of implemented modules

200,000150,000100,000100,000100,000

ERP system upgrade

Application upgrades for better features or enhancements

150,000150,000

ManpowerSupport personnel (9 persons)

3 x SR 200,000 & 6 x SR 150,0001,500,0001,500,0001,500,0001,500,0001,500,000

Total2,680,0001,500,0002,510,0002,220,0002,370,000

Roadmap for Implementation

Major Task123456789101112131415161718192021222324

Document processes

Prepare & implement CMP

Issue RFP for ERP system

Select ERP system

Prepare infrastructure

Issue RFP for ERP implemtr.

Select ERP implementer

Setup project environment

Prepare business blueprint

Configure & customize

Prepare & migrate data

Train and test

Perform quality assurance

Cut-over and go-live

Support users

Working Months

Change Management

• Management commitment

• Ownership

• Effective communication

• Sensitivity to users needs

• Training

• Flexibility

Conclusions and Recommendations

• The Committee, unanimously, recommends that an appropriate ERP system must be selected and implemented at the University

• Form a project management team entrusted to develop a detailed ERP program

• Develop a detailed ERP program with involvement of all stakeholders

• Focus on enhancement of professional capabilities and motivation of users as well as concerned IT professionals prior to commencement of ERP implementation

• Prefer a phased approach for implementation of various modules of the ERP system for effective management of the program and to reduce risks associated with large “big-bang” approach

• Formulate and implement an effective change management strategy and plan.

Thank you