trifinance erp lecture @ hubrussels

Click to edit Master title style


ERP in practice Within ICT & Finance context

19 December 2012

Nick Van Maele


Click to edit Master title style Agenda

p. 2

Introduction – TriFinance

Introduction – knowing IT to know Finance

Overview of roles in Finance

Introduction to ERP

Aspects of ERP Projects

Capita selecta in ERP Project Management

Conclusion


Click to edit Master title style TriFinance offering to customers

p. 3

Beyond Advisory

Initiated by a

Strong

BaseCamp

Advisory Intelligent capacity

Implementation Recruitment & Selection

Temporary workers

with added value and experience

High-level strategic consulting

Transformation & Implementation projects

Finding & selecting your future employees



p. 4




Introduction to ERP



Conclusion



• Some skills needed in Finance (Controlling)

– understand the business

– system & process understanding

– accounting knowledge

– understand myself & others

• Why IT as a base for Controllers?

– Data are the basic material for Finance to work with

– Master your systems & data master your Finance fate

Career considerations

p. 5



p. 6




Introduction to ERP



Conclusion



• Controlling

• Accounting

• Treasury

• Risk & Audit

• (ICT)

Roles in Finance

p. 7



Finance area Typical job focus

Controlling • Looking ahead (forecasts) • Finding order in chaos • Business aspects & problems • Challenging / steering the business

Accounting • Looking back (registering) • Correctly classifying what has happened • Deep insight in legal aspects & rules

Treasury • Cash management / cash forecasting • Interaction with banks (cash pools / connectivity / …) • Hedging risks (currencies / raw materials / …)

Risk & Audit • Checking systemic risks / making fail-safe procedures • Assuring accuracy of financial statements

ICT • Business processes / project management • Technological translation

Different people for different jobs

p. 8



p. 9




Introduction to ERP



Conclusion


Click to edit Master title style Definition of ERP

• ERP = Enterprise Resource Planning

• Goal of ERP = support for company process integration

• Historical origin = back office

– Finance, HR, Production, Logistics, Projects, Sales back-office, ...

• Other systems :

– SCM = Supply Chain Management

– CRM = Customer Relationship Management = Sales & Marketing

– Field Sales System = used by Field Sales people on the road

– WMS = Warehouse Management System = warehouse management

– Datawarehouse = large database for data integration and reporting

– ECM = Enterprise Content Management = unstructured text, video, ...

– etc.

p. 10


Click to edit Master title style Aim of ERP

HR Finance ... Business Functions

Applications & Interfaces

HR

Finance

...

Before ERP : disparate applications and data sources • hard to integrate (daily interfaces, errors, incompatible data) • difficult to upgrade • diffcult to report (different versions of the numbers)

After ERP : integrated application and data source

= database

= application

p. 11


Click to edit Master title style Integration via Processes

• ERP uses processes for smooth and logical information flow between people

• A process is a given set of steps which have a desired and predictable outcome

• Example:

Process - Vendor Master Data Creation

Fin

an

ceL

eg

al

Pu

rch

asi

ng

Vendor exists?

Create Vendor

Logistic Data

(status “New”)

Create Vendor

Financial Data

Background check Yes Authorise for use

Put Vendor Status

“OK”

No

Use existing

vendor

Yes

Place orders

Check OK?

Put Vendor Status

“Block”

No

p. 12



• ERP design follows from Process design

From Process to ERP system

p. 13

Process - Vendor Master Data Creation

Fin

an

ceL

eg

al

Pu

rch

asi

ng

Vendor exists?

Create Vendor

Logistic Data

(status “New”)

Create Vendor

Financial Data

Background check Yes Authorise for use

Put Vendor Status

“OK”

No

Use existing

vendor

Yes

Place orders

Check OK?

Put Vendor Status

“Block”

No

Different swimlanes translate into

different roles, user profiles and

authorisations for executing ERP transactions

Sequence of business actions is translated into ERP transactions

Information required per action is translated into data fields per transaction screen. Also input to the overall ERP data design.

Process diagrams are re-used in initial training to teach process understanding and give a high-level overview of the business

Some process steps reveal which data will

be needed


Click to edit Master title style ERP pro and con

Advantages of ERP

• Better business processes

• Effective

• Efficient

• Integrated processes & information

• Avoids interfaces

• Easier to report

• Authoritative data source

• One version of the truth

• Data input once, re-use elsewhere

Disadvantages of ERP

• Some functionality compromise

• Best-of-breeds can be better

• Users can perceive “step back”

•Expensive to start up

• Large upfront investment

• Lower running costs later

• Risky to implement

• Failure rate = 60%

• High stress in organisation

p. 14



p. 15




Introduction to ERP



Conclusion


Click to edit Master title style ERP Projects

• Very expensive to do

• Much potential efficiency & information gains

• Many different business aspects to tackle

• Stressful for organisation

• Risky (high failure rate)

p. 16


Click to edit Master title style Typical mistakes

• Not tackle business issues directly

• Believe software will solve problem

• Have no IT strategy

• Select software without Proof of Concept

• Insufficient business input in design

• Assume operational people will be available

p. 17



p. 18




Introduction to ERP



Conclusion


Click to edit Master title style Project Management (1/2) Generic methodologies : Prince2

Directing the Project

Planning

Starting Project

Initiating Project

Manage Stage

Boundaries

Controlling Stage

Closing Project

Manage Product Delivery

Advice

Project Brief Project Approach Project Organisation Initiation Stage Plan

Project Mandate

Initiation Stage Plan Project Plan Stage Plan Exception Plan

Advice Authorisation

Project Initiation Document

Advice Advice Authorisation

Advice

End Stage Report Exception Plan Stage Plan

Highlights Report Exception Report

End Project Report Lessons learned Follow-up actions

Team Plan

Checkpoint Report Work Package Quality Log

Work Package

Project Board

Project Manager

Team Managers

Project Manager

p. 19


Click to edit Master title style Project Management (2/2) TriFinance ERP methodology – overview

Initiate & Plan

Analyse & Design

Build & Test

Implement Hypercare Operate & Close

Project Management – Plan / budget / resources / issues / status / project mechanisms

Change Management – Key aspect! Involve impacted people / dialogue / prioritise

Training – Requires much effort to prepare and give.

Functional teams – Appropriate set-up (per region or process or role or knowledge area or ...)

Systems – IT specialists for hardware, installation, programming, performance, backup/restore, ...

Support Organisation – Absorb peak of problems at go-live. Prepare well in advance

Phases (time)

Workstreams (teams)

p. 20

Reporting – Management reporting & KPI needs



• Good ERP projects bring much change

– since most value is in reforming processes…

• Change is hard for people

• Different people react in different ways

• Project change management

Change management – why?

p. 21



• Insights © colour model = more simple & easier to remember

Change Management

p. 22


Click to edit Master title style Change Management Belbin® Team Roles ©

Team Role Contribution Allowable Weakness

Planter Creative, imaginative, unorthodox. Solves difficult

problems.

Ignores incidentals. Too pre-occupied to

communicate effectively.

Resource

Investigator

Extrovert, enthusiastic, communicative. Explores

opportunities. Develops contacts.

Over-optimistic. Loses interest once initial

enthusiasm has passed.

Co-ordinator Mature, confident, a good chairperson. Clarifies

goals, promotes decision-making, delegates well.

Can be seen as manipulative. Offloads

personal work.

Shaper Challenges, dynamic, thrives on pressure. The

drive and courage to overcome obstacles.

Prone to provocation. Offends people’s

feelings.

Monitor

Evaluator

Sober, strategic and discerning. Sees all options.

Judges accurately.

Lacks drive and ability to inspire others.

Implementer Co-operative, mild, perceptive and diplomatic.

Listens, builds, averts friction.

Indecisive in crunch situations.

Teamworker Disciplined, reliable, conservative and efficient.

Turns ideas into practical actions.

Somewhat inflexible. Slow to respond to new

possibilities.

Completer

Finisher

Painstaking, conscientious, anxious. Searches

out errors and omissions. Delivers on time.

Inclines to worry unduly. Reluctant to

delegate.

Specialist Single-minded, self-starting, dedicated. Provides

knowledge and skills in rare supply.

Contributes on only a narrow front. Dwells on

technicalities.

p. 23


Click to edit Master title style Training

• Assess current skills of end-users

– Training not only system but also business knowledge!

• Difficult logistics

– 50 users x 7 days = 350 training days max 8 people per trainer …

– dedicated training system, rooms, beamers, PC's

– availability of trainers last minute cancellations

• Very short time frame to develop & give training

– Wait until system design is stable training done before go-live

p. 24


Click to edit Master title style Process & Data Design

• Functional experts design good processes

– Adapt organisation to new processes where it adds value

• Data design follows process design – Data definitions ("what is a product?")

– New ERP data structure ≠ old data structure

• Data conversion = key go-live issue – Data cleansing effort nearly always underestimated

– Use data analysis to measure the As-Is reality

p. 25


Click to edit Master title style Systems

• Business strategy

– leading edge / cost effective / customer intimacy

• IT strategy

– identify key business support areas

• ICT architecture

– which system for what

– operational interfaces (WMS, production, ...)

– reporting

• Hardware budget

– servers / message queues / back-ups / data storage / …

p. 26


Click to edit Master title style Support

• Go-live causes a peak in problems / user tickets

• Existing helpdesk needs to be trained / equipped

• Project team stays on in Hypercare mode

– Become support level 2 and 3

p. 27


Click to edit Master title style Conclusion for ERP projects

• First simplify in the business

• First make a strategy

• ERP projects are not (just) IT projects

– change management, processes, organisation

• High risk experienced cross-functional team

• Enormous effort realistic budget

– training, data quality, ... are often underestimated

p. 28



• User friendliness

– intuitive and "modern" interfaces

• Accessibility

– mobile access

• Flexibility

– Changing the systems as fast as the world around it

• Data integration

– linking to suppliers, customers, banks, government (via web service?)

– ERP datawarehouses legacy systems

– internal external data

• Unstructured data (?)

– text, video, partner website, social media...

Future trends

p. 29



• Larger quantities of data being processed

– 2.5 exabytes = 2.5 billion GB of new data per day

– Walmart collects 2.5 petabytes per hour = 2.5 million GB per hour

• equivalent to 20 million filing cabinets

• Higher speed of processing: real-time or near-real-time

– Combination of real-time weather sensors, radar & historical flight data queries make computer predictions of landing times better than those of pilots more efficient planning of ground crew savings of up to 2 mio $ per year for large airports

• Larger variation of data formats

– SMS, GPS, sensors, smart meters, social media, websites, flash, YouTube, …

– GSM signal detection on parking lot of supermarket predict daily sales of supermarkt earlier than internal systems

Big data Source: Harvard Business Review – Oct 2012

p. 30



p. 31




Introduction to ERP



Conclusion



• Finance is a strategic area for companies

• Finance depends on good data

• To get good data, you need good systems

• Business applications are the core internal data providers – combine with external data (market research, Dun & Bradstreet, …)

• ERP is the internal backbone of larger companies – Sales, Finance, HR, Logistics, Production

• Master “IT” to master Finance

Conclusion

p. 32

trifinance erp lecture @ hubrussels

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