Migrating to a Standardized ERP System in a Cloud Computing Environment at ABC Corporation
Topic
This proposal discusses the use of multiple financial systems throughout ABC Corporation (ABC), the impact that this has upon effective corporate operations and proposes a solution. ABC maintains four different ERP systems (BaaN, PeopleSoft, SAP and Deltek) and a financial consolidation system (Hyperion) across all of its divisions leading to increased IT costs as individual systems must be procured, maintained, and manipulated to provide financial data in a format that is meaningful to the home office for reporting and strategic management purposes. Not only is this a potentially inefficient use of technology, the use of a non-standardized system impacts the ability of management to obtain, manipulate and interpret critical data elements for strategic planning purposes and regular performance monitoring.
Problem
The business problem to be solved is how to improve operational efficiencies, reduce IT costs, and improve insight into the financial management aspects of the company for improved strategic planning and performance monitoring.
Approach
Determine if a single ERP platform set in a cloud computing environment will effectively reduce IT costs, improve the financial reporting process, and improve strategic planning and performance monitoring efficiencies across an international, professional services company that has over 52,000 employees in more than 30 countries.
High-level Approach
Through the use of subject matter experts (SMEs), determine if each division has a limitation that requires it to utilize one ERP system over another - e.g., does each division provide a different service that is better supported by a specific ERP solution; or are there unique, country specific legal compliance requirements that only one specific ERP system addresses. If no major impediments other than resistance to change exist, review ERP options with appropriate experts and consultants, select the system that meets the greatest needs of the company as a whole, and carefully review what the ramifications of a conversion would be for that system (e.g., data compatibility and migration processes, scripts). Utilize systems analysts and other SME's to determine if an appropriate cloud service exists.
General Benefits
Moving to a single ERP system may reduce the annual maintenance costs - typically 18 to 20 percent of the purchase price of the product - that are being paid to support four different ERP systems as well as a corporate system to manipulate and "roll up" data. Further, if this ERP system can then be moved to a cloud setting, it will reduce the overall cost to support the functionality by reducing the costs associated with maintaining and supporting the system as well as reduce the number of IT personnel required to support the application as this would be passed back to the cloud provider. A cloud setting allows users to access data anywhere. This could enable the corporation to reduce its "brick and mortar" requirements for physical office space and move to a more virtual office mentality for some of its operational functionalities (e.g., the standard Finance department for each division in each country and for the Home Office), thereby further reducing overhead costs. There is also a positive impact to corporate responsibility as the migration to a cloud environment will help to reduce the company's carbon footprint across the globe. Finally, a single system that everybody understands allows for greater ease of use, access to similar data elements, reduces the risk of errors due to converting data from one platform to another via external databases such as Excel, and allows for more accurate information in the data warehouse which will improve the ability of management in decision making.