Project of Management Information Systems

Course Project Example used with permission from student Table of Contents

Abstract 3

Company Background 3

Business Problems 4

High-Level Solution 5

Approach 5

ABC’s Systems 6

Detailed Options/Solutions 9

Web Application

Native.NET/Java

Database Type

Management/Monitoring Tools

Security Risks

Changing Cloud Providers

Dynamic Scaling

High-level Implementation Plan 20

Changes to Technology

Changes to Personnel

Conclusion 22

Summary of Recommendations 24

References 26

Migrating to a Standardized ERP System in a Cloud Computing Environment at ABC Corporation

Abstract

The business problem to be solved is how to improve operational efficiencies, reduce IT costs related to ERP systems, and improve insight into the financial management aspects of the company for improved strategic planning and performance monitoring.

Company Background

ABC Corporation (ABC) is a twelve billion dollar ($12B), publicly traded, global management consulting and technology company headquartered in the United States. ABC has two business units, a public service sector that focuses on supporting federal, state and local government needs, and comprises eighty-nine percent (89%) of corporate revenues; and a commercial service sector that supports all other types of industry and accounts for the remaining eleven percent (11%) of corporate revenues. The company has over 52,000 employees globally.

ABC is the product of rulings by the Security and Exchange Commission (SEC) in the late 1990’s that forced large public accounting organizations to divest themselves of their consulting branches due to perceived conflicts of interest. Examples of the divestitures include Arthur Anderson who spawned Accenture, or KPMG that spun off KPMG Consulting (later to become BearingPoint). ABC spun off from its “Big 5” accounting parent in 1999, taking all of the parent company’s non-accounting related work with it. By 2000, they were fully independent of their parent company and began to grow within their U.S. based operations. During 2002, Arthur Anderson filed for bankruptcy protection and ABC decided to purchase assets in foreign countries, thereby creating an immediate global presence and also tripling their revenue base. By virtue of this rapid growth, the existing IT infrastructure was not closely reviewed and has created redundancy as well as a question as the reliability and accessibility to critical global financial data. In order to overcome these issues, “stove-piped” IT solutions that are unstable or not well integrated with a main system, as well as other solutions that require manual transference of critical data have been developed.

Business Problems

ABC currently has a presence in over 30 countries and the home office in each country operates on one of the following Enterprise systems: PeopleSoft, Infor (formerly Baan), SAP or Deltek. To further complicate matters, the umbrella corporation that owns all of the various entities (ABC Holdings) took a PeopleSoft base ERP program, customized it without the assistance of Oracle and has created a quasi-proprietary ERP system called “Obtuse”. Oracle has refused to continue support of this system because it has become so customized by ABC that they can no longer identify their core code. Obtuse has failed to meet Sarbanes-Oxley or SAS 70 ii requirements and in order to work around this ABC has created an intricate solution that requires the manual uploading and downloading of data through Excel spreadsheets and concludes with the consolidation of all financial data via Oracle’s consolidating system called Hyperion.

The impact of this hodgepodge of ERP systems to ABC is broad. As noted earlier, the systems are not well integrated. ABC must maintain extensive financial and operational reporting staff in order to manually process all of the data each month. They are paying maintenance fees on six different financial and operational management systems as well as per seat costs. An inordinately large IT staff must be maintained at each site in order to support the unique needs of each system. Further, corporate management at ABC Holdings is only able to have insight into the financial health of their company at a high level and cannot easily access project level detail at the various office locations around the globe.

High-level Solution

In order to more effectively manage the financial and overall operational aspects of ABC for strategic decision making, I propose that ABC consider transitioning to a single ERP system that meets the broadest needs of all of their entities and to streamline their IT functionalities to a single hub or a cloud base, which will have the added benefit of allowing the financial/operational support to also be streamlined thereby reducing both IT and Finance staffing requirements. ABC may also be able to recognize further cost savings in the per seat pricing because of economies of scale in transitioning to a single ERP solution. The final benefit for ABC could be one of social responsibility – reducing their carbon footprint creates a more environmentally friendly company by reducing brick and mortar space requirements.

Approach

Determine if a single ERP platform, possibly set in a cloud computing environment will allow the company to achieve the aforementioned goals.

Through the use of subject matter experts (SMEs), determine if each division within ABC 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. Once accomplished, select the single ERP system that meets the greatest needs and determine if any “work arounds” will need to be accomplished. Finally, in conjunction with systems analysts and other SMEs, determine what functionality, if not all can be moved to a single hub or to the cloud.

ABC’s Systems:

The following are the systems ABC utilizes to support both core business systems and support systems:

1. Hyperion – Hyperion is an Oracle product commonly used for consolidation of financial data from multiple sources. It can interface with most ERP systems (although some better than others) so that the need for manual input is alleviated.

2. SAP – this is one of the top five ERP systems in the world with over 35,000 clients in more than 120 countries. It is utilized by thirty percent (30%) of ABC’s global offices and integrates well with Hyperion. Although it can be modified for use in the professional services sector, it lacks the robustness and ease of use found in other ERP systems that have been specifically developed to support professional service entities and government cost accounting requirements. As such, the system does require some accounting functionality to be supported in an environment that is external to the ERP system. Still, SAP has a strong accounting, HRIS, payroll, time keeping, and CRM components. Its standard database is on a SQL platform and operates in a Windows environment. SAP has traditionally been an on-site application and has only recently started to explore the software as a service (SaaS) market. As such, SAP cannot yet support cloud computing needs.

3. Infor – Infor is the third largest global ERP provider (behind SAP and Oracle) with over 70,000 customers; however, their focus is the manufacturing environment, not the professional services industry. Infor’s database is an MS SQL platform and operates in a Windows environment. It offers accounting, HRIS, payroll, distribution and manufacturing (e.g., bill of materials or kitting) components, yet lacks strong CRM capabilities and requires manual operations outside of the financial component to meet government cost accounting standards. It clumsily integrates with Hyperion. This ERP solution is considered to be more suited to middle market companies and may not be robust enough to fully handle the needs of ABC on a corporate wide basis. Currently ten percent (10%) of ABC sites use Infor. Infor yet support the SaaS market.

4. PeopleSoft – PeopleSoft is one of several ERP solutions offered by Oracle. Its database is on an MS SQL platform and it operates in a Windows environment. It offers accounting, HRIS, payroll, time keeping performance and CRM modules that are robust and competitive with those offered by SAP. The ERP solution still does not meet all of the requirements of government cost accounting with the ease that the Deltek product does, so some financial activities need to take place outside of the main environment. PeopleSoft integrates well with Hyperion and has been successfully implemented in a cloud environment through Amazon EC2. Oracle offers both private and public cloud solutions. Twenty-five percent (25%) of ABC’s offices use PeopleSoft.

5. Deltek CostPoint– Deltek is considered the leading ERP solution for government contracting and professional services enterprises with over 11,000 customers. It operates in a Windows or Novell environment and its database is in an SQL platform. It offers strong accounting, CRM, HRIS, performance management, procurement, and inventory modules. Deltek’s robust professional services and government cost accounting focus resolves the need to perform critical financial functions outside of the primary financial system. It integrates with Hyperion, but not as efficiently as SAP or PeopleSoft. Deltek lacks a global presence but has begun to operate in the SaaS market offering private and public cloud solutions. They do presently offer some services through the cloud. Approximately thirty-five percent (35%) of all ABC sites use Deltek.

6. Obtuse – this ERP system is derived from a PeopleSoft base and is only used by the holding company. It is completely non-compliant with government cost accounting needs as well as other government reporting needs (e.g., 10K, 8K, Sarbanes-Oxley and other financial reports). Its database and operating platform are the same as PeopleSoft’s. This software will not be considered as an adequate solution to transition the entire corporation to.

7. MS Excel – this product is used heavily to supplement ABC’s various financial systems (with the exception of those sites on Deltek) and is used by all of the divisions to prepare data for financial consolidation to Hyperion. It is ultimately used to augment accounting systems; however, is a poor solution. Due to the open nature of excel, version control, access control and other problems exist, as does the error rate due to the manual input requirements. The use of excel to assist in the generation of financial reports places all financial data into question and increases the audit risk for the corporation and its investors.

8. Network and infrastructure – ABC has a large central purchasing organization that all divisions must utilize when procuring equipment. As such, PC’s are either Dell’s or IBM’s, and all systems operate on Windows NT with standardized configurations. Because there is no central purchasing organization, different parts of the business use different equipment. Implementing a standardized ERP system in a cloud or at a central hub location can be easily achieved due to this standardization; however, no location has sufficient server capacity to support a single ERP system, so increased server needs as well as the transition or relocation of IT resources to a central hub will need to be considered.

9. Website – ABC has an excellent website with intranet and extranet capabilities. It is well maintained at the ABC Holding’s office site in Vancouver and allows for sharing of some data.

Detailed Options/Solutions

ABC has four viable ERP systems in-house that are operational. Two of these systems can offer a cloud based solution (SaaS), which is desirable from a consolidation standpoint for ease of use and for reducing the capacity requirements of the globally distributed IT departments. All of the ERP systems operate on the standard operating system that ABC already uses, Windows NT and all of the databases are SQL which ABC is familiar with. All four of the ERP systems offer all of the necessary functionality across all operational needs of the corporation; however, only two are truly oriented towards professional service companies (Deltek and PeopleSoft) and only one is truly oriented towards government cost accounting requirements, which comprises eighty-nine percent (89%) of ABC’s business revenue.

The major questions to be answered in determining which ERP system to select are:

1. What is the return on investment of a cloud environment versus an in-house hosted solution

2. What is the total cost of ownership for each system under each option (cloud based if available versus in-house hosted)

3. Will additional hardware be necessary to operate in a cloud environment versus an in-house hosted one with remote access

4. Is a vertical vendor such as Deltek (oriented towards a specific industry) more desirable than a more generic vendor such as SAP (works across multiple industries and has a broad client base in many countries)

5. Can the ERP system manage the level of seats required for functionality

6. Ease of data migration from one system to another (e.g., will data integrity remain intact, can data be migrated easily or will it require manual efforts)

7. Understanding any unique requirements at a country and site level and ensuring that these needs can be met by the selected system

8. Which system offers the greatest capability for ABC’s needs with the least amount of customization

9. What is required for implementation and what type of support does the vendor offer

10. Who will actually be doing the implementation (e.g., does the vendor have its own in-house implementation team or do they subcontract this out)

11. How flexible is the system and how easily can it be modified to meet changing business needs

12. Are there any other business processes that can be improved through the implementation of one ERP system over another

Given this set of issues to be resolved, the recommendations for an ERP system in a cloud solution or in-house solution is as follows:

1. Hire an experienced system analyst and other appropriate SMEs to aid in the review of ERP options and the analysis of unique requirements

2. Have each of the four vendors provide proposal and a demonstration of their system capabilities

3. Down select to two vendors, provide them with a script that contains all of the business processes the system must encounter in a day and have them provide a proof of concept.

ABC must perform further research to determine if it should install an on-site ERP application or if it should look to a cloud-based solution (client-server versus a web-based solution in a public or private cloud deployment). We will address factors that should be reviewed and addressed as a part of this determination process and discuss how these might impact the four ERP solutions being considered – Oracle’s PeopleSoft, Deltek’s Costpoint, SAP and Infor.

Mallya (Mallya 2010) identified several basic areas to address when considering whether a cloud solution is reasonable:

1. Is your application a web application?

2. Is your application native .NET/Java?

3. What database type do you use?

4. What kind of management/monitoring tools do you use on your application?

5. What security risks would a cloud deployment will reveal?

6. Will you be able to move between cloud providers? Are you locked into a specific provider after the application is deployed?

7. Are you able to scale dynamically?

Web Application

The question being considered is whether the application in question is a web application. We have already established that only two of the four software solutions being considered by ABC are fully web compatible – Deltek’s Costpoint and Oracle’s PeopleSoft. IBM’s WebSphere Cast Iron Cloud Integration solution (Cast Iron) offers a configuration-based solution for data migration and application integration of the SAP solution in lieu of requiring the writing of potentially complex code and it requires no middleware. Cast Iron indicates that it can integrate with BaaN; however, BaaN no longer truly exists and was integrated into the Infor ERP solution. It is unclear whether Cast Iron can support Infor as it currently exists, which may mean that a source would need to be found so that code could be written. Since cloud providers are clearly offering Costpoint and PeopleSoft on the web with no conversion needs, these applications are recommended as the two to review further. Although SAP can be converted through Cast Iron, it will require more effort than Costpoint and PeopleSoft and the convertibility of Infor is fully in question, so neither application is considered a viable solution for further consideration and will not be assessed further.

Native .NET/Java

The purpose of this question is to determine whether a cloud provider can support the technology stack of the software application selected. A technology stack means the layers of components or services that are used to provide a software solution or application.

PeopleSoft uses PeopleCode, AE, SQR, CI, DMS, HTTP(S)/XML (extensible markup language), JDK (Java Development Toolkit), .NET/Java, COM or C/C++ to interface with their components. Oracle has teamed with Amazon Web Service Cloud (EC2) to provide its PeopleSoft product, so can fully support the application.

According to Jakovijevich (Jakovijevich, 2006) “Deltek Costpoint 6 is a scalable Java 2 Enterprise Edition (J2EE)-based platform of ‘industrial strength,’ capable of supporting even organizations with over a billion dollars in revenues. The product is standardized for integration with other technologies, and has the flexibility to support multiple OS platforms, with support for Web-native HTML, DHTML, Java Script, or rich client on the UI tier; Microsoft SQL Server or Oracle as databases; and the Actuate reporting server.” Costpoint uses a Microsoft .NET platform to enable real-time transparent connections via Web Service and XML across multiple platforms and applications. Deltek has also teamed with AppForge to deliver mobile applications to mobile and wireless devices including PDA’s, smart phones and other industrial devices without having to be connected to the network, potentially reducing hardware investment by the company.

In summary, Costpoint and PeopleSoft should be supportable by a cloud provider, so both are still equal contenders for selection in a cloud-based solution. Costpoint may offer more flexibility through mobile applications.

Database Type

This question asks us to look at the database type that we are using and determine if it is supportable by the cloud provider. ABC is already using both Deltek and PeopleSoft applicationsin a client-server deployment. Further, we know that the cloud providers such as Amazon (EC2) and Salesforce.com support these applications in a public cloud environment so we know that these database types are supportable. The question that would need to be addressed in an analysis other than this is what a data migration solution would entail for the ABC divisions that are presently utilizing SAP and Infor applications. In essence a data migration process would need to be developed to include the following (Database Answers):

1. Choose a data modeling tool with Reverse Engineering Capability

2. Define and create the data dictionary

3. Identify all the required data sources and the “owner” for each source considering data feeds, legacy systems and operational data stores

4. Define the data items required, in consultation with the users

5. Create the data models for the source data

6. Define the data validation checks (bottom-up) and clean-up business rules for source data

7. Carry out an audit of the data quality in the major databases, (bottom-up and top-down)

8. Define the staging area with MIRror Tables to store extract files.

9. Create the business data model for the consolidated database

10. Create the data model for the target ERP database

11. Define the data mapping between source and target data items.

12. Define acceptance tests for data in the integrated database.

Management/Monitoring Tools

This area reviews whether the management tools (e.g., dashboards, status reports) used can be used on the web or in a cloud-based environment. The management tools currently used by ABC are those developed in their “Obtuse” product from a PeopleSoft base. We know that ABC’s intent is to migrate from the four ERP applications presently used to a single application – in this study PeopleSoft or Deltek – and the management tools utilized by either of these solutions would be adopted. ABC would be more comfortable with the look and feel of the PeopleSoft tools because Obtuse utilizes similar management tools; however, the Deltek tools are more relevant to the industry that ABC support – management consulting. Through the answers to the previous questions we know that PeopleSoft and Deltek all have web-compatible as well as cloud-compatible management tools since both are currently being used in a public cloud environment.

Security Risks

This is a critical area of evaluation and impacts whether a public cloud deployment or a private one is more appropriate for ABC. Mallya (Mallya, 2006) states that there are two steps to evaluating the security risks:

1. Review the provider’s regulations and trust level

2. Know that security hazards can be created by making the client available from any PC that is connected to the web

The EUKhost Blog indicates “the location of deployment is the prime differentiating factor between” a public or private cloud option. A public cloud hosting solution is one that is offered over the Internet and the service provider bears the cost and responsibility of managing the infrastructure and security. Data storage is shared with all of the users of the service. In this type of a situation, ABC would have to rely upon the security measures the host implemented as satisfactory. For example, if ABC were to consider using Amazon’s EC2 option of cloud support, Amazon’s privacy policy states, “we will implement reasonable and appropriate measures designed to help you secure Your Content against accidental or unlawful loss, access or disclosure.” This does not tell the consumer much about what exactly Amazon does to protect the data in their care.

EUKhost Blog states that a Private cloud hosting is created “using software operating on hardware provided by the customer.” In this case, the data is fully managed by the customer, not by the cloud provider, so all security is that which the customer institutes. Another advantage that eUKhost Blog identifies with a Private cloud solution is that of greater scalability because of the ability to expand existing architecture.

In 2010,the Cloud Security Alliance (CSA) issued their report on the top threats to public cloud computing (CSA, 2010). The report indicates the following:

1. The abuse and nefarious use of cloud computing. This impacts mostly Infrastructure as a Service (IaaS) and Platform as a Structure (PaaS) and exploits their weak registration systems and limited fraud detection. Botnets have used IaaS for command and control functions as well as to introduce trojan horses and malicious code.Solutions include stricter initial registration and validation processes, enhanced fraud monitoring and coordination, comprehensive introspection of customer network traffic and the monitoring of public blacklists for one’s own network blocks.

2. Insecure interface and APIs. The security and availability of general cloud services is dependent upon the basic APIs used to manage and interact with cloud services and this threat impacts IaaS, PaaS and Software as a Solution (SaaS). This potential weakness can impact the confidentiality, integrity, availability and accountability of data. Examples include reusable tokens or passwords and limited monitoring and logging capabilities. Solutions include analyzing the security model of cloud provider interfaces, ensuring strong authentication and access controls are used in conjunction with encryption and understanding the dependency chain associated with the API.

3. Malicious Insiders. Impacting IaaS, PaaS and SaaS in a public cloud setting, this issue is amplified due to a single management domain coupled with a lack of transparency into provider processes and procedures. For example, the hiring practices of cloud providers may be unknown or undisclosed and could create a potential avenue for access to private and sensitive data. Consumers of cloud services must ask and understand what cloud providers are going to protect them against the threat of malicious insiders. Some solutions to mitigate exposure include specifying human resource requirements as a part of the service contract or demanding transparency into overall information security and management practices as well as compliance reporting.

4. Shared technology issues. This threat is focused on IaaS and exploits the shared technology aspects of a cloud computing environment – specifically CPU caches, disk partitions, GPUs and other shared elements lacking strong compartmentalization. Even the use of a virtualization hypervisor, designed to address this issue has proven to have its weaknesses and inappropriate access has been gained to the underlying platform. Solutions to this problem include implementing a security best practices for installation/configuration, promoting strong authentication and access controls for administrative access and operations, or the enforcement of service level agreements (SLAs) for patching and vulnerability remediation.

5. Data loss or leakage. This is a serious threat across IaaS, PaaS and SaaS. The loss of data can have devastating impacts upon competitive edges and financial positions. Depending upon the type of data lost, there could also be compliance and legal complications. Data can be compromised through the accidental alternation or records without a backup to restore from. The loss of an encoding key could result in the effective destruction of critical data. Data center reliability and operational failures are yet other avenues to create data loss or leakage. Some solutions to this issue include implementing strong API access controls, the encryption and protection of data in transit, and the contractual specification of cloud provider backup ad retention strategies.

6. Account or service hijacking. This is most frequently accomplished through the stealing of access credentials and impacts IaaS, PaaS and SaaS. In a cloud environment, this could allow the hijacker to manipulate sensitive data, return falsified information or even redirect clients to an illegitimate site. Possible solutions to the threat include prohibiting the sharing of account credentials between users and services or understanding the cloud providers security procedures and SLAs.

7. The unknown risk profile. Because functionality (e.g., the maintenance of hardware or software) in an IaaS, PaaS or SaaS offering may be provided by the cloud provider, the ability to understand the details/compliance to needs such as security procedures, auditing and logging may be a vulnerability. For instance, who has access to your data and related logs stored? Solutions to reduce risk in this area include a partial or full disclosure by the cloud provider of infrastructure details (e.g., patch levels, firewalls) or a disclosure of applicable network intrusion logs, redirection attempts and/or successes, and other logs or pertinent data.

Due to the sensitivity of ABC’s data that is to be managed, it appears that the public cloud may yet be too vulnerable. It is therefore recommended that ABC pursue a private cloud deployment over a public one and an appropriate platform would need to be evaluated and selected.

Changing Cloud Providers

This area explores whether ABC would be locked into a specific vendor should there be a reason to change service providers in the future and is only relevant if using a public cloud provider. Due to the complexity of a full ERP system and the limited number of cloud service providers who support Deltek or PeopleSoft in a cloud environment, at this time, it is reasonable to anticipate that the selection of a cloud provider would require the strong negotiation of services and rates as it would not be easy to migrate between providers. Amazon has a standard contractual termination clause of a thirty-day notice; however, as noted, the ability to find a different provider may be prohibitive.

If ABC agrees that it is more appropriate to deploy a private cloud solution, then the concern over issues with changing cloud providers becomes moot.

Dynamic Scaling

The goal of this question is to ensure that the cloud provider offers a fully scalable option for the ERP software selected. A scalable system is on whose performance has reached capacity but can be immediately improved through the addition of something else to the infrastructure, e.g., more hardware, software licenses, servers. Assuming that a private cloud deployment is selected, this means that ABC’s servers would need to be fully scalable. At this point, ABC has sufficient server capacity and resources to grow a larger “server farm” if required. Regardless of the ERP system implemented, scalability is not a concern in this environment.

In summary, we are able to conclude that two of the ERP solutions under review, Costpoint and PeopleSoft, are fully supportable in a public cloud environment; however, in a private cloud would be better able to meet the security needs of ABCand is strongly encouraged. Data can be migrated to a single application from all four of the ERP solutions being considered and this is a common practice for these specific application vendors. ABC can easily support scalability with any solution selected.

Costpoint or Peoplesoft would prove the most efficient/feasible application option to transition to a private or public cloud-based deployment. SAP would be a distant option because it requires middleware for a cloud deployment, therefore it is considered less viable. Infor does not appear to be in a sufficiently advanced stage to be considered for a cloud deployment option without a great deal of effort and cost.

High-level Implementation Plan

In order for ABC to successfully implement a conversion to a single ERP application, it will need to consider the additional following details:

Changes to Technology

As ABC converts to a single ERP application they would decommission the obsolete systems. Assuming that ABC accepts the recommendation to utilize either PeopleSoft or Costpoint, this means that Obtuse, SAP and Infor would become legacy systems. As the conversion process is reviewed, decisions will need to be made as to how the data on these systems will be preserved. There are several options; however, the most common approach is to have all of the systems “frozen” as of a point in time and preserved so that no further changes can be made to the data. The various applications would then be maintained by the Finance and Administration group in the Home Office when and if legacy financial data at the division level was needed for audit or other purposes. ABC can then keep the legacy data on a smaller server that is accessible only through password protection for those who have a need to know. This server can be made web accessible so that finance oriented staff in the various divisions may be granted access if they need their legacy data for any purpose.

ABC will need to consider whether it is still reasonable to use Hyperion for financial consolidation purposes as there are so many reporting divisions whose data must be combined to create a single financial statement for reporting purposes. Both Costpoint and PeopleSoft are able to manage a consolidation process without having to use an external program; however, neither system may not be able to handle the volume of data as easily as Hyperion.

All other applications are anticipated to remain intact at this time. Microsoft products such as Excel and Access are good and useful tools to support any accounting activities. They allow large amounts of data to be downloaded from the system for manipulation and review, and the data can then serve as auditable backup to adjustments that are ultimately recorded into the ERP system (e.g., documenting depreciation schedules for fixed assets, documenting journal entries and their purpose, or meeting government reporting requirements such as Incurred Cost Submissions).

A cloud-based solution is being contemplated at this time; however, is not critical to this process – it is an added benefit that may provide groundwork for future improvements and will aid in the ease of functionality with the entire ERP system.

Changes to Personnel

ABC maintains personnel in each division specifically to support IT infrastructure. As there will be no further need for software development, it is anticipated that the overall IT requirement (inclusive of divisions) will be reduced by at least 33 percent. By moving to a centralized ERP application that is based at its home office, the need to have IT staff at the division level for maintenance purposes is reduced or eliminated. Any system/application issues would be resolved by the Home Office IT staff who are maintaining the ERP application in the private cloud solution. Further, there will no longer be a requirement for continued software development once the Obtuse application is decommissioned.

It is anticipated that, while each ABC division will still need to retain some IT staff to resolve local issues such as PC issuance and imaging, hand held device support, and the maintenance of internal networks, due to a centralized ERP application, such staffing requirements will be reduced by at least one third in each division. It will be the responsibility of management within each division to determine and their staffing needs and to coordinate through Human Resources to ensure that all retention and termination processes are conducted in accordance with the laws of each country.

There will also be a requirement to train staff (all users and the IT group) on how to use the selected ERP solution and to ensure sufficient staff is proficient in SQL reporting queries. User training will be performed as a part of the conversion process and training needs/recipients will be identified by management so that an appropriate schedule may be developed with the conversion specialist for the ERP implementation.IT staff training for maintenance and other ERP application should also be identified by management and addressed prior to implementation. ABC will also need to ensure that the appropriate number of IT staff be proficient in the implementation and maintenance of a private cloud development and deployment. This can be accomplished through training or through the acquisition of individuals with the necessary skill sets.

Conclusion

The goal of this proposal was to determine if it was reasonable for ABC to move to a single ERP applicationin order to improve operational efficiencies, reduce IT costs related to ERP systems, and improve insight into the financial management aspects of the company for improved strategic planning and performance monitoring. A sub-goal was to also determine if by migrating to a single ERP application ABC might be able to recognize a cost savings through the reduction of support personnel and through a reduction in licensing/maintenance costs.

This review has established that a reduction in maintenance costs would be highly likely, yet a full assessment of current costs against maintenance costs of a single solution remains necessary to fully recognize the scope of that savings. This white paper cannot adequately address a true cost savings until management approaches the two recommended providers – Oracle (PeopleSoft) and Deltek (Costpoint) - and obtains their quotations. Regardless, we have established that moving to a single ERP application will reduce the required level of IT support at the divisional and corporate level by approximately one third, which does allows for a cost savings. Again though, until a final solution is selected by management, the fill significance of this savings cannot be firmly established.

Moving to a single ERP solution will allow all divisions to function from a common ERP platform and will remove the need to perform many of the accounting and operational functions outside of the system. This ensures that management has immediate and relevant access to meaningful data that is system driven, immediate and on demand instead of having to wait for somebody to “manipulate” the data into a format that may or may not be truly accurate depending upon the human error factor.

We have demonstrated that a strong cost savings potential exists as well as a definite ability to meet the greater need of improving operational functionality and management decision-making capabilities should ABC migrate to a single ERP solution. The determination to place an ERP solution into a cloud environment remains an open item in terms of cost savings; however, it is clear that a reduction of IT department infrastructure can be realized with a move from a decentralized IT department structure to one that is centralized.

Summary of Recommendations

· Migrate from supporting multiple ERP solutions on a divisional level to supporting a single ERP solution on a web-based or cloud-based platform from a centralized location at the Home Office.

· Retain system analysts and appropriate subject matter experts to review the options provided by migration to the full ERP solution offered by Oracle’s PeopleSoft or Deltek’s Costpoint applications and to determine which solution provides the greatest value to ABC and if a cloud-based platform is appropriate at this point. In addition, review whether migration to a private cloud-based environment is a reasonable consideration to pursue in conjunction with migration to a single ERP solution.

· Select a single ERP application to use on a corporate-wide basis after analysis.

· Upon selection of a single ERP application engage appropriate implementation specialists and other subject matter experts to aid management in developing an adequate migration and training plan, whether to utilize an in-house or cloud based platform, and to determine appropriate overall staff training requirements and reductions to the size and complexity of existing IT departments from the divisional level to a centralized operation.

· Retain or obtain appropriate IT personnel to support the new environment.

· Review the capabilities of the selected application to determine if Hyperion must be retained.

· Review legacy systems to determine best solution for preservation of data, access requirements and access protocols.

References

AWS customer agreement (2011, August 23). Retrieved from the AWS website: