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Concurrent Session CON6429

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1 Concurrent Session CON6429
Best practices for An Oracle E-Business Suite Global Implementation Project Concurrent Session CON6429 Gurjeet Khanuja IT Director, Enterprise Applications Logitech Inc. 29th September, 2014

2 About Logitech Me Project Manager, R12 Re-implementation project
Global leader in consumer electronics $2.32 billion in annual revenue, doing business in 100+ countries 3500 professional employees plus factory employees Manufacturing in China & Malaysia, distribution centers across the globe Me Gurjeet Khanuja: IT Director, Enterprise Applications Project Manager, R12 Re-implementation project MS & BS in Computer Science Over 23 years of experience Working with Logitech for past 14 years: Three ERP implementations (R11.0.1, R11i, R12.2.3), technical upgrade (R11.0.3), and several other biz process improvement projects Managed several IT teams: Oracle Application functional and technical, Enterprise Data Warehouse/BI team, CRM, Web Development teams Cloud Computing – Salesforce.com, Force.com, Informatica cloud | Networking:

3 Disclaimer I am an employee of Logitech Inc. The statements or opinions expressed are my own and do not necessarily represent those of Logitech.

4 ERP Projects According to market research data, ERP projects –
55 to 75% does not meet its objective 31% cancelled before completion 53% cost 189% more than original estimates Cause of failure Cross-functional agreement on enterprise wide business processes Lack of visible, vocal, and meaningful executive sponsorship Lack of formal and disciplined project management Project team turn-over of key staff Inability to identify and mitigate risks or remedy incidents that ultimately escalate Troubled user adoption Too much software customization Project viewed as “IT” project Inadequate data cleansing Source: Gartner, Analyst Firm and Standish Group, Research Firm

5 Logitech’s ERP Project (R12.2.3)
It’s a Success but we’re not done yet! One track, out of 6 is not ready Project is under budget 66% reduction in customization Global implementation Finance, Supply Chain, Manufacturing, and Sales & Marketing 40 Oracle modules, including 8 new modules Retrofit Enterprise Data Warehouse, reports and BI applications Simplified Org Structure (OUs, SOB, Inventory Orgs) Pricing Intercompany etc Standardize on Oracle Remove Trade Mgmt module build on Force.com Replace Ariba with Oracle Sourcing

6 We faced challenges Executives misalignment
Ineffective implementation approach Oracle Business Accelerator (OBA) Cost over-run Lost key resources Much higher customization than assumption Missing detailed project plan

7 Our Journey Apr-2013: Kick-off R12 Re-implementation
Aug-2006: Oracle EBS R11i Implementation Feb-2011: Oracle R12 Upgrade Assessment Dec-2011: RFP System Integrator Selection Year 2012: Several Upgrades AIX to Linux Exadata, Exalytics, Exalogic Apr-2013: Kick-off R12 Re-implementation

8 While waiting for R12 project approval …
Upgrade Infrastructure Implement Oracle Exadata, Exalytic, Exalogic Moved from AIX to Linux platform Data center consolidation Upgrade various up/down-stream systems that interact with Oracle ERP Study various other application modules that could be a good fit for Logitech biz Oracle documentation, white papers Product demonstration and discussion with product managers at Oracle and on-site Prepared Project Infrastructure: Oracle Content Management: Document Management System: iGrafx: Process Flows Documentation Jive: Business Social Media for Project related documentation & communication HP-Quality Center : Defect Tracking System, documenting test scenario/cases HP-ITG: Code migration OUM (AIM) Templates (BR100, MD50, MD70 etc) MS-Office, Project

9 Project Objectives Oracle R12 Standardize using R12 mega processes -
one version of the truth for reporting and analytics Oracle R12 Simplify Globalize Standardize Global integration to promote organization alignment and enterprise efficiency Reduce Customization Reduce customization with a focus on market differentiators in the core areas Simplify with streamlined processes Optimize for core areas of differentiation. Drive for competitive cost and performance in all other areas

10 Business Intelligence
Scope Mega Processes Forecast to Plan Build to Stock Source to Settle Order to Cash Market to Customer Finance to Manage Development (in scope) Oracle (RICEW) Data Conversion Less than 10% customization of current level Business Intelligence Retrofit BI Reports Retrofit BI Applications Retrofit BI Dashboards Integration Edge applications (OTM, PeopleSoft etc) Third-party systems Trading Partners Out of Scope Lifesize processes PLCM

11 Oracle Modules Financials Manufacturing Sales & Marketing
Credit Management Manufacturing iStore Sales & Marketing iExpense Shipping General Ledger Bill Of Materials Channel Revenue Mgmt Sub Ledger Accounting Global Order Promising Accounts Receivable Work In Progress Deduction Management Accounts Payable Supply Chain Plan& Logistics Costing Procurement Channel Rebate & POS AGIS Intercompany ASCP Quality Purchasing Application Admin & Integ Cash Management Collaborative Planning Engineering iProcurement Trading Comm Architecture Advanced Collection Demantra Demand Planning Order Mgmt & Logistics Sourcing XML-Gateway Fixed Assets Mobile Supply Chain Mgmt iSupplier Portal Order Management E-Comm Gateware E-Biz Tax Inventory Supplier Life Cycle Mgmt Advanced Pricing Workflows & Alerts

12 Cost System Integrator Cost
Functional Consultants Project Management Data Conversion & Data Cleansing Cost (Opex) Development Cost Oracle Development (RICEW) BI/EDW Development Integration DBA/Tuning Expert Professional Fees Incremental Employee Cost Business/IT resources dedicated to project (a backup resource is hired to do their regular job) New Software/Hardware Cost Internal Resource Cost (rough estimate)

13 Project Organization Structure

14 Project Governance Approach
Project Governance Structure Selected Strategic Decisions Executive Sponsors Logitech Project Plan Issues / Actions Log Key Business Decisions Log Change Control/Scope Management Risk Log Status Reports 5% Steering Committee Steering Committee Chair: Logitech Executive Sponsor Logitech Executives, IBM Key Business Decisions 15% Project Governance Project Governance Leaders: Logitech Project Executive Director, Logitech Project Manager, IBM Project Manager Cross-Functional Decisions 80% Mega Process Business Leads Testing Lead Technical Lead Organization Change Management Lead Detailed Team Decisions

15 Cascading Milestone & Workplans
Workplan & Milestone Planning Cascading Milestone & Workplans PMO MASTER SCHEDULE Program Team Milestone 1 Milestone 2 Milestone 3 Milestone 4 Alignment WORKPLANS Activity 1 Activity 2 Activity 3 Activity 4 WORKPLANS Activity 1 Activity 2 Activity 3 Activity 4 Mega Process Teams WORKPLANS Activity 1 Activity 2 Activity 3 Activity 4 Mega Process Teams will maintain detailed Workplans that align with the schedule requirements of the overall Project Plan. The overall Project Plan does not contain the high level of detail contained in the Mega Process Teams’ Workplans.

16 Oracle Unified Method (OUM)
OUM is rapid, broadly adaptive, and business-focused It uses project phases and processes to include quality and control checkpoints and allow coordination of project activities throughout the project OUM Phases: Inception – Global design phase Elaboration – Detailed design, create prototypes, and baseline architecture Construction – Functionality development and System integration testing Transition – User acceptance testing, training, and launch Production – Operate on new system and support users

17 High-level Project Plan

18 Test Cycles and Objectives
CRP1 Conference Room Pilot “Out of the box” process flows Demonstrate new modules, fit/gap analysis CRP2 End to end biz processes on a completely configured system Validate customization requirements (no customization) SIT1 System Integration Test Test 70% Customization and master date conversion End to end biz process flows with developed objects SIT2 100% customization and data conversion Test end to end biz process flows UAT User Acceptance Test Validate processes and system readiness by SMEs and biz team and “sign-off” 18 18

19 Project Cadence Weekly meetings Monthly/Bi-weekly meetings
Tuesday: IT & SI Thursday: Team Leads Monthly/Bi-weekly meetings Steering Committee Daily meetings During CRPs, SITs, UAT daily wrap-up calls Change Management meetings as needed

20 Challenges early on !! 6 weeks behind schedule Executive misaligned
Misunderstood OBA potential, resulted delay in CRP1 instance Reduced CRP1 scope from 12 OUs configuration to 7 OUs Delayed starting first CRP Executive misaligned Project objectives: total transformation vs tech upgrade Customization vs standardization discussions were contentious Not clear when to allow customization Projected cost 35% higher than original estimates, in first 5 months

21 Actions taken … Executive alignment workshop (4 weeks)
A small group, led by IBM, conducted Executive Alignment workshop Several key decisions made Executive Mega Process ownership established Steering Committee reformed Strategies where customization is permissible Controlled projected cost over run – Took over project management and organization change management responsibilities Used internal IT resources where ever possible As we gain control on IT tasks, we roll-off external consultants Adjust the plan Re-assessed project tasks Detailed planning for the Construction Phase Added 4 weeks to the schedule Team alignment, motivation, mentoring, put forward challenging tasks with positive reinforcement!

22 Our Success Factors Strong executive sponsorship & support
Monthly, Bi-weekly steering committee meetings Update Board members on quarterly basis Monthly, Quarterly blogs and update in “All Employees” meeting on quarterly basis A dedicated, smart, and committed team !! Effective organizational change management Thorough stakeholder analysis End-users training plan and training material preparation Document and communicate project progress, what’s changing Regular updates to Business Change Leads Effective project management Catch warning signals early on and proactively taking actions Detailed planning and effective monitoring & controls Clearly defined milestones and deliverables Well defined roles & responsibilities Processes & infrastructure – templates, change management, risk management, issues & decision logs, defect tracking, collaboration tools etc

23 Tips & Techniques

24 Prepare for ERP Project
Pain points, hybrid solutions, complex processes Data Quality Integration map up/down-stream systems, customers, vendors, partners, third party Stakeholder analysis Inventory of customization (RICEW) Implementation strategy Upgrade, Re-implementation, Hybrid Study and research new modules Scope outline Estimate level of efforts involved Exit strategy Project infrastructure Tools, Technologies Templates

25 Implementation vs Upgrade
Source: Deloitte Consulting

26 Tips & Techniques Clearly define project objectives and scope
Facts and assumptions Communication plan Detailed WBS, space milestones evenly Monitor and control Data cleansing, cut-over planning Effective organizational change management Current system, customization, processes, and pain points Team’s capabilities and training needs

27 Tips & Techniques RFP Responses Screen SI consultants
Its usually long, read it carefully Verify scope and deliverables Check resource estimates Fees, rate chart … negotiate! Screen SI consultants Team structure, Roles & Responsibilities, RACI SI vs IT work responsibilities Work as a “team” Plan contingency Exit plan for legacy system

28 Red Flags Look for early warning signals and take appropriate action:
No milestones Missing periodic checkpoints Missed milestone and deadlines Shifting priorities and specifications Infrequent or weak executive sponsorship Staff turnover Poor incident management and spotty reporting

29 Critical Factors for Successful Change
The most successful companies have realized that behavioral and cultural change are crucial to project success and are considerably tougher to address than the so-called “hard” factors, such as structure, performance measures and incentives – the soft stuff is the hard stuff. Real change depends on transforming attitudes throughout the organization and its business partners. Above all, people change business. Therefore, practitioners place a key responsibility for successful change right at top management’s door. Soft Factors Hard Factors Top management sponsorship Employee involvement Honest and timely communication Corporate culture that motivates and promotes change Change agents (pioneers of change) 92% 72% 70% 65% 55% Change supported by culture Efficient training programs Adjustment of performance measures Efficient organization structure Monetary and non-monetary incentives 48% 38% 36% 33% 19% Factors for successful change Source: IBM Global Making Change Work Study, 2008

30 Key Success Factors Organization understand the reasons and strategy behind the move Executive sponsorship and support Their job is to remove barriers and roadblocks Develop project structure and clearly define roles and responsibilities Effective Organizational Change Management Identify key changes to system processes and organizational structure Business Change Leads to communicate to end-users (formal & informal) about the upcoming changes Assess training needs, train end-users, provide refresher training as needed Effective post go-live support Decommission legacy system, reiterate benefits of new system Manage expectations and identify area of continuous improvement

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33 Abstract Oracle E-Business Suite ERP implementation at Logitech began with four clearly defined objectives: process simplification, standardization, globalization, and customization reduction. It involved global implementation of Oracle Financials, Oracle Supply Chain solutions, Oracle Manufacturing, and more—plus several new Oracle modules. Logitech standardized on Oracle by replacing hybrid systems such as Ariba, Sabrix, Force.com, and several custom solutions. It simplified the org structure, pricing, and intercompany and global banking processes and cut customization to one third. This session discusses the strategy, implementation method, and project management and offers advice, with practical tips and lesson learned


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