1. ENTERPRISE RESOURCE PLANNING
Every Monday, 13:30 – 16:00
Last Updated: 31 March 2009
ERP – Ir. H. Noor Hidayat, MMT.

2. ERP – Ir. H. Noor Hidayat, MMT.
Syllabus
Introduction
ERP Platform
ERP Component
ERP Development (Chevron Way)
System Life Cycle
References:
CPDEP: Chevron Project Development and Execution Process, © 2009 Chevron Corporation
Last Updated: 31 March 2009
ERP – Ir. H. Noor Hidayat, MMT.

3. CPDEP Overview - Outline
What is a Project and What is Project Management?
What is CPDEP?
Why do we use CPDEP?
How CPDEP is used?
Where CPDEP is used?
What value does CPDEP add?

4. Definition: What is a “Project”?
Has a definable beginning and end, and thus is "temporary" in nature.
Creates a unique, definable product or service.
Should include all scope items that:
Are needed for the project’s product to stand alone (needs no other improvements to make it work), and
Represent the true total cost of the opportunity.

5. Definition: “Project Management”
“Directing and coordinating human and material resources throughout the life of a Project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality, and participant satisfaction ……… the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project.”

6. Basic Concept of Project Management (PMI)
Closeout
Control
Execution
Planning
Initiation

7. Project Management - Key Knowledge Areas….
Support the processes and principles of project management
Total
Project
Management
Project
Safety
Management
Project
Risk
Management
Project
Procurement
Management
Plus one
Project
Quality
Management
Project Human
Resource
Management
Project
Communications
Management
Project
Integration
Management
Project
Scope
Management
Project
Time
Management
Project
Cost
Management
The building blocks of Project Management

8. The Project Life Cycle
For every project, there is a life cycle that starts with a concept that is developed into an executable plan, and implemented to result in a unique product or service.
ChevronTexaco did not invent the life cycle, they just called it “CPDEP”. CPDEP is the ChevronTexaco Project Development and Execution Process

9. What is CPDEP?
CPDEP covers both decision making (early stages) and execution (later stages)
Circle of the “CPDEP” represents the continuous nature of the process.
CPDEP is a process that improves
decision making and execution
by fostering better
planning, collaboration and communication

10. CPDEP Vision: The right projects implemented with Excellence
High
Consistent Success
Good Projects
Good Execution
Random Success
Good Projects
Average Execution
Ability to Make Right Decisions
Mid
Success Unlikely
Poor Projects
Poor Execution
Random Success
Poor Projects
Good Execution
Low
Mid
High
Ability to Implement Decisions
in Best Way Possible

11. Why use CPDEP?
It’s a process that can “guide” Team efforts:
Selecting the best opportunities through improved decision making process.
Improving overall outcomes by excelling in the execution of business driven decisions
Goal of the process is to have all of our projects fall into the top right quadrant: WE ARE SELECTING THE RIGHT OPPORTUNITIES AND DOING THEM WELL! (This is making the same point again, but don’t shy away from this - it is important!)
Doing the right project poorly or doing the wrong project well, leaves money on the table ChevronTexaco could use elsewhere.
Without consistent process, projects fall all over the grid.
The CPDEP process is nothing new. It is simply a collection of best practices put all together under one umbrella. We use common terminology to ensure understanding and consistency throughout the company.

12. CPDEP impact on Asset/Project Value
Value Identification
Value Realization
Good Project Execution
Good Project Definition A
VALUE B
In the early phase the value of an opportunity is identified, but not realized until the later phases. Both are important.
Curves represent:
A - Selecting the right project and doing it well
B - Selecting the right project and executing poorly and eroding value.
C - Doing the wrong project well
D - Doing the wrong project poorly.
Critical to the success of the SBU to generate the highest earnings and NPV is the ability to manage the portfolio of excellent opportunities. Project Planning is a critical phase in managing the portfolio because this is where value is identified and created. CPDEP provides the core work process that allows multi-functional teams to collaborate in the generation of well thought out development plans.
Each asset in the portfolio has a CPDEP Roadmap which identifies the critical decisions required to advance the asset, the information needed to make the decisions, and the resources required to generate the information.
Innovation and creativity are essential to driving the value of our assets even higher. Generating creative business and technical alternatives, and the use of innovative technology are examples of value-added activities in the early phases.
Review / reinforce the 1:10:100 rule.
Poor Project Execution C
Poor Project Definition D
Phase 1
Opportunity Identified
Phase 2
Generate & Select Alternatives
Phase 3
Develop Preferred Alternative
Phase 4
Execute
Phase 5
Operate

13. CPDEP Principles CPDEP is not just the roadmap which is commonly seen.
Focus on key value drivers for the opportunity
Use of integrated multifunctional teams
Effective input, communication and alignment between teams, decision makers and stakeholders
Decision driven, not activity driven - do the work necessary to support the next decision
Consistent use of best practices and tools (e.g. Decision Analysis, Benchmarking, PEP, VIP, etc.) 5 4 3 2 1
CPDEP is not just the roadmap which is commonly seen.
The process is indeed these five principles.
Discuss each of these principles to ensure understanding (especially decision driven - this concept is not necessarily intuitive to those who want to go build something).
The roadmap is simply a communication tool and a representation of how to apply these principles.
Make sure you tie in Peer Reviews as supporting strongly the CPDEP Principles.
“Activities create deliverables, decisions create value.”
The five principles are the heart of CPDEP. By design, the process and tools are flexible and scalable; the CPDEP roadmap is simply pictorial representation of the project. You must apply the principles to create and deliver value.

14. CPDEP Helps Drive Better Decisions
The Decision Quality Spider Diagram can be used to measure the quality of a decision 1
Appropriate Frame 2
Creative
Alternatives 3
Meaningful
Information 4
Clear Values
& Trade-off 5
Logical
Reasoning 6
Commitment
to Action
Decision Quality
The Six Components of the Decision Quality Spider provides a framework for assessing Decision Quality
The “webbing” on the spider indicates the status of each DQ component. Low is toward the center, high toward the outside.
Teams can use the spider diagram tool in many different ways:
Measures a team’s collective assessment of decision quality.
Provides a measure of quality that does not depend on the outcome.
Defines a road map of what work or analysis needs to be done in order to have “clarity of action”.
A quick thermometer to measure decision readiness.

15. Develop Alternative(s) Select Alternative(s)
Outline of CPDEP Process
3. HOW DO WE GET THERE ?
1. WHERE ARE WE NOW?
2. WHERE DO WE WANT TO BE?
Phase 1
Identify and Assess
Opportunity
Phase 3
Develop Alternative(s)
Phase 2
Select Alternative(s)
Phase 4
Execute
Phase 5
Operate and Evaluate
The process is based on classical gap analysis.
Point out how each part of our process relate to the three modules of this gap analysis.
Story to reinforce point:
“If you don’t know where your are or where you are going, any route will do! When you plan a vacation, don't you normally take a map, identify the start point and the end point, then your route? That is what we’ll do for a project using CPDEP.”
Opportunity Statement
Boundary Conditions
CPDEP Roadmap
Contingency, Action & Execution Plans
Definition of Success

16. Deliver the Project Right
CPDEP Fundamentals
AR/AFE APPROVAL
Define the
Right Project
Plan Your Work
Work Your Plan
Choose the
Right Project
Deliver the Project Right
Phase 5
Operate
Phase 4
Execute
Phase 1
Identify
Phase 3
Develop
DRB
Phase 2
Select
Clearly Frame the Goal
Generate and Select Preferred Alternative
Fully Define the Scope
Implement the Execution Plan
Monitor Performance
Evaluate and learn
Projects are divided into five phases, each with a key decision point

17. PREFERRED ALTERNATIVE(S)
Objectives and Key Activities of CPDEP Phases 1 2 3 4 5
IDENTIFY AND
ASSESS
OPPORTUNITIES
GENERATE AND
SELECT
ALTERNATIVE(S)
DEVELOP
PREFERRED ALTERNATIVE(S)
EXECUTE
OPERATE AND
EVALUATE
OBJECTIVES:
Develop Frame
Strategic
Commercial
Business Case
Conduct Preliminary Assessment
Develop Preliminary Overall Plan
Plan For Phase 2
Seek and Incorporate Learning's
OBJECTIVES:
Validate Business Case
Strategic
Commercial
Frame
Generate Alternatives
Define Preliminary Scope for Each Alternative
Develop Preliminary Implementation and Execution Plans
Assess Preliminary Value
Narrow and Select Alternatives
Plan for Phase 3
Capture, Share, and Incorporate Learning's
OBJECTIVES:
Refine Business Case
Fully Define and Freeze Scope
Develop Final Implementation and Execution Plans
Confirm Value and Commit to Business Metrics
Capture, Share, and Incorporate Learning's
OBJECTIVES:
Finalize Business Plan
Execute Consistent with Execution and Implementation Plans
Finalize Operating Plan
Capture, Share, and Incorporate Learning's
OBJECTIVES:
Execute Business Plan
Operate Asset
Monitor and Evaluate Performance
Identify New Opportunities
Capture, Share, and Incorporate Learnings
Key objectives of the five phases
Phase 1 - Clearly frame goal
Phase 2 - Generate several alternatives & then select the best alternative(s) to move forward
Phase 3 - Fully define scope of selected alternative(s); select one alternative to move forward
Phase 4 - Implement execution plan
Phase 5 - Monitor performance
Provide linkage from Phase 5 to Phase 1 (new opportunity)
Points outlined are key objectives of phases.
There are other objectives in each phase which are also important. There is more elaboration in following slides.
For your project, objectives may be slightly different. The process may be customized.
Perhaps illustrate the point using a simple process example (I.e. planning a vacation).

18. Elements of CPDEP
Team
Alignment
Quality
Decisions
Project
Execution
Emphasize that the balance of the three elements changes depending on where you are in the life of the opportunity and what you are doing.
Understanding elements from all sides, trying to find the win-win
Use of multifunction team (critical, especially early in a project when they have a chance to add greatest value)
Communication tool
Provides alignment at each phase
CPDEP is a balance of three key elements:
Team Alignment
Quality Decisions
Project Execution

19. Decision Review Board Member Project Manager / Team Leader
Key CPDEP Roles
Endorser
Decision Executive
Decision Review Board Member
Project Manager / Team Leader
Project Team

20. Questions
???

21. ERP – Ir. H. Noor Hidayat, MMT.
End of ERP Development
Last Updated: 31 March 2009
ERP – Ir. H. Noor Hidayat, MMT. 21