MAXIMIZING YOUR ERP UPGRADE S ROI

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2 MAXIMIZING YOUR ERP UPGRADE S ROI Presented By: thesmartpanda.com

3 MAXIMIZING YOUR ERP UPGRADE S ROI Table of Contents Introduction...3 Maximizing ROI...3 Architecture Redesign...4 Update Patches...5 Replace Custom Functionality with Delivered Solutions...5 Database Cleanup & Security Review...5 Application Upgrade...6 Business Process Review & Redesign...7 Re-Training & Knowledge Base Development...7 Improve Reporting...8 Increase User & Stakeholder Buy-In...9 Hire an Experienced Project Manager...9 Conclusion...9

4 Introduction Effective technology is considered a critical factor in determining a company's value. Implementing upgrades to technology indicate a willingness to transform to keep up with customers' needs and desires, as well as to maintain the vital technological components required to run a successful, technology-driven business. Upgrading ERP systems provides an opportunity to assess needs, evaluate processes, and streamline operations. The result: reduced costs, a more efficient system, and less vulnerability. All of these factors combine to offer the company a better return on investment. Your organization can benefit from the challenges experienced by other companies during their upgrades to increase ROI as much as possible. Here is an example of common difficulties encountered: Not enough emphasis placed on security prior to upgrade, which requires significant re-work post implementation. Reliance on costly customizations Poor configuration management to ensure cross-compatibility across multiple versions and environments Failing to automate time-consuming manual processes Neglecting controls and compliance, leaving gaps in the system Being aware of these difficulties is the first step towards ensuring a successful upgrade and implementation. Maximizing ROI 82% of PeopleSoft customers achieved a positive ROI, with an average payback period of 2.7 years An effective and successful PeopleSoft upgrade requires the following components in order to maximize ROI: A clear view of business benefits Collaboration between technology and staff Effective management of consultants A thorough project plan to ensure success Having a plan, a view, and good management and collaboration are not the only keys to ensure a successful upgrade that maximizes the return on investment for your business. This whitepaper will cover each point in detail to provide your business with actionable tips to maximize the ROI of your ERP upgrade and implementation. A recent survey cites that, on average: 61% of ERP projects take longer than expected 74% percent of ERP projects exceed their budgets 48% percent of projects cited a benefits realization greater than 50% 4 Source: Oracle

5 Keys to maximize architecture redesign: Architecture Redesign One of the initial planning steps for ERP upgrades and implementation is to evaluate your ERP architecture to look for areas of improvement, or to find areas where hardware and software costs can be reduced. Rather than focusing on upgrading for upgrading's sake, take the time to assess your architecture to look for ways to streamline operations. Will you implement new functionality with your ERP upgrade, or upgrade and implement new functionality as a secondary project? Implementing existing processes into an upgraded system can help to mitigate risks, but converting to new processes that are already built into the program can make a huge difference in your operations. You need to evaluate your business' needs to decide whether to take advantage of upgrade capabilities immediately, or take the longer, safer road to modify processes at a later date. One consideration: does your business have the resources to train staff on both the upgraded programs, as well as a change from customized to delivered programs? Consider a plaform upgrade Look for a cohesive middleware solution Ensure an adequate testing environment Deciding to change part of the architecture will increase the difficulty of your upgrade, requiring careful planning and implementation. A full performance test is highly recommended prior to the go-live date, to give your team the opportunity to tune the system and reduce performance issues. Assessments to architecture should be made as soon as an upgrade discussion is presented. Focus on the following points: Platform: Remaining on existing hardware, using the same operation system and database architecture may seem like the simplest solution; however, since changes are being made to the system it makes sense to evaluate and implement upgrades elsewhere where needed or advantageous. For example, upgrading your operating system as part of your ERP upgrade could lead to better performance as well as increased technical support. Middleware: A key decision as part of your upgrade is the middleware platform your business will utilize. Before choosing a middleware solution, take a detailed look at the licensing requirements of each option early to ensure understanding of contractual issues. Non-production Hardware: Anticipate approximate testing loads to ensure that your testing environments can handle the load prior to planning your ERP upgrade. Your test environments are vital to helping implement upgrades and ensure that your production environment can handle the load without affecting performance. As with all business decisions, making changes should be a balance of cost versus reward could making a change improve operations, save money, or increase ROI? 5

6 Update Patches Upgrading your ERP system is a complex process, one that takes significant time and financial resources. A smooth upgrade ensures minimal interruptions and maximum ROI. Getting your ERP system is up-to-date with all patches before an upgrade ensures that the upgrade runs smoothly and quickly. Without patches, your system will have to complete an update before it can proceed with your upgrade meaning the entire process will take that much longer. Getting your live environment upgraded as quickly as possible lets your business get back to normal operations with minimal downtime. Fortunately, Oracle provides resources to establish a baseline of your ERP system's current status so your team can make appropriate plans to update patches before an upgrade. Additionally, while you are ensuring your system is current you may want to do the same for your documentation so your team has up-todate resources to deal quickly with issues as they arise. Replace Custom Functionality with Delivered Solutions While custom code can provide your business with more efficiency; when it comes to system changes custom code has the potential to cause problems. Even perfectly customized code can interact negatively with an upgrade; requiring extensive testing prior to delivery of an ERP upgrade. Your organization's customizations can be identified in the Initial Pass of the PeopleSoft upgrade process. Businesses that choose to replace custom solutions with in-program functionality save on future programming costs and ensure smoother future upgrades. The bottom line: finding PeopleSoft solutions to fit your business will save on programming, testing, and upgrade costs. to retain custom code, perform the following prior to roll-out: Identify all customizations (interfaces, forms, & reports) Test customizations to ensure compatibility with upgrade-related changes Track any retrofit efforts completed during the upgrade process 6 Database Cleanup & Security Review Much like a physical move, a software upgrade is a terrific opportunity to clean house, so the business can reduce the amount of baggage it needs to migrate. Archiving data prior to an upgrade offers the following advantages: Important: ANY custom code can be impacted by upgrades.

7 In 2013, Symantec reported that companies lost an average of $136 per record in security breaches As your system grows, there will be a higher associated risk of security breaches. Increase speed of table conversions Increase speed of queries for a faster end-user experience Faster upgrades Minimized risk of data coversion issues A faster, more efficient system means a better experience for all users, faster reports, and positively impacts a company's ROI. Once the database is cleaned up, organizations need to take a look at the overall structure and user permissions to identify any security vulnerabilities. Prior to any upgrade, the system should be closely evaluated to remove any potential for unauthorized access to the system. Work with management and users to find a balance between security and usability. Also keep in mind that upgrades may provide your system with additional security measures that can save time and money. Application Upgrade Upgraded systems offer opportunities to enhance speed and efficiency by adjusting the way data is handled. Immediately after an upgrade, steps should be taken to identify and put into practice new data management practices. MINIMIZE APPLICATION DATA TO UPGRADE In order to prepare the application data for conversion, the amount of data should be minimized (see Archiving section above). It is advisable to create a data strategy for your archiving and purging data to guide future upgrade efforts. TESTING Testing a conversion with a copy of the production database will provide insight into how testing should be completed, as well as time to completion. Future tests should always use a current copy of the production database to provide the most accurate results. PARALLEL BATCH TESTING Time and effort spent testing can be reduced by upgrading one copy of the production database, while maintaining a second copy for comparison. Limited data entry or batch input can be used to stage data. Finally, batch processes can be executed in both copies of the database, and the results can be compared using compare utilities. UTILIZE CURRENT TEST SCRIPTS AND PLANS Begin by preparing test scripts used during the original implementation, which can be quickly adjusted to include testing of new functionality. At the same time, you can consider whether modifications are needed to process flow changes. 7

8 RUN A MINIMUM NUMBER OF TEST CON- VERSIONS The number of testing cycles required to ensure a smooth upgrade vary by company, amount of data, and depth of upgrade. It may take five test runs, ten, or even twenty. Decide on the minimum of test runs, add a few extra just in case, and plan on this minimum in your upgrade project calendar to ensure the time and resources complete each conversion, review the results, and make revisions to your upgrade matrix where needed to ensure a smooth and efficient live upgrade. INDEX MANAGEMENT There are two primary considerations regarding indices to improve your conversion: Ensure that all indices used within a conversion are available during the upgrade particularly if you have been archiving or moving data. By default, if no deletions or changes are made to the indices they will be available. You may may wish to limit the number of indices available, particularly for complex upgrades, as this could help increase the speed of the upgrade process. If users won t use technology Company ROI for ERP upgrades will always be negative Business Process Review & Redesign A Business Process Review (BPR) provides detail in regards to current processes. In an ideal BPR, an outside consultant documents these processes in order to discover how processes are completed and why they are required, from the user's point of view. The consultant then runs interviews to investigate all sides of the process, from top-down and side-to-side, as well as consulting with outside vendors and customers. This information provides a full picture of a company's processes to find benefits, risks, and gaps, so any ERP upgrade can address concerns, reduce budgets, as well as improving end-user and customer experience. Re-Training & Knowledge Base Development Upgrades are a perfect time to increase user knowledge about the system as well as increasing adaptation rates and efficiency. Here it is essential to make training materials available on an as-needed basis by implementing a knowledge base, as well as in-person training (or Training time will vary based on: Number of users Number of components Users starting skill levels 8

9 web-based training) for more complex initiatives, so users have access to solutions and are provided the opportunity to upgrade their skills. UTILIZE EXPERIENCED TESTERS Early adaptation can be found through end users who are asked to test new functionality or participate in test conversions. These users can provide insight into areas that may require tweaking or additional training, as well as becoming upgrade ambassadors to help other end users adopt the new system. PeopleTools 8.51 and higher Offer automated testing tools within the PeopleTools Testing Framework, which can be easily upgraded for future releases to reduce testing time for maintenance and upgrade paths. The Oracle University Website offers accessible training options for early adopters who would like to learn more about their modules. PROVIDE SPECIFIC TRAINING Both project teams and support teams are required to understand new technologies from the ground up prior to live dates, as well as understanding the underlying architecture and best practices. Part of any efficient upgrade plan is the inclusion of an assessment and plan to move these teams from their current knowledge level to the level required prior to a planned upgrade. ENHANCE TRAINING PROCESSES For the end users of upgraded systems, it may be difficult to distinguish between intended results (as part of the ERP system upgrade) or unintended side effects. This discrepancy puts a strain on IT departments that waste resources running down help desk reports. Even if an ERP upgrade results in similar business processes, investing in training for users will reduce confusion, particulalry in the case where there are cosmetic changes to menus, layouts, and functionality. It is vital to schedule training sessions to ensure that: Key users are trained early enough to have the ability to test changes prior to live date End users are trained close enough to the live date to be able to identify intended changes All users have enough time between training and expected usage to request follow-up training or access knowledge base For these reasons a tiered training schedule is recommended to ensure adequate and timely training while avoiding the overloading of available resources. Improve Reporting Increasing ROI means looking for places where efficiency can be improved, looking at your business' reporting practices is one key area to examine. Completing a review of current reporting strategies prior to upgrade will provide insight into areas where reports can be reduced, cut, or converted to paperless (web-based) versions to maximize cost reductions. 9

10 10 Increase User & Stakeholder Buy-In A quick buy-in from your workforce translates to a more expedient uptake of the system for an overall lower total cost of ownership. The accumulated effect of planning an upgrade, cleaning the database, improving processes and enhancing training is that your business increases buy-in, both of functional users and key stakeholders. Making the system as efficient to use as possible increases the chances that functional users will buy-in, while the reduction of operating costs and increased efficiency will convince stakeholders that an upgraded ERP system is well worth the investment. Ideally, receiving the support of 1-2 stakeholders will result in increased support from other business groups. Historically, the best place to start is with leaders in the HR department who are best positioned to understand the value of a more efficient system. Hire an Experienced Project Manager The single-most important factor for maximizing ROI is ensuring that your Project Manager can handle the job. Planning and executing an upgrade requires unparalleled documentation abilities, a key attention to detail, as well as the ability to anticipate and resolve issues prior to affecting live systems. Hiring a highly experienced project manager and ERP implementation team will maximize resources, minimize negative effects, and ensure that your ERP upgrade is completed to satisfaction. Conclusion ERP system upgrades are a major investment in time and resources for any company; maximizing the effectiveness of an upgrade by reducing conversion times, increasing query speed, reducing redundancies, and increasing buy-in results in a better system, happier users, and increases exponentially the ROI of your ERP system. Learn more at: Average number of training hours per user: 28 Is your company equipped to ensure adequate training time? Check our website for: Technical blogs Whitepapers Tips and tricks