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    Business Case on ERP Implementation

    ERP implementation in Sun Energy 1

    Contents

    1. Introduction2

    1.1Project Name.2

    1.2Project Team....2

    1.3Project Description...22. Background.....3

    2.1The industry...3

    2.2The Current Scenario...3

    2.3Problem Definition.3

    2.4Need for ERP Implementation..4

    3. Measurable Organizational Value (MOV). 6

    3.1Financial and Strategic Benefits... 6

    3.2Operational Benefits....7

    3.3Customer benefits.. 7

    3.4Quantifying MOV.... 73.5Framework for Evaluating Implementation... 8

    4. Analysis of Alternatives....11

    4.1Total Cost of Ownership... 11

    4.2Total benefits of ownership.....11

    4.3Financial Analysis Used..12

    4.4SAP HANA SAP BI reporting suite ....12

    4.4.1 Economic Analysis..12

    4.4.2 Cash Flow Summary Analysis...... 13

    4.4.3 Total Cost of Ownership....14

    4.4.4 Total Benefits of Ownership... 164.5Comparison with Other Alternatives...16

    4.5.1 Oracle PeopleSoft Enterprise 8.8 and 8.9..... 16

    4.5.2 Microsoft Dynamics AX 2012... 17

    4.5.3 Comparison of Market Shares...... 20

    4.5.4 Comparison of Various ERP Packages... 20

    5. Risk involved in ERP Implementation... 22

    6. Recommendation...23

    7. References...26

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    1. Introduction

    1.1 Project Name: Scope of ERP implementation in SUN Energy Ltd.

    1.2 Project Team: The team consists of basically

    a. Steering committee:The members of this particular committee include project sponsor& the project manager.

    b. Consultants

    c. Technical members/ Software Programmers

    d. Change managers and security persons

    e. Operations team which include people like inventory manager

    f. Financial Consultant

    1.3 Project Description:The project is all about scope of implementing ERP package in SUNEnergy Ltd., an Australia based integrated energy company, focused on power

    generation, gas production and energy retailing. The project covers various aspects like

    integrating the various functions across the organization in to a single system that can

    serve all the purpose of the functions specific needs.

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    2. Background

    2.1 The Industry:

    SUN Energy Limited (SUN) is one of Australia's largest integrated energy companies,

    focused on power generation, gas production and energy retailing. It is also one of thelargest private owners, operators and developers of renewable generation assets in

    Australia. The company is engaged in the purchase and sale of gas and electricity. It is

    also engaged in the construction and operation of power generation and energy

    processing infrastructure; and development of natural gas production facilities. The

    company is headquartered in North Sydney, with offices and operating sites around

    Australia.

    2.2 The Current Scenario:

    The Australian energy industry is barely recognizable from that which operated in the

    1990s. Regulatory barriers to interstate trade have been removed. There are regimes for

    third party access to the services of energy infrastructure. The old public monopolies have

    been split up. Where a single government-owned business used to generate, transport

    and sell electricity, there are now competing generators and retailers. Specialist

    businesses run the transmission (long distance) and distribution (local area) networks that

    transport electricity to customers.

    The states of Victoria, South Australia, New South Wales and Queensland have privatized

    some or all of their electricity supply. The gas industry has undergone similar restructuring

    and is mostly now in private hands. These changes have allowed competitive energy

    markets with a more national focus to develop.

    The Electricity Industry in Australia embarked on a major change primarily due to the

    rollout of Advanced Metering Infrastructure (AMI) followed by implementation of the

    National Smart Metering Standards. This resulted in the rollout of the smart meters

    replacing the existing basic meters in the state of Victoria.

    2.3 Problem definition:

    SUN is a large energy company in Australia wants to implement the SAP IS-U and CRM

    system to support the business processes and utility services of the company. However,

    the company is worried about the inadequate User Acceptance Testing (UAT) beingperformed on the changes that are continuously being rolled out. This is in part due to the

    limited bandwidth of the companys Subject Matter Experts (SMEs), and also because of

    the lack of a standard testing process. Documentation is insufficient and defect

    management and reuse of test assets is weak.

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    SUN, like most utility companies has a high dependency on quality and timely information

    to be delivered, distributed and processed by its key information systems. The operational

    performance, availability and integrity of these information systems are vital in ensuring

    continued commercial viability of SUN. With all the opportunities and benefits Smart Grids

    and Advanced Metering Infrastructure (AMI) provides, it also comes at a significant cost

    and introduces substantial risk as well; the most critical of these risks is the impact ofmanaging large data volume. It is important to note that over 95% of SUN s customer

    base had basic meters i.e. meters that are manually read or estimated every quarter; with

    AMI, these customer meters will be automatically read every 30 minutes and the meter

    reads transmitted daily. This will result to 17,520 reads per year and 4,400 times more

    data to store and process.

    Some of the problems the organization is facing currently include:

    a. No proper integration between the different functional units.

    b. Lack of proper asset management, book closures, accounts payable and receivable.

    c. Issue regarding proper activity based costing and product costing.

    d. Efficient management of human resources which includes payroll, training, leaves,

    career management etc.

    e. Regarding Planning, execution, inspection and certificates.

    f. Master scheduling, capacity planning etc.

    g. Better data handling

    So the organization is looking for a better enterprise application which will cater the

    demand of the organization and give a good ROI.

    2.4 The need of ERP implementation:

    An independent assurance model for SUN needs to be implemented, establishing a

    dedicated team that would be responsible for the overall quality certification of all changes

    rolled out into production. The teams initial responsibilities would begin with providing

    UAT, and later evolve to support a shared services function across the SUN business

    units, addressing the testing needs of the various units and covering both SAP and non-

    SAP applications.

    The main highlights of the solution include:

    Phase-wise roll-out of the initial pilot for RFS in the SAP CRM and SAP IS-Utilities

    modules, followed by the extension to other portfolios.

    Coverage of the following testing responsibilities

    Test preparation - understanding requirements, preparing test scenarios and test

    cases, all under collaboration with SUN business users

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    It helps in the planning for optimizing and scheduling of production.

    It not only provides a user-friendly environment can be tailored to the needs of companies

    both large and small, but also progressively expanded, both in the ` horizontal` sense to

    embrace additional organizational functions, as well as `vertically to integrate other stages

    of the production process.

    ERP enables accountability, accuracy, and transparency without breaking the existing workflow.

    In addition, other time-series data needs to be captured so the processing impact will be much

    higher than just the customer consumption readings. It is imperative that a scalable and

    sustainable IT environment be provided to support AGLs business operations.

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    3. Measurable Organization Value (MOV)

    3.1 Financial and Strategic Benefits:

    By implementing an ERP application, the organization wants to integrate all functionsacross the organization in to a single system that can serve all the purpose of the

    functions specific needs. Now breaking down the benefits of implementing an ERP

    package will give the following benefits:

    Financial and Strategic Benefits:

    High payback on investment.

    Improved adaptability to market changes.

    Reduction in operating cost and thereby giving Increased Profits

    Achievement of company-wide consistency of information

    Gain greater visibility into sales order and fulfillment data

    Reduced time required for consolidation of accounts considerably

    Enhanced order fulfillment by accelerating the sales order process

    Standardized business processes, reports, and data for increased efficiency and

    control

    Increased business transparency to control costs and support operational decisions

    Compliance with international financial reporting standards

    Transformation of the terms of competition within the market

    Improved data accuracy and consistency via real-time monitoring for informed

    decisions.

    Improved spend management

    Improved employee productivity significantly

    Establish greater operational efficiency via integrated processes

    Improved inventory management and also helps in reducing material wastage

    Improved asset tracking to streamline maintenance planning and tax filing.

    Gain better supply chain visibility and control to support negotiations and service

    Streamlined and standardized business processes transaction

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    3.2 Operational Benefits

    Improved spend management

    Improve employee productivity significantly

    Established greater operational efficiency via integrated processes

    Improved inventory management and also helps in reducing material wastage

    Improved asset tracking to streamline maintenance planning and tax filing.

    Gained better supply chain visibility and control to support negotiations and service

    Streamlined and standardized business processes

    3.3 Customer Benefits

    Transaction process will become easier for the customer

    Proper visibility and transparency

    Improved ability to meet customer commitments

    3.4 QuantifyingMOV

    In order to calculate whether the project is successful or not it was very essential to find

    out a quantified targets which will be achieved with the help of this project .So in this case

    we have calculated the measurable organizational value for a period of 5 years and have

    formulated certain targets which the project is supposed to meet at the end of 1year to

    become a successful project. They are:

    1) The implementation of the ERP package across the organization should give a rapid

    pay back, in 20 months.

    2) The implementation should also provide a very good return on investment based on

    substantial cost savings and business value creation as compared to continuing with the

    legacy systems.

    3) In addition to the compelling economic benefits, the implementation is viewed asstrategic, helping companies increase competitiveness, improve business agility and

    predict IT costs more accurately.

    Now to make things in a more systematic manner we have summarized the MOV in a

    tabular format so that it can be verified at the end of the stipulated time period.

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    Objective Change factor Time

    Rapid payback time 20 months

    Operating cost Reduction by 10% 1 year

    Delay in Financial close cycle Reduction by 1% 1 year

    Higher resource utilization Increase by 5% 1 year

    Higher productivity of finance, HR, and operations FTEs Increase by 10 % 1 year

    Higher accuracy of load forecast data Increase by 5% 1year

    Reduced monthly billing cycle time Reduction by 5% 1year

    Outbound-shipping processing time Reduction by 5% 1year

    Order-turnaround time Reduction by 1 % 1year

    3.5 Framework for Evaluating Implementation

    An intuitive framework for evaluating the cost savings, business value and strategic

    benefits for implementation was developed for this case. This framework includes four

    key elements:

    1. Implementation cost analysis

    2. Post-implementation cost savings analysis

    3. Post-implementation business value improvement analysis

    4. Post-implementation strategic benefit analysis

    Framework Cost and Benefit Drivers

    Now in order to carry out the above mentioned analysis it was very essential that we need to

    have some parameters for the analysis. The below mentioned table provides a list of the cost,

    cost savings, business value and strategic drivers included in this implementation business case

    framework and economic analysis.

    Implementation

    Cost Line Items

    Cost Savings Line

    Items

    Business Value Line

    Items

    Strategic Benefit

    Line Items

    Planning costs Operating cost Availability relatedvalue improvement

    Competitiveness

    InternalImplementation

    Parts inventory Enhanced decisionmaking

    High Efficiency

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    Implementation (3rd

    party)

    Days in inventory Process or cycle time

    savings/ value (order

    entry)

    Overall business

    agility / time to

    market

    Training Financial close cycle Predictability of costs

    Hardware costs Days sales outstanding Access to IT resources

    OS licensing costs Higher resourceutilization IT standardization / ITbest practice approach

    OS support fees Higher productivity offinance, HR, and

    operations FTEs

    Reduction in risk

    DB licensing costs Higher accuracy ofsales forecast data

    Travel Reduced monthly

    billing cycle

    Now based on the cost, cost savings and business value drivers in the preceding table, a

    comprehensive, comparative cost and benefit model to quantify the implementation return on

    investment (ROI) over a five-year analysis horizon was developed . The costs and benefits

    were based on the actual and expected costs and benefits validated in the primary and

    secondary research phases of the project. A discounted cash flow analysis was employed to

    account for the relative timing of the costs and benefits spanning the five years. The cost

    savings and benefits in the first year were factored down to account for the length of the

    implementation deployment and were factored up in years two through five to account for

    general growth in the ERP environment.

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    4. Analysis of Alternatives

    Now in order to find out which ERP package can best suit the need and which can basicallymeet the quantified targets, a comparative study between various ERP packages have beencarried out in this case.

    It includes

    1) SAP HANA SAP BI reporting suite

    2) Oracle PeopleSoft Enterprise 8.8 and 8.9 and Enterprise One 8.11

    3) Microsoft Dynamics AX 2012

    4.1Total cost of Ownership

    For quantifying the cost related with the project following factors are taken in to

    consideration for calculating the total cost of ownership

    The various costs that incurs during an implementation includes:

    Planning cost:It is the cost associated with planning prior to implementation.

    Implementation (Internal): Internal Labor for the implementation activities including

    installation, configuration and testing

    Implementation (3rd party): 3rd party labor for the implementation activities

    including installation .configuration and testing

    Training:The training investment for the new package

    Hardware cost:Cost for the hardwares associated with new implementation

    OS Licensing cost:Server Licensing cost and the user accounts costs

    New Server OS support fees:On-going server OS Support Cost (annual )

    Database licensing cost:Licensing cost for the new database associated with ERP

    Travel:Travel cost associated with implementation

    Admin/ misc:Admin / misc cost associated with migration

    4.2Total Benefits of ownership

    These are the savings or the benefits which company will receive because of implementing

    ERP across the organization. These benefits are classified into:

    1) Cost saving Line items

    2) Implementation Value Drivers

    3) Strategic Implementation Drivers

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    Total Benefits of Ownership

    Cost Savings Line Items Business Value Line Items Strategic Benefit LineItems

    Operating cost Availability related value

    improvement

    Competitiveness

    Parts inventory Enhanced decision making High Efficiency

    Days in inventory Process or cycle time savings/value (order entry,

    Overall business agility /time to market

    Financial close cycle Predictability of costsDays sales outstanding Access to IT resourcesHigher resource utilization IT standardization / IT best

    practice approachHigher productivity of finance, HR,and operations FTEs

    Reduction in risk

    Higher accuracy of sales forecastdataReduced monthly billing cycle timeImproved profit-after-tax (PAT)marginOrder-turnaround time

    4.3 Financial Analysis Used

    Here we are using the Return on Investment Method to calculate the ROI and from this we

    calculate the payback period also

    4.4 SAPHANA SAP BI reporting suite

    4.4.1 Economic Analysis

    The following analysis provides a summary of the return on investment and expectedbreakeven based on implementation cost/benefit analysis over five years. The results

    are based on the net present value (NPV) of the cost and benefit cash flows over the

    five year period.

    Based on an average five-year implementation cost of $675K, with an average

    implementation length of six months from initial planning to production deployment,

    the company cited substantial cost savings and business value drivers, yielding a total

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    five-year benefit of $2.65M. This results in a five-year Return on Investment (ROI) of

    293% and a payback of 15 months from the completion of the migration.

    Fig 1

    Business Case Summary

    Implementation(Investment) $675,407

    Cost Savings (NPV* of Cash Flows) $1,561,618

    Business Value (NPV* of Cash Flows) $1,092,458

    Five Year Benefits (NPV*) $2,654,076

    Net Benefit (Return Less Investment) $1,978,669

    Return On Investment 293%

    Estimated Payback (Months) 15

    *Discount rate for NPV of cash flows = 10%

    4.4.2 Cash Flow Summary Analysis

    The figure below illustrates the annual analysis of the implementation cost

    (investment), cost savings and business value for the initial year through year five.

    Also illustrated are the cumulative costs/investment and the cumulative economic

    benefits. The cumulative cost lines in the graphic illustrate the payback in the first

    quarter of the second year after the implementation of SAP

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    Fig 2

    Year 1 Year 2 Year 3 Year 4 Year 5

    Implementation Cost

    (Investment) $675,407 $18,333 $18,333 $18,333 $18,333

    Cost Savings $204,633 $429,730 $451,217 $545,444 $497,466

    Business Value $147,787 $310,353 $325,871 $342,165 $359,273

    Cost Savings + Business

    Value $352,421 $740,084 $777,088 $887,609 $856,739

    Cumulative Investment $675,407 $693,740 $712,074 $730,407 $748,740

    Cumulative Benefit $352,421 $1,092,504 $1,869,592

    $2,757,20

    1

    $3,613,94

    0

    4.4.3 Total Cost of ownership

    The various factors influencing cost of ownership are shown in the figure below

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    Fig 3

    A few key elements of analysis from the implementation cost research are listed below:

    The labor costs for the implementation planning and implementation represent the

    majority of the cost of the migration, 56% of the total five-year cost. The primary reason

    for the substantial amount of cost is that the implementation includes the buying of theSAP application itself as well as the underlying ERP database implementation.

    Software support fees are the next major cost element, primarily because this is a

    recurring annual cost of approximately $18K that amounts to about $92K over the five-

    year period.

    New hardware purchase represents 6% of the total five-year cost, with a cost of $46K.

    Server OS Licensing Costs represent only 3% of the total five-year cost, with a cost of

    $24K.

    4.4.4Total Benefits of Ownership

    Now as we saw in the previous section the various costs associated with the

    implementation here in this section we will see what all are the savings or the benefits

    which we will receive because of implementing SAP across the organization.

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    These benefits are classified into

    1) Cost Saving Line items

    2) Implementation Value Drivers

    3) Strategic Implementation Drivers

    4) Cost saving Line items

    These benefits are summarized in the form of a table which is shown below.

    Saving Line Items % Reduction Savings

    Operating Cost 14% $ 301,873

    Parts inventory 7% $ 142,393

    Days in inventory 8% $ 175,897

    Financial close cycle 1% $ 25,128

    Days sales outstanding 7% $ 150,769

    Higher resource utilization 8% $ 180,923

    Higher productivity of finance, HR, and operations FTEs 12% $ 251,282

    Higher accuracy of sales forecast data 5% $ 103,193

    Improved profit-after-tax (PAT) margin 7% $ 144,068

    Reduced monthly billing cycle time 11% $ 238,717

    Outbound-shipping processing time 6% $ 117,265

    Order-turnaround time 2% $ 36,855

    4.5Comparison with other Alternatives

    4.5.1Oracle PeopleSoft Enterprise 8.8 and 8.9

    People Soft is another leading ERP vendor. And basically these days it is alwaysbetween SAP and People Soft the comparative study happens .So as a part of the

    business case we thought of discussing the various costs we have discussed for SAP

    implementation. As shown below we can see that when we use People Soft

    application the payback period rises to about 21 months.

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    Business Case Summary

    Implementation(Investment) $669,633

    Cost Savings (NPV* of Cash Flows) $1,022,524

    Business Value (NPV* of Cash Flows) $873,966

    Five Year Benefits (NPV*) $1,986,491

    Net Benefit (Return Less Investment) $1,226,858

    Return On Investment 183%

    Estimated Payback (Months) 21

    Discount rate for NPV of cash flows = 10%

    4.5.2 Microsoft Dynamics AX 2012

    Microsoft Dynamics AX 2012 is a comprehensive Enterprise Resource Planning (ERP)

    solution for organizations that empowers people to work effectively, manage change, and

    compete globally. It makes it easy to operate across locations and countries by

    standardizing processes, providing visibility across your organization, and helping to

    simplify compliance.

    As shown below we can see that in the case of Microsoft Dynamics the payback period

    rises to 22 months

    Business Case Summary

    Implementation(Investment) $775,407

    Cost Savings (NPV* of Cash Flows) $1,061,618

    Business Value (NPV* of Cash Flows) $1,092,458

    Five Year Benefits (NPV*) $2,154,076

    Net Benefit (Return Less Investment) $1,378,669

    Return On Investment 177%

    Estimated Payback (Months) 22

    Discount rate for NPV of cash flows = 10%

    Figure 4 presents the relative advantage of implementation of SAP when compared with People

    Soft and Microsoft. Based on our research and analysis:

    Implementation of SAP offers a better return on investment and a shorter payback

    period than a implementation of People Soft and Microsoft dynamics , an average of

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    110% better ROI and a six month shorter payback, respectively.

    The five-year cost for a implementation of People Soft is just slightly less (1%) than a

    implementation of SAP. Despite the server operating system and user access licensing

    costs for SAP, People Soft ongoing subscription support costs are much higher in yearstwo through five. And in the case with Microsoft the implementation cost itself is larger.

    Implementation of SAP has the potential to improve cost savings by 53% over a

    implementation of People Soft. The key areas where implementation of SAP provides

    cost savings advantages over People Soft are Administration Labor (OS and DBMS),

    Database Software Support/Maintenance and Platform Leverage. Implementation of

    People Soft does not offer the opportunity for savings from implementation of the

    underlying existing database and does not offer a significant savings in OS

    administration staffing cost because an implementation to People Soft does not presenta significant staffing skill-level transition.

    Implementation of SAP also provides potential advantages for business value

    generation. Based on our analysis, a implementation of SAP can improve business

    value by 25% vis--vis implementation of People Soft over five years.

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    4.5.3Comparison of Market Shares

    Fig 5

    4.5.4Comparison of Various ERP Packages

    ERP Packages*

    Microsoft Net

    Dynamics

    Oracle People soft SAP HANA

    Implementation Ease Moderate Extremely good Good

    Application installation wizard Good Good Extremely good

    Advanced configuration Good Good Extremely good

    Process modeler Good Good Extremely good

    Advanced data loading and

    moving

    Average Good Extremely good

    Process-oriented integration Average Good Extremely goodPre-packaged integration

    between vendor applicationsGood Extremely good Extremely good

    Built-in web services integrations Good Good Good

    Task-oriented navigation Average Good Extremely good

    Navigation configurability Good Good Good

    28%

    20%

    17%

    10%

    7%

    18%

    SAP

    Oracle

    Microsoft

    Epicor

    Infor

    Others

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    Task-oriented dashboards Average Good Extremely good

    Web client Average Good Good

    Integrated office productivity Good Good Extremely good

    Diagnostic and technical support Good Good Extremely good

    Remote and online support Average Good Good

    Performance diagnostics and

    tuning

    Good Extremely good Good

    Patch management Average Good Good

    Automated upgrade process and

    toolsetsGood Extremely good Good

    User-centric performance testing Average Extremely good Good

    Data archiving. Extremely good Good

    *Ratings in the order of Extremely Good, Good, Average, Moderate, Bad, Extremely Poor .Ratings

    assigned by giving a mark between 10-0. The results derived from the survey conducted between 100

    companies which have implemented these ERP Solutions. Source: ERP wire

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    5. Risks involved in ERP Implementation

    Enterprise Resource Planning (ERP) system implementation is typically a massive undertaking

    for an enterprise. Due to the magnitude of an ERP implementation and the frequency

    of ERP failures, companies have greater incentives to proactively identify and mitigate the

    various risks associated with the implementation process.

    ERP systems are designed to integrate internal and external information that enhances the flow

    of communication and decision-making across an enterprise, and focuses on business

    processes and functions. As a result of the vast nature of the ERP implementation process, the

    related risks are commensurate with the scale of the ERP system project. Risks range from

    broad to narrow and pervasively affect the outcome of business processes after the go -live

    date when the ERP system is fully operational and available to end users (employees, lowerlevel managers, etc.).

    The categories of risks involved are:

    Organizational

    Project

    Technology

    Resource

    The following table summarizes the various mapped key risks under each category:

    No. Category Key Risk

    1 Organizational

    Lack of Top Management commitment and support.

    Insufficient raining of end-users.

    Failure to redesign business process.

    Underestimation of organizational structure and

    business processes.

    2 Project

    Unclear goals and objectives.

    Poor conflict management.

    Poor of changes and risks management.

    Poor project management.

    Ineffective communications.

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    Poor motivation and project team work.

    Lack of proper project planning and controlling.

    Ineffective project cost and time management.

    Lack of metrics for evaluating project efficiency and

    benefits.

    Lack of metrics for evaluating project work by

    phases.

    3 Technology

    Lack of vendor support and partnership.

    Poor integration of the infrastructure systems.

    The design and implementation of system disrupts

    the business operations.

    Insufficient automation.

    Underestimation of system technical architecture.

    Poor software troubleshooting.

    Data loses.

    Insufficient testing phase.

    4

    Resource

    (time, finance, human)

    Limitation in resources.

    Lack of business and technical knowledge.

    Lack of competence of ERPs consultants.

    Management Perspectives:

    A common pitfall of management is to assume that ERP is solely an IT project. However,

    post ERP implementation is pervasive such that most business processes are, at a minimum,

    affected by the system and at times are completely removed or integrated. Change

    management is broader than ERP systems, although change management managers should

    work alongside ERP project managers to ensure an effective transition post ERP go-live. The

    change management processspecifically for ERP implementationshould begin early on

    within the ERP implementation process. The result of initiating change management early is

    awareness created across the enterprise of the ERP project itself, and the impact and benefits

    of the change on end users, business processes, and technology. Additionally, later in the

    projects life cycle, change management creates more specific awareness of the

    impact ERP has on job design and organizational structure.

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    Therefore, because of the vastness and pervasiveness of implementing an ERP system

    (especially for first-time implementation) the risk are equally as prevalent in breadth and scale.

    Consequently, there are many mistakes that companies make when not adequately focusing

    efforts on both post and prior period implementation.

    6. Recommendations

    As SUN needs to integrate a large number of functional units to single application in which each

    unit can speak to other and also reduces the cost, the company should go for ERP

    implementation and that too with SAP. As discussed in the business case the advantages of

    SAP over the other two ERP packages which are being compared here are numerous. The

    return on investment for SAP implementation is better than the other two packages and also

    SAP is the market leader in the ERP and there have so many testimonials for the increased

    efficiency and customer satisfaction for SAP.

    According to a survey done, here is a result which shows the graph that shows the planned and

    the actual implementation time for SAP, Oracle and Microsoft Dynamics:

    Fig 5

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    ERP implementation in Sun Energy 24

    Also the table below describes how implementing SAP HANA is the best suited option for SUN

    energy:

    SAP Oracle Microsoft Others

    Market Share 35% 28% 14% 23%

    Average ERP Solution

    Satisfaction and Benefits

    Realization75% 60% 58% 60%

    Average Cost to maintain

    and implement the ERP

    Tool

    $16M $12M $3M $3.5M

    Average implementation

    Time Duration

    15 months 13 months 12 months 11 months

    Business Risk Factor 50% 56% 58% 62%

    (***The above data is collected from various providers like Panorama, SAP and oracle sites)

    The data above clearly shows that the cost involved in implementing SAP HANA is high yet the

    risk factor involved is the lowest hence SAP HANA is the recommended ERP system.

    As the analysis in the paper has demonstrated, the cost savings and the value generated from

    SAP implementation are compelling in absolute terms as well as relative to People Soft and

    Oracle. In addition to the economic and strategic reasons for SAP, the issue of risk mitigation is

    also of importance. Oracles imminent acquisition of Sun Microsystems, heading towards a

    potentially lengthy dispute with the European commission, presents many uncertainties as to

    the sun products (here the ERP platform for Oracle is sun based) and creates unnecessary

    risks. Taking all these points in to consideration and the other costs we strongly recommend

    SAP to be implemented.

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    Business Case on ERP Implementation

    7. References

    http://erm.ncsu.edu/library/article/erp-implementation-risk-managing-sources-of-project-

    delays-and-other-r#.VAsQbsKSz4Y

    http://imtcj.ac.in/ITBI%2010%20Proceedings/Book/28.pdf

    www.agl.com.au

    http://www.tcs.com/news_events/press_releases/Pages/TCS_AGL_SAP_Customer_Aw

    ard_Excellence_2012.aspx

    http://en.wikipedia.org/wiki/AGL_Energy

    http://www.aer.gov.au/industry-information

    http://scn.sap.com/community/hana-in-memory/use-cases/blog/2014/05

    http://sapignite.com/erp-fight-club-sap-vs-oracle-vs-microsoft-dynamics/

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