Best practices for An Oracle E-Business Suite Global Implementation Project

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

2. About • Logitech • 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 • GurjeetKhanuja: 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 • E-Mail: gkhanuja@logitech.com | Networking: http://www.linkedin.com/in/gkhanuja

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

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 - 2007

9. Project Objectives Standardize using R12 mega processes - one version of the truth for reporting and analytics Global integration to promote organization alignment and enterprise efficiency Reduce Customization Reducecustomization 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. Scope Mega Processes • Forecast to Plan • Build to Stock • Source to Settle • Order to Cash • Market to Customer • Finance to Manage Development (in scope) Out of Scope • Lifesize processes • PLCM

11. Oracle Modules Financials 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 Procurement Supply Chain Plan& Logistics Accounts Payable Costing Channel Rebate & POS Purchasing AGIS Intercompany Quality Application Admin & Integ ASCP iProcurement Cash Management Engineering Collaborative Planning Trading Comm Architecture Sourcing Advanced Collection Order Mgmt & Logistics Demantra Demand Planning XML-Gateway iSupplier Portal Fixed Assets Mobile Supply Chain Mgmt Order Management E-CommGateware E-Biz Tax Inventory Supplier Life Cycle Mgmt Workflows & Alerts Advanced Pricing

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 • Project Plan • Issues / Actions Log • Key Business Decisions Log • Change Control/Scope Management • Risk Log • Status Reports Executive Sponsors Logitech 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. WORKPLANS WORKPLANS WORKPLANS Activity 1 Activity 1 Activity 1 Activity 2 Activity 2 Activity 2 Activity 3 Activity 3 Activity 3 Activity 4 Activity 4 Activity 4 Workplan & Milestone Planning Cascading Milestone & Workplans MASTER SCHEDULE PMO Program Team Milestone 1 Milestone 2 Milestone 3 Milestone 4 Alignment Mega Process Teams 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 18

19. Project Cadence • 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 • 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 vsstandardization 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 • 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. Hard Factors Soft Factors 92% Top management sponsorship Employee involvement Honest and timely communication Corporate culture that motivates and promotes change Change agents (pioneers of change) 72% 70% 65% 55% 48% Change supported by culture Efficient training programs Adjustment of performance measures Efficient organization structure Monetary and non-monetary incentives 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

33. Abstract • Oracle E-Business Suite 12.2.3 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