Global Technology Company

Background Information

A global technology company (GTC) with three business units has decided to select and implement a new common ERP system within the next three years. GTCs current information systems are not integrated, have high operating cost because of different hardware/software solutions in place, and have caused inefficiencies to exist for several business functions. Exposure to global security risks and compliance risks relating to global and local reporting requirements are also increasing due to the disparate solutions that are in place. One of the business units (Technology) has strongly opposed changing to a common ERP solution and the standardized business functions/practices that would be required.

Because of compliance, reporting, and operational effectiveness issues the organization has decided to proceed first with systems to support the finance and procurement functions followed by human resources in year two, and sales/supply chain/manufacturing in the final phase. By implementing the financial software, critical compliance issues relating to the worldwide implementation of IFRS will be addressed, and through the creation of new financial shared service centers in the U.S. and Europe and reengineering of the finance function, it is expected that a 33% reduction in finance cost (headcount and salary arbitrage) will be achieved. These reductions are expected to be achieved by changing business process flows (e.g. prepare budgets, consolidate financial information, perform cost allocations, and manage costs), reorganizing the work to be performed, outsourcing, and implementing new big data and reporting technologies to eliminate manual activities. Key business capabilities would provide support for real time transaction processing, multiyear budgeting and planning, intercompany processing, consolidation, cost allocation and currency conversion.

The human resource system is expected to provide improved insight into the organizations human capital which will enable more effective resource deployment and management of personnel costs. The organization will continue to outsource their payroll processing with ADP (Payroll is considered a financial application in this organization). Management of a skills inventory, integration with third party benefits administrators, and a succession planning capability are key aspects of the solution to be deployed. The system will also capture and maintain employee demographic information, as well as employee training data.

Similarly, when the supply chain/manufacturing solution is deployed, preliminary assessments indicate that a 20% reduction in cost (accomplished through a 10% reduction in the workforce and a 25% decrease in working capital required) will be achieved. An optimized supply chain within and between businesses and their customers will help support these improvements. Because of the scale of the deployment, GTC has decided not to replace any of the current shop floor systems, the treasury management product in use, and the automated time and attendance software in use by two of the three business units. Additionally, business units will be required to report all financial results in U.S. dollars with commentary in English, although they can utilize local currencies for their internal and local statutory reporting needs. Expected EDI (which will process every hour), inventory management, and supply chain optimization functions will benefit two of the three businesses. Additional capabilities include sales analysis, bar code scanning, generation of backorders, and the generation of OSHA compliance reports.

Technically, the team has estimated that there will be a total of 300 RICEF components for the entire program of which approximately 100 will relate to the initial deployment. The common technology approach will require standardized hardware (i.e. servers, desktops, laptops and software) for all users of the organization. This will provide for economies of scale when purchasing new equipment, and simplify the training of users by minimizing product variations. Help desk support will become more efficient because of the adoption of standard solutions. It is also expected that with the new application software (ERP), new security software (SEIM) will be implemented to reduce risk to the organization. Since the software will be strategically deployed in regional centers, it will be necessary to have disaster recovery capabilities to support continued operations in the event of a disaster. Management requires 95% uptime for the business applications. Any application software product considered must be client server based and must use a relational database management system.

A high-level organization chart for GTC is provided below. As a strategic initiative, the CEO is the sponsor.

Global Technology Company (GTC)

$7b in revenue

Over 250+ IT staff in total

3 major business units (each business unit is a separate legal entity, there is also a separate legal entity for each country in which a business operates)

Telecom ( 2 plants in US) - Oracle ERP (old version- lacking support)

Auto ( 2 plants in Germany)- QAD Software

Technology ( 3 plants in U.S and 3 in Europe)- Custom Software for all functions

Each Business Unit has their own systems for Supply Chain, Manufacturing, and time and attendance

All business units report into a Corporate Consolidation system for global financial reporting.

Current Organization Structure

GTC Resource Summary
Resource Summary	Corporate	U.S.	Europe	Total
CFO/VP of Finance	1	2	1	4
Controller	1	5	5	11
Budget Analyst	2	5	5	12
Financial Analyst	5	20	20	45
Financial Reporting	6	10	10	26
Accounting Clerks	15	45	42	102
Total				200
VP Purchasing	1	1	0	2
Purchasing agent	2	10	10	22
Inventory clerk	2	30	30	62
Administrative support	5	5	5	15
Contract Administrators	2	5	5	12
Receiving clerk	2	10	10	22
Total				135
VP Human Resources	1	0	0	1
Payroll clerk	2	10	10	22
HR/benefits analysts	8	10	10	28
Administrative clerks	2	7	5	14
Total				65
CIO	1	0	0	1
Director of IT		2	1	3
Manager of IT		5	5	10
Programmers		20	20	40
Analysts	10	40	40	90
Administrative Support	2	5	5	12
Operations	5	40	40	85
Total				261
VP Sales	1	2	1	4
Sales Representatives		20	20	40
Order Processing		10	10	20
President/CEO(incl BU)	1	2	1	4

Assignment Requirements

The GTC is undertaking an initiative to replace their legacy systems with a new ERP system. The first step for the initiative will be to determine requirements for the new system. After determining the requirements, an analysis of product offerings from SAP and Oracle will be performed to determine the best fit for the organization. The company has determined that only the most recent available versions of the software will be considered.

As the lead analyst on this strategic initiative, you have been asked to lead the requirements definition for the replacement product. For the information included in the case, perform the following:

1.Identify the vision and scope for the project

2.Identify business requirements

3.Identify stakeholders and user classes

4.Develop a plan for elicitation. Identify objectives, strategies and techniques, documents and systems needed, and risks.

5.Identify/describe several functional and non-functional requirements, and events relating to the new systems.

6.Identify challenges relating to the project and for gathering requirements. Also identify approaches that could be used to minimize issues relating to these challenges.