Erp roadmapping one way to do it
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This document summarizes the process used by Cenovus Energy to develop an ERP roadmap. A cross-functional team created a 5-year roadmap based on business and vendor input. It identified moving from multiple systems to an integrated ERP system as the future state. Key prerequisites included rationalizing applications, defining master data ownership, and establishing IT governance. The next steps outlined establishing governance, scoping the changes, and a technology refresh to prepare for an ERP reimplementation starting in late 2010.
Erp roadmapping one way to do it
- 1. ERP Roadmapping, One Way to Do It Sue Shaw Lead, ERP Solutions, Cenovus Energy Inc 2010-08-17
- 2. Agenda Cenovus Energy Roadmap Process Roadmap Process Results
- 3. Cenovus Energy Inc Formed on November 30, 2009 from the split of Encana Corporation into two highly focused and independent publicly traded energy companies: one an integrated oil company (Cenovus) the other a pure play natural gas company (Encana) Pronounced se-NO-vus Cen for Century Novus from the Latin root word meaning New Headquartered in Calgary, Alberta, Canada More than 3000 staff www.cenovus.com
- 4. Financial & Operating Highlights Financial: 2009 - 11 months Encana carve-out, one month actual (net to Cenovus on a before royalties basis) Revenues: $11.5 B CAD Cash flow: $2.8 B CAD Op earnings: $1.5 B CAD Production: Oil & NGLs: 100,000 bbls/d Natural gas: 905 MMcf/d Proved reserves: Oil & NGLs: 1,143 million barrels Natural gas: 1.5 Tcf Land position: Net acres: 7.8 million Shareholder base: Common shares: 751 million Trading symbol: TSX & NYSE: CVE
- 5. SAGD – Steam Assisted Gravity Drainage Cenovus is a leader in SAGD, and uses this recovery method at both its Foster Creek and Christina Lake projects. Relatively new process that many companies are using for commercial scale development in western Canada. It is a simple process in concept but complex in application: a well injects steam into the producing zone, creating a high-temperature steam chamber in the formation. The heat melts the thick bitumen which allows gravity to assist it to flow freely to the horizontal production well below. About 80 percent of the oil reserves in northeast Alberta are deep under the ground and can only be accessed using enhanced oil recovery methods, such as SAGD. Interest in seeing 2 minute video?
- 6. Roadmap Process – Background and Context In late 2009 it was recognized that an ERP Roadmap was required. In early January 2010 it became apparent that a roadmap wasn’t just optional but a document was required to understand what the future state of ERP and options developed to navigate from the current state to the future one. Any pre-requisites to make that navigation possible would be identified and documented.
- 7. Roadmap Deliverables Five year outlook (roadmap) gathered based on business and vendor input. Options explored to help navigate from the current state to the future state. Prerequisites outlined to drive the transition. Roadmap created with possible timelines and dependencies and presented to ERP stakeholders.
- 8. Roadmap Team / Stakeholders ERP Roadmap Stakeholders: HR- VP, HR Development and Operations Finance - VP and Comptroller SCM - Manager, Supply Chain Capital Projects – Senior Lead Asset Management - VP, Business Services IT - CIO ERP Roadmap Core Team: HR IT Manager Finance JDE Business Manager, Fin HR IT Manager SCM Lead, Capital Projects BA, SCM BA 2 Maintenance Leads, EAM IT Mgr ERP Solutions Lead, IT PM IT Tech Architect, Enterprise Architect
- 10. Visioning Developing the future state model will be using input from the business, services and consulting areas. This is a core deliverable that must be performed prior to analyzing the options and prerequisites. Each group (Finance, HR, SCM, Capital Projects and Asset Management) will hold envisioning sessions to explore the “business need”. The meeting in more is an open forum where ideas can be freely expressed and time is taken to do some ‘blue sky’ thinking.
- 11. Options Analysis Each Business area reviewed options available and discussed pros, cons and risks for the different options. Also timing considerations were discussed. The preferred option, by business area was documented, with the goal of coming to consensus on the best path forward. Options Considered: Integrated System - This refers to trying to keep functionality within one ERP system. Best of Breed - This refers to having multiple ‘best in class’ systems. ERP with Specialty and/or Best of Breed Applications Timing: There will likely be some Best of Breed or Specialty applications, assuming that a business case has been made to use an alternative to the Integrated System (newest release). This leads to some timing questions. Implement Best of Breed before an ERP Upgrade This is to be interpreted that a Best of Breed (BoB) project is entirely complete before an ERP Upgrade project begins. Implement Best of Breed with an ERP Upgrade Implement Best of Breed after an ERP Upgrade
- 12. Prerequisites Before we reached this stage we thought that would be technical in nature. Things like infrastructure upgrades. It turned out quite differently as most of the prerequisites turned out to be more business focused. The identified prerequisites found will be discussed with the Findings below.
- 13. Key Findings Proliferation of Systems : There are too many tools and in some cases not the right ones. Multiple sources of truth exist for master data and no there are common process to ensure the reliability and maintenance of it. The need to review and transform business processes to ensure they meet the needs of an oil-centric organization and evaluate and rationalize the applications that support them. Ownership and definition of master data and associated business processes needs to be defined. Standards and governance of IT architectural principles must be in place and adhered to. The changes to effect the required change need to be driven by the business , not IT.
- 14. Future State ERP is not necessarily a single branded/vendor solution. There may be multiple “core” components to an ERP that provide required enterprise resource planning functionality for the business. One of those core components will be JDE EnterpriseOne. Other components may consist of approved ‘Best of Breed’ equivalents, based on merits, to be used in lieu of an existing JDE module(s).
- 15. Future State (cont’d) Changes to the ERP are governed so that new releases can be leveraged. Governance is in place for new applications to ensure that those requirements are not already met by existing applications or the ERP that is in place. An effective information strategy is in place to ensure that data maintenance, master data management and reporting provide timely and accurate results to the business.
- 16. Next Steps Governance / Strategy Scope & Definition Technical Reimplementation
- 17. Next Steps Governance / Strategy (2010: Q1-Q2) Establish Steering Committee Confirm Cenovus Operational Model Define Governance Model Begin IT Strategy initiative
- 18. Next Steps (cont’d) Scope Definition (2010: Q2-Q4) Identify areas for review Conduct Business Application Roadmap exercises for strategic areas of the business. Business Process Reviews Application Review and Rationalization Information Architecture / Data Reconfiguration Review JDE Module & Function Re-evalution
- 19. Next Steps (cont’d) Technology (2010:Q2 – 2011:Q1) Create Integration Strategy Ensures that all ERP components can communicate in this new more distributed environment. Effective communication between systems is key to the long term strategy. ERP Technical Refresh Prepare for changes required for ERP to be served with web applications in a services oriented architecture
- 20. Next Steps (cont’d) ERP Reimplementation (2010:Q4–2012:Q2) ERP Reimplementation Scope Defined by Q4 2010. Project teams / planning in place for a January 2011 project start-up.
- 21. Steering Committee Formation A specific mandate would need to be defined but at high level, this group would provide direction and leadership for the establishment of: Rules, Standards and Principles Governance Rules of Engagement (Framework) Decision stage-gates for further project phases Senior Leaders from all Business Areas that use ERP Systems are on the steering committee.
- 22. Questions?
Editor's Notes
- #4: Cenovus has retained assets from both PanCanadian Energy Corporation and Alberta Energy Company Ltd. (AEC) — two Canadian oil and gas companies that merged to form Encana in 2002. It's through those two companies that Cenovus can trace its roots back as far as some of world's oldest petroleum companies. PanCanadian: In 1881, the Government of Canada commissioned Canadian Pacific Railway (CPR) to build a transcontinental railroad to connect the country from east to west. As part of the deal, CPR was paid with land. In some cases mineral rights were included. A CPR crew drilling for water near Medicine Hat in 1883 actually made Alberta's first natural gas discovery and launched the petroleum era in Western Canada. PanCanadian is the oil and gas company that eventually emerged from that first discovery. AEC: Amid the tumultuous oil shocks of the 1970s, the Government of Alberta created AEC to provide Albertans and other Canadians with an opportunity to participate, through share ownership, in the industrial and energy-related growth of the province.
- #8: Upon inception it is not the intent for the ERP Roadmap to be an “all inclusive” document containing an exhaustive amount of information. What it will contain is the following: A five year outlook, also referred to as the “Vision” or “Future State”, will be gathered based on the requirements and needs of the business represented in the existing JDE ERP system (HR, Finance and Asset Management). This will be aligned with what is perceived to be the future of ERP solutions represented through material provided by vendors and external consultancy. Options, or paths, will be explored to help navigate Cenovus from the current state to that future state. This area will outline the advantages and disadvantages of each path and identify the risks and possible mitigation to them. Finally a recommended path will be identified with possible timelines and dependencies outlined. Prerequisites that are required to ensure a transition from the current to the future state will be identified. This may include identifying technology upgrades, service model changes or other roadmap reviews that are necessary.
- #9: Key point – all areas represented
- #12: 6.1. Option: All 3 groups are in agreement on which option would be preferred: Option 3, 'ERP with Specialty and/or Best of Breed Applications' is the logical choice as all required business functionality cannot be provided with any ERP. Since integrations may lead to data and/or process inconsistencies, the ERP should always be considered first for requirements, which follows Architectural Principle 2: Reuse before purchase, purchase before build. 6.2. Timing: Finance: If a Best of Breed application is to be implemented in the near future (1-2) years it would be Finance's preference to have that implementation after an ERP upgrade. Any application that interfaces with the financials would need financial project resources. It would be difficult to manage 2 large projects at once. HR: If a Best of Breed application is to be implemented in the near future (1-2) years it would be HR's preference to have that implementation after an ERP upgrade. This is so that up-to-date integration technology is in place to enable better alignment/interfaces between the ERP and any specialty application. AM and SCM: If any Best of Breed or Specialty application is to be implemented in the near future (1-2) years it would be AM/SCM's preference to have that implementation before an ERP upgrade. This is so that critical business needs can be met as soon as possible.
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