Transcript ERP Stories
ERP Stories – Whirlpool: hundreds of distributors without deliveries after the update of the SAP software – Hershey: despite $115 million spent on SAP R/3 all shops empty on Halloween week – Allied Waste Industries: ERP project stopped after $130 million investment – Unisource Worldwide (wrote off $168 million in costs) and Dell (after months of delay and cost over-runs, found that the new system was not appropriate for its decentralised management model) cancelled their projects – Foxmeyer: after three years of unsuccessful implementation, company sues SAP before going bankrupt…………… PPARS: The Irish Health Sector PPARS - the story • Started as a Payroll replacement solution • 5 Health Boards and Saint James Hospital - not a national project • 3 year implementation schedule • Budget of €8.8 million • Main Driver of Project – CEO of NWHB – Project Manager Health Service Reform (2001) • 2001 – government launched ‘National Health Strategy: Quality and Fairness, A Health System for You’ – Identified the need for system change to occur • Developing HR • Organisational Reform PPARS - the story • 2002 – Hay Management Consultants reviewed the PPARS project – ‘value for money’ audit – €17 million spent on PPARS (twice planned amount) • Recommended – Enhanced Governance (still not considered as a business change programme) – National Coverage (only some facilities involved) – Standardisation (too many area specific processes) PPARS - objectives for a national initiative – Development of a strategic approach to HRM - standardise and implement best practice HR processes and procedures – Support the decentralisation of the HR functions – empowering managers to manage the human resources in their respective areas – A fully integrated HR system, inclusive of payroll and attendance/ absence management – A streamlined process between rostering and payment of salaries and eliminate the necessity for completion of different documents for payroll, personnel, attendances etc, where substantial duplication occurs – Implement electronic data entry and approval process – Accurate and timely reporting data on organisation structures and its people PPARS PPARS - Phase 2 • 2002 – move for national coverage – Expected cost of €90 million for national coverage by 2005 – Deloitte Consulting introduced as implementation partner Health Service Reform (2003) • 2 reports written – The Brennan Report – The Prospectus Report • Both reports highlighted – Need for investment in IS – Establishment of a NSSC (shared services centre, e.g. to coordinate Finance and HR data) New Roles for PPARS • The Brennan Report specifically referred to the centrality of PPARS in a reformed Health Service • Both reports pointed to the positive role that PPARS would come to play in the Health Service of the future PPARS - the story • 2004 – Gartner Group commissioned to examine the structures and costs of the project • 2005 – leaks to the press • PPARS is suspended (after €150 million spent) – Public outrage – Opposition assaulted the government – Inquiry is ordered PPARS Problems • • • No business rationale at the outset – No appreciation of organisational change Poor Governance structures – No Top Management support at Area level – Over 500 project team members – Poorly defined roles and responsibilities Not a ‘priority one’ project – No decentralised Ownership or Responsibility for the project • Poor HR personnel involvement at Area level • Poor appreciation of process changes (replicated instead of replaced) PPARS Problems • No ‘end-game’ in mind before setting out (scope) – Impossible to control timeframe and funding requirements • Using legacy systems as departure point introduced ‘local interpretations’ and ‘selective nature’ on what was ruled in and what was ruled out • Core of PPARS is Time Capture but never addressed by team - business process change PPARS illustration • Introduction of ‘Pay Group Rationalisation’ – To standardise the number of Payrolls and try to bring Payroll back from monthly to fortnightly – For example, the HSE Western Area and the HSE SouthEastern Area have 7 and 64 Payrolls respectively – 64 different Gross to Nets and 64 different deadlines for the collection of Payroll information – the HSE Mid-Western Area have 32 additional employees to process employee payments through PPARS on a fortnightly basis PPARS Problems • Manual data entry errors reported – A number of incorrect payments made to HSE employees through the PPARS • Manual workarounds • These problems are being rolled out to all ‘golive’ HSE Areas Conclusion and Discussion • What can we learn from such cases? • What would you suggest is the best approach for the HSE going forward? • Was PPARS an IT failure?