Implementing

Ashley Briggs.Dominic FranceschiMelissa Hart.Nestor Urita. Mark WalnyISTM 654.21 Spring 2011

Background

Issues and Requirements

Transitioning

Financial Budgeting

Implementation

Final Thoughts

Implementing/Aribacontent

Implementing/Aribabackground

FreeMarkets

British Petroleum's first software

Supply management software and consulting services

Purchased by Ariba in 2004

Ariba

Four years ago, Ariba switched to cloud system

eSourcing Software that delivers real time tracking,

discovery, and improvement of the procurement

process

Alternatives

SAP

Crictionless

Procureei

Iasta

Implementing/Aribabackground

Implementing/Aribaissues.requirements

What was required

Physical Security

Data Security

Availability & Reliability

Security Certification

Ariba succeeded, where others fell

short

Three months to integrate the data

Full access by Procurement and Supply Chain

Management only

Suppliers conduct all communication through

Ariba’s messaging center

Implementing/Aribatransitioning

Conversion

Immediate Cutover from CD to Ariba’s On Demand

Phased Rollout across the company

Results

IT experienced multi-tenant benefits with the switch

Automated Fixes and Updates-No Cost!

New service packs and automatic functionality

Quicker response time

Simpler employee training system

Implementing/Aribafinancial.metrics

Goal: Help keep business in line with their

finances and aids in the assessment of projects

BP originally budgeted $7.3M towards the

implementation

Included software for 3 years

Switchover cost

Deployment

Change management

Heavy reliance on external IT consultants

Consultants have fee negotiation leverage

Training

350 users

For 9 months extensive and on-going as needed

Implementing/Aribafinancial.metrics

BP opted to proceed with the project, thus we assume the NPV and other project indicators to be positive.

Budget recalculation

Given the favorable budget figures, the project had little resistance in being approved

NPV: $1.09MPayback period of 2.15 yearsAccounting Rate of return: $3.44MROI: 20.19%IRR: 25.2%

Implementing/Aribafinancial.metrics

Implementing/Aribafinancial.metrics

After implementation the project was under

budget by $1.8M

Only expended $5.5M

Increased pace of deployment

Lower license fee

Less external support in implementation

BP Expectations

strategic sourcing cost to decrease by 3%-5%

e-sourcing cost to decrease by 1%-8%

Productivity to increase 30% at sites

Implementing/Aribafinancial.metrics

Metrics to Measure

Project is still at its roll-out stage

Currently no definite measure to assess

effectiveness

Measurable criteria after implementation RFI (Request for information on bids to vendors)

Spending reports

Measure effectiveness by comparing criteria with

industry averages RFI average for 2008 was 8.5 days

Overages will negatively impact the

implementation decision

Implementing/Aribaimplementation

 Goal: Formalization to Realize Cost Savings

Set Initiative to train 350 Users

Selected to Outsource Rollout Process -

Accenture Corporation

Centralized to Decentralized training

approach

Issues in Implementation

30% more personnel than anticipated

Underestimated Scale of Process

Sites progressing at various rates

Implementing/Aribalooking.back

Training

Underestimated total end users by 30%

Initial rollout plan did not take into account user

resistance, training needs, or effects

A Second Implementation model was adopted later to

with a greater focus on training objectives.

Management

Implementation, Benefit Analysis, and Feedback was not

communicated by management effectively

Resulted in slow user adoption

Disruption of individual business processes

Lack of transparency between all segments

Implementing/Aribalooking.back

Overall

Successful as a benefiting software for BP

Satisfied requirements and goals that were set forth

Unsuccessful in including the adoption process across

the variety of end users

Did not take into account changes in ownership or

outside factors.

Implementing/Aribaquestions

Questions