Business Case - ERP

ERP Implementation
in SUN Energy

A Business Case

2014

9/5/2014
Submitted By:
Amar Prasad Keshari
Enrolment No: 13810008
DoMS, IIT Roorkee

Business Case on ERP Implementation

ERP implementation in Sun Energy 1

Contents
1. Introduction 2
1.1 Project Name. 2
1.2 Project Team.... 2
1.3 Project Description... 2
2. Background..... 3
2.1 The industry... 3
2.2 The Current Scenario... 3
2.3 Problem Definition. 3
2.4 Need for ERP Implementation.. 4
3. Measurable Organizational Value (MOV). 6
3.1 Financial and Strategic Benefits... 6
3.2 Operational Benefits.... 7
3.3 Customer benefits.. 7
3.4 Quantifying MOV.... 7
3.5 Framework for Evaluating Implementation... 8
4. Analysis of Alternatives.... 11
4.1 Total Cost of Ownership... 11
4.2 Total benefits of ownership..... 11
4.3 Financial Analysis Used.. 12
4.4 SAP HANA SAP BI reporting suite .... 12
4.4.1 Economic Analysis.. 12
4.4.2 Cash Flow Summary Analysis...... 13
4.4.3 Total Cost of Ownership.... 14
4.4.4 Total Benefits of Ownership... 16
4.5 Comparison with Other Alternatives... 16
4.5.1 Oracle PeopleSoft Enterprise 8.8 and 8.9..... 16
4.5.2 Microsoft Dynamics AX 2012... 17
4.5.3 Comparison of Market Shares...... 20
4.5.4 Comparison of Various ERP Packages... 20
5. Risk involved in ERP Implementation... 22
6. Recommendation...23
7. References...26



1. Introduction

1.1 Project Name: Scope of ERP implementation in SUN Energy Ltd.

1.2 Project Team: The team consists of basically

a. Steering committee: The members of this particular committee include project sponsor
& the project manager.
b. Consultants
c. Technical members/ Software Programmers
d. Change managers and security persons
e. Operations team which include people like inventory manager
f. Financial Consultant

1.3 Project Description: The project is all about scope of implementing ERP package in SUN
Energy Ltd., an Australia based integrated energy company, focused on power
generation, gas production and energy retailing. The project covers various aspects like
integrating the various functions across the organization in to a single system that can
serve all the purpose of the functions specific needs.



2. Background

2.1 The Industry:
SUN Energy Limited (SUN) is one of Australia's largest integrated energy companies,
focused on power generation, gas production and energy retailing. It is also one of the
largest private owners, operators and developers of renewable generation assets in
Australia. The company is engaged in the purchase and sale of gas and electricity. It is
also engaged in the construction and operation of power generation and energy
processing infrastructure; and development of natural gas production facilities. The
company is headquartered in North Sydney, with offices and operating sites around
Australia.

2.2 The Current Scenario:
The Australian energy industry is barely recognizable from that which operated in the
1990s. Regulatory barriers to interstate trade have been removed. There are regimes for
third party access to the services of energy infrastructure. The old public monopolies have
been split up. Where a single government-owned business used to generate, transport
and sell electricity, there are now competing generators and retailers. Specialist
businesses run the transmission (long distance) and distribution (local area) networks that
transport electricity to customers.
The states of Victoria, South Australia, New South Wales and Queensland have privatized
some or all of their electricity supply. The gas industry has undergone similar restructuring
and is mostly now in private hands. These changes have allowed competitive energy
markets with a more national focus to develop.
The Electricity Industry in Australia embarked on a major change primarily due to the
rollout of Advanced Metering Infrastructure (AMI) followed by implementation of the
National Smart Metering Standards. This resulted in the rollout of the smart meters
replacing the existing basic meters in the state of Victoria.

2.3 Problem definition:
SUN is a large energy company in Australia wants to implement the SAP IS-U and CRM
system to support the business processes and utility services of the company. However,
the company is worried about the inadequate User Acceptance Testing (UAT) being
performed on the changes that are continuously being rolled out. This is in part due to the
limited bandwidth of the companys Subject Matter Experts (SMEs), and also because of
the lack of a standard testing process. Documentation is insufficient and defect
management and reuse of test assets is weak.



SUN, like most utility companies has a high dependency on quality and timely information
to be delivered, distributed and processed by its key information systems. The operational
performance, availability and integrity of these information systems are vital in ensuring
continued commercial viability of SUN. With all the opportunities and benefits Smart Grids
and Advanced Metering Infrastructure (AMI) provides, it also comes at a significant cost
and introduces substantial risk as well; the most critical of these risks is the impact of
managing large data volume. It is important to note that over 95% of SUNs customer
base had basic meters i.e. meters that are manually read or estimated every quarter; with
AMI, these customer meters will be automatically read every 30 minutes and the meter
reads transmitted daily. This will result to 17,520 reads per year and 4,400 times more
data to store and process.

Some of the problems the organization is facing currently include:

a. No proper integration between the different functional units.
b. Lack of proper asset management, book closures, accounts payable and receivable.
c. Issue regarding proper activity based costing and product costing.
d. Efficient management of human resources which includes payroll, training, leaves,
career management etc.
e. Regarding Planning, execution, inspection and certificates.
f. Master scheduling, capacity planning etc.
g. Better data handling

So the organization is looking for a better enterprise application which will cater the
demand of the organization and give a good ROI.

2.4 The need of ERP implementation:
An independent assurance model for SUN needs to be implemented, establishing a
dedicated team that would be responsible for the overall quality certification of all changes
rolled out into production. The teams initial responsibilities would begin with providing
UAT, and later evolve to support a shared services function across the SUN business
units, addressing the testing needs of the various units and covering both SAP and non-
SAP applications.
The main highlights of the solution include:
Phase-wise roll-out of the initial pilot for RFS in the SAP CRM and SAP IS-Utilities
modules, followed by the extension to other portfolios.
Coverage of the following testing responsibilities
Test preparation - understanding requirements, preparing test scenarios and test
cases, all under collaboration with SUN business users


Test execution - execution of signed-off test scenarios, defect logging and reporting,
with test results being reviewed by SUN business process owners.
Use of the HP Quality Centre for test management and defect management
Tracing of requirements maintained through the use of the HP Quality Centre
Providing overall test process management and continuous process improvement
Automation and Performance Testing
Streamlined processes, with standardization and enhanced rigor
Tool-based test management and defect management
Uniform processes for testing across work streams
Rigorous and independent testing leading to improved quality of deliverables in
production
Single point of accountability for UAT Onsite/offshore model
Core-flex resource model
Automation
Cost reduction through reusable assets created to avoid reinvention Client
Increased accuracy in load forecasting and settlements processes which lead to more
accurate bidding in the wholesale market and financial forecasting.
Enhanced customer insight into the market data and advanced capabilities like
profiling and customer segmentation.
Significantly reduced processing time of analytical algorithms.
Ensured accuracy of data.
Also, by using ERP, the following advantages can be obtained when compared with non ERP
systems.

It helps in the optimal uses of manufacturing resources and reduces wastage.
Higher quality of end-product/service is obtained by using it.
It vanquishes the old standalone computer system in Finance, HR, Manufacturing and
Warehouse, and replaces them with a single unified software program divided into
software modules and shares information enterprise wide in real time thus improving
customer service and corporate integration.
It provides software components for vertically integrated companies requiring system to
cover the entire production cycle.


It helps in the planning for optimizing and scheduling of production.
It not only provides a user-friendly environment can be tailored to the needs of companies
both large and small, but also progressively expanded, both in the ` horizontal` sense to
embrace additional organizational functions, as well as `vertically to integrate other stages
of the production process.
ERP enables accountability, accuracy, and transparency without breaking the existing workflow.
In addition, other time-series data needs to be captured so the processing impact will be much
higher than just the customer consumption readings. It is imperative that a scalable and
sustainable IT environment be provided to support AGLs business operations.



3. Measurable Organization Value (MOV)

3.1 Financial and Strategic Benefits:
By implementing an ERP application, the organization wants to integrate all functions
across the organization in to a single system that can serve all the purpose of the
functions specific needs. Now breaking down the benefits of implementing an ERP
package will give the following benefits:
Financial and Strategic Benefits:
High payback on investment.
Improved adaptability to market changes.
Reduction in operating cost and thereby giving Increased Profits
Achievement of company-wide consistency of information
Gain greater visibility into sales order and fulfillment data
Reduced time required for consolidation of accounts considerably
Enhanced order fulfillment by accelerating the sales order process
Standardized business processes, reports, and data for increased efficiency and
control
Increased business transparency to control costs and support operational decisions
Compliance with international financial reporting standards
Transformation of the terms of competition within the market
Improved data accuracy and consistency via real-time monitoring for informed
decisions.
Improved spend management
Improved employee productivity significantly
Establish greater operational efficiency via integrated processes
Improved inventory management and also helps in reducing material wastage
Improved asset tracking to streamline maintenance planning and tax filing.
Gain better supply chain visibility and control to support negotiations and service
Streamlined and standardized business processes transaction



3.2 Operational Benefits
Improved spend management
Improve employee productivity significantly
Established greater operational efficiency via integrated processes
Improved inventory management and also helps in reducing material wastage
Improved asset tracking to streamline maintenance planning and tax filing.
Gained better supply chain visibility and control to support negotiations and service
Streamlined and standardized business processes

3.3 Customer Benefits

Transaction process will become easier for the customer
Proper visibility and transparency
Improved ability to meet customer commitments

3.4 Quantifying MOV

In order to calculate whether the project is successful or not it was very essential to find
out a quantified targets which will be achieved with the help of this project .So in this case
we have calculated the measurable organizational value for a period of 5 years and have
formulated certain targets which the project is supposed to meet at the end of 1year to
become a successful project. They are:
1) The implementation of the ERP package across the organization should give a rapid
pay back, in 20 months.
2) The implementation should also provide a very good return on investment based on
substantial cost savings and business value creation as compared to continuing with the
legacy systems.
3) In addition to the compelling economic benefits, the implementation is viewed as
strategic, helping companies increase competitiveness, improve business agility and
predict IT costs more accurately.
Now to make things in a more systematic manner we have summarized the MOV in a
tabular format so that it can be verified at the end of the stipulated time period.



Objective Change factor Time
Rapid payback time 20 months
Operating cost Reduction by 10% 1 year
Delay in Financial close cycle Reduction by 1% 1 year
Higher resource utilization Increase by 5% 1 year
Higher productivity of finance, HR, and operations FTEs Increase by 10 % 1 year
Higher accuracy of load forecast data Increase by 5% 1year
Reduced monthly billing cycle time Reduction by 5% 1year
Outbound-shipping processing time Reduction by 5% 1year
Order-turnaround time Reduction by 1 % 1year

3.5 Framework for Evaluating Implementation
An intuitive framework for evaluating the cost savings, business value and strategic
benefits for implementation was developed for this case. This framework includes four
key elements:
1. Implementation cost analysis
2. Post-implementation cost savings analysis
3. Post-implementation business value improvement analysis
4. Post-implementation strategic benefit analysis
Framework Cost and Benefit Drivers
Now in order to carry out the above mentioned analysis it was very essential that we need to
have some parameters for the analysis. The below mentioned table provides a list of the cost,
cost savings, business value and strategic drivers included in this implementation business case
framework and economic analysis.
Implementation
Cost Line Items
Cost Savings Line
Items
Business Value Line
Items
Strategic Benefit
Line Items
Planning costs Operating cost Availability related
value improvement
Competitiveness
Internal
Implementation
Parts inventory Enhanced decision
making
High Efficiency


Implementation (3rd
party)
Days in inventory Process or cycle time
savings/ value (order
entry)
Overall business
agility / time to
market
Training Financial close cycle Predictability of costs
Hardware costs Days sales outstanding Access to IT resources
OS licensing costs Higher resource
utilization
IT standardization / IT
best practice approach
OS support fees Higher productivity of
finance, HR, and
operations FTEs
Reduction in risk
DB licensing costs Higher accuracy of
sales forecast data

Travel Reduced monthly
billing cycle

Now based on the cost, cost savings and business value drivers in the preceding table, a
comprehensive, comparative cost and benefit model to quantify the implementation return on
investment (ROI) over a five-year analysis horizon was developed . The costs and benefits
were based on the actual and expected costs and benefits validated in the primary and
secondary research phases of the project. A discounted cash flow analysis was employed to
account for the relative timing of the costs and benefits spanning the five years. The cost
savings and benefits in the first year were factored down to account for the length of the
implementation deployment and were factored up in years two through five to account for
general growth in the ERP environment.



4. Analysis of Alternatives
Now in order to find out which ERP package can best suit the need and which can basically
meet the quantified targets, a comparative study between various ERP packages have been
carried out in this case.

It includes

1) SAP HANA SAP BI reporting suite
2) Oracle PeopleSoft Enterprise 8.8 and 8.9 and Enterprise One 8.11
3) Microsoft Dynamics AX 2012

4.1 Total cost of Ownership
For quantifying the cost related with the project following factors are taken in to
consideration for calculating the total cost of ownership
The various costs that incurs during an implementation includes:
Planning cost: It is the cost associated with planning prior to implementation.
Implementation (Internal): Internal Labor for the implementation activities including
installation, configuration and testing
Implementation (3rd party): 3rd party labor for the implementation activities
including installation .configuration and testing
Training: The training investment for the new package
Hardware cost: Cost for the hardwares associated with new implementation
OS Licensing cost: Server Licensing cost and the user accounts costs
New Server OS support fees: On-going server OS Support Cost (annual )
Database licensing cost: Licensing cost for the new database associated with ERP
Travel: Travel cost associated with implementation
Admin/ misc: Admin / misc cost associated with migration
4.2 Total Benefits of ownership
These are the savings or the benefits which company will receive because of implementing
ERP across the organization. These benefits are classified into:

1) Cost saving Line items
2) Implementation Value Drivers
3) Strategic Implementation Drivers


Total Benefits of Ownership
Cost Savings Line Items Business Value Line Items Strategic Benefit Line
Items
Operating cost Availability related value
improvement
Competitiveness
Parts inventory Enhanced decision making High Efficiency
Days in inventory Process or cycle time savings/
value (order entry,
Overall business agility /
time to market
Financial close cycle Predictability of costs
Days sales outstanding Access to IT resources
Higher resource utilization IT standardization / IT best
practice approach

Higher productivity of finance, HR,
and operations FTEs
Reduction in risk
Higher accuracy of sales forecast
data

Reduced monthly billing cycle time
Improved profit-after-tax (PAT)
margin

Order-turnaround time

4.3 Financial Analysis Used
Here we are using the Return on Investment Method to calculate the ROI and from this we
calculate the payback period also

4.4 SAP HANA SAP BI reporting suite

4.4.1 Economic Analysis
The following analysis provides a summary of the return on investment and expected
breakeven based on implementation cost/benefit analysis over five years. The results
are based on the net present value (NPV) of the cost and benefit cash flows over the
five year period.
Based on an average five-year implementation cost of $675K, with an average
implementation length of six months from initial planning to production deployment,
the company cited substantial cost savings and business value drivers, yielding a total


five-year benefit of $2.65M. This results in a five-year Return on Investment (ROI) of
293% and a payback of 15 months from the completion of the migration.

Fig 1
Business Case Summary
Implementation(Investment) $675,407
Cost Savings (NPV* of Cash Flows) $1,561,618
Business Value (NPV* of Cash Flows) $1,092,458
Five Year Benefits (NPV*) $2,654,076
Net Benefit (Return Less Investment) $1,978,669
Return On Investment 293%
Estimated Payback (Months) 15

*Discount rate for NPV of cash flows = 10%

4.4.2 Cash Flow Summary Analysis
The figure below illustrates the annual analysis of the implementation cost
(investment), cost savings and business value for the initial year through year five.
Also illustrated are the cumulative costs/investment and the cumulative economic
benefits. The cumulative cost lines in the graphic illustrate the payback in the first
quarter of the second year after the implementation of SAP



Fig 2

Year 1

Year 2

Year 3

Year 4

Year 5

Implementation Cost

(Investment) $675,407 $18,333 $18,333 $18,333 $18,333

Cost Savings $204,633 $429,730 $451,217 $545,444 $497,466

Business Value $147,787 $310,353 $325,871 $342,165 $359,273

Cost Savings + Business

Value $352,421 $740,084 $777,088 $887,609 $856,739

Cumulative Investment $675,407 $693,740 $712,074 $730,407 $748,740

Cumulative Benefit $352,421 $1,092,504 $1,869,592
$2,757,20
1
$3,613,94
0

4.4.3 Total Cost of ownership

The various factors influencing cost of ownership are shown in the figure below



Fig 3

A few key elements of analysis from the implementation cost research are listed below:

The labor costs for the implementation planning and implementation represent the
majority of the cost of the migration, 56% of the total five-year cost. The primary reason
for the substantial amount of cost is that the implementation includes the buying of the
SAP application itself as well as the underlying ERP database implementation.

Software support fees are the next major cost element, primarily because this is a
recurring annual cost of approximately $18K that amounts to about $92K over the five-
year period.
New hardware purchase represents 6% of the total five-year cost, with a cost of $46K.
Server OS Licensing Costs represent only 3% of the total five-year cost, with a cost of
$24K.

4.4.4 Total Benefits of Ownership

Now as we saw in the previous section the various costs associated with the
implementation here in this section we will see what all are the savings or the benefits
which we will receive because of implementing SAP across the organization.


These benefits are classified into

1) Cost Saving Line items

2) Implementation Value Drivers

3) Strategic Implementation Drivers

4) Cost saving Line items

These benefits are summarized in the form of a table which is shown below.

Saving Line Items % Reduction Savings
Operating Cost 14% $ 301,873
Parts inventory 7% $ 142,393
Days in inventory 8% $ 175,897
Financial close cycle 1% $ 25,128
Days sales outstanding 7% $ 150,769
Higher resource utilization 8% $ 180,923
Higher productivity of finance, HR, and operations FTEs 12% $ 251,282
Higher accuracy of sales forecast data
5% $ 103,193
Improved profit-after-tax (PAT) margin
7% $ 144,068
Reduced monthly billing cycle time
11% $ 238,717
Outbound-shipping processing time
6% $ 117,265
Order-turnaround time
2% $ 36,855

4.5 Comparison with other Alternatives
4.5.1 Oracle PeopleSoft Enterprise 8.8 and 8.9
People Soft is another leading ERP vendor. And basically these days it is always
between SAP and People Soft the comparative study happens .So as a part of the
business case we thought of discussing the various costs we have discussed for SAP
implementation. As shown below we can see that when we use People Soft
application the payback period rises to about 21 months.


Business Value (NPV* of Cash Flows) $873,966

Discount rate for NPV of cash flows = 10%

4.5.2 Microsoft Dynamics AX 2012
Microsoft Dynamics AX 2012 is a comprehensive Enterprise Resource Planning (ERP)
solution for organizations that empowers people to work effectively, manage change, and
compete globally. It makes it easy to operate across locations and countries by
standardizing processes, providing visibility across your organization, and helping to
simplify compliance.
As shown below we can see that in the case of Microsoft Dynamics the payback period
rises to 22 months
Business Value (NPV* of Cash Flows) $1,092,458

Discount rate for NPV of cash flows = 10%

Figure 4 presents the relative advantage of implementation of SAP when compared with People
Soft and Microsoft. Based on our research and analysis:

Implementation of SAP offers a better return on investment and a shorter payback
period than a implementation of People Soft and Microsoft dynamics , an average of


110% better ROI and a six month shorter payback, respectively.

The five-year cost for a implementation of People Soft is just slightly less (1%) than a
implementation of SAP. Despite the server operating system and user access licensing
costs for SAP, People Soft ongoing subscription support costs are much higher in years
two through five. And in the case with Microsoft the implementation cost itself is larger.

Implementation of SAP has the potential to improve cost savings by 53% over a
implementation of People Soft. The key areas where implementation of SAP provides
cost savings advantages over People Soft are Administration Labor (OS and DBMS),
Database Software Support/Maintenance and Platform Leverage. Implementation of
People Soft does not offer the opportunity for savings from implementation of the
underlying existing database and does not offer a significant savings in OS
administration staffing cost because an implementation to People Soft does not present
a significant staffing skill-level transition.

Implementation of SAP also provides potential advantages for business value
generation. Based on our analysis, a implementation of SAP can improve business
value by 25% vis--vis implementation of People Soft over five years.


4.5.3 Comparison of Market Shares

Fig 5
4.5.4 Comparison of Various ERP Packages
ERP Packages*

Microsoft Net
Dynamics
Oracle People soft SAP HANA
Implementation Ease Moderate Extremely good Good
Application installation wizard Good Good Extremely good
Advanced configuration Good Good Extremely good
Process modeler Good Good Extremely good
Advanced data loading and
moving
Average Good Extremely good
Process-oriented integration Average Good Extremely good
Pre-packaged integration
between vendor applications
Good Extremely good Extremely good
Built-in web services integrations Good Good Good
Task-oriented navigation Average Good Extremely good
Navigation configurability Good Good Good
28%
20%
17%
10%
7%
18%

SAP
Oracle
Microsoft
Epicor
Infor
Others


Task-oriented dashboards Average Good Extremely good
Web client Average Good Good
Integrated office productivity Good Good Extremely good
Diagnostic and technical support Good Good Extremely good
Remote and online support Average Good Good
Performance diagnostics and
tuning
Good Extremely good Good
Patch management Average Good Good
Automated upgrade process and
toolsets
Good Extremely good Good
User-centric performance testing Average Extremely good Good
Data archiving. Extremely good Good

*Ratings in the order of Extremely Good, Good, Average, Moderate, Bad, Extremely Poor .Ratings
assigned by giving a mark between 10-0. The results derived from the survey conducted between 100
companies which have implemented these ERP Solutions. Source: ERP wire



5. Risks involved in ERP Implementation

Enterprise Resource Planning (ERP) system implementation is typically a massive undertaking
for an enterprise. Due to the magnitude of an ERP implementation and the frequency
of ERP failures, companies have greater incentives to proactively identify and mitigate the
various risks associated with the implementation process.
ERP systems are designed to integrate internal and external information that enhances the flow
of communication and decision-making across an enterprise, and focuses on business
processes and functions. As a result of the vast nature of the ERP implementation process, the
related risks are commensurate with the scale of the ERP system project. Risks range from
broad to narrow and pervasively affect the outcome of business processes after the go-live
date when the ERP system is fully operational and available to end users (employees, lower
level managers, etc.).
The categories of risks involved are:
Organizational
Project
Technology
Resource

The following table summarizes the various mapped key risks under each category:

No. Category Key Risk
1

Organizational
Lack of Top Management commitment and support.
Insufficient raining of end-users.
Failure to redesign business process.
Underestimation of organizational structure and
business processes.
2

Project
Unclear goals and objectives.
Poor conflict management.
Poor of changes and risks management.
Poor project management.
Ineffective communications.


Poor motivation and project team work.
Lack of proper project planning and controlling.
Ineffective project cost and time management.
Lack of metrics for evaluating project efficiency and
benefits.
Lack of metrics for evaluating project work by
phases.

3

Technology
Lack of vendor support and partnership.
Poor integration of the infrastructure systems.
The design and implementation of system disrupts
the business operations.
Insufficient automation.
Underestimation of system technical architecture.
Poor software troubleshooting.
Data loses.
Insufficient testing phase.
4

Resource
(time, finance, human)
Limitation in resources.
Lack of business and technical knowledge.
Lack of competence of ERPs consultants.

Management Perspectives:
A common pitfall of management is to assume that ERP is solely an IT project. However,
post ERP implementation is pervasive such that most business processes are, at a minimum,
affected by the system and at times are completely removed or integrated. Change
management is broader than ERP systems, although change management managers should
work alongside ERP project managers to ensure an effective transition post ERP go-live. The
change management processspecifically for ERP implementationshould begin early on
within the ERP implementation process. The result of initiating change management early is
awareness created across the enterprise of the ERP project itself, and the impact and benefits
of the change on end users, business processes, and technology. Additionally, later in the
projects life cycle, change management creates more specific awareness of the
impact ERP has on job design and organizational structure.



Therefore, because of the vastness and pervasiveness of implementing an ERP system
(especially for first-time implementation) the risk are equally as prevalent in breadth and scale.
Consequently, there are many mistakes that companies make when not adequately focusing
efforts on both post and prior period implementation.

6. Recommendations

As SUN needs to integrate a large number of functional units to single application in which each
unit can speak to other and also reduces the cost, the company should go for ERP
implementation and that too with SAP. As discussed in the business case the advantages of
SAP over the other two ERP packages which are being compared here are numerous. The
return on investment for SAP implementation is better than the other two packages and also
SAP is the market leader in the ERP and there have so many testimonials for the increased
efficiency and customer satisfaction for SAP.

According to a survey done, here is a result which shows the graph that shows the planned and
the actual implementation time for SAP, Oracle and Microsoft Dynamics:

Fig 5



Also the table below describes how implementing SAP HANA is the best suited option for SUN
energy:
SAP Oracle Microsoft Others
Market Share 35% 28% 14% 23%
Average ERP Solution
Satisfaction and Benefits
Realization

75%

60%

58%

60%
Average Cost to maintain
and implement the ERP
Tool
$16M $12M $3M $3.5M
Average implementation
Time Duration
15 months 13 months 12 months 11 months
Business Risk Factor 50% 56% 58% 62%

(***The above data is collected from various providers like Panorama, SAP and oracle sites)

The data above clearly shows that the cost involved in implementing SAP HANA is high yet the
risk factor involved is the lowest hence SAP HANA is the recommended ERP system.

As the analysis in the paper has demonstrated, the cost savings and the value generated from
SAP implementation are compelling in absolute terms as well as relative to People Soft and
Oracle. In addition to the economic and strategic reasons for SAP, the issue of risk mitigation is
also of importance. Oracles imminent acquisition of Sun Microsystems, heading towards a
potentially lengthy dispute with the European commission, presents many uncertainties as to
the sun products (here the ERP platform for Oracle is sun based) and creates unnecessary
risks. Taking all these points in to consideration and the other costs we strongly recommend
SAP to be implemented.



7. References
http://erm.ncsu.edu/library/article/erp-implementation-risk-managing-sources-of-project-
delays-and-other-r#.VAsQbsKSz4Y
http://imtcj.ac.in/ITBI%2010%20Proceedings/Book/28.pdf
www.agl.com.au
http://www.tcs.com/news_events/press_releases/Pages/TCS_AGL_SAP_Customer_Aw
ard_Excellence_2012.aspx
http://en.wikipedia.org/wiki/AGL_Energy
http://www.aer.gov.au/industry-information
http://scn.sap.com/community/hana-in-memory/use-cases/blog/2014/05
http://sapignite.com/erp-fight-club-sap-vs-oracle-vs-microsoft-dynamics/

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