Post on 23-Mar-2018
Technology Solutions for E&C Growth
Jeff Gallant Senior Manager Deloitte Consulting LLP
Tom PendergastManaging Director Deloitte Consulting LLP
8:30 a.m. - 10:00 a.m.
Module/Topic
Growing the Business
Best of Breed Strategies
Integration Strategies
What are SaaS, PaaS, IaaS?
ERP Latest Functionality
Oracle JDE SolutionPrint for E&C
Q&A
Agenda
Argument for Growing your Technology Spend
$
Profit Margin Affected by the Use of Technology and Integration
Investment in technology are likely to have different effects on profit margins by reducing SG&A. Technology allows companies to deliver larger revenue projects with the same or reduced support team. Use of technology and integration may result in higher initial costs but bigger margins in the long run.
Revenue
Less SG&AMore SG&A
Time
The State of Technology Spend in E&CIT Spending Percent Change, by Industry, 2014 to 2015 IT Spending Percent of Revenue, by Industry, 2015
*SOURCE: GARTNER IT KEY METRICS DATABASE, 2012**ENR, March 2016
The State of Technology Spend in E&CIT Spending per Employee, by Industry, 2015 IT Spending Percent of Operating Expense, by
Industry, 2015
*SOURCE: GARTNER IT KEY METRICS DATABASE, 2012**ENR, March 2016
The State of Technology Spend in E&C• Construction industry is last or near last in IT spending compared to 21 other
industries
• The smaller revenue companies actually spend more on IT by Revenue, by Operating
Cost, and by Employee than the larger companies
• Underspending on IT may be a short sighted strategy
• 70% of US productivity growth comes from IT*
• IT investment is one of the key drivers in attracting and retaining young talent,
69,000 construction jobs will be filled with millennials this year**
• Are you putting yourself in a competitive disadvantage?
*SOURCE: GARTNER IT KEY METRICS DATABASE, 2012**ENR, March 2016
• Overview• Start with the end in mind. Where are you spending the most time
for the least value. Allow technology to deliver more work with less effort.
• Data View• Start with the end in mind, think Big Data to Small Data• Create a Master Data Management (MDM) strategy• Use a governance model to support the strategy
• Application View• Resign the fact that ERP does not do “Everything”• Resistance is futile, Cloud is here to stay• Use a Best of Breed approach to support business competencies
and to fill functionality gaps• Plan and test integrations to be invisible• Provide a comprehensive application roadmap so the entire
company can see the vision and understand the timeline
How Should Technology Solutions Work?
Best of Breed
11
BIM (3D)
AutoCadBentley
ArchiCad
Quantities by Location
Recipes
Schedule(4D)
PrimaveraMS Project
Project ScheduleChanges
Cost(5D)Unifier
Prism G2Ecosys
Materials & Resource by
Location
5D (Load Spring, Vico, Hard Dollar, McCarthy)
Oracle ERP CloudEBS, JDE, SAP, CMiC, Sage, VP
AutoVue, Cafeone, EDO
Tasks, Progress, Resources
WO, Bid Packages, Quotes,
Procurement
6D
Insite, SRM
Internet of Things (IoT)
Orchestrator
User InterfaceDashboard
Projects, WBS, Budgets, Actuals, Forecast, Change Orders, Rev Rec, Billing, Payments
Example of Best of Breed Decisions for PM Tool
Potential Solutions for Best of
Breed
Analysis is focused on the project management component of the current IT architecture – how best to manage forecasting, budgeting, and change orders, while addressing key pain points of duplicate and manual entry.
Option 1
Oracle EBS
Exposing EBS functionality to PM using a user friendly
overlay
Option 2
Oracle EBS PM Tool (GC friendly)
Utilizing a GC-specific PM tool and interface with EBS
Option 3
New ERP Platform
Implement a new GC-focused ERP solution
Oracle CRMMS Excel
MC2Timberline
Oracle EBS/ MS Excel Oracle EBS
Hyperion with MS Excel/ SmartView
Primavera Contract
Management
MS Excel/Tableau
Current IT Tools
SharePoint 2010 for Collaboration
MS Excel for Risk Management
Work Acquisition Estimating Budgeting
Financial Mgmt Forecasting
ExecutiveReporting/
BI Env.
Textura/MS Access
Vendor MgmtProject Mgmt
Primavera P6
Scheduling
HTML 5 Overlay
IntegrationsCurrent Latest
Eliminate Manual spreadsheets Implement solutions to delegate time entry for jobs to the field, enter of productivity units and equipment utilization
Master Data Management Strategy – “We’ll get to it later, it’s a technology solution”
Construction companies have grown through acquisitions over the last 10 years and by having standards enable you to have 1 source of truth for data and eliminate the need to enter into multiple systems
How do I improve job cost controls? Automating the use and approvals of purchase orders, forecasting and integrations to best of breed PM tools
Creating Key Performance Indicators that are meaningful to Project Managers and Top Level Executives rather than traditional reports
Think more about the use of visible “Dashboards” that you can access on mobility devices
Forecasting once a month may identify surprises with your budget vs. actuals
Setup Watch list to be proactive in providing you with alerts if you incur cost over a certain threshold by WBS.
Managing suppliers and subcontractors across your organization is cumbersome
Get real-time updates on subcontractors to include reason codes for sub-par performance and quality of work
Plan and Test integrations to be invisible and simple
Systems Integration and MDM RepresentationGiven below is a representation of various steps of the construction process lifecycle, illustrating the data fields at each step, along with integration points throughout the process. (Job # gets entered 1 time!)
SharePoint 2010 for Collaboration
1 Integrate Historical Project information from Financial / Vendor / Project Management
Work Acquisition (CRM)
• Job #• Customer #• Contract
Amounts• Discrete project
attributes
Estimating
• Job #• Customer #• WBS/CBS• Historical cost
Budgeting
• Job #• Customer #• WBS/CBS• Budgets• PM name• Job attributes
Financial Management
• Job #• Actual Cost
(A/P, Payroll, GenCon)
• WBS/CBS• Committed
cost• Budgets
Project Management
• Job #• Subcontractor #• WBS/CBS• Change Orders• RFIs, Submittals,
Transmittals• Insurance and
Bonding Info
Vendor Management
• Subcontractor #• WBS/CBS• Insurance and
Bonding Info
Forecasting• Budgets• Actual Cost• EAC• ETC• EV
2 Integrate Job # and Customer # from CRM
3 Integrate Job #, Customer #, and WBS/CBS from Estimating
4 Integrate Job #, WBS/CBS, and Budgets from Budgeting
Integrate Subcontractor # and Insurance and Bonding information from Vendor Management
32
Scheduling - P6
1
Integration Points
4 5
6
6 Integrate Job #, WBS/CBS, Budgets, and Actual Costs from Financial Management
Risk Management
5
IT a
bilit
y to
resp
ond
to B
usin
ess
need
sEvolution
4-5 years 4-5 years
Business Model User Technology
IT a
bilit
y to
resp
ond
to B
usin
ess
need
s
IT Inflection Point(s)
Evolution
4-5 years 4-5 years
Traditional IT Delivery model SaaS Delivery model
Business Model User Technology
Cloud offers the agility, scalability, and continuous updates to features in order to meet business, users, & IT’s evolving needs
IT Delivery Model with SaaS for evolving Business and IT needs
18 Deloitte Consulting | Oracle ERP Cloud
Operate
Implement
More EffortLess Effort Similar Effort
Develop Interfaces
Migrate Data
Configure SolutionInstall Hardware and Software
Train Users
IT & Operations Training
Perform Regression Testing
Install Patches
Upgrade to New Releases
Lead Change and Adoption
Standardize Processes
Test Solution
Cleanse and Validate Data
Manage Service Requests
DevelopCustomizations
Develop Reports
How does the effort compare to on-premise ERP Implementations?
19 Deloitte Consulting | Oracle ERP Cloud
Cloud computing is a model for enabling convenient, on-demand access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications and services), over the internet, that can be rapidly provisioned and released with minimal management effort or service provider interaction.
Infrastructure-as-a-Service (IaaS)Platform-as-a-Service
(PaaS)Software-as-a-Service
(SaaS)
• Personalized, secure, and connected
• Functional Applications hosted by a provider on a cloud infrastructure
• Delivered as subscription service
• Enrich your SaaS• Create New features & New
applications• Providers deliver not only
infrastructure but also middleware (databases, messaging engines and so on) and solution stacks for application build, development and deploy)
• Delivery of computing infrastructure(network, storage and compute resources, usually with some virtualization technology) delivered as a service
Applications
Platform
Infrastructure
Applications
Platform
Infrastructure
Applications
Platform
Infrastructure
Use Case(s) Use Case(s) Use Case(s)
• ERP, CRM
• Personalize the delivered UI
• Change existing business processes
• Extend SaaS functionality
• Create Custom Web and Mobile applications
• Modernize legacy apps
• Extend your existing IT footprint with advanced Engineered Storage and Compute functionality
Vendor Managed Customer Managed
What is Cloud?
Oracle Platform as a ServiceOracle Platform as a service is a cloud service model that provides a platform for customers to develop, run and manage applications in the cloud. Oracle hosts software and hardware on its own infrastructure and delivers it as a service to customers.
Complete stack of software and infrastructure products to build and extend Oracle ERP Cloud and
non-Cloud ERP solutions
Management
Content &Collaboration
DataManagement
Business Analytics
Integration
Application Development
PaaS
• Eliminate the cost of maintaining applications, databases, middleware and the underlying infrastructure that supports them
• Provide platforms that facilitate faster development and deployment of applications, integrations, and business analytics
• Enable customers to innovate and transform their business operations leveraging a combination of cloud product offerings
• Well-suited for hybrid cloud scenarios due to binary compatible on-premises and cloud and dev/test in cloud and Prod on-premises
• Range of products provides clients ability to “mix and match” best-of-breed products from the PaaS suite, based upon need
• Protects investments made in IT staff and leverages their knowledgebase in Oracle’s on-premises products
Marketplace is moving to cloud for new ERP projects Business
Transformation
NETSUITE
Proven cloud solution for smaller organizations or second-tier ERP for large companies
SAP
Claims S/r HANA Enterprise Cloud edition is complete ERP and cloud available. More of hosted solution.
Oracle
Oracle is committed to cloud-only for all new pursuits in FY17. (Exceptions require approval
Workday
Developing stronger ERP cloud marketplace position. Strategy is often selling future road map
Microsoft
Position full cloud version of Dynamics product
Cloud Computingproviders
• Oracle Financials Cloud• Oracle Procurement Cloud• Oracle Supply Chain Cloud• Oracle Project Portfolio Management Cloud• Oracle Accounting Hub Reporting Cloud
Example Oracle’s Cloud Offerings
PaaS
ERP Cloud
Customer Experience Cloud
Java Cloud
Enterprise Performance Management Cloud
Software-as-a-Service (SaaS)
Database Cloud
(partial listing of PaaS services)
BI Cloud Mobile Cloud
Integration Cloud
IaaS
Compute CloudStorage CloudPrivate Cloud
Managed CloudSOA Cloud
Cloud Devices
Human Capital Management Cloud
(currently for PaaS and IaaS)
Enterprise Resource Planning – ERP Cloud
Why is it Important?• ERP Cloud continues to add functionality at
a rapid pace• Will soon be a viable alternative to On-
Prem• Can be integrated to On-Prem for best of
breed solutions
How do I Prepare?• Upgrade to the latest version of your
software• Reduce customizations• Prepare for business discussions the
answer the question “Why Not?”
New Functionality• ERP Cloud now contains: Financials,
Accounting Hub, Project Execution Portfolio and Financials Management, Risk Management, Revenue Management, Procurement, HCM and SCM (limited)
• Project Controls, Costing and Task Management
Enterprise Resource Planning – JDE
Why is it Important?• JDE continues to invest in industry-specific
functionality• JDE is very IoT centric• JDE continues to invest in the user
experience through User Defined Objects (UDO) and Cafeone
How do I Prepare?• Upgrade to the latest version E1 9.2• Assign a functionality champion• Get trained• Download the ASU for Revenue Performance Obligations• Review functionality in Advanced Job Forecast around the use
of work orders (new HA ledger), new MOC, and detailed ETC calculations
• Prepare for JV Accounting changes• Leverage JDE mobile applications• Consider Best of Breed to leverage components of ERP Cloud
New Functionality• Environmental Accounting• Health and Safety• Project & Government Contract Accounting• Project Portfolio Management• Advanced Job Forecasting• IFRS Revenue Recognition Model• Mobile user and Store and Forward
Enterprise Resource Planning – EBS
Why is it Important?• EBS continues to invest in industry-specific
functionality• Closer to the Cloud User Experience
How do I Prepare?• Upgrade to the latest version 12.2.5• Prepare for more mobility• Get trained• Align EBS and Cloud vision• Consider Endeca
New Functionality• Modern User Experience and Mobility
• Converged look and feel with Cloud
• Optimized Tablet user interface
• Endeca Information Discovery
• Functional Advancements
• Advanced Asset Management
• Procurement Command Center
• Advance Project Planning
• Schedule of Values
• Map Visualization
• OTL Timecard Automation
Enterprise Resource Planning – SAP
Deloitte Consulting LLP
Why is it Important?• SAP continues to invest in industry-specific
functionality, although more slowly than Oracle
• SAP continues to invest in HANA, needs development resources
• SAP still struggling with a complete Cloud solution
How do I Prepare?• Upgrade to the latest version SAP ERP 6.0• Consider an SI partner that has pre-built
solutions (Kiewit) • Prepare for functionality gaps and the need
for development
New Functionality• Optimized project management• Mobility• Performance analytics• Visual design & construction• Team collaboration• Subcontractor collaboration• SAP HANA enhancements
Enterprise Resource Planning – CMiC
28Deloitte Consulting LLP
Why is it Important?• CMiC leads the pack in solution
completeness• CMiC is Cloud enabled• CMiC is 10 years old and a credible Tier 2
ERP• Limited large client experience
How do I Prepare?• If you are considering a change, be sure to
understand the Selection Process.• Concentrate on business process and
functionality, not bells and whistles • Use scripted demos with weighted scoring
and results• Don’t be swayed but the most dominant
player on the team
New Functionality• Integration with Vico (3D, 4D, 5D)• New Revenue Performance Obligation• Scheduling with Primavera• New mobile solutions• Cloud ready
Enterprise Resource Planning – Sage / ViewPoint
Deloitte Consulting LLP
Why is it Important?• If you are considering a change, be sure to
understand the Selection Process.• Concentrate on business process and
functionality, not bells and whistles • Use scripted demos with weighted scoring
and results• Don’t be swayed but the most dominant
player on the team
New Functionality• Sage
• Affordable Care Act• Payroll Outsourcing Interface• Integration to Sage CRM• Employee Self Service• Not a pure Cloud solution
• ViewPoint• ViewPoint Buys Maxwell Systems• Compliance with EEO, Certified Pay, DOT, OSHA, and ACA• Navigation still needs work
What is SolutionPrintTM?
•Deloitte SolutionPrintTM is a package of ready-to-use business process models, application instances and documentation sets that can be used to improve the quality, speed and affordability of Oracle projects. The SolutionPrints are tailored for both Oracle EBS and Oracle JDE.
Process Flows100’s of industry-specific detailed flows covering key process areas (OTC, PTP, PTM, RTR, etc.)
Requirements 1000’s industry-specific requirements linked to the associated process steps
Project PlanSingle ~4000-line project plan encompassing all threads and phases of the implementation
Technical Objects ~100 objects typically leveraged in implementations
ConfigurationsTested and industry-pertinent configurations of all modules within the solution
Increased Quality Time to Value
Project Affordability Reduced Risk
The SolutionPrint™ Difference
BuildDesign
Requirements &Fit/Gap
Design ProcessesUnit Test
Configuration Integration TestString
Test
Phase
Stage
Process & Requirement Confirmation
Integration Test
Lifecycle (Specs, Code & Test)
Lifecycle (Specs, Code & Test)
Adapt
Trad
ition
alSo
lutio
nPrin
t Phase
Stage
• “Cloud” delivery of a pre-configured JD Edwards instance provides greater agility
• Immediate Process Confirmation allows development to start sooner
• Overall ~ 50% reduction from traditional Design & Build Phases
SolutionPrint DifferentiatorsLeverage industry specific best-practice processes Minimize configuration, unit testing and string testing stages
Leverage industry specific system as part of design confirmation Jump directly into integration testing
Early identification and head start on development and data Timely Oracle knowledge transfer to client due to early system exposure
• By collapsing the traditional “Design and Build Phases” of a waterfall approach into an initial “Adapt Phase”, SolutionPrint helps our clients to accelerate the project, focus on the most critical aspects of their business with the agility necessary to ensure their to-be processes are aligned with leading practices.
Introducing the NEW SolutionPrint™ for Engineering & Construction
•Meets E&C specific requirements around:
• Environmental Accounting
• Health and Safety
• Project & Government Contract Accounting
• Project Portfolio Management
• Advanced Job Forecasting
• IFRS Revenue Recognition Model
• DSI mobility integration
This preconfigured JDE solution from Deloitte with accelerators addresses many of the pressing issues facing the core ERP functions found in E&C today and provides our clients with a shorter time to value and reduced Total Cost of Ownership. This SolutionPrint is based on Deloitte’s deep industry expertise and knowledge and addresses Key Design Decisions, KPIs, JDE gaps and the JDE roadmap.
Business:• A Business event that’s driving
significant / foundational IT investment
• Business mandate to drive increased standardization, efficiency, reduction in operational costs
IT• An increased gap b\w evolving
business needs and ability of your ERP application to meet them
• A burning IT platform that’s driving significant / foundational IT investment
• Imminent sizeable invest in an upgrade project to stay current on technology platform
• IT resource and budget being consumed in "keeping the lights on", leaving little room for innovation
A move to Cloud can be positioned as a transformative event for IT organizations as they educate, equip and prepare themselves to be the next-generation, modern IT organization. Cloud fuels a shifts of focus from traditional to higher value added activities. Same is true for business organizations and their operations. A well thought out decision making process isessential to keep the right focus
Are you experiencing:
Maintain Status Quo
No
• The value of net new business transformation capabilities enabled by cloud
• The value of digital enabled built into the cloud: Mobile, Social and real time analytics
• Total cost of ownership (TCO) Cloud vs. On premise
• Cloud Operating model: ongoing release updates, adoption models, data security
• Suitability of standards-based extension tools
• Replacement of customizations with extensions
Have you explored:
Explore cloud relevancy for
your Organization
No
Yes
Cloud Day
What aspect of Cloud’s Value are most relevant to your
organization?
• Business transformation• Digital enablers• Innovation and upgrades• Focusing IT to higher value
added tasks
Yes
Outsourcing infrastructure support and maintenance only
Primary go forward
strategy: IaaS
• The right SaaS product by leveraging a comprehensive evaluation framework
• Ability to adopt leading practices
• SaaS capability fit for unique requirements
• The needs for PaaS and the right PaaS product
• A business case• Cloud adoption readiness
Execute Cloud Transition Lab
No
Cloud Transition Lab
Have you confirmed:
Enterprise Value Map
• The optimal architecture / roadmap for cloud move
• Hybrid / phased architectural considerations
• Low business risk and cost effective deployment options
• Master data, transactional data, close process, reporting and integration aspects
Have you considered:
• Phase scope, execution plan, cost estimate and roadmap to end-state
• Next generation IT operating model (see next slide)
Have you defined:
No
No
Yes
Yes
Cloud Decision Tree