实施计划business case培训

IBM

“Beyond

ERP”

Solution

ProfileBusiness

Case2010ERP实施的Businesscase主要通过尽量准确的预估项目实施成本，以及企业业务紧密相关的KPI，来分析系统带来的收益，一般有两种用途：1）投资前预估项目投资的回报率，支持领导的投资决策；2）在系统上线稳定运行一段时间后，分析系统的应用是否带来了相应的收益，以指导下一步的优化提升无特殊需求可选一些专业的business

case分析软件，如

VLM中国食品BungeBusiness

Case

Overview方案概览所需软硬件已实施客户有明确的项目实施总体的方案和计划，方能基于此进行系统建设成本的估算业务准备该方法适用于任何类型的客户和行业，但在针对不同的客户或行业时，需要根据其业务特点选择企业管理所关心的、和ERP紧密相关的KPI业务提升价值适用客户/行业2Business

Case

is

Analyzed

for

a

Specific

Scenario3For

ERP

system

implementation

business

case,

normally

the

scenario

isimplementation

roadmap

and

plan;Based

on

the

plan,

the

most

likely

or

conservative

benefit

assumptions

will

bediscussed

and

estimated.MethodologyBusinessframework

andpain

pointsBenefit

TimingKPIs

SelectedProject

CostNPV/IRRHigh

level

valuedriver

analysisData

CollectionFinancialAssumptionsBenchmarkingand

Target

SettingWorkshopsExcel

Template1KPIidentification/Prioritization2PerformanceBaseline3BenefitsAssumptions4Financial

Impactand

NPV4Methodology

–

1

KPI

identification/PrioritizationHigh-level

Gap

AnalysisAs-Is

Pain

PointsFuture

ERPFunctions

*KPI

Prioritization*

Since

the

business

case

is

for

ERPimplementation,

KPIs

which

can

demonstrateERP

benefits

should

be

selected.5BenefitsMethodology

–

1

KPI

identification/PrioritizationExpected

benefits

are

demonstrated

in

different

formats,

including

tangibleand

intangible

ways,

and

can

be

estimated

via

different

methods:TangibleIntangibleTranslated

into

dollarsCan’t

be

translatedinto

dollarsROI

and

NPVAnalysisTargetSettingImprovementAnalysisMethodology

–

1

KPI

identification/Prioritization7KPISelectionFor

each

KPI,

we

have

a

KPI

formula

and

valueformula

.

KPIformulashows

how

wecan

calculatetheKPI

based

on

somecertain

data

whilevalue

formula

tells

how

wecan

benefit

from

the

KPI

improvement.Forexample,DSOisaKPIKPI

formula

:

DSO=

Accounts

Receivables

*

365/

Total

RevenueValue

formula

:

Value=DSO*

Total

Revenue/365

(showing

that

if

we

can

reduce

DSO,

wecan

benefit

from

the

reduction

of

accounts

receivables)KPI

Selection

Principles:

ERP

related,

Company

related.Value

TypesOne-time

Benefit-benefit

that

can

only

be

realized

one

time:

the

increase

of

working

capital,e.g.

the

reduction

of

ARs.Recurring

Benefits-benefits

that

can

be

realized

annually:

the

reduction

of

COGS,

SG&A

orinterest

saving

etc,,

e.g.

the

interest

saving

due

to

reduction

of

ARsTypical

KPISamples—

DSO8KPI

Name:DSO

–

Days

Sales

OutstandingKPI

Definition:To

measure

how

fast

we

can

get

our

ARs

back

(usually

thefaster

thebetter)Data

Needed:b.AccountsReceivablesc.

TotalRevenued:

WACC

(Weighted

Average

Cost

of

Capital)KPI

formula

:

KPI

=

b*365/cOne-time:Value

Driver:Reduce

DSO

-

reduction

of

ARs

(increased

working

capital)Value

formula

:

Value=

KPI*c/365Recurring:Value

Driver:

Reduce

DSO

–interestsaving

due

to

reductionof

ARsValue

formula

:Value=KPI*c/365*dTypical

KPISamples—

DPO9KPI

Name:DPO

–Days

Payable

OutstandingKPI

Definition:To

measure

how

long

we

pay

APs

(usually

thelongerthebetter)Data

Needed:b.

AccountsPayablec.

TotalRevenued:

COGS(Costof

Goods

Sold)

as

apercent

of

Total

Revenuee:

WACC

(Weighted

Average

Cost

of

Capital)KPI

formula

:

KPI

=

b*365/(c*d)One-time:Value

Driver:

Increase

DPO

-

increased

APs

(increasedworking

capital)Value

formula

:

Value=

KPI*c*d/365Recurring:Value

Driver:

Increase

DPO

–interest

saving

due

to

increased

APsValue

formula

:Value=KPI*c*d/365*eTypical

KPISamples

—Monthly

BooksCloseTime10KPI

Name:Averagetime

to

close

monthlybooksKPI

Definition:To

measure

how

longit

takes

FinanceFTEs

to

close

monthly

booksData

Needed:b.

Average

time

to

close

monthlybooksc.

Number

of

FinanceFTEs

doing

monthly

closingrelatedworkd:

Average

fullyloadedcostperFinance

FTEKPI

formula

:

KPI=

bRecurring:Value

Driver:

to

reducetime

to

close

monthly

books

(

to

improve

efficiency

&

reducelaborcost)Value

formula

:Value=KPI*c*(d/240)*12Note:

240

stands

for

the

working

days

of

Finance

FTEs

per

year,

12

stands

for

12

monthsMethodology

–

2

PerformanceBaseline11Data

Collection:

All

data

related

to

KPI

and

Value

calculation

should

becollected:Based

on

selected

KPIs,

consultants

need

to

prepare

data

collection

form;Prepare

data

collection

plan,

allocate

owners

and

conduct

training;Owners

fillin

data

collection

forms

and

submit

on

time;Calculate

KPIvalues

for

performance

baseline

based

oncollecteddata.KPI/

Formula

/

Value

–

VLM

Example12Methodology

–

3

Benefit

Assumption13Benchmarking

and

Target

SettingTo

decide

towhat

degree

theproject

can

help

to

increase

KPIs.How

to

decide

the

improvement-Benchmarks:A)

Global

Average

(shows

the

global

average

level

of

certain

KPIs,

can

help

companies

findtheir

positions)B)

Proof

Points

(shows

how

KPIs

are

improved

after

ERP

is

implemented

in

other

companies)KPI/

Formula

/

Value

–

VLM

Example14Methodology

–

4

Financial

Impact

and

NPVProcessFinancialAssumptionsEstimate

horizon:

normally

if

the

implementation

duration

is

2-3

years,

estimate

will

bemade

for

the

future

5

years,because

it

willtakesome

timefor

ERPsystemtodemonstrate

its

benefit

when

deeply

used.

And

if

so

on.Depression:

for

hardware

and

software,

depression

yearneeds

to

be

consideredaboutits

impact

on

future

cash

flow.

However,

this

part

is

not

significant

so

can

be

ignoredsometime.Benefit

TimingBenefits

can

not

be

achieved

immediately,

we

need

to

decide

how

much

percentageofbenefits

we

can

realize

in

the

followingyears.In

Bunge

ERP

Assessment

Project,

the

assumption

we

use

is

:One-time

Benefit:

Year

1:

0%,

Year

2:

5%;

Year

3:

10%;

Year

4:

15%;

Year

5:

20%Recurring

Benefits:

Year

1:

0%;

Year

2:

20%;

Year

3:

50%;

Year

5:

80%;

Year

5:

100%1516Below

is

5-year

payoffs

and

costs

analysis

forSAP

implementation:20142015Unit

($M)

2010

2011

2012

2013High

estimate

on

tangible-

$2.56

$3.64$4.32$4.26-$4.96$0.86$5.35$1.21$1.25$1.41$0.41$1.58$0.40-$4.96-$4.96-$2.79-$4.49$2.39-$0.04$3.91$1.00$3.86$1.18IRR=10%

(High

Estimate)Assumptions:SAP

project

will

start

from

2011

based

on

Roadmap

Option

1A

5-year

horizon

is

analyzed

from

2011

to

2015Benefit

estimate

is

based

on

KPI

analysis

(details

followed)4.

Recurring

Benefits

realized:

Y2011:

0%,

Y2012:

50%,

Y2013:

70%,Y2014:

80%,

Y2015+:

100%

;

One-time

Benefit

realized:

Y201110%,

Y2012:

20%,

Y2013:

30%,

Y2014:

40%,

Y2015:

10%5.

Comprehensive

implementation

cost

estimate

includes

consulting,software,

hardware

etc

(details

followed)6.

Annual

maintenance

cost

and

comparison

with

baseline

is

analyzedseparatelyUsing

2012

High

Estimate

Benefit

as

an

Example:2012:

One

time

benefit*Y2012

One

Time

Ratio

+

Recurring

Benefit*Y2012

Recurring

RatioTang2i0b12l:e2.5B6=e2.n84e*2f0i%ts+(0S.23u+m3.7m5)*5a0%ryInventoryBenefitReduction

(One

Time

Benefit)-Low

estimate

on

tangibleBenefit

-PrProojjeecctteeddBaBasseelliinnee

TaTargrgeett

BBeenneefifittProjectVaValluueeSoSouurrccImplementationee

($($MM))

Cost

ImImpprroovveemmeenn$0.12tt

($($MM))IInnvveentontorryy

RReeducductitioonn

((EEddiiblblee

OiOillssNet,,

CChhiinnaa))

e

$$

4.4.4040

1010%%

$0$0..4444

InvInveentontorryy

RReeducductitioonn

((EEdidibbllee

OiOillss,,

IInndidiaa))

$$224.4.0000

1010%%

$2$2..4400TTootatallPrProojjeeccHightetedd

BBeeneneffEstimateiitt

––

LLooww

EstEstiimmaatete((CChihinana

oonnllyy))

-$0.12$0$0..4444Net

eTTootatall

PrProojjeeccteteLowdd

BBeeneneffiittEstimate––

HHiigghh

EEsstitimmaatete

((CChhiinana

++

InIndidiaa))

-$0.12$2$2..8844InventoryReduction

(One

Time

Benefit)$2.84$0.44$2.84Total

Projected

Benefit

–High

Estimate

(China

+

India)$0.44$2.4010%Inventory

Reduction

(Edible

Oils,

India)

$24.00Total

ProjectedBenefit–

Low

Estimate

(China

only)$0.4410%$4.40Inventory

Reduction

(Edible

Oils,

China)Projected

Benefit

($M)Target

ImprovementBaseline

($M)Value

SourceInventory

Carrying

Cost

(Recurring

Benefit)$0.23$0.04$0.23Total

Projected

Benefit–

High

Estimate

(China

+

India)$0.0410%

$0.19Carrying

Cost

Savingfor

InventoryReduction

(Edible

Oils,

India)

$1.92Total

Projected

Benefit–

Low

Estimate

(Chinaonly)Carrying

Cost

Savingfor

InventoryReduction

(Edible

Oils,

China) $

0.35ProjectedTarget

Benefit

Improvement

($M)10%

$0.04Baseline

($M)Value

SourceCost

of

Sales

(RecurringBenefit)$

1.5$3.75Cost

of

Sales

Savings

($M)Savings

by

Cost/MTTotal

Asia

Volumes

Per

Year

(MT)High

Estimate Low

Estimate15,000,000

15,000,000$0.25

$0.10$3.75 $

1.5Value

SourceMethodology

–

4

Financial

Impact

and

NPV17Project

CostCapital

ExpendituresYear

0Year

1Year

2Year

3year

4Year

5Software$0$0$0$0$0$0Hardware$0$0$0$0$0$0Other$0$0$0$0$0$0Total$0$0$0$0$0$0Other

One-time

InvestmentYear

0Year

1Year

2Year

3year

4Year

5Trainning

and

Education$0$0$0$0$0$0Others$0$0$0$0$0$0Total$0$0$0$0$0$0Implementation

CostsYear

0Year

1Year

2Year

3year

4Year

5External

Impl.

Cost-Capitalized$0$0$0$0$0Internal

Impl.

Cost-Capitalized$0$0$0$0$0Total

Impl.

Cost-Capitalized$0$0$0$0$0External

Impl.

Cost-Expensed$0$0$0$0$0Internal

Impl.

Cost-Expensed$0$0$0$0$0Total

Impl.

Cost-Expensed$0$0$0$0$0Grand

Total-Implementation$0$0$0$0$0Annual

Operation

ExpensesYear

0Year

1Year

2Year

3year

4Year

5Annual

Maint.%

of

Software

License0.00%0.00%0.00%0.00%0.00%0.00%Software

Maintenance

Expense$0$0$0$0$0$0H/W

Maint.%

of

H/W

Cost0.00%0.00%0.00%0.00%0.00%0.00%Hardware

Maintenance

Expense$0$0$0$0$0$0Ongoing

IT

support

Costs$0$0$0$0$0Other

Annual

Expense$0$0$0$0$0Annual

Operation

Expenses$0$0$0$0$0$0Project

costestimate

isanalyzed

based

onproject

roadmap

andplan:Methodology

–

4

Financial

Impact

and

NPVNPV:

Net

Present

Value

of

a

time

series

of

cash

flowsthe

sum

of

the

present

values

(PVs)

of

the

individual

cash

flows,

bothing

and

outgoingNPV

is

a

central

tool

in

discounted

cash

flow

(DCF)

analysis,

and

is

astandard

method

for

using

the

time

value

of

money

to

appraise

long-term

projectsFormula:t

-

the

time

of

cash

flowr-

the

discount

rate

(the

rate

of

return

that

could

be

earned

on

aninvestment

in

the

financial

markets

with

similar

risk).CashFlowt

-

the

net

cash

flow

(the

amount

of

cash,

inflow

minus

outflow)at

time

t.T18ttCashFlowNPV

=t

=0(1+

r)NPVMeaningActionNPV>0The

investment

would

add

valueto

the

firmThe

project

may

be

acceptedNPV<0The

investment

would

subtractvalue

from

the

firmThe

project

should

be

rejectedNPV=0The

investment

would

neithergain

nor

lose

value

for

the

firmIndifferent

in

the

decision

whether

to

accept

or

reject

the

project.

This

project

addsno

monetary

value.

Decision

should

be

based

on

other

criteria,

e.g.

strategicpositioning

or

other

factors

not

explicitly

included

in

the

calculation.Note:

NPV

is

a

good

estimation

of

the

investment,

but

not

the

only

criteria.Methodology

–

4

Financial

Impact

and

NPVIRR:

Internal

Rate

of

ReturnThe

internal

rate

of

is

theannualized

effective

compoundedreturn

rateordiscountrate

that

makes

the

net

present

value

of

all

cash

flows

(both

positiveandnegative)from

a

particular

investment

equal

to

zero.Arateof

returnused

in

capitalbudgeting

tomeasure

and

comparethe

profitability

ofinvestments.The

term

“internal”

refers

tothe

fact

thatits

calculationdoes

not

incorporateenvironmental

factors

(e.g.,

the

interest

rate

or

inflation).Formula:t

-

the

time

of

cash

flowCashFlowt

-

thenetcashflow

(the

amount

of

cash,

inflow

minus

outflow)at

time

t.IRR:

Internal

Rate

of

Return.

(to

be

calculated)UsesIRRis

arate

quantity,anindicator

oftheefficiency,

quality,or

yield

of

aninvestment.This

isin

contrastwith

the

NPV,

whichis

an

indicator

ofthe

value

of

an

investment.An

investment

is

considered

acceptableif

its

IRR

is

greater

than

an

establishedminimumacceptablerate

of

returnor

cost

of

capital.TNPV

=

19t

=0CashFlowt

=

0(1+

IRR)tSample

1Below

is

5-year

payoffs

and

costs

analysis

forSAP

implementation:Assumptions: tion

1ed)2013:

70%,d:

Y20110%onsulting,6.

Annual

maintenance

cost

and

comparison

with

baseline

is

analyzedseparatelyUnit

($M)2010

2011

2012

2013

2014

2015-

-

$2.56

$3.64

$4.32

$4.26High

estimate

on

tangibleBenefitLow

estimate

on

tangibleBenefitProject

Implementation

Cost-

-$0.12

$4.96$0.86$5.35$1.21$1.25$1.41$0.41$1.58$0.40Net

e

High

EstimateLow

Estimate-$0.12-$0.12-$4.96-$4.96-$2.79-$4.49$2.39-$0.04$3.91$1.00$3.86$1.18IRR=10%

(High

Estimate)-$6.00-$-$$$$$($M)6.00

1.

SAP

project

will

start

from

2011

based

on

Roadmap

OpNet

e4.00

2.

A

5-year

horizon

is

analyzed

from

2011

to

20152.00

3.

Benefit

estimate

is

based

on

KPI

analysis

(details

follow4.

Recurring

Benefits

realized:

Y2011:

0%,

Y2012:

50%,

Y0.00

Y2014:

80%,

Y2015+:

100%

;

One-time

Benefit

realize2010

2011

2012

2013

2014

2015

10%,

Y2012:

20%,

Y2013:

30%,

Y2014:

40%,

Y2015:

12.005.

Comprehensive

implementation

cost

estimate

includes

c4.00

software,

hardware

etc

(details

followed)High

Estimate

Low

EstimateAs

Bunge

Asia’s

WACC

is

8%,

although

the

5-year

internal

rate

of

return

doesnotshow

significant

paybacks,

but

is

still

worthy

of

investment.NPV=

δ+

δ1/（1+R）+

δ2/(1+R)^2+

δ3/(1+R)^3+

δ4/(1+R)^4When

NPV=0,IRR=R20Sample

1Below

is

5-year

payoffs

and

costs

analysis

forSAP

implementation:Assumptions: