Assessment of ERP Implementation for a Car Dealership

3/30/2014
Prepared by Ghassan Kabbara, IT
Director Group 1
Assessment of eRP
Project.Past, Present, &Future/IT Org
Prepared by Ghassan
Kabbara
28/03/09

3/30/2014
Director Group 2
Table of Contents
 Introduction
 ERP Utilization Stats
 SWOT Analysis
 Index of Observations Part 1
 Index of Observations Part 2
 Illustration of a Vertical Dealership “DMS” vs
Group Zricle eRP.
 ERP Costs (Historic and Forecast)
 Problems with this Setup
 IT proposed Setup
 Problems eliminated with this setup
 Time Frame to receive benefits of eRP

3/30/2014
Director Group 3
Introduction
 Group has invested in an Zricle eRP Generic
application, and that has been installed in over
20 industries.( Our investment , 4,200,000).
Zricle has over 20,000 Tables. (currently Group
is touching only on 10% of these Original
tables in the last 6 months. And 1.6% of the
tables developed by Group IT ERP Team).
 If you were to do a simple calculation in terms
of the actual amount of Group investment in
Table Utilization, then just take 10% of the
4,200,000 investment to just give you an idea
of what was paid and being used in terms of
Zricle Functionality.

3/30/2014
Director Group 4
Introduction
 The Zricle ERP does not have a Vertical
Dealership Automotive Solution.
 Our Zricle eRP is not a Vertical Automotive
DMS application. (The Vehicle, Service & Parts
Process are intertwined harmonically
throughout a proven DMS solution. )
 As you will also see in the next slide the
automotive industry that Zricle has been
installed in is primary for Automotive
Manufacturers & OEM Suppliers.

3/30/2014
Director Group 5
Zricle

3/30/2014
Director Group 6
Introduction
 Group Invested in a team of Consultants &
Developers to design / develop / implement /
maintain the eRP Zricle Application Investment (
3.2 + 1.2 Mil in Maintenance Costs in the last 3
years)
 Group has further invested in two consultants
Consultant1 and Consultant2 who were assigned
the task to map out Group current business
processes and recommend a “best re-
engineered” process. ( 9,000,000).
 This was required as a pre-requisite to
implementing Zricle at Group as Zricle does not
have a Vertical Solution for a Car Dealership.

3/30/2014
Director Group 7
What is wrong with this scenario.
 The expertise Consultant1 bought to our business was based
on fine tuning best practices of the Process of a generic
industry. (logistics, Procure-to-Sales, Make-to-Order, etc..)
This also is reflected in the proposal by Implementer. (who
only were planning on introducing 6 customized modules.)
 Some of Consultant1 recommendations were introduced in
Dolphin
 The expertise that Consultant2 bought to our business was
reviewing of Consultant1’s Process maps and fine tuning the
missing Dealership processes. This was done by conducting a
study of Group current processes, that was being used by the
previous application. Dolphin. (Basically a cut n paste and a
little customization.)
 These processes are not Optimized for a Car dealership. As
they involve a lengthy process from Start-to-Finish.
 One of many examples is the creating of a Sales Order for an
Inventory Item. (that has caused us a lot of issues .. Referring to
the last 6 weeks of investigation being conducted by the Parts
Steering committee.)

3/30/2014
Director Group 8
Introduction
 The Deliverables of Consultant2 were used to
design the Zricle system. Consultant2 were
involved in confirming the high level process
maps. As I mentioned earlier these are generic
processes.
 Unfortunately Consultant2 did not propose a
solution to cater to the more intricate sub-
processes and controls for the dealership. Well
they did to some extent as I mentioned earlier
they mapped Group current processes then.
 Is was then left to the Implementer team who are
now part of the Group IT team, to ensure that the
processed mapped by Consultant2 that were to
some extent copied from Group current processes
were designed and applied in the eRP Zricle.

3/30/2014
Director Group 9

3/30/2014
Director Group 10
 In Summary:
 Two International consultancy
companies were hired to map Group
existing processes, add their final
touches that would be used by
Implementer Consultants to
design, develop and implement the
Zricle eRP at Group.
 When we touch on the Opportunities of
the SWOT analysis section, I will
further speculate why this strategy was
used in more detail. (make a note)

3/30/2014
Director Group 11
What went wrong?
 The problem with this approach was that
Group originally invested in an Zricle ERP
base; to be used with minimum
customization but ended up developing
the extra functionality required to suite
the DMS business. (by introducing 500
plus tables)
 Thus the deviation from the original plan.
 We would have been much better off by
Investing in the Zricle Development tools
to design the system from scratch. (for
more info on this kindly make a note)

3/30/2014
Director Group 12
Introduction on Stats
 The next slide will show a little stats
that confirms that Group eRP team
has been developing the current
system as appose to merely
customization of the screens.
 Requiring to have a ERP dev team
to support the developed Sub-
modules for the years to come.

3/30/2014
Director Group 13
A Brief Overview
Data derived from first extract.
AAC using
Original Oracle
Tables
AAC new tables
Created XX
Oracle tables not
beinng used
AAC New tables
not being used
% 21.67% 2.42% 75.63% 0.28%
Table Count 4,724 527 16,488 61
0.00%
200000.00%
400000.00%
600000.00%
800000.00%
1000000.00%
1200000.00%
1400000.00%
1600000.00%
1800000.00%
AxisTitle
Zricle System Utilization

3/30/2014
Director Group 14
Statistics in more details. Drilling down into True Utilization of
Database Tables.
Data derived from Second Extract

3/30/2014
Director Group 15
Keeping in mind as we go through this
presentation
 The ERP Consultants and Dev Team have been
in process of developing the DMS for Group.
(527 new tables were added) This is NOT a
customization effort but a Full Fledged
Development initiative.
 The IT ERP Team current setup was not
established for such a development initiative
as we will see in the coming slides. (no
QA, formal documentation procedure, change
control process,)
 Too many rules are being broken, shortcuts to
get the job done; this has in Fact caused a lot
of data integrity issues; Impact of which has
contributed to stock Variances.$$$$

3/30/2014
Director Group 16
80 / 20 utilization on Custom Tables
 150 Group Customized Tables have over
10,000 Records.
 No documentations exists as to what purpose these
tables serve to the benefit of Group business. Not to
forget technical Documentation that should be
prepared as part of the development process.
 These are being touched by on a frequent
basis.
 We do not have any technical documentation. Risk
of which means that any developer that leaves
Group, the replacement will have a very hard time
trying to understand the design process. 116 tables
are touched on during the last 6 months.

3/30/2014
Director Group 17
Immediate Action required
 Identify what role do these
Customized tables play in the key
daily processes.
 Document those that are being affected
by these processes.
 Formalize a QA program to Map
processes setup in Zricle. Control
future development initiatives

3/30/2014
Director Group 18
SWOT Analysis
 In the next slides I will focus on the Weaknesses and
Threats that I have identified and that I believe are
quantitative and qualitative enough to let us pause on
moving further with the City Rollout and as such work
on an immediate contingency plan to salvage the ERP
project. (that is if it is salvageable)
 The Opportunities are best left to be discussed outside
the scope of this presentation as they do not coincide
with Group Core business Strategies. (can be discussed
after the presentation.)
 It is part on the IT Governance Initiative to share all
this crucial information with you the “Owners” of the
application as whatever system we end up with will be
utilized by you to assist you Direct Managers/Directors
and Management in meeting your business
goals, objectives and accordingly achieving your KPIs.

3/30/2014
Director Group 19
Ground Rules that were broken
 It should not be IT’s decision to decide on
what eRP should be used.( Unfortunately
IT disqualified DMS1 for a technical
issue, that is secondary to Group
Business Requirements) for discussion.
 The decision lies in the hands of
management and the Team of End Users.
 IT should provide enough facts / intel to aid
management in this decision.
 Wrong / Distorted / Incomplete Facts means
wrong decisions.

3/30/2014
Director Group 20
Two Things to remember
 Group is in the Business to Sell Cars and the last
thing they need to worry about is “re-inventing the
Wheel” (i.e. developing a tailor made application on
a tier 1 ERP platform) that requires an army of ERP
consultants to maintain the application.
 Garbage in, Garbage out, (GIGO). Management
requires Reliable reports to make key decisions. If
these reports lack integrity and cannot be produced
in a timely manner the competitive advantage will
be within our competitors.
 Group will remain at the mercy of the IT ERP
Consultants for many years to come. (Benefit to
consultant is CV update.)

3/30/2014
Director Group 21
Three Facts
 We went out of a Legacy and back into
another pre-legacy built on the Zricle ERP
Platform.
 Delusion that Zricle best practices are
currently applied in Group needs to be
confirmed. (will be a wasted effort)
 The facts gathered from the IT Staff, the
users complaints heard to-date are
substantial indicators to confirm we are
having major issues with the application
that are not be addressed. (recent trip to
City2 confirmed with end users)

3/30/2014
Director Group 22
Index of Observations in detail
Part One
• IT eRP Staff Competency
– ERP Consultants
– Dev team (are requesting to attend training courses)
– DBA
• Performance Issues(DBA purchased “Doppler’ a Database monitoring tool)
• Zricle eRP Utilization. Chart
• IT non ERP Setup (no architect, not using helpdesk, experimenting with
expensive devices, trojans / viruses in network, no IT policies)
• Business Rules Setup( HR, Weighted Avg cost for vehicles, role setup)
• DMS1 Copying. 4 Executives have DMS1 experience
• ERP Staff commitment to see the project through.
• Current Competency of End Users. Pre-requisite to using Zricle.

3/30/2014
Director Group 23
IT Staff Competency
 ERP Functional Consultants:
 6 key consultants having a total of 96 years
experience, with 24 years Automotive. (15 of
those are by the 2 consultants that have been
working with Group on Dolphin.) Only 6 years
of combined new Automotive Zricle experience
comes from outside Group.
 In Summary the 75% of the Combined eRP
consultants experience prior to working at
Group is purely Zricle
Consultancy, Development experience in non –
Auto- Dealership environments.
 eRP Project Manager does not have any
previous automotive experience prior to his
joining Group. Excellent Project management
skills however

3/30/2014
Director Group 24
More Facts
 The team has been learning along as
they develop “Customize “ in the last 3
years.
 Receiving feedback from End Users
who were used to working on the old
Dolphin application.
 Cut and Paste
 Trying to integrate where possible the
customized forms into the Zricle base

3/30/2014
Director Group 25
IT Staff Competency
 Check Point:
 As much as the Team tried to stick to
the Deliverables of the AIM
methodology when the system was first
being designed, through-out the last 2
years the end users have had a large
influence on changes being made to
the original design.

3/30/2014
Director Group 26
IT Staff Competency
 Development Team
 The 2 – 4 developers that are part of the ERP Consultancy
team are creating newly customized tables:
 Customization means creating custom forms that talk to
new tables, that in essence need to linked to the Original
Zricle tables. (which affects causes performance issues;)
 This amount of customization means that we require a
development team , to support for as long as Zricle is
being used in Group. The more the customization being
created, means more maintenance and developers are
required. And a high risk of “bad programming”
 Especially when no formal methodology of development is
used. Proof of which; No documentation exists.
 Customization means we are diverting from the Zricle
bases. Once more Creating performance problems, and
tailoring the Zricle to look like Dolphin.

3/30/2014
Director Group 27
IT Staff Competency
 Database Administrators
 Two DBAs. Each acting as backup to each other.
Redundancy.
 Before my joining an expensive tool “Doppler” was
purchased, not yet applied, that will used to monitor the
database performance. Approx TCO 2 years ($140,000)
 I am have requested that the initial amount of $50,000 be
refunded as this was paid. (no action on this to-date)
 Tool is not required as the dbas’ have the qualifications to
identify performance issues, but in reality many of these
issues are out of DBAs control. (as we will see in the
coming slides on performance issues). Eg( programmers
need to revisit their Queries to address their SQL
programming)
 Currently on Zricle DB 11x; Upgrading to 15z DB will have
a better monitoring grid control management panel that
needs to be looked into.

3/30/2014
Director Group 28
ERP Project team current Org
 Currently the ERP project team is as follows:
 DBA should not report to Erp project manager
especially once development has increased in our
current environment.
 Dev team should not be under Project manager for
implementation.
Project Manager
Should only have to deal
With ERP Functional
Consultants

3/30/2014
Director Group 29
Performance Issues
 One of the Performance Issues are due to
programming inefficiencies by the consultants and
developers. They have been hired initially to implement a
project, being out-sourced. Now they are part of the
group family they are being forced to customize. (due to
pressure from End users)
 Risk to Company: Losing customers as they are unable to
wait for their invoice to be generated.
 Decreasing Productivity of staff.
 Time consuming tasks being sent to IT. EDP once more.
 Consultants who are not experienced in optimizing
programming code cannot have time to re-fix the code.
 DBA has purchased a very expense tool to monitor
performance. “Doppler” that will cost us $ 140,000 for the
next 3 years if we cannot get a refund.
 This tool itself will be a performance overhead.

3/30/2014
Director Group 30
Performance Issues
 Another Performance Issue lies in the
created Customized Tables that need to be
linked to the Zricle Built in tables. This
causes an Overhead to the database, as the
transactions needs to touch on all these
tables in the Original Zricle Schema.
Especially for reporting Requests. (A never
ending requests by end users)
 Risk to Company: This affects other users that
are doing more critical tasks such as
invoicing, creation of job cards, etc. Hence we
lose customers. (15 min in City2 SC to close a
job card, up to 30 min to create a new JC for a
new customer.)

3/30/2014
Director Group 31
Performance Issues
 Performance can be affected by 3 Variables, Network
latency, Database Efficiency, and bad
programming, Hardware specifications, and
Viruses/trojans traveling in our network.
 Current Network is not designed/ optimized to
handle Current and Future traffic.
 Computers are not Centrally controlled by IT
allowing users to install own programs, access
internet, etc. (started testing of a Centralized IT
Asset Control application)
 Risk to Company: High cost of passive devices to
improve bandwidth, increase bandwidth, and
affecting end users. ($70,000 for a cache server)

3/30/2014
Director Group 32
Zricle Utilization. Where do we stand?
Un-necessary Overhead
Wasted $$$

3/30/2014
Director Group 33

3/30/2014
Director Group 34
73% of total Records / Table Hit Ratio
is in our Customized Tables.
Meaning The customized tables have more records
per table 3 times more than the Original Zricle Tables.
Meaning 3 times more transactions
per hit on the “XX” Customized
Tables.
Zricle

3/30/2014
Director Group 35
IT non ERP current Setup and Issues
 IT non ERP Section, is fighting fires. Trying to adjust to
Performance issues.
 No planning for Infrastructure. No Architect
 Concerned with Personal Projects for personal gain.
(DR, Telephony, training, Utilities)
 Total PCs over 1600 in company having over 3000 programs.
 No formal IT policies and procedures. No control over regional
dealership Purchases, Assets.
 No planning. No Delegation when required.
 Emails can be accessed by IT. Recommend Outsourcing.
 No Helpdesk for ERP Issues. Verbal Calls, emails.
 Link between City3 and City2 crippled due to trojan.
 EPC being introduced via web affecting bandwidth. Did not
consider alternative option of using DVDs.
 Still using old method of backing up data. Tapes.

3/30/2014
Director Group 36
Business Rule Setup in Zricle
 Vehicle
 Weighted Average Calculation of Cost for vehicles.
 Decision by IT.
 Affecting Gross Margin, Reconciliation.
 Finance
 COA. No control Accounts security.
 Too complicated.
 No Posting reports
 HR
 Payroll Calc.
 Loans Cutoff
 Other Issues. Role Setup. Duplication of roles.

3/30/2014
Director Group 37
Business Rule Setup in Zricle
 Parts
 Recent finding Invoice can be
generated while SO status in
Entered, booked or Shipped.
 Abuse by end users, that contributed to
Stock variances.
 System is triggering automatic transfer
of parts to locations that are not being
requested by End Users.
 Affect stock variances.

3/30/2014
Director Group 38
Index of Observations in detail 2
• DMS1 Copying. 4 Executives have DMS1 experience
• Zricle Bugs
• Development Issues affecting Data Integrity, Customer confidence.
• User Friendliness of the Zricle Forms.
• Complexity of understanding the process. Lack of User documentation.
• Lack of End User Training
• Why we cannot hand over the Superusers functionality to Corporate
Departments.
• Why I believe the eRP has failed in Group and will Continue to Do so.
• How the IT eRP Team are handling Problem issues that has been an
obstacle for me to gather significant intelligence on the amount of
maintenance that the ERP team has been /is working on.
• User Feedback & Feedback from Existing-Customer Internal Staff regarding
the Zricle Project
• RFP Feedback from Zricle. Evaluation Criteria is too ambiguous.
CCenter, back office issues.

3/30/2014
Director Group 39
Historical Direct Costs of Zricle Investment
and Optimistic Forecast for next 3 years
Forecast based on
Assumption
the Current Staff stay
with Group for the next
3 – 4 years

3/30/2014
Director Group 40
Problems with this approach
 We are creating Legacy once more
using the old “Dolphin” Screens for
many forms and touching on many
tables that are affecting
performance.
 As an example:-
 In the Dolphin system we the same
screen (kardex) possibly touched on 3
or 4 tables. In Zricle the same screen is
touching in not less than 15 tables.

3/30/2014
Director Group 41
Problems with this approach
 The new tables we touch on need to
be maintained, hence they need to
be documented.
 Any future upgrades we receive by
Zricle means we need to re-visit the
customized tables.

3/30/2014
Director Group 42
 Three Questions that need answers:
 If the processes were re-engineered for automotive
“dealership best practices” by Consultant1 /
Consultant2 were they applied in Zricle?
Consultant2 did review the Design however, but
post implementation was not verified.
 Over 20,000,000 has been invested so far for eRP.
Forecast for the next 3 years will be approx
10,000,000. Are the shareholders ready to make
this substantial investment. (This does not include
indirect costs eg. invest in Users with high skills to
take ownership of Zricle eRP.)
 Is Management aware that the current ERP team
are in the process of developing(not Customizing) a
Dealership application at the expense of the
Company?

3/30/2014
Director Group 43
Issues noted to-date
1. The eRP team are Zricle experienced and
most of them do not have automotive
experience.
 Risk to Company: They have been taking
requirements from users who have used the
old “Dolphin” systems and applied many of
the business rules / screen layouts. The team
has been learning as they go along. Taking
requirement from one Region, from possibly
an end user that has gone and left.

3/30/2014
Director Group 44
2. The Customization / Development is an
ongoing process, that requires through
testing by development team and end
users. The current IT environment is not
setup for this.
 Risk to Company: New forms are migrated to
Production. Program could have “Bugs” that
will effect Production Data. We are already
witnessing this phenomenon with Parts. And
Zricle Service tickets are being raised with
Zricle.

3/30/2014
Director Group 45
3. There is no formal documentation
process for Development as our
consultants are overloaded and which
to continue with project
implementation. Over 500
Customized Tables have been created
in Zricle so far. (this is a major
issue, 2.5% of the total Zricle
Database)
 Risk to Company: Losing a developer
means crippling the progress of the
maintenance process. More importantly
we cannot verify the Programming
integrity of the developer.

3/30/2014
Director Group 46
7. Business Rules have been applied in
the Zricle by IT department. That are
not as per the best practices of the
Auto dealer ships. The introduction of
the Weighted Average for Vehicles for
example.
 Risk to Company: This is creating a lot of
issues with our Gross Profit. (Refer to
Finance for problems this has caused). It
is affecting our Bottom Line.

3/30/2014
Director Group 47
8. Even though eRP team has customized a few
of the screens to simplify the process, the end
users still suffer from the complexity of the
process. Upon a recent visit to City2 to discuss
issues with Vehicle specs, I was informed that
the end users cannot take an initiative to fix
the specs as it takes them over 30 minutes to
review specs of one vehicle. This is just one
example:
 Risk to Company: Need to find time to
customize more screens if doable. More
importantly the current skills of the users
need to raised to be capable of understanding
the process. (this is fine for back office ops.)
Take example of City staff capabillity.

3/30/2014
Director Group 48
9.Customization Overload. This will
no doubt mean we will require a
team of developers

3/30/2014
Director Group 49
Aging
 379 1- 3 months
 2430 3 – 6 months
 2471 9 -12 month
 2542 12 >

3/30/2014
Director Group 50

3/30/2014
Director Group 51
Taken from Sales Data for 2008
Percentage of Invoices breakdown generated for 2008
(i.e. 2.1%of total Invoices On Average are prepared 1st Day of each Month; While13.2%are generated on the 30th
of each Month)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

3/30/2014
Director Group 52
 In the next few slides I will present
the current iT organization

3/30/2014
Director Group 53
iT current Setup
IT
Direct
or
ERP
Application
Manager
Unix
Admin
1
DBA 2
eRP
Tech 2
eRP
Functi
onal 9
IT
Manag
er
Region
al
Suppo
rt
City5 4 City 4City2 7 HT 1
Micros
oft
Syste
m 2
Comm
Infrast
ructur
e 3
Web
Dev
(Vaca
nt)

3/30/2014
Director Group 54
Problems with this Current Setup
IT
Direct
or
ERP
Application
Manager
Unix
Admin
1
DBA 2
eRP
Tech 2
eRP
Functi
onal 9
IT
Manag
er
Region
al
Suppo
rt
City5 4 City 4City2 7 HT 1
Micros
oft
Syste
m 2
Comm
Infrast
ructur
e 3
Web
Dev
(Vaca
nt)
Functional team who need to
implement should Be isolated
from Tech Team who develop.
DBA should be isolated from tech. Regional Offices de-centralized in support.

3/30/2014
Director Group 55
What is missing in this setup
 No Quality Assurance.
 IT Functional doing Operational
Tasks No super users in business
units.
 No ERP training Unit to support new
users.

3/30/2014
Director Group 56
Proposed Setup
IT Director
Corporate
IT
Operatio
ns
eRP Tech
Quality
Assuranc
e (
Security
Super
User
Support
Regional Support
City2 City Towns
eRP
Projects
Function
al

3/30/2014
Director Group 57
Proposed IT Org
IT Director
IT Operations
Infrastructure
Comms
Support
(Corporate, Regional)
Security
eRP Project Manager
Functional Consultants
Super User Support
Quality Assurance
Dev testing
IT polices & proc
DBA
Development
eRP Tech
Web Master
Training (Via HR)
Assistant

3/30/2014
Director Group 58
 Zricle todate does not have a vertical DMS to sell to
clients., finds an IT Manager who is trying to convert
his IT dept to a profit center and It offers a high
discount to potential Dealerships, promising the IT
Manager that after he implements Zricle in his
company he can sell the product to potential clients.
 This way both are happy IT manager goes to
management and convinces them that there is a future
in selling DMS. Zricle then sells the Zricle to other
dealerships telling them they have an expert DMS
implementer, and as such sell licenses.
 In the end the company doing R&D on the
implementation suffers.
(competition1, competition2, competition3)

3/30/2014
Director Group 59
Symptom check
 52 two sub modules proposed by
Implementer.
 What are we touching on now from
these sub modules. What has been
modified
 7 customizations.(what was done

3/30/2014
Director Group 60
 In addition to the above applications, the end users also use Excel / Access or manual
systems in the following areas:
 Vehicle Sales
 Sales forecasting and order planning;
 Prospect tracking;
 Sales quotations;
 Sales & Inventory reporting;
 Campaign management.
 Vehicle Service
 Vehicle loading & planning in the workshops;
 Repair orders for Opel vehicles;
 Tracking technician productivity;
 Warranty claims management;
 Pre-Delivery Inspection (PDI) management.
 Finance and Accounts
 Financial Budgets;
 Financial consolidation & reporting;
 Cash forecasting;
 General Purchasing (non vehicles and parts procurement);
 Fixed Assets tracking.
 Human Resources
 All the activities except payroll processing.

Assessment of ERP Implementation for a Car Dealership

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