Upgrading from an on-premise to cloud-based ERP system is never going to be a simple task. But when Railcar pooling company TTX made the decision to move to the cloud in 2018, it also selected a vendor it hadn’t worked with before to provide the technology.
The firm was originally running SAP for its ERP, with some cloud-based expense reports and tax applications, along with other homegrown systems and manual processes. TTX decided to “rip the Band-Aid off”, and went all-in for a technology upgrade encompassing new ERP, EPM, HCM and SCM systems from Oracle. TTX focused on these applications because of their commoditized nature, according to Bruce G. Schinelli, the railcar firm’s Vice President Information Technology and CIO:
We looked at all of these in many cases very critical back-office functions and recognized that we were not going to be able to innovate in those areas because they're pretty much the same business processes across any company. We realized we should be looking at this in terms of bringing these business processes together so that the data is more integrated, with a single data model.
And the reason that we went with so many modules all at once was to leapfrog ourselves from older technology and in some cases manual business processes, and bring it all into one particular suite of applications.
TTX’s strategy was to go mobile-first, but not-mobile only; it was also intent on a switch to the cloud to get away from the “rat race of constant upgrades” that it could never keep up with on its existing on-premise software, Schinelli added.
When Vicki Dudley joined the business as CFO in 2012, it was clear that TTX was behind not only from a finance transformation standpoint, but also from a team skillset. She explains:
We actually have put in 14 different systems including this since I joined in 2012 and a lot of them were bolt-on and in a lot of cases, cloud applications that we tried to put on to our on-prem SAP. What we found in looking at the new future for this backbone was that a lot of that technology was already inherent in what was currently being offered [by Oracle].
It was an opportunity to shrink the technology footprint and what Bruce and my team had to manage in terms of the different applications.
Lack of maintenance
While TTX was managing its hotchpotch of applications, the aspect that really tipped the scales from a timing perspective was realizing that the SAP system the firm was using may not be maintained anymore. Schinelli explains:
SAP were indicating that they wanted people off of on-prem – I don't necessarily hold a tremendous amount of stock because they're going to move where their customers want to go - but they were pushing for their own version of the cloud. And there were underlying pieces of technology like SQL Server that we were using that if you're not getting updates on the SAP side and can’t update the SQL Server side, there are vulnerabilities associated with that; and certain versions of SAP had to run on certain versions of Windows Server. The conundrum you run into is that you can't just upgrade one, you've got to make sure that you're upgrading everything and none of those things provide any additional or new value to the company.
Hence, the technological obsolescence issue and lifecycle management pressures made it the right time to make a switch.
When it came to selecting the right technology vendor for its migration to the cloud, TTX used a weighted scoring methodology, and ensured that every business function had a voice from supply chain to human resources. The overall score came down heavily in favour of Oracle because of its ability to satisfy all the different business functions at the same time, despite certain standalone cloud applications scoring higher in a specific area. The Oracle suite was also more integrated at the time, though Dudley added that doesn’t mean SAP won't get there at some point.
TTX went live on the new Oracle platform on 1 January 2020, just a couple of months ahead of the remote working enforced by Covid lockdowns and in time for its financial reporting deadlines, to close the company's books on the old system and start fresh on Oracle for the new financial year. It was quite a sprint to get the system up and running in time, delayed slightly by some turnover at the implementer company TTX worked with. Dudley adds:
Until probably March of 2021, which was our first year-end close on the system, there was a noticeable de-stressing on the finance team, when we made it through our audit without problems with our external auditors and we got through the audit committee. We knew that it had worked as we had envisioned, but we all have a bit more grey hair and wrinkles over the last year or so.
And we didn't miss any trains getting out on time as a result of the software.
While connecting the existing on-premise systems that TTX still uses with the new Oracle cloud platform had its challenges, these weren’t insurmountable, and just required proper testing to ensure when everything was switched on, it would all work correctly. From a technology standpoint, the trickier aspect was the data conversion - taking all the old data and creating a gold copy, understanding which data you're removing, making sure appropriate decisions were made about how much and what was necessary, what data to keep and how long to keep it for.
Looking back over the project rollout, Dudley acknowledges the firm could have done a better job on training and change management.
We did ask people who were used to saying, I do A, B and C and it all works out, to think about not only how they're doing the work but what the outcome is. And as humans, we don't like to change. So I think we could have done a little bit better on that.
The importance of change management can’t be emphasized enough, Schinelli reiterates. Even though the business processes are relatively the same in the old and new systems, people liked the order they were doing things in; getting people to step up and change those aspects and move on to the new system could be challenging:
There was a lot of net new, and when you're doing net new, it gets a little hard. When you're working with your configuration group, they're on a schedule, we're paying them and you want decisions being made, but there was a lot of - we don't really know and then we didn't really understand it. Understanding those business processes better going in may not be possible, but I'd say don't underestimate your net new. That’s really the tough part.
For Dudley, this change management should also extend to external partners and users:
One of the harder things that we have encountered is getting our suppliers to use some of the portals that are inherent in the system to allow for more touchless processing from procurement all the way through payment of the invoices. If we had this to do again, we needed a longer runway to get outside parties converted to what we needed.
She also advises other organizations going through this kind of upgrade project to focus on putting in some extra padding in terms of internal people resources.
A-players are the ones that always get tapped to do every project. So not only did they have some of their existing responsibilities to do, they were very heavily immersed in the work of pulling this off and in a good fashion from a technology standpoint.
TTX is now focusing the team on getting involved with as many of the various groups within Oracle as possible, both to take the opportunity to have a voice in terms of how the software progresses, and to work with other companies to understand their approach.
The firm is also busy exploring how quickly it can continue to advance the new technology, through the use of bots or other forms of automation to get to the end of its finance transformation roadmap. Dudley says:
We're now getting to the fun part because the foundation is in, it’s solid and now we’ve achieved that I’d say the advances are going to be limitless as long as the software continues to progress.