Crunching ERP Deployment Schedules to Derive Value
The Client
The client is the sixth largest life insurance firm in USA. It prides itself on a tradition of 'doing the right thing' for the customer, a tradition that dates back to its inception in 1857. Its commitment to building long-term relationships to meet customers' needs; building and preserving financial strength and offering best-of-breed insurance products and services has paid off. Today, it earns revenues worth US$ 16 billion.
A giant in the insurance industry, the company deals with all aspects of the business of insurance. Its product portfolio ranges from permanent life insurance plans, term life insurance and disability income, to annuity plans for personal, business, estate planning and pension markets. In addition, the company has subsidiaries that offer mutual funds, equities and long-term-care insurance.
Business Need
At the time of the engagement, the client was experiencing all the incipient drawbacks of a two-tier architecture. Change-management in a two-tier model is extremely complicated as typically, it leads to monolithic applications, which are expensive to maintain. While actual processing of the data takes place on the remote client; data has to be transported over the network, which leads to increased network stress.
As all of the application logic is executed on individual PCs, incorporating a new release is a matter of updating all the machines in an enterprise, which in the case of a large corporation like this client, could be a matter of updating thousands of PCs. This can be time-consuming and prone to error, quite apart from being expensive. The client also faced concerns over security of data, the requirement of extremely well trained systems operators and the inability to run advanced techniques. All these factors contributed to the client feeling the need to move from its existing two-tier architecture to a four-tier Web enabled architecture.
To align its long-term Information Systems (IS) and business objectives, the company felt the need to segregate the AP, PO and TE database from the General Ledger database. By sticking to a vanilla implementation of the AP, PO and TE modules of PeopleSoft 8.4, the company could achieve savings of over US$ 1.2 million over the next two years.
Key Challenges
Infosys was engaged to design a system that would address the long-term business and IT needs of the client. This involved many challenges:
- The business processes in Purchasing and Payables had to be re-designed in a manner that would incorporate best-of-breed practices. The processes would also have to be scalable and able to accommodate change easily
- Infosys would have to enable the deployment of newer PeopleSoft modules across the entire corporate infrastructure of the client. Considering the size of the client and the scope of its activities, this was a complicated exercise in itself. Infosys had to implement the Accounts Payable, Purchasing and Travel Expenses modules of PeopleSoft 8.4 and keep them vanilla
- The client had a customized General Ledger instance. Infosys had to create an interface between the customized General Ledger instance and the vanilla AP, PO and TE instance
- The General Ledger had a Sybase instance and AP, PO and TE had an UDB instance. Managing the differences between these instances presented significant technical challenges
- The existing PeopleSoft system had to be changed to interface with the Mainframe system for cash disbursements
- Large quanta of existing data had to be migrated from outdated legacy systems into the PeopleSoft system. Care had to be taken that none of the functionality of the data was lost in the process
Our Solution
Infosys leveraged its considerable technical, management and domain expertise to map a solution that would best fit all the challenges presented by the client situation.
Redesigning the business process presumed a thorough understanding of the existing processes. In order to achieve this understanding, Infosys formed two close partnerships - one with the business end of the client to understand business processes, another with IS to understand the technology and infrastructure of the enterprise.
Coordinating disparate contributing agencies is often crucial to resolving problems. Working with this end in view, Infosys set up a governance structure among the client, Sybase and PeopleSoft for the early identification and resolution of issues in this manner:
- Infosys took a two-instance approach in order to increase business and IS benefits. It separated AP, PO and TE onto a different database, separating them from the General Ledger database
- Infosys conceptualized, defined and created a PeopleSoft Solution Center. The objective of the exercise was to enable the client to achieve long-term goals with ease
- The AP, PO and TE modules of PeopleSoft were on an UDB instance. Infosys carried out an impact analysis of changes that would have to be made in the UDB instance
- Infosys developed custom scripts for migrating data from legacy systems to the PeopleSoft system. Units of migrated data were continuously tested with extant data in order to ensure that no functionality was lost
- Infosys instituted a process of refreshing scripts daily. Custom processes like Structured Query Reports and App Engines were run daily in order to keep the Sybase instance of General Ledger and UDB instance of AP, PO and TE synchronized with one another. These processes were used whenever possible for the purpose of migrating data
Business Value
A team of about 16 highly skilled professionals from Infosys completed the engagement successfully over a period of 11 months. The client benefited enormously from the initiatives implemented by Infosys.
- A vanilla implementation of AP, PO and TE has given the client savings of over US$ 1.2 million over the next two years. The implementation of AP, PO and TE onto a separate database has enabled the client to align their business processes with long-term business and IS objective
- A completely vanilla implementation of AP, PO and TE has resulted in a significantly reduced Total Cost of Ownership to the client
- When Infosys re-designed the client's business processes; it also significantly reduced process time. The business processes were aligned in a manner that enabled the client to deploy strategic initiatives in the future
- Infosys' strength in Program Management was leveraged to bring about synergies between various projects and teams of the client