TCO Paper

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TCO Paper

Postby red1 » Wed May 30, 2018 1:42 pm

Guide to Calculating Total Cost of Ownership for an ERP System.

Objectives of a modern sophisticated ERP system
1. Interoperate among different vendors and standards in open manner
2. Sovereignty and ownership with access to source code to ensure security and control
3. Transfer of know-how to independent vendors or in-house for fulfilling (2)
4. Sustainable over the long term competitively

Executive Brief
The vision is to control the costs of ERP systems ownership over the long term. This involves many factors and issues which large organisations are trapped in. Today we have experience and expertise to move away from a single vendor lock-ins and sustenance of their ERP systems in a systematic and orderly manner.
The ROI should generally be realised over five years with a target cost savings of 30%.

A. Total Cost of Ownership Model
1. To compare with alternative ERP system costing models.
2. Costs are to be amortised over 5 years for apple to apple comparison.
3. To ascertain ROI (Return On Investment) of any change to ERP adoption.


B. Breakdown of costs
1. Cost of licensing
2. Cost of preliminary viability study
3. Cost of requirements analysis and feature gaps
4. Cost of system development
5. Cost of data migration
6. Cost of resource, and support
7. Cost of change management
8. Cost of risks, errors and disasters
9. Cost of testing
10. Cost of certification
11. Cost of insurance
12. Hidden costs
13 Opportunity costs wishlist features.
14. Cost of eco-system, sustaining the continuity of a project

C. Pairing of Costs and Weight index
1. Due to different charging and business models of software industry for example proprietary vs open source softwares, each criteria has different cost formulas and weight index or aggregation.
a. For example cost of a proprietary license can be aggregated with extra costs in gap of confidence or ‘insurance policy’ of an eco-system due to Open Source been free licensed not popular or certified, or having a global principal vendor.

D. Roadmap of an ERP Software Migration Plan
a. Costs of Licensing and viability.
a.1 Study the costs as it is. Most operations are either manual, desktop based or disparaged legacy or outmoded integrated closed system needing to open up to a global environment.
a.2 There may also be ongoing projects where the amortisation will look at post 5 years costing.

a.3 When comparing with an alternative or more models, the costs are put on an apple for apple matrix to give a fair and balanced view.

b. Proof of Concept
b.1 One method to build confidence in adopting new alternative system is to pick a small challenge within the group to install a test system that incorporate sufficient business process and regulatory compliance to show to the end users.
b.2 During such exercise, the other costs stated above can be picked out.

c. Software Implementation
c.1 When the owner or management is convinced of the software, it is then installed, setup and configured.
c.2 The gaps are then built into the system.
c.3 Data migration from legacy occurs.
c.4 After proper validation it is then handed over.

E. Concerns of Top Management
Q1. Can the new system be successful?
A1. Most ERP systems are not completely successful. There are costs overrun, hidden costs, surprises, and worst of all non freedom to dictate terms with the software producer.
Our approach is to first make a careful study and a small prototype to prove the concept works. In this way a small risk step is taken rather than a big bang jump.

Q2. Can the new path ensure costs will not increase over time due to unforeseen circumstance? To avoid such risks, all related factors are calculated and estimated so that a proper budget is prepared. To be accurate in such calculations, the previous prototype pilot step is crucial where the experience will validate and fine tune the assumptions.
red1
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Workshop Paper - 2 days

Postby red1 » Wed May 30, 2018 5:57 pm

"FOSS ERP from the Guru - Red1"
How a Malaysian became a leader of a global open source project and what can we learn from it.

Target Group: Software Practitioners from Implementors to Engineers. Open Source Software enthusiasts, Cyberpreneur Startups, Database Applications users and developers.
DAY 1 Demo and HIgh Level Theory

1. What is iDempiere ERP by world community - the best sofware in the world
a. What is an ERP and why it is dominated by SAP

2. What is Ninja by Red1 - the fastest ERP maker in the world
a. How to use this toolset to demistify the whole quick ERP modeling process

3. Can ERP replace SAP?
a. Discuss scenario for Petronas

4. Can it be implemented in your organisation i.e. Campus Management System?

DAY 2 Installation on own server, PC, notebook.
(Preparation and assistance will be sent out prior to workshop to download and setup. For both end user binary and developer Eclipse environment. Need a technical person and accessible server on your end.)

1. Hands on exercise to create simple plugin and export for deployment.

2. Using Ninja for easy handling in Excel and generate plugin model and data.
red1
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Why iDempiere?

Postby red1 » Wed May 30, 2018 6:43 pm

iDempiere is an Open Source ERP project that descended from Compiere and ADempiere.
1. 1999 - Jorg Janke made his company Accorto version of a high quality Java based ERP software operating on Oracle DB, as an Open Source project in SourceForge.net
1.2 It soon became a household name among ERP space and hit top active spot in SourceForge around 2003.
1.3 Red1, joined the project in 2003, forming a Malaysian company to represent Compiere locally. He soon contributed tutorials and howto guides in his http://www.red1.org/adempiere forum.
1.4 Jorg Janke then sold the project to a commercial entity which crippled the licensing with an EULA version.

2. The community then requested Red1 to fork the project and he was made founding leader in September 2006.
2.1 The community then successfully improve the project in many ways and swriftly became the top active project in SourceForge.net by December 2006.
2.2 The community again split over commercial vs community focus and Red1 faclitated its breaking up into a new entity called iDempiere.

3. iDempiere, around 2011 is a return to meritocracy and grow even better using OSGi framework of IBM Eclipse Equinox allowing true plug and play components that resolved the complexity of ERP design.

4. In the original forked website of http://www.adempiere.com is explained in more details the technical aspects and a listing of the awards and achievements gained thus far.
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Eco System

Postby red1 » Thu Jun 07, 2018 12:27 am

Item B 14 on the first posting is referred.

There is a need for a sustainable eco-system to ensure ample resources to maintain an Open Source project in a large end-user environment. Such a resource or excellence centre can be highly sought after as the answer to Open Source's uncertainty of corporate and commercial support. Among its objectives:

0. Train locals to meet the full environment needs for professional expertise
1. Free the need to refer to foreign software and support
2. Reverse brain drain of talent to become highly qualified and certified for global and domestic market.
3. Provide certification and benchmarking of ERP implementations
4. Become economically viable by scaling to cover a critical mass of corporate and govt users in the region.
5. Branded as first of its kind as no such centre has yet to exist. This can boost a govt or administration image in the world of ICT adoption.

The skills training needed are:
0. What is Open Source and its web economy
1. How to setup ERP and developer server
2. What is the ERP consulting process
3. How to model an ERP using Ninja
4. How to migrate data to an ERP using Ninja
5. How to test an ERP using scripted FitNesse tools and CI Jenkins

Here is a slide presentation for Malaysia's MSC fulfilment http://www.red1.org/MSC8.pdf
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How To Compare Between SAP and iDempiere

Postby red1 » Fri Jun 08, 2018 4:29 pm

Licensing Cost: SAP charges very high for license. iDempiere has no license costing model. But that can be deceiving. As the first article above states, Total Cost of Ownership includes all other costs and licensing is only a way to hide or factor the the other costs of ownership. Costs must not be the primal issue. It is should be the opportunity cost of freedom from a restrictive vendor locking.
Verdict: Consider all costs in first article.

Features: There are two. First is technical. Second is functional.

A. Technical: All active softwares keep up with the times. And there is confusion to bunch it as one size to fit all. ERP is best to be a backend core business functional stack. Not front end user interface or even a super in memory database. These are best left to third party and the ERP merely adapt itself to both ends. An ERP must be niched. Speed is more effective and meaningful in functionals. Thus the likely technical features of a core ERP are:

0. The one quality of Open Source that is unreachable by SAP is the freedom of source code. The experts can examine the underlying code to ascertain if there is fraud, spyware, and mistakes. It is future proof, modifiable to any environment, and sustainable without vendor lock-in.

1. Highly coherent to accomodate ERP functions, built from the ground up. Has to be object oriented, modern, high decimal point accuracy such as Java. iDempiere is built and compatible to the latest Java version. It is developed using IBM Eclipse integrated development environment with OSGi plugin characteristic to allow for complex mixture of functionalities

2. Highly configurable design. Usually meta-data and not hard coded. End-user may change them and need not change code that carries high risk of bug creeping. iDempiere uses an Application Dictionary to define all menu, window display, data models and data types without touching the core.

3. Compatible with modern open data standards such as ASCII, CSV and text and able to easily migrate data in and out via in-built import and export interfaces.

4. Well documented with a thriving open community worldwide. iDempiere is such and has won InfoWorld BOSSIE Award 2015 and 2016 as well as SourceForge.Net project of the month and community numerous times.

B. Functional.
1. Must handle supply chain traceablity with financial and inventory information.
2. Must be multi-tenant, multi-role, multi-currency, multi-accounting, multi-organisation, and multi-languages as well as localisable to different accounting standards in each country or region.
3. Must possess advanced taxation rules such as GST, VAT and WHT.
4. Must have business intelligence and advanced reporting tools and formats.
5. Must have audit trail and change log to trace activity.
6. Must have secured access with advanced anti-hacking capability.
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