Extracting reporting capabilities from ERP

PALM DESERT, CALIFORNIA (03/09/2004) - The information was there; it was just hard to get at. That was the conundrum facing Northrop Grumman Information Technology, a Herndon, Va.-based provider of advanced IT, engineering and business offerings.

In a speech at Computerworld's Premier 100 IT Leaders Conference here in Palm Desert, California, yesterday, Rapheal Holder, vice president of shared services operations at Northrop Grumman IT, described the inherent difficulties in extracting information from an ERP system.

The problem with many such systems, he said, is that they're typically set up to provide financial reporting with an accounting orientation and don't always include the front-office data required to effectively manage program and project performance. ERP systems usually replace legacy environments that have highly evolved reporting systems.

In ERP, "reporting is an afterthought," said Holder. That loss of familiar information access for workers in turn reinforces a resistance to change, he said. So the question remains: How do you get information out of the system?

One approach, said Holder, is to live with the system as is and use its inherent reporting capabilities. The downside is lost productivity. Another approach is to make the new system resemble the old by providing data in the same formats. The good news is that people get what they're used to; the bad news is people wonder why they needed the new system at all, he said.

A third approach is to build what Holder called a data warehouse that delivers the real reporting needs of a company. At Northrop Grumman, the objectives were to provide business information -- such as contracts, financials and human resource data -- to all end users in a way that made it easier for them to do their jobs. Other goals were to use the most appropriate means of data distribution -- reports, dashboards and downloads -- and to provide effective mechanisms for pulling data where necessary.

"We went to Lawson (Software) with this and worked with them to include functionality from a business warehouse. Lawson provided that critical piece," said Holder.

Northrop Grumman, a division of defense contractor and shipbuilding giant Northrop Grumman Corp., defined its ERP strategy back in 1999 and began rolling it out in 2001. Business has since grown through acquisition and organic growth from an original target of US$1 billion to an estimated 2004 operating revenue of $6 billion. Over $4 billion is currently operating on the IT sector's ERP platform, said Holder.

Payback from the system includes reducing administrator head count from 292 to 262 and increasing sales from $401 million to $770 million. Over the next 12 months, Northrop Grumman plans to roll out the capabilities to the entire sector.

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