CA picks SAP's apps for global ERP system

New system will help monitor sales data and fulfil CA's obligations to US Justice Dept.

Computer Associates says it plans to roll out SAP's ERP software globally, partly to help meet the requirements of the deferred-prosecution deal CA reached with the US Department of Justice in September.

For CA, the project "is both a business and IT transformation," CIO Kevin Kern says. "It's the mother of all transformations, affecting just about everything."

Kern said the mySAP ERP software will replace a mix of internal applications affecting four key business areas: core financials, business intelligence, CRM, and e-procurement and sourcing.

A CA spokeswoman said the project could cost $US5-$10 million. A consulting team from Accenture will assist CA on the rollout, which is scheduled to be completed by the end of next year.

Kern, who joined CA in July, said the new ERP system will give executives "unprecedented levels of financial transparency" across the software vendor's operations. He noted that one of the purposes of the rollout is to help CA fulfill a significant portion of its agreement with the DoJ, which was designed to let the company avoid prosecution in connection with alleged accounting fraud by former executives in 1999 and 2000.

The DoJ claimed that CA counted some software sales outside of the fiscal quarter in which they should have been booked in order to boost its short-term financial results. A unified ERP system should help make the company's accounting procedures more efficient and more visible to auditors, according to analysts.

"I'm kind of shocked that CA hasn't installed a big ERP system before now," said Mark Ehr, an analyst at Enterprise Management Associates. "As a technology company, they've suffered from the 'invented here' syndrome and have in place a mishmash of internal ERP systems, which was probably part of the cause of the accounting problem."

"Of course the new system will improve financials and tighten that up," Kern said, adding that it will also help CA's sales teams to function "much more efficiently and effectively." As part of the agreement with the DoJ, CA said that it would implement an ERP system by the end of 2005. Kern said the project is "well under way," with 80 employees working on it full time.

In one of Kern's earlier jobs, he was vice president of strategic development at SAP America, SAP's US subsidiary. He wouldn't name the companies that competed with SAP for the ERP project, but said CA evaluated several prominent vendors and narrowed the list to those that could handle a global rollout before settling on SAP.

CA doesn't use any SAP software now, Kern said. The company has installed a few packaged applications from outside vendors, including PeopleSoft's human resources software and a marketing system from Aprimo. Kern said those products will continue to be used for the time being while CA focuses on replacing applications such as Masterpiece, an accounting package that it once owned. CA sold Masterpiece to SSA Global Technologies in 2002.

Accenture didn't help with the selection of mySAP ERP but is providing a team of 20 workers to assist with the implementation, said Stefan Kampe, a partner at the IT services firm.

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More about Accenture AustraliaAprimoCA TechnologiesDepartment of JusticeEnterprise Management AssociatesPeopleSoftSAP AustraliaSSASSA Global TechnologiesUS Department of Justice

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