DENVER -- The Canadian Broadcasting Corporation (CBC)'s project team quickly learned that a mySAP ERP technical upgrade by itself was not going to result in the hard ROI that its project approval process often requires. However, by focusing on future improvements that the upgrade would enable, the project was approved and succeeded.
Based in Ottawa, the CBC is Canada's public broadcasting company. It runs television and radio stations throughout the country and employs approximately 10,000 people worldwide. In the last 10 to 15 years, it has seen its government funding decrease about 33% in real dollar value.
The CBC has turned to television advertising to help make up part of the funding shortfall but has also pushed for greater efficiencies in its operations, said Stéphane Rivest, director of CBC's financial systems. The company's SAP upgrade is part of that efficiency push.
However, being a publicly funded organization, the CBC must meet strict requirements in order for capital projects to be approved. If an initial feasibility analysis pans out, the project team then builds a business case that includes five-year financial analysis complete with ROI calculations.
With the initial installation of SAP in 1999, the ROI case was fairly straightforward, according to Rivest -- the CBC was replacing 45 to 50 legacy systems with SAP.
The upgrade to mySAP ERP 2005 was trickier to position.
"With a technical upgrade, which includes the new license, it's difficult initially to come up with hard dollar ROI," Rivest said. "So a lot of the ROI for this project was soft dollars."
The project team, which was made up of business and IT personnel, developed the business case with the next phases of the project in mind in order to make the strongest argument for the upgrade, according to Rivest.
The team then presented the upgrade as a strategic positioning tool that was necessary to bridge the gap between where the company was now and where it wanted to be in a few years.
"We positioned ourselves to say, 'Here's the benefit we'll gain in a year, two years, three years down the road from the project, with additional investments, of course,' " Rivest said. "But we needed the technology upgrade to take the next step forward."
And the CBC does have big plans for its SAP installation going forward, according to Rivest, including expanding from 950 SAP users to 10,000 in the next few years.
After the upgrade, the next key rollout for the CBC would be travel and expense. The company currently has 8,000 people who travel, and by September 2007 it wants everyone to use the system, which includes employee self-service using SAP Travel Management, according to Rivest.
The team is also developing a business case for an SAP HR implementation to be put in place by 2010, if all goes according to plan.
"This is where we got the ROI," Rivest explained. "We built the business case with binoculars into the next phases of the project."
The strategy worked and the project was green-lighted. The first phase, hardware acquisition and planning, started in April 2006.
Along the way, the project did encounter the usual, relatively minor, setbacks, Rivest said.
For example, the project was under strict time pressure to go live before the end of CBC's fiscal year on March 31, 2007. If the corporation missed that date, Rivest said, fiscal year-end activities would force the project to hold until June.
Although the company planned to use ECC 6 (ERP Central Component), it had not been released to the general public when the project's business case was approved. CBC decided to start the project working with ECC 5 in order to save time, while always planning to use ECC 6 when it became available.
This, combined with the fact that the ECC 6 release was slightly delayed by SAP, caused CBC to invest more than anticipated in a third-party gap-analysis assessment to determine where changes would be required in order to get from the old environment to the upgraded one.
Despite this setback, the project rolled out in January 2007 and was under budget, Rivest said.
"People have said that the mySAP ERP 2005 upgrade was one of the best [ever] IT projects at the CBC," he said.