Babcock centralises core ERP in multi-million pound project

Babcock centralises core ERP in multi-million pound project

It provides engineering support services to the Royal Navy

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Babcock International is in the process of consolidating five instances of its IFS ERP system into one, in a multi-million project that follows the consolidation of the group’s IT estate into a centralised infrastructure.

Computerworld UK spoke to Tim Welburn, the IT director for Babcock’s marine and technology division at IFS’ World Conference in Sweden this week, where he explained the progress being made in the company’s multi-year project.

Babcock has a number of divisions, all of which had fragmented IT systems until this year.

“At a group level all the different divisions had their own IT infrastructure and were very disparate. A project – called Picasso - ripped and replaced everything.  We started from scratch,” explained Welburn.

“Everyone is now on 64 bit, Windows 7, new desktops, new HP kit, all running from a private cloud in our Swindon based datacentre.”

He added: “We have literally just finished this, so a lot of people in our IT community are tired and haggard from having spent the last 18 months on this massive infrastructure project. It’s really huge stuff and will be the foundation upon which everything else is done.”

In parallel to this, Welburn has been overseeing a project for the past year in the marine and technology division, which will see its five instances of IFS’ ERP product consolidated into just one.

“We call it Marine One, and its’ always going to be complicated because it’s not just systems, you have got the processes, the culture change, the data standards etc. We have been doing it for the past year now and the first iteration will be to get everyone onto one common instance [IFS Service Pack 6],” he said.

He added: “The second iteration will be to migrate everyone to IFS Application 8 [IFS’ latest ERP product], which will be a clean, common version for our users.”

Migrating to Application 8 will allow Babcock to standardise a lot of its data processes, and it hopes to have its 6,500 users in the division live by April 2014. However, Welburn did comment that ‘it would take Babcock to make one acquisition’, which would need to be migrated into the project, to push the timeline back.

Although he could not put a final figure on how much the entire project will cost, he did say that it will ultimately be a ‘multi-million pound’ investment.

Welburn also admits that Babcock will retain some legacy apps that will never migrate into the one system, such as complex engineering applications and big project planning apps.

Babcock uses IFS for all of its major back-office functions, such as HR, finance and procurement.

“Around our front-end we use a number of different tools. While IFS does do a lot of the project control, we have got some legacy systems that are so embedded in things such as nuclear site licences, which are just too difficult to get out of those front-end components,” he said.

The benefits of the Marine One and Picasso project are vast for Babcock. As a company it is growing at 10 percent a year, which made the business realise that it needed a system in place that didn’t restrain that growth.

Welburn said: “For example, when we acquire a new organisation, or win a new contract, the systems can just be deployed. One of the things that has always been tricky in the past is when you buy a new company, how do you integrate quickly?”

“With the Picasso platform, from a systems point of view, we can roll that out very quickly. And hopefully when we have got Marine One in a box, we will have the processes to roll-out quickly.”

Welburn also said that by having all areas of the division using the same instance it allows second and third line application support to happen from anywhere. He said that doing this with five instances, the fragmented approach made it ‘a bit of a nightmare’.

He added: “Even with things like having a single approach to HR will be really useful. At the moment we use business intelligence layers to figure out how many employees we have got.

“We can do it, but it’s through tying bits of information together. When we have got the single system we can do it at the touch of a button.”

Babcock, as a group, either uses IFS or Microsoft Dynamics for its ERP. Welburn explained that although things like SAP and Oracle had been considered in the past, they would not be an option now.

He said: “Fundamentally, the investment in skills and knowledge, and everything else, would be tricky to put in a business case for migrating away. IFS and Dynamics are embedded.”

However, there are challenges for Babcock in getting Marine One implemented. Primarily, Welburn explained, it is difficult for IT to change the model for the processes that are already deeply embedded in projects that are currently ongoing.

“At what point do you change the model? If you are half way through a nuclear refit on a submarine, or half way through building a new aircraft carrier, at what point do you say let’s decommission that way of doing it and move onto something else?” he said.

“Essentially it all comes down to an options analysis, but it’s rarely ever going to be a big bang migration.”

He also warned that to get major projects such as Marine One and Picasso approved by the business, it is important to have a wide focus for the return on investment, and not to just consider the benefits for IT.

“I think it depends on whether you are looking at some of these ERP projects as a foundation for the business to do something clever with, or whether the ROI is simply on the implementation of new kit. If it’s the latter, it will be a negative ROI,” said Welburn.

“More new stuff is often more expensive than just keeping the old legacy stuff. However, if you start looking at the new way of doing processes, the business transformation stuff, then you can make it work

 “It’s the scope of what you are looking at for the ROI. The more you narrow it down onto IT the more difficult it becomes. Fortunately with Babcock, the business understands that it needs good systems to grow and the investment in IT over the last few years has been staggering.”

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