Construction group AJ Lucas adds ERP on private cloud

Failure of ERP projects often not the system itself, but bad infrastructure

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Local engineering and construction company AJ Lucas Group (Lucas) will transform its core business processes by consolidating on one ERP platform for financials, payroll, HR and business intelligence.

The company has experienced rapid growth over the past two years with head count going from 200 to 1200 and it has fast out-grown its collection of siloed business applications.

Lucas CIO Simon Soon said after a strategic review of its operations the company entered into a three stage transformation project involving network infrastructure, ERP and innovation to prepare it for future requirements.

“We didn’t have an ERP system, but rolling out an ERP is a recipe for disaster if you don’t have the right infrastructure in place. The failure of ERP projects is sometimes not the ERP system itself, but lousy infrastructure,” Soon said.

After throwing out its old networking gear and consolidating on Cisco, Lucas began stage two of its business transformation six months ago by looked at ERP systems. It considered 22 vendors, short-listed five and then three before selecting Oracle.

“Oracle’s key strength is application in our sector and it seemed to have everything we need,” Soon said. “Our core business is managing the work, managing projects and managing plant and equipment. If we do those three well we will be the best in our industry sector.”

Oracle’s recent acquisition of Primavera also helped it clinch the deal.

“Primavera is what we use and our clients expect us to use it so it is a key aspect of the offering. They also have a strong asset management package for the engineering and construction sector.”

Lucas doesn’t have any existing Oracle ERP software so the move is a “massive change” for the company.

Last month another large construction company, John Holland, also detailed its intentions to overhaul its business processes with modern, centrally-managed software.

“We use Dynamics for HR, Workbench for financials and asset management, Great Plains for financial reporting and Meridian (Micropay) for payroll so we have a whole host of systems,” Soon said.

By June 2011 all those applications will be decommissioned and replaced with the Oracle alternatives for “one vendor, one system, one database”.

“It will streamline everything for Lucas – one database for the whole organisation which is spread across the country,” Soon said. “And our projects are spread across different areas.”

Formerly the CIO of Yarra Valley Water where he managed Oracle software, Soon said Lucas didn’t have the in-house expertise so it partnered with services company CSG on Oracle’s recommendation to build a private cloud for the project.

“CSG will be providing fully hosted management, including development and training,” he said. “We have our own data centre in Sydney and will connect the two MPLS clouds with a 10Mbps pipe. The production system will be hosted by CSG in Canberra and we will have DR.”

Soon said while there is a lot of talk about cloud computing and this is Lucas’ private cloud, the concept is “not that new”.

“It’s all fully Web-based so people in the field will be able to access it and a client is available on the iPhone.”

As part of the change there will be job redesigns with operations staff moved to more strategic roles. The ROI for the project is expected to be three years.

“And we should get more staff satisfaction from this,” Soon said. “There is an air of excitement within Lucas IT that we are doing an ERP.”

Soon is confident the level of commitment from Oracle and CSG to monitor the project will make it a success.

“Our board is very committed too and I said to the board the person you can least afford to not have on board with the project is the people working on it,” he said. “From a Lucas perspective we have commitment from the board, CEO and CFO.”

“I have been a CIO at a number of organisations and this is the first where have allocated 50 per cent of cost to change management and training. There is also a business process change program.”

Lucas chairman and CEO Allan Campbell said the ERP system is not a technology project for Lucas, but a major strategic initiative to align the Company’s systems and processes to match the business process and requirements of its clients.