Drill rig operator steps towards cloud

Drilling group AJ Lucas has taken its first step towards hosted software through an enterprise resource planning (ERP) deployment, ‘Project Cornerstone’.

The group this month deployed web-based human resource, payroll and competencies modules of the Oracle e-Business suite, with a view to replacing six core software systems by October.

According to chief information officer Simon Soon, Project Cornerstone was the second stage of a three-stage ICT Strategic Plan conceived two years ago.

Under stage one in May 2009, AJ Lucas deployed Telstra, Cisco and HP networking equipment to connect its 16 offices and 83 drill rig sites in Queensland, Western Australia and NSW.

With the wide area network (WAN) in place, AJ Lucas began seeking a single ERP platform to replace business applications from four separate vendors.

It forged a new relationship with Oracle and channel partner CSG last June, after assessing 21 other proposals.

Soon said Oracle onDemand financials, projects, procurement, inventory and business intelligence modules would go live by October.

Other “enablement, efficiency and business intelligence” tools would be deployed between October and April, after which Soon hoped to look at “innovation; where to from here” applications until late 2012.

Outsourcing and the cloud

AJ Lucas chose to have the Oracle ERP suite delivered and hosted by CSG after determining that it lacked the skills internally to deploy and maintain the system.

Decision-makers were also attracted to CSG’s offer of a fixed price for implementation and hosting, Soon said, explaining that this lowered the level of risk that AJ Lucas had to bear.

“When we selected Oracle, it was quite clear that we didn’t have the skill set to get that going,” he said, expressing a reluctance to hire Oracle database administrators and consultants for the project.

Prior to Project Cornerstone, AJ Lucas operated two full racks of equipment in an HP data centre in Sydney. Soon expected to need only one rack when all the Oracle modules were activated.

After Cornerstone, the group would also decrease its IT headcount from 20 – including seven project staff and eight business leads – to about three.

“All these resources will be deployed back into the business on completion of the ERP project,” Soon said.

“Depending on the outcome of our cloud computing strategy for office productivity applications, our ICT support model will change.

“Most of our applications will be accessible from the internet, hosted in either a private cloud provided by CSG or a public cloud infrastructure.”

Soon said AJ Lucas was comfortable with outsourcing its IT.

Offshoring, he said, was a more serious concern and one that the group currently faced as it considered cloud-based productivity software, including Google Apps and Microsoft’s Office 365.

“We’re looking at the business case of the cloud because that suits Lucas’ type of business,” he said.

Managing change

Despite its technologically focused components, AJ Lucas’ ICT Strategic Plan was “really a business transformation exercise”, Soon said.

He declined to identify the company's outgoing core business applications, stating only that it was “very much a Microsoft SQL company originally”.

Prior to the WAN deployment, “we couldn’t even communicate; sending files across different parts of the business used to take a long time”, he said.

“People used to store files on their own laptops. There was a tremendous amount of duplication and different processes with timesheets for example.

“The CEO recognised that the business could not keep operating the way it did.”

AJ Lucas planned to reduce its number of different timesheets from more than 20 to four. Those four would adhere to Oracle best practices, Soon said.

While Project Cornerstone was uncomplicated so far, Soon expected most challenges to arise from having its 600 computer-using staff adapt to the new system and processes.

During the next nine months, the company planned to deliver 120 structured training courses to the 270 staff it expected to directly interact with the Oracle suite.

 “What [applications] we’re rolling out to the business is a lot better than what they ever had,” he said.