Carlyle Group's ERP Deployment Deadline

By Jennifer Lawinski  |  Posted 02-18-2011

Carlyle Group's ERP Question: To Host or Not to Host?

When The Carlyle Group decided the time had come to upgrade its Enterprise Resource Planning system, it gave itself one year to deploy a new solution.

Previously, the global alternative asset management firm used Microsoft Dynamics SL. But, Carlyle Group CIO David Roth says that after "a very structured analysis" of the available ERP options, the company decided to deploy the Oracle PeopleSoft Enterprise and Hyperion Performance Management applications across its global operations.

In order to meet its deadline and have the system up and running by January 1, 2011, Carlyle Group decided that it couldn't host the system in-house. "From the very beginning, I had decided I did not want to hire the expertise necessary for me to build that environment internally. So we went through a fairly structured RFP process to identify and select a managed service provider that had expertise in managing PeopleSoft environments," says Roth.

The group had very stringent requirements and wanted to find a managed service provider that also had proven expertise in hosting the ERP solutions. "We were looking for a cost-effective solution," says Roth. "One that probably had a mix of on-shore and off-shore resources that could provide 24 X 7 management of that environment. We were looking for a vendor that could deliver on our disaster recovery requirements. One that would be willing to sign up to the SLAs that we required, and someone willing to work with us on contract terms and conditions that we knew our legal department would require.  We're pretty tough on vendors. We spend a lot of time going through terms and conditions making sure that we are protected against loss of confidentiality and because our data is so critical to us."

The group solicited proposals from several vendors, including Oracle on Demand, IBM, Cedar Crestone, Indian-based firm Mind Tree and Dell Services. IT also asked its integration partner, Accenture, for a proposal. Price proposals, client feedback, and the kinds of SLAs and timetables the vendors were willing to commit to were among the deciding factors, Roth says.

Carlyle Group's ERP Deployment Deadline

Carlyle Group ultimately selected Dell Services to host its ERP solutions. Dell Services now provides hardware, data-center hosting, IT services management and ERP application management to The Carlyle Group. The first phase of the project, the deployment modules including general ledger, accounts payable, accounts receivable and cash management, launched on-schedule on January 1. Additional capabilities will be added in future phases, Roth says.

Meeting that deadline was a key factor in choosing a hosted solution, according to Roth. "To bring all the expertise on board that would be required, to build that environment and maintain it, we thought would take awhile," says Roth. "It would also require us to significantly increase the size of our staff." That would have meant adding at least six or seven staff members to his global team of 60 in order to provide the 24/7 coverage that a hosted provider with global operations like Dell can supply. Roth declines to provide specific financial details about the anticipated savings and return on investment.

For other CIOs looking to outsource hosted ERP systems, Roth has some advice.

  1. The cheapest solution may not be the one that meets your needs. Evaluate your options. "Price was important and we were surprised at how much variation there was in the price that was presented to us by the five or six vendors that we invited. Dell was not necessarily the cheapest, but they were on the cheaper end. There were some vendors that were significantly higher," he says.
  2. Look for a vendor that pays attention to detail and is willing to work with you and answer your questions at every step along the way. "We put together an RFP with lots of specific questions and were looking for fairly detailed answers and Dell was very careful to answer the questions in the RFP. They were very responsive. Some of the other vendors were very unresponsive... and didn't answer the questions adequately," Roth says.
  3. Evaluate the experiences of existing customers."We spent a lot of time talking to existing customers and got very enthusiastic input from existing Dell customers who found that the team that had been assigned to them by dell was very responsive, took a lot of pride in the account and worked with them very closely. We did not get that same enthusiasm or comfort level in talking to some of the other references presented by some of the other vendors."

So far, Roth says, there have been a handful of post-production challenges and glitches in the system. Going forward, as the Carlyle Group adds PeopleSoft functionality and deploys Hyperion, set for the end of Q1 2011, performance will be key.

Carlyle Group plans to leverage Dell's performance measurement tool, which shows how every user is experiencing the system in near real time, examining how much time is being taken by the network, the database and various components of the transaction. "If we get somebody in our Dubai office expressing concern about performance we can use this tool and specifically pinpoint where the problem is, and we thought that was a very valuable capability," Roth says. "We're going to be very sensitive to performance. The PeopleSoft implementation is based out of [Dell's] Plano, Tex., data center, and that is being used by our offices distributed around the world," says Roth. "So far, the limited testing that we've done, and anecdotal evidence we've gotten from people, have been very good."