Erp in Tosco B

Topics: Enterprise resource planning, ConocoPhillips, Employment Pages: 54 (15289 words) Published: August 13, 2011
Tosco’s success begin by COMETS

In February 2001 Donna was very pleased with the success of COMETS. It was a warm February day. Sunshine provided some badly needed relief from the winter’s blues. Donna was sitting in her office observing the green lawn bathing in the warm sun. It was a beautiful day for her observing the performance of COMETS.

Estimated costs of COMETS

After four-and-a-half years of implementation and approximately $40 million excluding costs of Tosco’s internal staff and ongoing maintenance costs of COMETS over the initial approved budget, COMETS was a success.

COMETS had allowed Tosco to grow through major acquisitions

Unlike many IT projects that are scrapped after millions have been spent, COMETS worked and had allowed Tosco to grow through major acquisitions, even during the implementation process, without adding many more personnel. However, implementing COMETS was far from smooth or easy. The COMETS project was finished. Donna reflected on the whole experience.

The implementation of the project

Tosco maintained a customized approach

Because of the unique business process Tosco maintained, the company decided on the customized approach. To write the software programs for COMETS, Tosco formed teams comprised of operational and accounting users, systems analysts and programmers, and consultants from Aspen Consulting.

The project people were mostly part-time workers

Most of the Tosco people assigned to the project were assigned part-time. It was for the advantage of part-time workers who are brilliant in terms of working, so that they can work in the firm anytime.

Formation of teams from different functional areas and locations

People, when available, were pulled off their jobs from different functional areas and locations. The teams were made up of 70% Tosco and 30% Aspen Consulting in order to keep costs down, obtain buy-in from upper management, and retain knowledge within Tosco.

Tosco tracked budget every month for the COMETS project

Budget was tracked monthly within the COMETS project. The teams had to re-examine some requirements and get additional funding, although the convenience stores would largely continue to be run on their own system.

The major acquisition of Circle K by Tosco expanded Tosco’s core business

In the first year of implementing the COMETS system, Tosco had another major acquisition that of the Circle K convenience stores, headquartered in Phoenix, Arizona. The teams had to re-examine some requirements and get additional funding, although the convenience stores would largely continue to be run on their own system. The Circle K acquisition expanded Tosco’s core business, and adjustments had to be made to the COMETS system.

COMETS process was tasking longer which was doubling the initial price tag of the task

In 1996, as Donna expected, the cost overruns on the COMETS project started to surface. Cost growth began gradually and was mainly due to underestimating the difficulty of the project design phase. Time and again, Donna was approached with news that a particular process was taking longer than expected, sometimes dramatically longer, and often doubling the initial price tag of the task. Each time, Donna went back to Aspen Consulting and argued for them to absorb the costs. The change orders to date were growing and she often wondered if COMETS was ever going to materialize.

Five-person management team in Tosco

She was growing tired of the heated discussions within their five-person management team (three from Tosco, two from Aspen Consulting). If requirements had not been clearly communicated by Tosco or if requirements were added, Tosco would have to pay.

The cost management of Tosco

Fortunately, Donna had kept good records of Tosco’s stated requirements that enabled her to win at a 70-80% rate. Still, these change orders raised the cost of the project from $10.5 million to $40 million, even after she cut...
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