CA Picks SAP's Apps for Global ERP System

Says rollout will help it fulfill settlement with DOJ, address accounting issues

By Matt Hamblen

December 6, 2004 12:00 PM ET

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Computerworld - Computer Associates International Inc. last week said it plans to roll out SAP AG's ERP software globally, partly to help meet the requirements of the deferred-prosecution deal CA reached with the U.S. Department of Justice in September.
For CA, the project "is both a business and IT transformation," CIO Kevin Kern said in an interview. "It's the mother of all transformations, affecting just about everything."
Kern said the mySAP ERP software will replace a mix of internal applications affecting four key business areas: core financials, business intelligence, CRM, and e-procurement and sourcing.
A CA spokeswoman said the project could cost $5 million to $10 million. A consulting team from Accenture Ltd. will assist CA on the mySAP ERP rollout, which is scheduled to be completed by the end of next year.
Kern, who joined CA in July, said the new ERP system will give executives "unprecedented levels of financial transparency" across the software vendor's operations. He noted that one of the purposes of the rollout is to help CA fulfill a significant portion of its agreement with the DOJ, which was designed to let the company avoid prosecution in connection with alleged accounting fraud by former executives in 1999 and 2000 .
The DOJ claimed that CA counted some software sales outside of the fiscal quarter in which they should have been booked in order to boost its short-term financial results. A unified ERP system should help make the company's accounting procedures more efficient and more visible to auditors, according to analysts.


Kevin Kern, CA's CIO

Too Many Systems
"I'm kind of shocked that CA hasn't installed a big ERP system before now," said Mark Ehr, an analyst at Enterprise Management Associates Inc. in Boulder, Colo. "As a technology company, they've suffered from the 'invented here' syndrome and have in place a mishmash of internal ERP systems, which was probably part of the cause of the accounting problem."
"Of course the new system will improve financials and tighten that up," Kern said, adding that it will also help CA's sales teams to function "much more efficiently and effectively." As part of the agreement with the DOJ, CA said that it would implement an ERP system by the end of 2005. Kern said the project is "well under way," with 80 employees working on it full time.
In one of Kern's earlier jobs, he was vice president of strategic development at SAP America Inc., SAP's U.S. subsidiary. He wouldn't name the companies that competed with SAP for the ERP project. But he

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