CAE Fusion Project Mary Lambert CAE Change Management

CAE Fusion Project Mary Lambert, CAE, Change Management Lead Managing Your Process and User Changes while implementing Oracle E-Business Suite' Santa Clara, California January, 17 th , 2008

Session Objectives of the Executive Work Session ► Demonstrate how critical it is to the success of a project to identify and address the impacts on the organization and the people early on to ensure adoption ► Highlight challenges you may face during your implementations and share what we have learned ► Highlight the value of Change Management ► Share our experience in managing change with Oracle CAE Inc. Confidential and/or Proprietary Information 2

Session Agenda ► About CAE ► Organizational context and key project challenges ► Fusion – The business solution ► Our strategy for pro-actively managing expected challenges ► Accomplishments and lessons learned ► Contribution of Change Management to the success of the project ► Contribution of Oracle Change Management Services ► Open discussion CAE Inc. Confidential and/or Proprietary Information 3

CAE Fusion Project About CAE

Do not modify – comes from the CAE Global comm department CAE Profile ► CAE is a leading provider of simulation and modelling technologies and integrated training services for civil aviation, and defence customers worldwide ► Annual revenues of more than C$1 billion derived from worldwide exports ► CAE employs more than 5, 500 people at more than 75 sites and training locations in 19 countries. ► CAE was founded in 1947 and is headquartered in Montreal, Canada. CAE Inc. Confidential and/or Proprietary Information 5

CAE Fusion Project Organizational Context and Key Project Challenges

Organizational Context ► CAE was In the midst of major restructuring effort ► Clearly established need for a global integrated solution that would support CAE’s growth by § Integrating different information flows § Providing timely and accurate information to enhance decision-making ► Experience from previous implementations and change initiatives was not perceived as positive ► Recent layoffs left a negative impact on the organizational climate and communication, as a whole, required improvement ► CIO and VPHR fully aware of the high risk associated with any ERP implementation ► Failure was not an option ► Heavy workload and competing priorities CAE Inc. Confidential and/or Proprietary Information 7

Key Project Challenges ► High level of cynicism and fear due to previous implementations § Some projects were delayed or abandoned § Employees felt a lack of involvement on their part § Employees were afraid of not receiving enough training or being well informed ► Employees wanted the benefits of the project, while having a customized tool ► Very aggressive timeline driven by SOX requirements ► No as is processes and lack of standardization between sites ► Fear of job loss due to recent layoffs and ongoing restructuring ► Securing the resources for the project due to the competing priorities ► Change in scope partway through the project CAE Inc. Confidential and/or Proprietary Information “The hardest stuff is the soft stuff. ” - Paul Allaire Xerox 8

CAE Fusion Project Fusion – The Business Solution

Project Statement CAE Inc. Confidential and/or Proprietary Information 10

Fusion Wave 1 – ICT&S Business Solution Finance {AR, AP, GL, Fixed Assets, Automated Bank Reconciliation} Procurement In-direct (CT&S) Internal Controls Mgr Business Intelligence ERP Oracle TCIS 2 Baan CRM Web. Reg Training Center Information System (CAT) (Customer Relationship Management) Training Center Information System (BAT) STARS (CAT) STARS (BAT) Scheduling Tool CAE Inc. Confidential and/or Proprietary Information 11

Fusion Wave 1 – Implementation Timeline TCIS/STARS Web. Reg/STARS • Denver • Phoenix • Seattle Apr 24 CRM • Montreal • Toronto • Singapore • Denver • Seattle • Dallas • Santiago • Brussels • Madrid • Amsterdam • Dubai Jun 12 • Dubai • Brussels 26 27 Jul 3 10 15 • Kuala Lumpur • Singapore • Amsterdam • Montreal 16 Doha 17 • Dallas 18 24 • Toronto • Vancouver • Santiago Madrid TCIS/STARS CAE Inc. Confidential and/or Proprietary Information 26 31 ERP/Oracle • Montreal • Toronto • Denver • Dallas • Santiago • Brussels • Madrid • Amsterdam • Dubai 12

CAE Fusion Project Our Strategy for Pro-actively Managing Expected Challenges

A Strategy Anchored in Best Practices ► ► Facing challenging situations during the implementation of technology is par for the course Change Management Factor Contributing to the Success of ERP Implementation Goal Clarity Guiding principles in developing our strategy § Ensuring goal clarity through executive § § alignment Strong executive leadership throughout the project is key for securing real management involvement Involving End Users early to increase their buy-in Structuring communication to manage expectations, reduce fears and prepare people for the transition Well planned and well designed training to ensure utilization of the system 90% Project Leadership 87% End Users Involvement 83% Training 70% 53% End Users Communication 20 40 60 80 ERP Change Management Survey, 2005 CAE Inc. Confidential and/or Proprietary Information 14

Planning our CM Work ► Being pro-active and planning for all Change Management activities ► Working with Oracle, required deliverables identified § Based on: Change Management Work plan • Oracle Best Practices • Our culture and organizational context and risks identified during phase zero ► Aligned with project milestones, the key change management deliverables included Change Management Effectiveness in project plan ► More detailed Change Management work developed following § Executive interviews § Readiness assessment ► Monitored our efficiency and made adjustments as required CAE Inc. Confidential and/or Proprietary Information 15

Getting Executive Commitment ► Adoption of strong governance rules § Executive Workshops, lead by Oracle, conducted before project kick-off ► Steering Committee under coleadership ► Set-up of Management Committee ► Oracle provided Best Practices and guidance in § Defining roles, responsibilities and rules for committees § Developing a sponsorship approach § Providing guidance, enabling our leaders to lead the way ► Empowering Leaders by giving them visibility and allowing them to demonstrate their commitment CAE Inc. Confidential and/or Proprietary Information 16

Communicating Effectively ► Creation of an integrated communication strategy § Adopted a change agent structure to model the changes and rollout change management activities § Structured the project team communications § Aligned our communications with the project milestones and challenges CAE Inc. Confidential and/or Proprietary Information 17

Communicate, Communicate… ► Utilization of multiple communication vehicles § Newsletters § Website § Weekly face-to-face meetings or conference calls § Focused e-mail communication § Communication tours Regular and effective two-way communication ► Assessing the effectiveness of change management and communication ► Walking the talk – Respecting our communication commitment for credibility ► Celebrating successes and leveraging them ► CAE Inc. Confidential and/or Proprietary Information 18

Managing the unexpected ► Planning will not prevent the unexpected from occurring ► Creates an environment that is more responsive and better able to find solutions more effectively ► Some unexpected challenges we had to face § Change in scope due to aggressiveness of timeline and SOX requirements § Going from a Montreal/ Tampa implementation to a global multi-site, multi -system implementation § Change in business process owners and SMEs as a result of scope change CAE Inc. Confidential and/or Proprietary Information 19

CAE Fusion Project Achievements and Lessons Learned

Key Project Achievements ► Project delivered on budget and on time ► In-class training of all Oracle ERP users ► Global deployment of Oracle ERP’ Finance & Purchasing module to ICT&S training centers § Amsterdam, Brussels, Chili, Dallas, Denver (Phoenix, Seattle), Dubai (Doha), Madrid, Montreal, Toronto (Vancouver) ► Multiple system integration § Integration of CRM, TCIS/STARS, Web. Reg/STARS with Oracle ERP CAE Inc. Confidential and/or Proprietary Information 21

ICT&S Financial System Improvements BEFORE AFTER ► Many different financial systems One common financial system – Oracle One common chart of accounts ► Many different charts of accounts ► Manual conversion of Trial Balances into Hyperion Chart of Accounts with possibilities of input errors Automated conversion with standard mapping ► Many subjective mappings One common mapping ► No visibility into divisions’ books Full visibility into divisions’ books ► Often manual calculation of depreciation Automatic calculation of depreciation ► Two-plus weeks to do global close Less than one week to do global close CAE Inc. Confidential and/or Proprietary Information 22

Lessons Learned and Pearls of Wisdom ► Business process definition ► Resources ► ► ► § “When planning for resources, make sure you have the right people (competence & quality) at the right time (plan) doing the right thing (scope)” Schedule & plan § Involve the project team in the development of the plan and gain their full commitment Business decisions § “We need to make business decisions in a timely manner by the appropriate stakeholders. This is a must to establish business process & architecture of systems” Silos § “Ensure you identify all silos in advance, and establish rules, procedures and organization to bridge them” Scope § “When scoping, take the time, do it once, do it right!” Testing, testing § “System integration testing, user acceptance testing, end-to-end testing: Thorough and complete testing done by the right people (functional and technical teams working together) at the right time (properly planned and no waiting until the last minute) will save time, money and aggravation during and after implementation” § “The business processes are the foundation by which you build on. Knowing the “as is” to define the “to be. Knowing who the process owners are is a must” Do not change wording – ► Communication Official document § “Communication is everyone’s responsibility. Don’t assume that people know or from offsite understand, resulting always validate information and involve people at all levels. Communication is a two-way street!” ► Knowledge of business/customer § “Understanding where everyone’s starting from is essential in getting everyone to the same place” CAE Inc. Confidential and/or Proprietary Information 23

Leveraging What we Did Right ► Project management § “Monitor project progress on a weekly basis – reinstate daily “war room” meetings as required – Leverage use of tracking tools to gain visibility on tasks critical to timeline” ► Teamwork § “Working as an integrated team with ► you say – Following-through on your commitments – Ask for help and Dothe not change wording – never hide truth” ► all sites and teams (multiple systems) to resolve issues and find solutions” ► Being responsive § “Be flexible and adapt to business ► User involvement § “Involve as many users as possible ► before going live – Get them involved in testing” ► Official document Change mgt, communication and resulting from offsite support § “Leverage what has been done, validate what has worked well and not so well and build on it” reality, but don’t be afraid to challenge” ► Integrity § “Saying what you do – Doing what Data integrity § “Keep the focus on having good data at all times – develop monitoring tools as required” End-to-end testing § “Make end-to-end testing an integral part of user acceptance testing” SOX compliance § “Build in SOX compliance as you go along to prevent re-work” CAE Inc. Confidential and/or Proprietary Information 24

CAE Fusion Project Contribution of Change Management to the Success of Projects

Contribution of Change Management Contribution ► ► Benefits Presence at Steering and Management Committee meetings Working closely and coaching the project team, trainers and business people involved in projects ► On-going visibility of change management achievements and risks ► Greater responsiveness from Executives resulting in more effective resolution of risks ► More cohesive team, better able to identify and address change management issues ► Building change management capability within the organization ► Development and execution of change management and communication plans ► Managers and End Users better informed and ready resulting in smoother transition ► Reacting quickly to the unexpected and developing appropriate interventions as required ► Ability to recover quickly from the unexpected and obtain the support required, thus minimizing the negative impact on the project and the people ► Planning and coordination of training ► Quality training including material minimizing productivity dip ► Smooth delivery of training ► End-users trained before go-live CAE Inc. Confidential and/or Proprietary Information 26

Contribution of Change Management Not Just From My Perspective ► Top Executives now believe that big system implementation can be successful and are asking the Fusion team to take on additional projects ► CIO is looking how the whole IT organization can benefit from the Program and Change Management expertise residing within the Fusion project ► Other groups outside of IT are asking for the Fusion group to oversee Project and Change Management for their projects ► Fusion Change Management team is asked to share their methodology and tools with other groups within the organization CAE Inc. Confidential and/or Proprietary Information 27

My Advice to You ► Start thinking about (and working on) change management at the very beginning of the project ► Don’t forget about the strategic aspect of change management ► Know your organization and be realistic about the challenges – ignoring them doesn’t make them go away ► Make the business accountable for the success of the project and for achieving the benefits ► Know your people and quickly involve those who will make it happen ► Get some expertise in change management and specifically in ERP or large system implementation ► Don’t underestimate the level of effort required – it’s hard work and there’s a lot of it – so put adequate staffing in place ► Integrate change management activities in the project plan ► Invest in communications – people, events, website, newsletters, posters, mementos CAE Inc. Confidential and/or Proprietary Information 28

CAE Fusion Project Contribution of Oracle Change Management Services

Contribution of Oracle OCM ► Oracle included OCM as part of their solution ► Strong methodology and pre-formatted tools for accelerating the work ► Experience with Oracle implementations ► A team of experienced change management specialists that integrated quickly and efficiently with CAE project team ► Key organizational risks were clearly identified before the start of the project by Oracle’s OCM lead during Wave 0 (Oracle Insight program) ► Provided good insights in establishing links between challenges inherent to ERP implementation and the organizational CAE Inc. Confidential and/or Proprietary Information 30

Contribution of Oracle OCM ► Strong leadership and high involvement from Oracle CM leader during the initial planning and kick-off of the project § Quickly organized all communications in order to properly jumpstart the project § Quickly planned the work allowing us to be proactive rather than becoming reactive § Availability of OCM Leader throughout the project ► Demonstrated great flexibility in working with the internal change management specialist hired partway through the planning phase § Played a leadership role in key activities such as readiness assessment and job impact analysis § Hands-on contribution for the execution of the change management and communication plan CAE Inc. Confidential and/or Proprietary Information 31

Future with OCM ► Leveraging the work done during the initial phase of the project and making it part of all new initiatives ► Even if we have internal expertise, it is still relevant to involve Oracle for their specific knowledge in § Readiness Assessment § Job Impact Analysis § Post go-live surveys ► Leveraging the advantage of being an external specialist that is more objective § Recommendations may have a better reception § Ability to obtain more honest information from managers and end users ► Future decisions will be based on the projects and level of risks involved CAE Inc. Confidential and/or Proprietary Information 32

CAE Fusion Project Open Discussion