Bancroft Ch6

The case of Battco • •

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Two weeks on average to enter, process and fill orders Order entry people did not have rapid access to product information and delayed the customers Lost orders The process was complex, sequential and slow

Chose SAP as their software vendor

Challenges • How the duties between the sales force and the order entry clerks should be reallocated? • Battco’s decision: – Maintain a sales force who spent time with its customers and learned their business.

• How to handle orders? Should the sales people enter them online using portables? • Battco’s decision: – Put the product, customer, and A/R information online, and train the order entry people to manage the orders

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Challenges in the implementation process 1.

2. 3.

Convince the sales people to structure and report the information they had received about their customer’s changing requirements Educating the order entry people The finance manager felt that the information which she was responsible for should not be available to people who did not understand it or its security requirements. She was also concerned that a portion of her job would be out of her control

Battco project team structure Steering Committee

Project Leader

Technology

Finance

Sales

Order Entry

Manufacturing

Sales Force

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Nine Critical Success Factors 1. 2. 3.

4. 5.

6. 7. 8. 9.

Understand your corporate culture in terms of readiness and capability for change Begin business process changes prior to implementation. Make the hard decisions early and stick to them. Communicate continuously whit all levels of new users in business, not technical, terms. Set reasonable expectations. Then communicate again. Provide superior executive championship for the project. Ensure the project manager is capable of negotiating equally between the technical, business and change management requirements. Choose a balanced team Select a good project methodology whit measurements Train users and provide support for job changes. Don’t forget the project team. Expect problems to arise: Commit to the change.

Understand your corporate culture • Both readiness for change and the capability to make that change must be present for success in choosing the right technical/business solution and implementing it. • Time and increased understanding, particularly of the opportunity to change and the cost of not changing, will help increase readiness. • The more change involved, the greater the potential implementation challenge will be. • Excellent project leaders prepare for a change effort by understanding the degree of difficulty they face. • Don’t underestimate the complexity of the initiative!

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Begin process changes first • When using the implementation of R/3 to identify the changes in business process it is useful to engage in a brief business redesign effort prior to engaging in implementation. • Design the reengineered organization concurrently with the design of the SAP R/3 system • Some companies prefer to carry out a redesign project prior to implementation • Steelcase project manager Diane Schwarz said: – ”We did the financial business process changes first, and they were significant. Then we used what SAP had to help firm up the design. Completing the conceptual level first was extremely helpful in our process”

• It is far greater cost and difficulty of changing the way a packaged system is configured after implementation than that of making the most informed decisions early

Communicate • Employees at all levels, who are affected by the new system, needs to be informed by a rigorous communications program • People need to be told several times about a change • Expectations must be managed: – Both too high and too low expectations will slow their ability to accept and fully use the system

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Provide superior championship • The difference between informal support and active leadership can be the difference between success and failure • Chuck Norlander ,director of human resources for Monsanto, says: – ”you have to develop a steering team. You have to teach them change management and the process of redesign and integration. Once they have been through a project, they accept the need to learn these topics”

Ensure the project manager is capable • The successful project manager: – Integrates concerns that would otherwise fall between the cracks – Communicates with all those involved

• Project manager needs to be sensitive to the three perspectives—technical, business and change management • Project manager needs to be sensitive to the impact of technology, business, organizational structure and individuals on the project as a whole

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Choose a balanced team • Provide the team whit clear role definitions • Expect to shift to nontraditional roles • At Battco the team included members of the IS, order processing, manufacturing, sales, and finance department

Select a good project methodology • Helpful to have a road map, even though you don’t always follow every step in the process you choose • Project leaders must: – Set out clear measurable objectives at the beginning of the process – and review the progress at intervals

• Realize that client/server projects are system integrations projects. Which means: – They are complicated and require attention to the implementation of the slightest change

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Train everyone • A new system inevitably means new ways of operating • Users must be informed as to the business needs for such changes as well as ”which keys to press when” • The project team also needs to be trained in – – – – –

The technology The business Basic communication skills Decision making Stages of team development

Commit to the change • Expect problems • It is natural that problems will arise in a project of the scale and complexity generally found with R/3 – The technical architecture may not be adequate – The requirement or scope may change – The users may revolt

• You never know what might happen – For instance, underseas cables line the ocean floor and are sometimes torn up by trawlers

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Unique aspects of R/3 project management 1. 2. 3. 4. 5. 6.

R/3 is not a silver bullet. R/3 does not support loose boundaries or gray areas. Customize, don’t modify R/3. Be sure your business fits within the limits of R/3’s flexible tables. When you’ve completed the R/3 training, you are only at the beginning. The project team must be both visionary and detail focused.

R/3 is not a silver bullet • It is costly and time consuming to become proficient • Experimentation is the best way to gain experience • If you set up a system one way, you may not be able to access some data in the way you want • You need to educate people from various branches of your business

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R/3 does not support loose boundaries • To understand the structural and policy decisions that must be made you need to spend time either: – prior to the beginning the R/3 implementation process – or in the first few phases

• Identify in detail the way you want your business to operate • Business process scenario are the most efficient way to test your hypotheses prior to implementation

Customize, don’t modify • Many companies can accomplish 80% of what they want by using R/3 • Thousands of choices • Only in special cases will unique software need to be written • Make limited or no changes to the R/3 software

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Be sure you fit within R/3 • R/3 may not support the business structure or information architecture you need • Companies have decided against R/3 because: – It does not track serial numbers on parts within its product – It does not provide the flexibility of distribution of its product to locations within locations – It cannot run a true 24x7 – The structure did not fit theirs

• Many companies have studied the system in detail and matched it against their business needs

Train is only the beginning • R/3 school will not teach your people everything about everything. • No one can be an expert in all modules • Class time depends upon the modules you implement: – Production planning (PP) module: 6weeks – Sales and distribution (SD) module: 4 to 5 weeks – 1 year to fully train a person in how to configure a major module

• Team members need to continue experiment in their own environment to fully appreciate what the system will and will not do, even with the best training approach • Multiple ways to achieve the same result • Choosing one option will block the ability to choose others

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Visionary and detail focused • Ideally, you should choose project team members who are in management or supervisory positions. – They must understand the details of business segment – They must be able to take the longer and broader view that will enable them to contribute to the definition of how the business might be. – They must experiment whit the system parameter to develop the screens and table entries that will best meet the new business requirements

Implementation Time Frame • The average implementation for R/3 is 9 to 12 months • Some companies have implemented in 4 to 6 months, by choosing the vanilla system approach: – No change to the system structure – Tables and function are primarily the standard ones provided by the software – Few interfaces and reports to add

• Some companies have taken up to 18 months to implement R/3 • For many companies it will take longer then anticipated to implement R/3

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Implementation Approach Choices • The first two choices any company must make upon choosing R/3 are: – Which modules to select – Where to implement them

• Most corporations choose to implement either: – A suite of modules (not the entire system) for a major business segment – All modules for a strategic business unit (SBU)

• Big Bang approach: – Implementing all modules for the entire company – Avoid this approach unless it is imperative for your company – It is a risky strategy

• Small Bang or pilot approach: – Choosing one of the smaller company and implement all the appropriate modules at once

Communicate to the user organization • End users will know little about the new system • It takes at least three occurrences before people begin to hear the message • Managers and supervisors must be told what messages to give and how to help people make the transition • The communications effort generally consist of: – Publications – Presentations – Other vehicles: • online messages • brief blurbs in the company newsletter • A video playing in the lunch room

• The message should come from the highest-level project sponsor, as well as the management chain responsible for the individuals

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Communication vehicles should cover the following points: • • • • • • • • •

Overview and rational for the company Explanation of the business process changes Explanation of the implications of these changes Demos of SAP R/3 Demos of applicable modules if possible Briefings of change management issues Establishment of individual’s contact person Testing of scripts and scenarios as they are made available Periodic updates

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