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Enterprise Reporting Solution - SAP
Change Management & SAP
SAP Business One
mySAP All-In-One

Change Management & SAP

An ERP Implementation Statement

Click on the icon opposite to download the full 'ERP Implementation White Paper' 

 Why State of the Art Information Systems?

Integrated software systems have been around since the seventies, usually of the modular variety. Companies have been able to install combinations of desired modules and interface them to legacy systems, write add-ons, or customise the software to fit specific company needs. Since this time, systems have been viewed as a series of interrelated modules, much in the same way as businesses have become increasingly compartmentalised.

Most of these systems were thought of as integrated because each of the business functions was included and updates between modules were affected.  In fact, most applications were only interfaced to whatever legacy systems were retained and to each other. The difference between integrated systems and interfaced systems is basically that with interfacing, data is necessarily duplicated between systems. As such, real time updating is not always available and data sources can become confused. With so many integrated systems around, databases and communications proves to be the challenge, while in tandem, PC-based subsystems were and still are being used to patch problems left by incomplete functionality of systems. This effectively results in more duplication and new systems producing mountains of information with spreadsheets and database systems. The results are too often that information is limited to the departments who generate it. Management information, used for decision-making, is culled from a variety of sources, such as mainframe and PC-based, and then re-manipulated. This results in a “management information system” based upon anecdotal business data.

The emergence of client-server technology has now accelerated the stampede towards greater data and “information islands”, with a serious consequence; users can not only run “company” systems but continue to run ‘complimentary’ systems and share data and programs with other complimentary systems. With these enormous amounts of information and data being expressed in new ways, companies have become overwhelmed with data based points of view. Unfortunately a key factor in all of this and the systems promoting the new direction is the neglect and ultimately the need to maintain data integrity. Additionally and more to the point was the fact that data flow has not necessarily lead to information flow. Remember data becomes information when it enlightens or instigates action.

Only recently has the true concept and understanding of workflow begun to truly emerge as the focal point of new systems supports. Workflow allows for a smooth business path that incorporates, both, information and action, a way of working that cuts to the profitable chase. 

Are You Ready for ERP & SAP?

There has been much written on the subject of ERP and especially SAP, with some positive and a lot of negative issues being raised. However cutting through the smoke of the hearsay and opinions in search of what is true and untrue is one of the critical issues that companies face in trying to ensure a successful implementation. No matter what companies look for or endeavour to achieve through the implementation of an ERP system, especially SAP, one thing is certain and that is a lot of pain goes into implementing these systems. But it is also recognised that a company can LEAP into the future if the implementation is wisely rendered.

The following table gives an understanding to implementing an ERP system such as SAP R/3 over a classical software implementation, such as legacy systems and to some degree, SAP R/2:

Yet, there are alternatives to implementing new ERP systems, as companies still investigate the options in having:

1. All homegrown systems.

* Non-realistic in these advanced data and information systems times.

2. Legacy Systems + Packages + Interface.

* This is what 99% of the business world has chosen or been forced into by circumstance. Individual packaged software with high performance can be very desirable for specific applications.

3. SAP + Packages and/or Home-grown + Interfacing.

* The impetus for such a mix is either 1) prudence, in which the implementation must be of the roll-out or the phased variety, or 2) politics, in which a given business sector prefers to use another package and wins.

However, whatever choice is made a ‘modern information system’ is one that reflects clear-minded, results-oriented, business process reengineering. Unfortunately not all systems are capable of adequately supporting new business processes.

SAP R/3

SAP should be implemented for a reason, a clear, visible, measurable reason that can be communicated throughout an enterprise. As a company goes through the agonies of choosing and ultimately implementing a new system there is one thing that must be constant VISION.

• A vision that is not shared will not be realised.
• A Vision that is cloudy will give cloudy results.

Traditionally, systems projects are undertaken for business reasons: manual operations and flows require automation because of rising volume; legacy systems are outdated and/or non-supported; management information is needed so the company can be properly steered. Just as business has drifted, IS has come through with one result or another, which may or may not be linked to the business drivers and processes of the company. Unfortunately by the time ‘the system’ is in place, the compelling reason for that system has shifted or been lost entirely.

For a  SAP implementation to truly succeed, there must be one clear, shining, intelligible, communicable, and measurable reason. Furthermore, if everyone in the enterprise has a clear idea of the reason behind an SAP implementation:

1. Resistance to the project will be undercut;
2. business processes will adhere to one vision rather than several;
3. modifications to SAP will be less likely;
4. employees will want the implementation to succeed.

 Is SAP the right one?

There are many horror stories about SAP Projects, which have failed, and although there may be many reasons why, in short, these companies were lacking a critical event.

A critical event is a compelling, overriding reason to do so, and essentially there are two types of critical events that will give a company a reasonable shot at successful implementation:

a)      Survival:

·        Needs to catch up to the competition, as failing companies do not cling to traditional methods.

b)      Declaration of Intent - Visionary with Power:

·        In this instance both elements, vision and power, are mandatory.

·        The visionary must see clearly the benefits of SAP and have sufficient power to overcome:

i.      Company resistance

ii.      Decision knots

iii.      Bottle-necks

iv.      Time Lags

v.      Radical Change Decisions

It is essential to understand that in any SAP R/3 implementation and in fact, any other ERP solution, ‘critical decisions’ will have to be made (and supported) by someone with authority to back them up. Additionally ‘radical change’ to business processes does not lend itself to compromise or halfway measures.

WHY?

·        People’s positions are at stake.

·        Career paths can be altered.

·        Mini Kingdoms will be levelled.

·        Vertical data flows are either squashed or balanced with horizontal data flows.

There is a lot of pain associated with an SAP implementation and it will only succeed if people and the company are prepared to embrace it. Remember the ‘old adage’: Companies that need change the most are the companies that resist change the most.

The obstacles to an SAP implementation are as natural as: Office inertia, force of habit, turf protection, fear of change, and (wilful or involuntary) ignorance. This is even more evident when a company has been through this before and endured an element of or total failure.

It seems SAP and other ERP solutions do fail, but there are signs to look out for which, if avoided or controlled, can assist in an overall successful implementation:

1. Top Management: if they are weak, uncoordinated or divided on which business processes to change – “hold-off” the project….

2. Impetus: if the impetus behind an implementation does not come from the top with a business vision – there is little chance of success….

3. Divisions & Departments: if divisions, departments and business elements are highly independent or “free-wheeling” – resistance to SAP and other ERP solutions could derail the project….

4. Nature of Business: make sure the nature of business falls within the application suite offered by the vendor….

5. Expectations: if management or line staff expectations are for a ‘quick fix’ – reconsider the project or the implementation plan….

6. Business Process Drivers: if the IS drivers and legacy systems begin to take over the project and business processes take a ‘backseat’ – reconsider the project….

7. Bureaucracy: if committees and teams become the focus of the project – remap the implementation plan.

 Remember SAP is really:

 BPR + Configuring + Change Management + Training

and not:

Installation + Enhancements + Interfacing & Training

 Finally orientate yourself to the vendor’s product and the process of implementation.

HOW?

• Establish a Visionary with Power.

• Eliminate committees and establish a direct line of power.

• Maintain a high threshold level of pain.

• If redundant, eliminate legacy systems as soon as possible. These can duplicate systems, processes and tasks and slow the project down.

ORIENTATION?

Adequate orientation will reduce confusion as to project aims, reduce subsequent consulting costs because the consultants won’t have to spend half their time telling your staff what the project is about, reduce implementation timescales because key players will start out on the same page, and reduce aggravation, which, by itself, is worth the cost.

• Establish three levels of orientation:

1. Level 1: C Level – CEO, CIO, CFO

2. Critical Success Staff; those who will make it work

3. IS Staff: These are the people who will glue it together.

• Establish and stick to a Decisive Path for the implementation by using three elements:

1. Education / Change Management

2. Critical Path

3. Technical Track, and apply these to the various phases, such as:

• Planning

• Development

• Implementation & Conversion.

To ensure success early the company must establish the following:

• A Visionary with Power

• Orientate the senior management, i.e. C Level (CEO, CIO, CFO etc.) through workshops and training

• Establish a communication line for the Executive Level to impose support for the project to all staff throughout the organisation.

Ensure a Continuous Business Improvement Cycle is understood. For example, as needs arise and the performance of the current system is found wanting, the company will find it advantageous to re-engineer the business processes that were the model of the initial implementation and reflect changes in the SAP R/3 configuration. This would certainly apply to an upgrade situation such as SAP R/2 to SAP R/3.

Furthermore, to ensure that the Continuous Business Improvement Cycle is successfully used in business process re-engineering, methodologies such as the Diamond Methodology should be used in parallel.