27 June 2008

Who Does What? - #1

ERP implementation or upgrade projects, in many ways, have a life of their own. While the team members may report to accounting, sales, procurement, receiving, or a warehouse for their daily work, they become separate from those departments when they join the project team. Yet, it is extremely important that the project continues to be part of the overall organization and aligned with the corporate strategy. To ensure that this occurs, an umbrella organization is created - the PMO or project management organization. Effective PMO groups assist communication between the project and the organization as a whole. The PMO also helps the business process and training team by removing obstacles and facilitating communication among the client subject matter experts, the functional and technical consultants, and the BPTT team members. Who are the individuals that comprise the PMO?

  • Project Sponsor
  • Steering Committee
  • Program Manager
  • Workstream or Track Leads
  • Key Stakeholders

Project Sponsor

The Project Sponsor, typically a Senior Executive, provides the top management support required to see the ERP project to completion. Not only does he or she gets approval for the project scope, timeline and budget, but ultimately is held responsible for the project’s success. Necessary skills include the ability to navigate the politics across company departments, key external stakeholders, and fellow executives. The Project Sponsor’s activities do not amount to a full-time role, but depending on the size and complexity of the project, this role may consume 25% to 75% of his/her time.

The Project Sponsor also provides guidance to the project team on strategy, direction, and issue resolution at a more hands-on level than is possible for the Steering Committee (see below). In conjunction with the Project Manager, project sponsors may have responsibility for managing external suppliers and negotiating internal resources. The Project Sponsor is also the second point of escalation with respect to significant project issues. Although the Project Sponsor may have the authority to resolve these larger issues alone, these decisions are typically ratified with the Steering Committee before distribution to the project team.

Steering Committee

Every ERP project requires senior level sponsorship and buy-in across the company. Done properly, Steering Committees give senior management the ability to oversee the project progress and in doing so, help garner their support and increase their understanding. Steering Committees typically meet monthly and review project progress, provide overall project guidance, and provide positive, visible support to the organization for the project. They ensure the implementation is consistent with both the strategic and technical business goals and they resolve major business policy issues and internal conflicts that impact the project. The Steering Committee also helps manage project scope and approves all scope changes impacting funding, timing, and project risks. They set overall goals, milestones, and performance criteria and secure and maintain resource commitments for funding and personnel.

Project Manager

Just as every ship needs a Captain, every ERP project requires a part to full-time Project Manager to direct the day-to-day activities. Working under the guidance of the Project Sponsor, the specific responsibilities of the Project Manager include:
  • Developing and maintaining the project plan, including milestones, checkpoints, and deliverables
  • Establishing the project team and project resources
  • Monitoring and reporting the progress and status of project activities
  • Managing project resources to see that all tasks are assigned to an appropriate resource
  • Leading status meetings with the overall Project Team, Track Leads, Management, and the Steering Committee
  • Resolving implementation issues, escalating as necessary to Project Sponsor and Steering Committee

Track (Workstream) Lead

Most projects of any size require multiple levels of management. The Project Manager manages the overall day-to-day activities for the entire project, but in the example of larger projects impacting multiple functional areas or multiple business processes (sometimes called workstreams), Project Track (or Workstream) Leads manage the day-to-day progress of each specific area. Project Track Leads can do much of the heavy lifting, with up to 75% of their time allocated toward detailed project work as opposed to managing the track. However, the larger the project, the more management takes precedent over specific project work effort.

The Track Leads ensure that project activities within a track are worked through to completion and on schedule. The Track Leads share responsibility for coordinating project activities with other team members, meeting with other members of the project team as needed to resolve issues, completing deliverables, communicating status, and escalating issues as necessary to project management. Each Track Lead is also responsible for specific deliverables in his/her area of expertise.

Key Stakeholders

What about Key Stakeholders? Stakeholders are organizations or groups internal or external to your company who have a positive or negative interest in the outcome of your project and may influence the success or failure for the project. Internal Key Stakeholders for an ERP implementation or upgrade project include the respective department heads (Procurement, Logistics, Manufacturing, Finance, etc.) or if your company is organized around business processes instead of functional departments, the executives in charge of Procure to Pay, Record to Report, Order to Cash, Supply Chain Planning and so forth. External Key Stakeholders usually include your audit firm, customers, suppliers, or other groups not in direct employment by your firm.

Ultimately your Key Stakeholders decide whether or not the project is a success. For example, if you implement your project on time and on budget, but the key users of the project (which are usually represented by your key stakeholders) hate the results, face it, the project is a failure. They may even sabotage the new business processes and related ERP Systems in an attempt to return to the old way of doing things. If the Key Stakeholders are your customers they may go to your competitors instead of using the newly implemented ERP System. Given the potential to determine success or failure they should be involved early in the definition and approval of the project. And as projects do not progress in a linear fashion, the expectations of the stakeholders must be continuously be realigned with the project progress.

Critical Success Factors

What factors make or break a project? How can the above PMO members help or hinder the outcome?
Too many times PMO sidesteps its basic objective for getting obstacles out of the way for the team members actually doing the work. Instead you may find the following issues, mistakes, and hidden agendas:
  • How can this project help my career or bonus or recognition?
  • If the project is going badly, can I blame someone else?
  • Nevermind the facts, why can’t that task be done as planned?
  • Or no the project is not under-resourced, we planned it that way. You just have to work weekends and overtime to get it done.
  • We need a new ERP system and the IT (information technology) project team will drive new business processes
  • I’ve always used that third-party provider as my PMO advisors. So what is they do not understand the underlying technology, project risks or related business process areas?
  • Why communicate to our suppliers or employees or customers? They are not part of the project team.
  • I’ve heard about this new method for running projects. Lets do it on this project starting immediately.
Does any of the above sound familiar? Here are some project success factors common to all effective projects:
  • Project objectives aligned with the company’s business strategy.
  • Strong project leadership with well-defined project plans.
  • Project tasks, resourcing and timelines agreed across the Project Management Organization.
  • Project Sponsor, Steering Committee, Project Manager, and Track Leads, with:
    • Common goals and objectives across the project team, supported by the Steering Committee.
    • Having communication strategies in place for both within and outside the project with regular communication to sponsors and stakeholders.
    • Commitment by all project team members, PMO and Key Stakeholders to the project.
    • With the ability to quickly spot and resolve issues; having decision-making capability.
So how would you set out to organize your project to avoid these mistakes?

20 June 2008

Observations About ERP Implementations and Upgrades

Since my March 2008 post, several of us have begun work on a book about business process transformation and training. It’s exciting actually to start collecting in one, single place all the different observations and lessons we’ve experienced over the years. We have agreed on the topics we plan to cover. We have a schedule, and hope that we can keep it despite the reality that all of us have paying jobs for which we are responsible. Finally, it was also decided that I would share snippets of our thinking here. The notion is that some of you might have input, comments, or feedback about what we are saying.

Whose Idea Was It, Anyway?

The idea of a book about business process transformation and training (BPTT) is the outgrowth of numerous discussions with clients, conversations with peers, research, and over 60 years’ collective experience consulting with organizations that are working to achieve better business functions, and, ultimately, sustain a competitive advantage. Throughout all of these activities, we discovered that we had some observations that have become conventional wisdom at FMT Systems.

Observation 1: A process that is defined poorly with no “buy in” from the affected stakeholders cannot be automated.

Observation 2: Business process transformation is about better customer interactions, improved efficiency, and superior decision making. It is not about software.

Observation 3: Employees will not embrace or learn new software, especially an ERP system, without understanding the business reasons and rules, as well as the processes, which drive it.

Observation 4: Once started, business process improvement is an integral part of all organizational programs that seek to increase competency, i.e., Lean Initiatives, activity based management, Total Quality Management, Business Intelligence Competency Centers, and Learning Organization programs, to name just a few.

Observation 5: Too many ERP implementations fail to achieve their potential and, as a result, fail to recoup the monies invested. Although there are many reasons for this, the key failure for many ERP projects is lack of project communication among the participants and with its shareholders and customers.

Observation 6: Unless the CEO and CFO are openly and completely committed to the success of the project, it will, without a doubt, fail! This one came from a colleague who reminded me that I had told him this very thing when he was the CFO of a manufacturing company considering an ERP implementation.

Do these ring true for you? What have you observed during your organization’s ERP implementation or upgrade?

In the coming weeks, I will post additional snippets from our discussions on methodologies, tools, insights, and case studies, as we continue our work on the forthcoming book. Perhaps these posts will assist you in finding your way through the business process transformation and training maze associated with ERP upgrades and implementations. I hope you enjoy this sneak peek at our work in progress and look forward to your comments.

18 June 2008

When Companies Focus On Technology

The April Baseline magazine was sent to the office a while ago. I was finally able to carve some time to read it. For those of you who are unfamiliar with this magazine, it is published by Ziff Davis and its audience is senior IT professionals, i.e., managers, directors, IT/IS vice presidents, and CIO's. In its April issue, Baseline's cover story is about Symantec's ERP recovery.

This is an illuminating discussion about what can happen to an organization when it focuses on technology, rather than customers and business processes.