TriFinance organized a seminar about the do's and don'ts of an ERP implementation.

1. ERP DO’S AND DON’TS
24 April 2014
Serge Vigoureux Saskia Van Kerckvoorde
Dries Van Avermaet Luc Dekimpe
Nick Van Maele

2. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
process analysis 15’
software selection 15’
standard ERP versus customizing 15’
data conversion 15’
importance of good design (video) 10’
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 2ERP do’s and don’ts

3. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 3ERP do’s and don’ts

4. TriFinance | Management Information & Systems
24 April 2014 page 4ERP do’s and don’ts

5. ERP key note
• ERP projects in real life
• Tips & tricks
• What if the system is already live?
24 April 2014 page 5ERP do’s and don’ts

6. A typical ERP project
Some
persistent
business
problem
oops!
Sudden issue is wake-up
call for action
“Need
new
software!
Quick!”
“This is the
perfect
tool”
“Let’s go
go go!”
“No time
but IT is
working
on it.”
oops!
a few months + a lot of money
“This is not
what we need.”
24 April 2014 page 6ERP do’s and don’ts

7. Typical mistakes
Not tackling a
business problem
directly
Believing that
software will solve
your problem
Software selection
without company
& IT strategy
Software selection
without thorough
investigation
Too little business
input
Good operational
people get massively
overloaded with work
Some
persistent
business
problem
oops!
“Need
new
software!
Quick!”
“This is the
perfect
tool”
“Let’s go
go go!”
“No time
but IT is
working
on it.”
oops!
24 April 2014 page 7ERP do’s and don’ts

8. ERP challenges are harder than they appear
DESIGN
PROJECT MANAGEMENT
unclear priorities
translating business to IT
solutiontoocomplex
ADAPTORGANISATION
INTEGRATE PROCESSES
RESISTANCE
skilllevels
breakdownsilos
tackling problems at the root
underperformers
CULTURE
data quality
workload
support
LEADERSHIP
COMMUNICATION
software selection
responsibilities
incentives
testing
LINK TO STRATEGYERP EXPERIENCE
BUDGET
projectduration
expectations
24 April 2014 page 8ERP do’s and don’ts

9. Important aspects of ERP projects
Initiate
& Plan
Analyse
& Design
Build
& Test
Implement
Hyper-
care
Operate
& Close
Project Management – Governance; Project plan; Budget; Follow-up; Project reporting; Issue management; ...
Change Management – Stakeholder dialogue; Communication plan; Buy-in; Resistance; ...
Training – Training end users in new mind-set, new processes & new tool(s)
Functional – Business expert team; organisation; roles & responsibilities; design; testing; issue escalation; …
Systems – Vendor relations; Relating to internal IT team; IT strategy; IT architecture; tools; interfaces; data; ...
Support Organisation – Preparing additional support for go-live period
Phases
Workstreams
Reporting – Management reporting needs; impact on design; flexible data models; relating ERP to BI
24 April 2014 page 9ERP do’s and don’ts
GO-LIVE

10. Tips & tricks
• Processes & people first
– The system does not solve everything
• Business in charge
– IT much needed for technical aspects
• Realistic budget in Euro / man-days / duration
– less people available   more workload than you think
• Change management
– Communication; Dialogue; Involve people
• Embedding continuous improvement
– Project does not stop at go-live
24 April 2014 page 10ERP do’s and don’ts

11. If a live system has problems
• Do not panic & take it step by step
• Step 1 : Quick Scan ~ few days of work
– get a specialist to map out all issues
– Holistic view: business / people / IT / culture / data / ...
• Step 2 : Agree priorities & plan ~ few weeks of work
– Priorities mostly from a business perspective
– Realistic estimates for the plan ( requires experience)
• Step 3 : Deliver step by step
– Stabilise each result prior to taking next step
24 April 2014 page 11ERP do’s and don’ts

12. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 12ERP do’s and don’ts

13. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
process analysis – Saskia Van Kerckvoorde 15’
software selection 15’
standard ERP versus customizing 15’
data conversion 15’
importance of good design (video) 10’
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 13ERP do’s and don’ts

14. Opportunity / problem statement
– The system does not work
• How can the system be improved
• Do we need another system
– We need a system
• To move towards automation and reduce the manual
interaction and creation of transparency and visibility
• Innovation – do more with less
24 April 2014 page 14ERP do’s and don’ts

15. Situation description
Some facts:
• Case 1 : Post-merger integration of 2 SME’s
– Construction industry
– 2 small organizations merged about 1 year ago
– Assessment and optimization of currently used ERP system
• Case 2 : Automation of core business process
– Facility management industry
– 10.000 workers / 300 first-line operations managers
– Implement a system that automates core process : sign contract with customer
 plan and provide services  bill customer
24 April 2014 page 15ERP do’s and don’ts

16. 24 April 2014 page 16ERP do’s and don’ts

17. The road to the solution…
• Customers suggested approach
– Look at my system and tell me what is the solution
• TriFinance approach
– Step 1 : Interview some key stakeholders
– Step 2 : “As Is” Processes and systems
– Step 3 : “To Be” Processes and systems
24 April 2014 page 17ERP do’s and don’ts
Interviews
As-Is processes
& systems
To-Be processes
& systems
Func & tech
requirements

18. “Do” look at your system and processes
• Why look at your business from a 'systems & processes' point-of-view?
• Business runs on systems, systems run through processes
• Optimum system performance is nearly impossible with flawed or
inefficient processes.
“If you can't describe what you are doing as a process,
you don't know what you are doing.”
W.E. Deming
24 April 2014 page 18ERP do’s and don’ts

19. “Do” focus on the “added value” processes
• Conclusions from interviews
– Core problem not solely related to systems
• Unclear roles and responsibilities
• Communication
• A lot of rework (inefficiency)
– Basis for scope of project and “As Is”
• Conclusions and results from “As Is” processes
– No standard process across the organization and individualized processes
– Unclear roles and responsibilities
– Awareness and acceptance of “pain points” and “best practice”
– Basis for the “To Be processes”
24 April 2014 page 19ERP do’s and don’ts

20. Resulting into “To Be” processes
• “To Be” processes
– 6 processes optimized to 2 process flows
– Clear roles and responsibilities
– Organization wide validation and buy-in
– Change Management
– Basis for functional and technical system requirements
24 April 2014 page 20ERP do’s and don’ts

21. Processes – People - Tools
People
Process
Tools
People without
process is “action
without effectiveness”
NOT efficiency
Tools enhance
efficiency but not
effectiveness
Processes without
people is “paper
and ink”
24 April 2014 page 21ERP do’s and don’ts

22. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
process analysis 15’
software selection – Luc Dekimpe 15’
standard ERP versus customizing 15’
data conversion 15’
importance of good design (video) 10’
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 22ERP do’s and don’ts

23. Steps in selection decision process
• Case : semi-public company
– existing systems not flexible / lot of customizing
– weak reporting / not process driven
• Detail of desired improvements as is  to be ?
• processes
• functionalities (e.g. reporting, dimensional structures)
• Specified requirements to define and to draft
• Important document for blue print once implementation starts
24 April 2014 page 23ERP do’s and don’ts

24. Steps in selection decision process
…
Decision criteria
Start
implementation
Assessment offer,
references, gaps...
Start
implementation
24 April 2014 page 24ERP do’s and don’ts
Functional & Technical
Requirements
Request for
Proposal (RfP)
First
offer
Discussion &
negotiation
Best And Final
Offer (BAFO)
Proof of Concept
demo (PoC)
Decision
Start
implementation
Design …

25. Selection criteria for partner and software
• references (check, relevancy, feed-back)
• proposed implementation and project plan
– (days, approach, impact internal organization, team software provider ...)
• licence granularity
• licence price and maintenance fee
• implementation fees (consultancy)
• impact on internal IT
• degree of customizing versus standard functionalities
• reliability of partner
• ...
24 April 2014 page 25ERP do’s and don’ts

26. Proof of Concept (PoC)
• Always include a Proof of Concept (PoC) scenario in RfP
– proof of concept test should last +/- 4 hours
– keep master data simple / focus on core processes
– describe clearly and step by step the transactions you want to
‘see’ based on well defined data
– all participants evaluate PoC at end of session
– materiality is crucial in PoC
24 April 2014 page 26ERP do’s and don’ts

27. Proof of Concept (PoC)
• Make score card to evaluate the PoC outcome
– by topic / domain
– with weight importance by domain and topic
– separate input from every participant  global consensus
• PoC gives flavour of expertise and skills of implementation
partner
24 April 2014 page 27ERP do’s and don’ts

28. Example score card PoC
150 113,2 PoC gewicht van de geteste items
75%
Weging Score Criteria # X op 10
20 15,3 1. Demo kwaliteit 11 84 Dit betekent : 84/110 = 76%
13% 76%
Opbouw van de PoC demo 2 8
Software Expertise van het presentatie team 3 7
Funktionele POC expertise van presentatie team 2 6
Integriteit en attitude 1 10
Tijdsduur 1 9
Inhoudelijke kwaliteit 2 8
30 22,3 2. Gebruiksvriendelijkheid 7 52
20% 74%
65 49,5 3. Funktionaliteiten 26 198 Verwijzing naar RFP
43% 76%
20 15,6 4. Technisch 5 39 Verwijzing naar RFP
13% 78%
15 10,5 5. Lastenboek compliance 6 42
10% 70%
24 April 2014 page 28ERP do’s and don’ts

29. How to score BAFO
• PoC: use score card
• Scoring price: lowest offer = 100 = max points
• Scoring project plan, references, … : use appreciation level
+++ / ++ / + / = / - / - - / - - -
points depend on weight of criteria
24 April 2014 page 29ERP do’s and don’ts

30. How to score BAFO
• each selection element has % impact on total score
POC
PRICE licences
PRICE implementation
REFERENCES
PROJECT PLAN
OTHER...
Example :
24 April 2014 page 30ERP do’s and don’ts

31. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
process analysis 15’
software selection 15’
standard vs customizing – Dries Van Avermaet 15’
data conversion 15’
importance of good design (video) 10’
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 31ERP do’s and don’ts

32. Customizing versus standard…
• Difficult decision to make in any ERP system implementation
• Most customizing decisions are being made under time pressure after
or late in the design phase  not a well thought-through decision
• Best practice is to identify gaps during demo or design phase
– business needs  standard functionality available
• For changes after Design phase: install change request process!
• Not all customizing is bad…
but usually a standard solution is possible
24 April 2014 page 32ERP do’s and don’ts

33. Make cost-benefit analysis
• Customizing = significant impact on short and long term
• Resist making decisions under time pressure
• Make cost-benefit analysis with IT and business elements
Benefits:
– Process efficiency and elimination of manual (re)work
– Shift from transactional actions to value added actions
– Increased management reporting transparency
Costs :
– Development, test and possible rework (do not underestimate!)
– Maintenance and/or rework during future system upgrades
24 April 2014 page 33ERP do’s and don’ts

34. Case – textile production automation (1/3)
• Multinational production company implementing a global ERP in
Belgium and China
• During design phase became clear that the standard ERP production
functionality did not fully cover the different business needs from
sales, management reporting and production quality control :
– Business specific decision logic for end product quality could not
be covered in the ERP
– High number of system transactions had important impact on
costs and could lead to increased financial risks
24 April 2014 page 34ERP do’s and don’ts

35. Case – textile production automation (2/3)
• Approach taken was to integrate all different business needs
in an integrated customized solution, based on the standard
ERP functionality :
– Triggered by standard confirmation system transaction
– Automated algorithm to decide on product quality based on
product classifications and parameters
– Automatic downgrading and material transfer postings of inferior
quality products (and related financial consequences)
• Main benefits :
– Production process automation and elimination of manual errors
– Business logic embedded in system
– Increased financial transparency on sales margins
24 April 2014 page 35ERP do’s and don’ts

36. Case – textile production automation (3/3)
• Decision to customize was taken based on the positive cost-benefit
analysis
• A phased approach was taken
• Phase 1:
– Customized solution being developed and tested in Belgium
– In parallel, the china companies were implemented on the standard ERP
flows. This allowed the organisation to gain experience with the new
system
• Phase 2 - planned:
– Customized solution will be rolled out in China after implementation in
Belgium
24 April 2014 page 36ERP do’s and don’ts

37. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
process analysis 15’
software selection 15’
standard ERP versus customizing 15’
data conversion – Nick Van Maele 15’
importance of good design (video) 10’
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 37ERP do’s and don’ts

38. Data conversion challenges
Initiate & Plan • Underestimating required budget & resources for data
Design • Not seeing that 20% exceptions will be 80% of problems (costs)
Build & Test
• A lot of other work next to cleansing – who will do it?
• Do cleaners understand what is required?
• Dummy test data & training data are also needed…
• Sheer workload of cleansing
Implement
• Data have changed: re-convert everything quickly and
correctly
• Sequence of loading data
• What if data do not load? Plan B?
• Who has time to load and solve errors?
Hypercare
• Who is checking operational data quality?
• Keeping up with demand for master data creation
24 April 2014 page 38ERP do’s and don’ts

39. Some real life stories…
• Marcel on a Friday afternoon
• Could you come help us with the go-live?
• What is a customer?
24 April 2014 page 39ERP do’s and don’ts

40. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
process analysis 15’
software selection 15’
standard ERP versus customizing 15’
data conversion 15’
importance of design – Troyka Vervaeke 10’
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 40ERP do’s and don’ts

41. Importance of good design
Troyka Vervaeke, Finance manager, Vlerick Business School
testimonal Troyka Vervaecke
24 April 2014 page 41ERP do’s and don’ts

42. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
Q & A 10:10 – 10:30
Reception 10:30 - …
24 April 2014 page 42ERP do’s and don’ts

43. contact details
serge.vigoureux@trifinance.be
TriFinance Director MI&S - Management Information & Systems
www.trifinance.be
TriFinance controllers community
24 April 2014 page 43ERP do’s and don’ts

44. Agenda
ERP key notes 08:30 – 09:00
Case studies 09:00 – 10:10
Q & A 10:10 – 10:30
Reception 10:30 – …
24 April 2014 page 44ERP do’s and don’ts

45. Thank you
Speakers
Troyka Vervaeke – Finance Manager, Vlerick Business School
Saskia Van Kerckvoorde – MI&S Manager, TriFinance
Dries Van Avermaet – MI&S Manager, TriFinance
Luc Dekimpe – MI&S Manager, TriFinance
Nick Van Maele – MI&S Manager, TriFinance
24 April 2014 page 45ERP do’s and don’ts