Session 7 Notes


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • SAP has also adapted with the changing business requirements. We began by providing high quality products with rich functionality and a solid technology infrastructure. We also providing strong services and support. We then turned our attention towards implementation leveraging our business partners and new tools to improve our implementation capabilities. In 1998 we introduced an industry focus to our solutions. Most recently we have introduced ValueSAP and which further increase the business value we provide to our customers. Consistent set of tools, content and methodologies to support whole life cycle of a solution Tools: IDES (link to web demo), Solution Map composer, Q&Adb/Diagram Explorer, IMG, RBE, Project Estimator Methodologies: Customer Solution Strategy (Evaluation), Accelerated SAP/Global ASAP (implementation), Continuous Business Improvement Content: Solution Maps, KPIs & Benchmarks, IDES, Pre-configured best Practices, Reference Model, Value Scenarios Programs: Team SAP, CCC, Review Program, Accelerated Solutions/Ready to Work
  • Not much is market facing Concern over Y2K at the top
  • Session 7 Notes

    1. 1. IS560 ERP - Session Number: 7 <ul><ul><li>Session Date: February 17, 2003 </li></ul></ul><ul><ul><li>Session Objectives: </li></ul></ul><ul><ul><ul><li>Administrative Items </li></ul></ul></ul><ul><ul><li>Session Topics: </li></ul></ul><ul><ul><ul><li>ERP Support for eBusiness (continued) </li></ul></ul></ul><ul><ul><ul><li>ERP Life Cycle Considerations </li></ul></ul></ul>
    2. 2. Enterprise Organizational Structures <ul><li>Organization structure & management style will impact ERP implementation effort. </li></ul><ul><li>Specialization is concerned with division of labor. </li></ul><ul><ul><li>As organizations grow in size and complexity, they tend toward specialization. </li></ul></ul><ul><li>Functional Specialization </li></ul><ul><li>Geographical Specialization </li></ul><ul><li>Product or Service Specialization </li></ul><ul><li>Matrix Structures </li></ul><ul><li>Hybrid Structures </li></ul><ul><li>Centralization vs.. Decentralization Management </li></ul>
    3. 3. Functional Specialization <ul><li>Advantages </li></ul><ul><ul><li>Professional expertise is enhanced </li></ul></ul><ul><ul><li>Because it is the traditional form and widely encountered, it is readily accepted by employees </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>May encourage narrow departmental interest to the detriment of overall objectives (known as sub-optimality) </li></ul></ul><ul><ul><li>May be difficulties in adapting to change e.g. geographical dispersal, product diversification </li></ul></ul><ul><ul><li>Narrow functional experience is less suitable as training for management </li></ul></ul>
    4. 4. Geographical Specialization <ul><li>Organization is divided up on a regional basis, and local management given responsibility for the activities of the region </li></ul><ul><li>Advantages </li></ul><ul><ul><li>On the spot decision making using local knowledge </li></ul></ul><ul><ul><li>Speedier reactions and better service creates customer goodwill </li></ul></ul><ul><ul><li>Some operating costs are lower e.g. transport, storage </li></ul></ul><ul><ul><li>The all-round experience is good training for managers </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Loss of control by head office </li></ul></ul><ul><ul><li>Problems of coordinating local activities </li></ul></ul><ul><ul><li>Duplication of some jobs </li></ul></ul>
    5. 5. Product or Service Specialization <ul><li>Frequently encountered in large organizations which have a wide range of services or products </li></ul><ul><li>Advantages </li></ul><ul><ul><li>Develops expertise in dealing with a particular product or service </li></ul></ul><ul><ul><li>Enables responsibilities to be clearly identified which may increase motivation </li></ul></ul><ul><ul><li>Diversification and technological change easier to handle </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Managers may promote their product or service to the detriment of the organization as a whole </li></ul></ul><ul><ul><li>Possible coordination problems and loss of top-management control </li></ul></ul>
    6. 6. Matrix Structure <ul><li>Concept developed from the aerospace and high tech industries </li></ul><ul><li>Project teams (each with designated manager) are combined with a conventional functional structure </li></ul><ul><li>Attempts to combine the efficiency and stability of the more conventional departmental and functional structure with the flexibility and directness of a project-based approach </li></ul><ul><li>Advantage </li></ul><ul><ul><li>Can increase motivation and helps in directing productive effort </li></ul></ul><ul><li>Disadvantage </li></ul><ul><ul><li>Conflicts over divisions of responsibility between project groups and functional heads, and over the way resources are allocated </li></ul></ul><ul><ul><li>Functional heads may resent the apparent downgrading of their responsibilities </li></ul></ul>
    7. 7. Centralization and Decentralization Management <ul><li>Decentralized organizations </li></ul><ul><ul><li>Dispersal of authority to parts of the organization. </li></ul></ul><ul><ul><li>Authority to commit resources and to take real decisions is spread . </li></ul></ul><ul><ul><li>Decentralization can improve local decision making, increase flexibility and reduce communication problems. </li></ul></ul><ul><ul><li>Potential problems include sub-optimal decision making, and problems with coordination and control. </li></ul></ul><ul><li>Centralized organizations </li></ul><ul><ul><li>Authority is exercised by top management. </li></ul></ul><ul><li>Decentralized operations with centralized policy control. </li></ul><ul><ul><li>Certain functions are more easily decentralized (Purchasing and Marketing). </li></ul></ul><ul><ul><li>Certain functions often remain centralized even in a largely decentralized organization (Finance and Research). </li></ul></ul><ul><ul><li>Operating units encouraged to act as largely independent entities, with clear performance guidelines regarding core values (e.g. quality of product and service). </li></ul></ul>
    8. 8. ERP Life Cycle Considerations - SAP Perspective <ul><li>SAP Implementation History </li></ul><ul><li>Implementation Sins </li></ul><ul><li>Implementation CSFs </li></ul><ul><li>Implementation Examples </li></ul><ul><li>Project Planning Fundamentals </li></ul><ul><li>Microsoft Project Familiarization </li></ul>
    9. 9. SAP Implementations Historical Perspective <ul><li>First Wave Implementations </li></ul><ul><li>1990-1998 </li></ul><ul><li>SAP R/3 software only </li></ul><ul><li>Imp Partners installed & configured </li></ul><ul><li>SAP only supplies software </li></ul><ul><li>Expensive </li></ul><ul><li>Long time lines </li></ul><ul><li>Initially (90-86) installed via SAP “Ecosystem” </li></ul><ul><ul><li>Consultant firms- Ernst & Young, PriceWaterhouse, KPMG </li></ul></ul><ul><ul><li>Standard methodologies </li></ul></ul>
    10. 10. <ul><li>ASAP 1997 </li></ul><ul><li>1997-now </li></ul><ul><li>SAP concerned </li></ul><ul><ul><li>Cost blowouts </li></ul></ul><ul><ul><li>Market saturation </li></ul></ul><ul><ul><li>SME penetration </li></ul></ul><ul><ul><li>Improvement in competitive ERPs </li></ul></ul><ul><ul><li>Globalization </li></ul></ul><ul><ul><li>Technology advances </li></ul></ul><ul><li>All above issues indicated need for affordable implementations </li></ul><ul><ul><li>Generic methodology </li></ul></ul><ul><ul><li>Midsize System Integrators now enter the market </li></ul></ul><ul><ul><li>Large SIs unhappy </li></ul></ul>SAP Implementations Historical Perspective (continued)
    11. 11. <ul><li>Second Wave </li></ul><ul><li>2000- </li></ul><ul><li>SAP concerned </li></ul><ul><ul><li>Fine Tuning core SAP </li></ul></ul><ul><ul><li>Preparation for eCommerce </li></ul></ul><ul><ul><li>Data preparation </li></ul></ul><ul><ul><li>Improvement in ERPs </li></ul></ul><ul><li>All lead to need for Upgrade core ERP & new functionality </li></ul><ul><ul><li>CBI </li></ul></ul><ul><ul><li>Data Warehousing </li></ul></ul><ul><ul><li>APO </li></ul></ul><ul><li>ValueSAP(CBI) </li></ul><ul><ul><li>2001- </li></ul></ul><ul><ul><li>CBI (continuous business implementation) </li></ul></ul><ul><ul><li>Free </li></ul></ul><ul><ul><li>Tools for improvement </li></ul></ul><ul><ul><li>Pre-configuration packages </li></ul></ul><ul><ul><li>SAP services, develops templates as support for the software. </li></ul></ul>SAP Implementations Historical Perspective (continued)
    12. 12. <ul><li>Third wave </li></ul><ul><ul><li>2001- </li></ul></ul><ul><li>Vertical Service Providers </li></ul><ul><ul><li>ASP model faltering, potential answer VSP </li></ul></ul><ul><ul><li>From Estimated $22.7 billion 2003 </li></ul></ul><ul><li>New Functionality </li></ul><ul><ul><li>CRM </li></ul></ul><ul><ul><li>SCM </li></ul></ul><ul><ul><li>SEM </li></ul></ul><ul><ul><li>BOLT third party functionality </li></ul></ul>SAP Implementations Historical Perspective (continued)
    13. 13. 1997 <ul><li>ValueSAP is the framework that changes the </li></ul><ul><li>emphasis from “time to market” into “time to benefit” </li></ul><ul><li>Team SAP - Binding a network of industry experts from partners and SAP working together for customers success </li></ul><ul><li>AcceleratedSAP - Delivering methods and tools to ensure on-time and on-budget implementations </li></ul><ul><li>Knowledge maps to improve speed and quality of knowledge transfer between customers, partners and SAP </li></ul><ul><li>Launch of SAP Solution Maps for 17 different industries at SAPPHIRE Los Angeles (1998) </li></ul>1999 1998 <ul><li>Developed products with rich functionality and high quality </li></ul><ul><li>Using an up-to-date technology infrastructure </li></ul><ul><li>Providing a powerful service and support infrastructure worldwide </li></ul>SAP Implementations Historical Perspective (continued) Products People & Processes Knowledge Transfer
    14. 14. Critical Success Factors - Four Dimensions REF: T Jace, Ernst & Young : <ul><li>People & Organization </li></ul><ul><li>Process </li></ul><ul><li>Knowledge </li></ul><ul><li>Technology </li></ul>
    15. 15. People & Organization Considerations <ul><li>Address business unit autonomy quickly and frequently </li></ul><ul><li>Define and publish staff selection criteria </li></ul><ul><ul><li>Highlight behavioral attributes, not just technical competency </li></ul></ul><ul><li>Identify and openly discuss new organizational alignments </li></ul><ul><li>Comprehensive communication plans are mandatory </li></ul><ul><ul><li>Tailor to various audiences with a focus on aligning stakeholders </li></ul></ul><ul><ul><li>Symbolize the new identity </li></ul></ul><ul><li>Structure training to include facets of all four dimensions </li></ul><ul><li>Realize that pessimism will prevail until certainty is in sight (senior management support) </li></ul>
    16. 16. Process Considerations <ul><li>Adopt best and leading practices (e.g. workflow, imaging) and constantly evaluate outsourcing options </li></ul><ul><li>Involve future staff in detailed redesign and re-engineering when appropriate </li></ul><ul><li>Detail the processes at a low level, encompassing: </li></ul><ul><ul><li>standardized business rules and control </li></ul></ul><ul><ul><li>performance metrics </li></ul></ul><ul><ul><li>non-SAP activities </li></ul></ul><ul><li>Clearly differentiate hand-offs between shared services and business partners and ensure consistency amongst the business partners </li></ul>
    17. 17. Technology Considerations <ul><li>Quickly establish enterprise-wide (world-wide?) communications backbone </li></ul><ul><li>Manage to an integrated SAP / BPR implementation methodology </li></ul><ul><li>Focus on integration testing </li></ul><ul><li>Minimize modifications while balancing differentiating business requirements </li></ul><ul><li>Evaluate Electronic Commerce opportunities rigorously </li></ul><ul><li>Double, triple, then double again your sizing estimates </li></ul>
    18. 18. Knowledge Management Considerations <ul><li>Institute controlled scope and issues management through use of chartering and groupware </li></ul><ul><li>Couple the site selection process with the re-engineering initiative </li></ul><ul><li>Adopt strict data capture and version control </li></ul><ul><li>Build a culture of quick decision making </li></ul><ul><li>Centralize the communication mechanism to key stakeholders </li></ul><ul><li>Priorities knowledge transfer through use of user ‘champions’ and client configuration </li></ul>
    19. 19. Implementation Sins <ul><li>Not understanding the scope </li></ul><ul><li>Not committing the right resources </li></ul><ul><li>Not managing the change </li></ul><ul><li>Not managing benefits </li></ul><ul><li>Not embracing integration </li></ul><ul><li>Not planning for the end of the project </li></ul>Ref: Manoeuvre, The Six deadly ERP Sins
    20. 20. Implementation Sins (continued) <ul><li>Not understanding the scope </li></ul><ul><ul><li>Last time you will replace major systems </li></ul></ul><ul><ul><li>Partial delegation of your IT strategy to vendor </li></ul></ul><ul><ul><li>Every aspect & person to be affected </li></ul></ul><ul><ul><li>These are business not IT projects </li></ul></ul><ul><ul><li>Limit conflicting parallel activities, e-commerce </li></ul></ul>Ref: Manoeuvre, The Six deadly ERP Sins
    21. 21. <ul><li>Not committing the right resources </li></ul><ul><ul><li>Creative, capable & knowledgeable staff </li></ul></ul><ul><ul><li>Use the best people in the organization </li></ul></ul><ul><ul><li>Steering committee empowered to make business decisions </li></ul></ul><ul><ul><li>Full time people, not part time </li></ul></ul><ul><ul><li>Team members will be greatly enhanced </li></ul></ul><ul><ul><li>Motivate and retain team members </li></ul></ul>Implementation Sins (continued) Ref: Manoeuvre, The Six deadly ERP Sins
    22. 22. <ul><li>Not managing the change </li></ul><ul><ul><li>Change management, soft & psychological </li></ul></ul><ul><ul><li>Communicate and influence change </li></ul></ul><ul><ul><li>Be personal in your communications </li></ul></ul><ul><ul><li>Use network of project reps, 2 way feedback </li></ul></ul><ul><ul><li>Change man need to be trusted and respected </li></ul></ul><ul><ul><li>User training crucial </li></ul></ul>Implementation Sins (continued) Ref: Manoeuvre, The Six deadly ERP Sins
    23. 23. <ul><li>Not managing benefits </li></ul><ul><ul><li>Costs & Times actively reported </li></ul></ul><ul><ul><li>Benefits not actively reported </li></ul></ul><ul><ul><li>Business case needs to be revisited including benefits </li></ul></ul><ul><ul><li>Benefits need - owners & key factors </li></ul></ul><ul><ul><li>Bus case needs detailed benefit delivery plan </li></ul></ul>Implementation Sins (continued) Ref: Manoeuvre, The Six deadly ERP Sins
    24. 24. <ul><li>Not embracing integration </li></ul><ul><ul><li>Resistance to organizational restructure </li></ul></ul><ul><ul><li>Functional depts. and senior man remain </li></ul></ul><ul><ul><li>Operational staff are empowered </li></ul></ul><ul><ul><li>Significant change to structure necessary </li></ul></ul><ul><ul><li>Roles need to be redefined along processes </li></ul></ul>Implementation Sins (continued) Ref: Manoeuvre, The Six deadly ERP Sins
    25. 25. <ul><li>Not planning for the end of the project </li></ul><ul><ul><li>What are the long term implications </li></ul></ul><ul><ul><li>Outsource vs. in-house for long term management </li></ul></ul><ul><ul><li>Build in-house support groups for future </li></ul></ul><ul><ul><li>What is the future of project team after ERP? </li></ul></ul><ul><ul><li>Continuous improvement, how do you transfer from “project mode” to “structured improvement”? </li></ul></ul>Implementation Sins (continued) Ref: Manoeuvre, The Six deadly ERP Sins
    26. 26. Motivation to undertake ERP Note: Based on multiple answers per respondent Source: Deloitte Consulting and Benchmarking Partners Circa 1999 (Based on a study of 62 companies that have gone live with an ERP system)
    27. 27. Anticipated Temporary Dip in Performance <ul><li>… 4 months to bring back to legacy system baseline </li></ul><ul><li>… 6 months of decreased productivity </li></ul><ul><li>… 2 to 3 month performance decline due to the normal learning curve </li></ul><ul><li>… 6 months of stabilization after go-live </li></ul><ul><li>… reality is this hurts the business in the first 6 months </li></ul>Some reported examples ... Source: Deloitte Consulting and Benchmarking Partners (Based on a study of 62 companies that have gone live with an ERP system) Go-Live Performance Time A B C
    28. 28. Synthesize Implement Stabilize Synergize Go Live 3-6 Months 6-18 Months Ongoing Anticipated Timeline to Full Performance
    29. 29. Stabilize <ul><li>Retraining </li></ul><ul><li>Process cleanup </li></ul><ul><li>Data cleanup </li></ul><ul><li>Software reconfiguration </li></ul><ul><li>Report design </li></ul>ERP Optimization Will Drive a Variety of Initiatives Synthesize <ul><li>Data warehousing </li></ul><ul><li>e-commerce </li></ul><ul><li>Additional vendor software </li></ul><ul><li>Data collection systems </li></ul>Synergize <ul><li>Strategic planning </li></ul><ul><li>Major process redesign </li></ul><ul><li>Business case development </li></ul><ul><li>Supply chain </li></ul><ul><li>Lean manufacturing </li></ul>
    30. 30. Next Session Highlights: <ul><li>Topics </li></ul><ul><ul><li>ERP Life Cycle Management (continued) </li></ul></ul><ul><li>Read chapters 18 of “ERP Tools, Techniques, and Applications” by Ptak and Schragenheim. </li></ul>