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How Much Pre-
                                               Panning Do I
                                                  Need?
                                          A structured way of looking at
                                           challenges and building best
                                               approach for future


Bobby Spaid (bobbyspaid@ymail.com), SVP / CIO, Consultant , Information Services
Suresh Gopalakrishnan (sgk_00@yahoo.com), Program Manager, Fujitsu America Inc
Approach
Objective: Highlight criticality of a thorough planning phase before
embarking on large ERP/CRM initiatives
Case Study Firm: Large Consumer Goods Distribution Company
Solution: A best practice approach based on benefit map




                                                                       2
Why Failures?
Projects fail to meet schedule or budget (or both) despite availability of
abundant materials on best practices, lessons learned, good quality PM
education etc.
One of the main reason for early shut down or completion with huge
budget overrun of large ERP implementations is due to under estimation
of effort during pre-project planning (RFP) stage
   Even if the initial numbers are published as "ESTIMATE“, more often than
   not, it will be treated as ”FINAL”
   No one remembers ‘Assumptions’ attached to an estimate
Is it lack of methodologies and/or competence during implementation?
Or is it due to lack of proper planning before the start of the project?




                                                                              3
36 Common Project Failure Reasons




From article “IT Project Management: Infamous Failures, Classic Mistakes, and
                                                                                4
Best Practices” by R. Ryan Nelson, University of Virginia
How to correct it?
Theoretically, after a project is launched, concentrating on top ten
mistakes should increase your success rate close to 100%
    But that is not always the case
Expectation is already set based on the “ESTIMATE” prepared before the
project launch
    Too late to correct




                                                                         5
Case In Point – ERP Implementation at a
         Distribution company




                                  ACTUAL – 40+ Months
 PRE-PLANNING        PLANNED
     PHASE      DURATION – 19Months
                                                        6
Case In Point – Contd..




Business spent more than a year building flow diagrams as above
These depicts “To Be “ state after implementation of new ERP software


                                                                        7
Case In Point – Contd..
At the end of this exercise RFP was prepared and floated
Then months spent on
   Evaluating ERP software packages
   Selecting a vendor to implement
Average vendor response estimated approx. 6 months for global
design/development, which includes around 7K hrs of custom
development
   Then rollout to all five warehouses, 2-3 months apart ~19 months total
During project discovery phase, team estimated 25K hrs of custom
development work to make the ERP software meet business requirements
   Mid 2010 it was estimated to take another 2-3 years for completion
What Happened?
   Misalignment between software’s capability and business requirement
   Gaps in business processes between distribution centers
   Business processes changed as time passed making global design obsolete

                                                                            8
A Sample Case Of Misalignment




                                            Assumption: System
  RFP mentioned                             will consider
“Ability to print label                     1. Inventory stocked in
  during shipping”                          warehouse
                                            2. Inventory yet to be
                                            put away
                                            3. Inventory sitting in
                                            trucks yet to be received




                                                               9
Project Beginning
Most softwares available in the market meet assumption#1, but 2 and 3
were totally outside its ability
During discovery phase team found out it will take 3-4 months to write a
program that would satisfy all the requirements of label printing
There were more than 30 cases of similar misalignments !!




                                                                           10
Depth of Requirement?



           Level of requirement
          definition at RFP stage –       Full project
         before project is awarded
                                         duration and
         to a system integrator or
             product selection        budget decided at
                                      this point (though
                                      with assumptions)
           Level of requirement
           definition during
           discovery phase after
           project start


           Level of requirement
           definition during design
           phase – just before
           development phase


                                                   11
Top three mistakes
Firm took a common approach to avoid “Analysis Paralysis”
During RFP preparation there was no involvement of SME’s (Subject
Matter Experts) on customer side who understand the software’s
capabilities in detail
Firm had no priority of requirements – all were very high irrespective of
whether it is critical to business or not
   Lack of benefit map




                                                                            12
Framework For Success (Not a silver bullet!)

                                                             • Bring in solution architects
                                                               and conduct a high level
                                                               review of business
                                           1. Discover &       processes
                                               Align         • Analyze top ten business
                                                               process that supports
                                                               firm’s competitive edge




                             2. Define &
                               Initiate
       • Generate a benefit map
       • Define clear guidelines to
         measure the “SUCCESS”:
       • Bring IT and Business into                       3. Monitor &
         same page                                          Measure
       • Conduct business impact
         assessment                   • Measure the outcome
                                        against pre-defined “To-
                                        Be”s
                                      • Ongoing evaluation to
                                        ensure business need and
                                        solution are aligned
                                      • People first (as always!)                             13
Potential Benefits
Ensures there is a clear business case that justifies the project
Convert the business case to Benefit Map (see a sample slide#16)
   This helps prioritization of requirements
Ensures availability of mutually agreed criteria (between IT and Business)
to measure the success
Business realizes and agrees how the new system will help them improve
performance
   Realistic, instead of inflated, expectation is set at the outset
Business understands how new software can offer additional features that
could potentially improve firm’s competitive edge
Monitor continuously through survey
Above all, no ‘unrealistic’ budget expectation is set




                                                                         14
Backup Slides




                15
Sample benefit map:
                       Spare parts supplying
                           organization


                                     Desired
Complete                           Result of the
Project or                           program
 part of a
  project




             Outcome                        16
Project Health Check Survey




                              17
Project Health Check Meter




                             18
Project Health Radar Map




                           19
Project Health Check Bubble Map




                                  20
References




             21

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Pre planning for large ERP/CRM initiative

  • 1. How Much Pre- Panning Do I Need? A structured way of looking at challenges and building best approach for future Bobby Spaid (bobbyspaid@ymail.com), SVP / CIO, Consultant , Information Services Suresh Gopalakrishnan (sgk_00@yahoo.com), Program Manager, Fujitsu America Inc
  • 2. Approach Objective: Highlight criticality of a thorough planning phase before embarking on large ERP/CRM initiatives Case Study Firm: Large Consumer Goods Distribution Company Solution: A best practice approach based on benefit map 2
  • 3. Why Failures? Projects fail to meet schedule or budget (or both) despite availability of abundant materials on best practices, lessons learned, good quality PM education etc. One of the main reason for early shut down or completion with huge budget overrun of large ERP implementations is due to under estimation of effort during pre-project planning (RFP) stage Even if the initial numbers are published as "ESTIMATE“, more often than not, it will be treated as ”FINAL” No one remembers ‘Assumptions’ attached to an estimate Is it lack of methodologies and/or competence during implementation? Or is it due to lack of proper planning before the start of the project? 3
  • 4. 36 Common Project Failure Reasons From article “IT Project Management: Infamous Failures, Classic Mistakes, and 4 Best Practices” by R. Ryan Nelson, University of Virginia
  • 5. How to correct it? Theoretically, after a project is launched, concentrating on top ten mistakes should increase your success rate close to 100% But that is not always the case Expectation is already set based on the “ESTIMATE” prepared before the project launch Too late to correct 5
  • 6. Case In Point – ERP Implementation at a Distribution company ACTUAL – 40+ Months PRE-PLANNING PLANNED PHASE DURATION – 19Months 6
  • 7. Case In Point – Contd.. Business spent more than a year building flow diagrams as above These depicts “To Be “ state after implementation of new ERP software 7
  • 8. Case In Point – Contd.. At the end of this exercise RFP was prepared and floated Then months spent on Evaluating ERP software packages Selecting a vendor to implement Average vendor response estimated approx. 6 months for global design/development, which includes around 7K hrs of custom development Then rollout to all five warehouses, 2-3 months apart ~19 months total During project discovery phase, team estimated 25K hrs of custom development work to make the ERP software meet business requirements Mid 2010 it was estimated to take another 2-3 years for completion What Happened? Misalignment between software’s capability and business requirement Gaps in business processes between distribution centers Business processes changed as time passed making global design obsolete 8
  • 9. A Sample Case Of Misalignment Assumption: System RFP mentioned will consider “Ability to print label 1. Inventory stocked in during shipping” warehouse 2. Inventory yet to be put away 3. Inventory sitting in trucks yet to be received 9
  • 10. Project Beginning Most softwares available in the market meet assumption#1, but 2 and 3 were totally outside its ability During discovery phase team found out it will take 3-4 months to write a program that would satisfy all the requirements of label printing There were more than 30 cases of similar misalignments !! 10
  • 11. Depth of Requirement? Level of requirement definition at RFP stage – Full project before project is awarded duration and to a system integrator or product selection budget decided at this point (though with assumptions) Level of requirement definition during discovery phase after project start Level of requirement definition during design phase – just before development phase 11
  • 12. Top three mistakes Firm took a common approach to avoid “Analysis Paralysis” During RFP preparation there was no involvement of SME’s (Subject Matter Experts) on customer side who understand the software’s capabilities in detail Firm had no priority of requirements – all were very high irrespective of whether it is critical to business or not Lack of benefit map 12
  • 13. Framework For Success (Not a silver bullet!) • Bring in solution architects and conduct a high level review of business 1. Discover & processes Align • Analyze top ten business process that supports firm’s competitive edge 2. Define & Initiate • Generate a benefit map • Define clear guidelines to measure the “SUCCESS”: • Bring IT and Business into 3. Monitor & same page Measure • Conduct business impact assessment • Measure the outcome against pre-defined “To- Be”s • Ongoing evaluation to ensure business need and solution are aligned • People first (as always!) 13
  • 14. Potential Benefits Ensures there is a clear business case that justifies the project Convert the business case to Benefit Map (see a sample slide#16) This helps prioritization of requirements Ensures availability of mutually agreed criteria (between IT and Business) to measure the success Business realizes and agrees how the new system will help them improve performance Realistic, instead of inflated, expectation is set at the outset Business understands how new software can offer additional features that could potentially improve firm’s competitive edge Monitor continuously through survey Above all, no ‘unrealistic’ budget expectation is set 14
  • 16. Sample benefit map: Spare parts supplying organization Desired Complete Result of the Project or program part of a project Outcome 16
  • 17. Project Health Check Survey 17
  • 20. Project Health Check Bubble Map 20