ERP PROJECTS GETTING REAL ABOUT WHAT YOUR ORGANIZATION IS TAKING ON
by Wayne Strider

Often there is little or no discussion at all in the pre-RFP stage of an
Enterprise IT project about the value management expects to see, what
management is willing change to gain that value, or how management will
know the value is actually gained.  If there are such discussions they
usually stay at a high level and are never formalized and tracked after
go-live.  At a minimum the "getting real" questions below should be
discussed and the answers formalized prior to committing resources to
the project.  Formalized means decisions are documented with signature
approval by the president and executive sponsors. If your project is
already underway it is not too late to ask the questions. The sooner you
ask them the better.

Here are the "getting real" questions

WHAT BUSINESS VALUE DO WE EXPECT TO SEE AS A RESULT OF INSTALLING THIS
SOFTWARE?
Business value comes from how the software is used in your organization,
not from the software itself.  Perhaps you expect to see lower costs,
faster cycle time, better service, higher quality products, less
duplication of work, or better decision support data.

HOW WILL WE KNOW WE ARE GETTING THE VALUE WE EXPECT?
As you identify the specific value you expect to see set goals,
establish a current baseline and a method of measurement.  Goals without
a baseline and measurement are not goals.  They are slogans.  For a
simple example, suppose the value you expect to see is faster cycle time
for requisitions.  You need to know the current cycle time for
requisitions-the baseline (before the new software goes live.)  You
might choose to examine requisition history to determine the number of
days it takes to cycle a requisition to establish the baseline.  After
the new software goes live, periodically compare the number of days it
takes to cycle a requisition to the baseline number of days to check
your progress.

Another example of expected value might be to eliminate
shadow systems.  Shadow systems are old systems that users often
continue to use after a new system is implemented until they are
confident and comfortable with the new system.  You could baseline the
number and cost of existing shadow systems and set a goal for
eliminating them over time.  The costs associated with maintaining
shadow systems can be considerable because users may duplicate their data
input and report generation efforts unnecessarily.  The integrity of
data can be compromised as well.

WHAT CHANGES ARE WE PREPARED TO MAKE IN OUR BUSINESS PROCESSES AND
ORGANIZATION STRUCTURE TO GET THE VALUE WE EXPECT?
This is the single most critical question because decisions that flow
from the answer will drive implementation cost, total cost of ownership,
and will determine whether you will get the value you expect.  The best
practices embedded in the new software may present opportunities to
consolidate services, eliminate staff, better utilize existing staff,
provide better service, or all of these.  If the software has been
extensively modified to avoid having to change your organization's
business processes, there is a 100% probability that you will not get
the value from the software that you could.

Some staff may not be able to adjust to the new way of doing their work
or may not have the computer skills required to use the new software.
Job descriptions may need to be revised or new job descriptions created.
Some existing staff will either have to upgrade their skills or face the
possibility of reassignment to a job that better fits their skills if
one exists.  You and your senior staff should be prepared in advance to
make tough decisions regarding business process change, organization
change, training, and handling of displaced staff.

WHAT ARE THE LARGE DECISIONS, WHO WILL MAKE THEM, AND WHAT INFORMATION
WILL BE NEEDED?
A large decision is a decision that changes
* The approved project scope, budget, or schedule
* Business processes or policies
* Organization structure.
A formal decision matrix should be developed by the project's primary
decision-making body and approved by the president.

HOW WILL LARGE PROJECT DECISIONS BE DOCUMENTED AND COMMUNICATED ACROSS
THE ENTERPRISE?
It's hard work to get decisions made at the right level in a timely
fashion.  But once a decision is made it needs to be quickly documented
and rapidly communicated to those who need to know.  When decisions are
not documented it is very difficult to follow up on them.  People tend
to interpret them parochially.  When decisions are not rapidly
communicated it is difficult for people who need to know to stay on the
same page with one another.  Often there is a time value associated with
large decisions that can get lost in the shuffle.

Getting Real Saves Money
Time spent getting agreement on the answers to these questions will be
well spent.  The answers will provide focus for the project and a
compass to guide decision-making along the way. You can save money in
the following ways

$ You are more likely to get the value you expect by making tough
decisions about business process and organizational structure change up
front and sticking to them. These decisions can lower implementation
cost, total cost of ownership, and can enable you to get value sooner.

$ You significantly lower the total cost of ownership and risk of
incompatibilities with future releases of the software if you modify
your existing business processes to match the software.


Strider & Cline, Inc. Maximum Value Newsletter Vol. 2003 No. 2