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SEPTEMBER 2004ISSUE 04-09

INVENTORY MANAGEMENTR . E . P . O . R . T

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Improving Logistics and Supply Chain Management

IOMA

3 Keys to EnsuringTech ROI: Process,People & Technology

Technology is being infused into the inventory man-

agement process at an increasing rate. Yet, manyIMRreaders complain that it is not so easy to always havesuccess with technology deployment. However, Rich-ard H. Sharpe, president and CEO, Competitive Logis-tics LLC (Atlanta, Ga.; rhsharpe@competitivelogistics.com), has an approach that could very well help toincrease the probability of gaining the ROI that inven-tory management personnel are looking for from theirinvestment. He labels it the TPP approach: technology,process, and people.

In my opinion, the technology issues are the easiestto solve, he maintained 5. The process issues are notdifficult, but often overlooked, while the people issuesare really the most challenging and require the most timeto resolve.

Overcome the technology barriers to implemen-tation success.When it comes to technology, the causeof failure often can be traced back to the fact that notenough time was spent in defining what the businessreally required, how the initiative would be supported,and the business functions affected, Sharpe explainedat the 27th Annual WERC Conference (WarehousingEducation and Research Council, Oak Brook Ill.;www.werc.org). He recommended focusing on the fol-lowing:

Ensure the technology fits. Here, he advisesboring in on four critical areas, such as, Developing asolid set of business requirements, and make themspecific enough to be the basis for creating solid func-tional requirements; also clearly document their theimpact on other functions/groups for today and tomor-row.

Functional requirements, he explains, are really thebridge between the business and technical requirements,

therefore, have your subject matter experts and futureusers in the organization validate them.

Technology requirements, the third area of concen-tration, requires the specification of both current andfuture IT system requirements that will be needed tosupport business functions. Also perform a critical re-view of integration requirements.

Finally, define and agree on the technical supportrequirements that must be provided before adoption.Start to think about the support requirements early in the process, he advises. In effect, answer the question,what do I need and what is critical for us, in terms of thesupport that we will require for our needs.

Consider the data. Ensure quality, check forintegrity, and understand synchronization complexitiesare the guides. Specifically, know what it is that youregoing to be doing with that data and make sure that it isthe right data for the initiative, Sharpe offers.

Once again, involve the business subject matter

experts upfront who know the reasons behind thedata, and ask them if there is anything about the data thatshould be altered before moving ahead.

Complete vendor due diligence. Go beyondthe standard feature/function review before committingsignificant dollars, Sharpe insists. Its a very fairquestion to ask the potential provider where they arecommitting their R&D and investment dollars. Does itparallel what youre planning for the future?

Also inquire about the project team profile (specificpersonnel, experience, roles). And make sure to inquireabout the boundary of standard support versus addition-

al support. Is there going to be a premium associatedwith how youre going to be supported?

Define the potential process barriers to address.The focus here is on how to manage the IT implementa-tion. Therefore, Sharpe instructs:

Realistically estimate resources and sched-ules.Have experienced personnel, preferably those notinvolved with your project, review your resource and

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INVENTORY MANAGEMENT REPORT SEPTEMBER 2004

www.ioma.com

3 Keys to EnsuringTech ROI: Process,People & Technology

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schedule expectations, and provide feedback aboutwhether it is realistic, Sharpe offers. Another view-point helps to catch elements that you and your teammay have missed or overlooked, he maintains.

Also, plan on contingencies and develop remediesfor handling the what-ifs. Given the nature of theproject, itemize all of the problems that could happen,and then create a plan that provides potential solutionsto be implemented.

Another critical factor is to ensure that all activitydependencies are completely understood. A critical path diagram indicating the interrelationships of the

various activities is a recommended tool that should beused and considered.

Identify key project metrics. Define the data,source and approach to calculate accurate measure-ments, and make sure the metrics are objective andquantifiable.

Also, it is important to obtain upfront agreement inwriting from the people that are sponsoring the projectthat once we achieve this state, weve achieved suc-cessdo you agree? And, Sharpe insists, tie metricsto incentives whenever possible. He offers, Incen-tives do not necessarily mean money. It could be stock,

recognition, or some other incentive that works well inyour company culture.

Resist rushing the process. Theres always thetemptation, once the project is defined and approved, toquickly begin working the activities without first in-cluding some of the steps that are really vital, Sharpewarns. Adequate attention to planning and analysis andplanning checkpoints sometimes are overlooked, or notconsidered thoroughly.

Dont overlook key considerations (business pro-cess review), think through project dependencies, setplanning checkpoints that have to be cleared to proceed,

and get steering committee signoff before beginningexecuting against the plan, are a few of the steps thatmust not be detoured, he invokes.

Throughout the plan be sure to stop at the definedmilestones and ask the question, Are we on track, is thiscorrect? If the answer is No, dont go forward untilall of the requirements up to that point are satisfied; if

Yes, move to the next step.

Concentrate on the people barriers to assureproject success. In my opinion, the people issues arethe most challenging, Sharpe offers. Address thefollowing:

Gain stakeholder support.The factors that must

be considered include ensuring executive support, cor-rectly aligning incentives, using the right format tocommunicate with each stakeholder, and communicat-ing early and frequently.

Every company should have a published set ofstrategic initiatives, Sharpe notes. This is whats im-portant to your company, therefore, you must be able tomap your project directly to the overall strategic initia-tive. If it cant be done, then I question whether youshould even propose it, he offers. Additionally, headvises, Once you get your executive team in align-ment with what youre about to do, get them involved in

the leadership of the project.A big factor is communications. One mistake to

avoid is having the same form of communication for allstakeholders. Different people communicate in differ-ent ways, so think about the right format for each party;then do it frequently, and continue to reinforce theproposition that this is important, he details.

Ensure commitment.Create a clear project map,and include anticipated investments over time. Alsosecure in writing the required percentage of time mappedto project schedule, and routinely report on commit-ment, deliverables and budget.

Even though there may not be a lot of uncertaintyabout the future, do define what the investment levelsare for the entire project, and not just the front end, hereminds. Also, to be sure that the people youre going tohave to draw on are available when needed, be sure tohave them and their supervisor sign off in such a waythat you have their commitment.

Expect/plan for change.Finally, people changeduring a project. Therefore, Sharpe outlines, Create aclear project roadmap with documented responsibili-ties, give proper attention to documenting project de-tails throughout the project, and keep all involved cur-

rent and informed.

He advises, Make sure that documentation proce-dures are in place and various reports and documents areupdated, so that sufficient information is captured aboutthe project. When made available to the new teammembers, this information will enable the new memberto contribute much more quickly and effectively.

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