IMPLEMENTING ANERP SOLUTIONKEY CONSIDERATION

Are you looking at investing in a new ERP solution?

If so, then stop and read this toolkit.

Learn the lessons from other companies and make sure that you give due consideration to the key areas covered.

IMPLEMENTING AN ERP SOLUTION

The purpose of this document is to define the key activities an organisation needs to consider before investing in a new ERP solution.

Within the document, we provide guidance on the approach, governance process, project management, likely risk mitigation and focus required to ensure a successful integration.

PURPOSE

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Typicial challenges faced by organisations considering an investment in a new ERP solution...

The key drivers for change are typically:

• Act as value driver through standardised business processes

• Provide real cost savings and benefits to the business

• Meet identified needs and short-comings of the business and systems today

• Minimise risk and business disruption

• Create a platform for future growth and competitive advantage.

• Deliver an integrated IT platform

• Provide a data architecture to remove complexity from the business and introduce standardisation.

DRIVERS FOR CHANGE

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PROBLEM STATEMENT

A typical problem statement:

“The current organisation is working across disparate systems and non-standard processes that are driving non-value adding activity, rework, and complexity. The existing systems and processes are scalable but require a significant amount of effort, limiting the Company in it’s delivery of future growth targets”

VISION STATEMENT

A typical vision:

“Central functions across the Company are working in a coherent, consistent way using standardised processes and systems, performing value-adding activities that deliver efficient end-to-end solutions”

TARGET OPERATING MODEL

Prior to embarking on any significant investment in an ERP solution, it is essential that the Company have defined clearly their future Target Operating Model (TOM).

The TOM dictates the architecture of the ERP solution and although any solution should be flexible enough to be able to adapt to changes in the operating model, it is essential that the TOM is challenged and agreement reached across the Senior Executive Team prior to Build phase.

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• The scope of any implementation has been contained so only required customisations are implemented and only modifications to the core project which are supported by a robust business case are incorporated;

• The organisation is able to operate effectively once the new ERP has been released, i.e. there is minimal disruption to BAU operations, people are trained to use the system, and the proposed business benefits are realised;

• The system has enabled a right-first-time approach across the central functions, reducing rework, delays and duplication;

• There is a positive impact on the current month-end process, ensuring that reports can be produced in a timely, effective manner;

• The Board and key stakeholders are engaged throughout the lifetime of the project and understand the impact that the ERP solution will have on the organisation.

CRITICAL SUCCESS FACTORS

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In most ERP implementations, non-tangible benefits are perceived as being ‘more important’.

Non tangible benefits typically relate to compliance (risk & control), management information, and to have a solid foundation for growth.

Management Information• Improved contract decision making through more timely and

accurate information

• One Truth – Capture of Finance & Commercial data in one system

• Contract Accountability – Trial Balance by contract

Reliability of Data Capture• The system does not make formula or calculation errors

• No time delays as integrated

• The system provides an audit trial

• Enforces policies

POTENTIAL BENEFITS

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Improved Decision Making • Single Vendor list

• HR + Finance + Commercial aligned to one system held organisational model

Risks and Controls • Formalised user permissions and associated audit process

• Proactive rather than reactive

Platform for Growth • Solution provides a proven enterprise platform that can be scaled in

terms of integrity, performance, database etc.

• Future proofed e.g. currencies etc

• Standard & configurable solution to support the Company to work in range of different ways

• Standard processes, supported by systems that allow for easier recruitment and training, minimising local knowledge

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HIGH LEVEL REQUIREMENTS

The solution must meet identified needs and short-comings of the business and systems today;

It must be a platform for future growth and competitive advantage (e.g. be able to support future acquisitions);

The solution must integrate with key components of the existing architecture (e.g. operational systems);

It must provide the business with options in terms of scope and delivery.

PROJECT APPROACH

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FUTURE VISION FOR SYSTEMS

Prior to any significant investment in an ERP solution, it is essential that an organisation has a clear view of the future vision for the Systems that the Company relies upon to deliver against customer/ client expectations.

However, benefits can be gained by maintain focus on the following;

• Where possible, adopt Out of the Box best practice process

• Minimise integration issues by driving towards a single solution but maintaining process efficiency and effectiveness at minimal cost and supported by a business case

• A limited amount of customisation supported by business cases for each gap being built out within the ERP solution

TESTING APPROACH

As with any new technology, the Testing phase is an essential element of a successful launch and best practice suggest clear milestones are adopted for each phase of the Test Criteria, namely;

• Functional Acceptance Testing (FAT)

• System Integration Testing (SIT)

• System Acceptance Test (SAT)

• Performance Testing

• Final Acceptance (UAT)

• Operational Acceptance Testing (OAT)

Typical high level requirements across a range of clients

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INTRODUCTION TO CONSENSUS

A robust approach to managing ERP programmes is outlined below. The Consensus methodology outlines the stages that a project will go through, including the associated approach and supporting deliverables.

It is a tried and tested approach, fitting the implementation project lifecycle by providing a standard set of project activities and deliverables across the different project stages.

INCEPTIONThe key objective of the inception phase is to establish the commercial and technical viability of the project. This includes:

• Understanding the business drivers for the implementation of the new solution;

• Examining the business drivers to establish the scope of the project;

• Ensuring there is a high level fit with the ERP solution and the project is achievable within the desired budget and suggested timeframes;

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• Understanding the critical path, key time dependencies and producing a high level project plan for rollout of the solution;

• Identifying and mitigating anticipated risks or issues that will impact the programme or project;

• Communicating these items to the client in the form of a high level project design.

ELABORATIONThis stage involves the core process design and mapping activities in a workshop environment. Level-2 and Level-3 template processes are used as baseline processes and all key business processes are identified and mapped to the application. Key to this phase is the identification of all Gaps from standard product so that detailed planning and costing can take place. This is usually undertaken with the external Provider.

The core objectives of this Elaboration Phase within the Implementation Method are to:

• Validate business requirements against standard Best Practice Processes & Configuration.

• Define solution to be delivered – including agreement on all gaps from standard product.

• Confirmation of delivery timeline and cost for solution.

CONSTRUCTIONThe Construction phase takes the agreed scope and design and implements it within the solution. Also included within this phase of the project is the build of all solution architecture, interfaces and data migration templates.

The core objectives of the Construction Phase within the Implementation Method are to:

• Build the end to end solution

• Validation of the end to end solution against the business require-ments and signed off process

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TRANSITIONFollowing the sign off from the Construction Phase the system is released for formal acceptance testing and signoff. Key to this acceptance is not just the solution but also that the reconciled data can be migrated into the solution. Following this the business is prepared for the live operation of the solution including training of all users and preparation of the operational support organisation.

The core objectives of the Transition Phase within the Implementation Method are to:

• Prepare the business for live operation

• Prepare and execute the deployment to the live environment

• Ensure the support organisation are ready to accept the solution

OPERATIONThe objective of the Operation phase is to run the production system within Service Level Agreements.

The core objectives of the Operation Phase within the Implementation Method are to:

• Ensure the solution is managed efficiently within the organisation

• Provide advice and guidance on subsequent planned phases of solution development and releases

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INTERNAL TEAMTo ensure sufficient governance and delivery of a fit for purpose solution, it is essential that an internal team is pulled together consisting of representatives from the key functions of the business.

A Steering Board is recommended to ensure that all impacted areas of the business are represented at a senior level.

Typical areas to be covered include:

• Finance lead

• Commercial lead

• HR lead

• Procurement lead

• Order to Cash lead

• Technical Design lead

• Integration lead

• Data migration leadA full time Project Manager is also recommended, along with dedicated process management support.

PROJECT ORGANISATION

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THIRD PARTY SOLUTION PROVIDER

The third party Solution provider will deliver a team which will likely include:

• A full-time Project Manager

• Solution Architect team to cover off each functional area

• Technical Solution team to manage the data migration, integration and testing

ROLES & RESPONSIBILITIES ACROSS THE PROJECT TEAM

Steering Committee• Provide the overall strategic direction and vision for the project,

ensuring this remains aligned with ongoing changes across the business;

• Establish the priority of the project within the wider portfolio, ensuring this is communicated and adhered to this is adhered to;

• Agree the Business Case for the project and deliver the ongoing benefits;

• Provide resources to deliver the project and where necessary, resolve conflicting priorities and resource constraints;

• Make strategic decisions regarding material changes to cost, time, scope, benefits, and quality surrounding the project;

• Removal of barriers across the organisation;

• Support in resolving key risks and issues escalated by the project team;

• Responsible for signing-off each project stage;

• Validate strategic assumptions that the project and solution are based upon.

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Executive Sponsor• Board member with accountability for active Executive sponsorship

and delivery of the overall project;

• Provide leadership and direction throughout the life of the project;

• Accountable for all stages of the lifecycle from inception through to delivery and ultimately the realisation of Business Benefits;

• Owner of the project brief and business case;

• Owner of the overall business change that is being supported by the project;

• Owner of the Steering Committee, ensuring it is providing the necessary support to the project team;

• Development of the project organisation structure;

• Ensure that the project is subject to review at appropriate stages;

• Ensure the appropriate Commercial structure is in place with third party;

• Support in resolving key risks and issues escalated by the project team;

• Broker relationships with stakeholders within and outside the project;

• Deploy delegated authority to the Programme Director;

• Responsible for formally closing the project and holding a post-implementation review.

Third Party Programme Sponsor• Accountable for overall programme delivery on behalf of Third Party;

• Responsible for ensuring that correct levels of resource are deployed to meet the project demands;

• Responsible for the commercial relationship between Third Party and Company, managing any commercial issues;

• Leadership and direction to the third party team throughout the life of the project;

• Provide advice to the customer on all aspects of the project based on best practice and lessons learned from other customers;

• Ensure that from a third party perspective, the project is subject to review at appropriate stages;

• Support in resolving key risks and issues 15

Programme Manager• Manage the project and interactions on a daily basis under the

directions from the steering committee;

• Responsible, on behalf of the Sponsor, for the successful delivery of the new capability including facilitating, planning, delegating, monitoring and controlling all activities;

• Plan and design the programme, proactively monitoring its overall progress, resolving issues and initiating corrective action as appropriate;

• Define the project's governance arrangements;

• Quality assurance and overall integrity of the project;

• Management of interfaces with other projects;

• Management of the programme's budget on behalf of the Sponsor, monitoring costs against delivered realised benefits;

• Facilitate the appointment of individuals to the project delivery teams;

• Ensure that the delivery of new products or services from the projects is to the appropriate levels of quality, on time and within budget;

• Manage third party contributions to the project;

• Manage communications with all stakeholders;

• Manage risks to the project's successful outcome.

Third Party Project Manager• Manage the third party project within the scope, cost, and timescales

cascaded by the Steering Group;

• Responsible for the successful delivery of the new system including facilitating, planning, delegating, monitoring and controlling all third party activities;

• Plan and design the Solution providers elements of the project, proac-tively monitoring its overall progress, resolving issues and initiating corrective action as appropriate;

• Adhere to the project's governance arrangements, as cascaded by the Programme Manager;

• Responsible for quality assurance and overall integrity of the solution;

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• Facilitate the appointment of Solution provider individuals to the project delivery teams;

• Ensure that the delivery of the Solution provider products or services is to the appropriate levels of quality, on time and within budget;

• Support stakeholder communications;

• Manage Solution provider risks to the project's successful outcome.

Solution Architect• Responsible for the overall solution design.

Technical Architect• Responsible for overall technical architecture required to deliver the

solution.

Company Solution Lead• Responsible to ensure that the proposed solution design fits the

business requirements and expectations.

Integration Lead• Responsible for analysing and specifying the integration points for

the systems. Ensuring that systems integration work is carried out according to the specification.

Company Integration Lead• Assist in defining the integration points and ensuring that the internal

systems are modified to meet any integration requirements. Ensure the solution meets the Technical Design Authority requirements

Infrastructure Lead• Assist in specifying the required infrastructure to run the final solution.

Company Infrastructure Lead• Responsible for specifying the infrastructure required to run the final

solution and to ensure that the infrastructure is deployed according to the project plan.

Functional Leads• Working with the Workstream Leads to build a common

understanding of the future systems and processes

• Providing best practice input in Solution implementations e.g. what has worked well before

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• Challenging the Workstream Leads on whether non-standard functionality is required

• Responsible for identifying workshop requirements, advising on who needs to attend, and when workshops need to happen

• Preparing for and running the Elaboration Workshops, ensuring the outputs are documented, signed-off and followed up (as per SLAs)

• Designing, producing and communicating the process flows, including identification of interfaces

• Providing estimates for time and cost associated with any gaps.

• Supporting the System and Workstream Leads in the planning process, helping to understand what needs to be done, how longs things take etc.

• Escalating and resolving risks, issues, assumptions, and dependencies.

• Ensuring that the solutions design has taken into consideration all identified gaps and the necessary functionality is available

• Facilitate the Conference Room Pilots

• Responsible for designing, communicating and agreeing the system-related processes

• Create functional / technical specifications according to business requirements and approved gaps

• Identify and document business related configuration values (e.g. transaction types)

• Support the test execution efforts and training materials development

• Support change management efforts

• Assist in the design and testing of reports, extensions, data migration & interfaces

• Production of the Weekly Workstream Report

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Company Workstream Lead• End-to-end delivery of solution within the specified business area,

acting as single point of contact into and from the business (NB: this could fall outside standard BAU responsibilities)

• Management of stakeholders within the specified business area and ensuring all necessary parties are involved in the Elaboration Workshops

• Key interface between the project and operational teams

• Ensuring all business requirements are communicated and captured within the project

• Leading the business through change and system familiarisation

• Defining reporting requirements within the specified business area

• Input into and sign-off of Workstream Plans (including dependencies / linkages with other Workstreams)

• Documentation and escalation of risks, issues, assumptions and dependencies

• Supporting the development and implementation of change and communications strategies

• Supporting the development, review and implementation of future processes

• Production of a Gap Business Case for each gap identified by the external team

• Sign-off of the solution design for the specific business area (including processes & gaps)

• Input into and review of data migration and data reconciliation strategies

• Manage the delivery of process design into the business

• Ensure timely delivery of business sign-off

• Data Extraction from legacy systems

Business Change Manager• Responsible for developing the business change plan and ensuring

the business is ready to run the new system.

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Training Team Lead• Develop the training strategy and plan and ensure that all relevant

staff within the organisation meet a sufficient competency level in the new system.

Communications Workstream Lead• Overall responsibility for the overarching Communication strategy and

plan, ensuring it dovetails and is consistent with the Communications Strategy. Facilitates communications at the Work stream level

UAT Lead• Assist in the development of UAT scripts.

Company UAT Lead• Responsible for developing the acceptance criteria and the test

scripts and ensuring that they cover all the different scenarios for the different business processes covered by the solution

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xynergie Ltd. Blackburn Business Centre, Davyfield Road, Blackburn, BB1 2QYTel : +44 (0) 845 1309031 Web : www.xynergie.co.uk

xynergie is designed to provide experience, expertise and business insight from initial vision through to completed implementation and successful outcome.

Working with business leaders and their teams, we keep change programmes under control and focused on delivering results. This is why we very carefully select highly experienced consultants with the motivation to achieve results with your team.

All come from a solid consulting and/or blue chip company background with an average of over 20 years relevant experience, and many have worked at senior levels for big-name consultancies.

You will find our style of working to be very action-oriented, for example:

• Arriving with high impact tools and techniques, and our proven experience of specific types of change in a variety of sectors

• Making a fast start through pragmatic approaches and developing plans that are challenging but achievable

• Providing advice and guidance to leadership teams, helping them to work through issues and set direction

• Keeping the objectives, deliverables, ownership and outcomes clear, communicating the key milestones in a way that allows people to see their targets and understand their importance to the overall plan

• Using highly visual and effective approaches to engage people, enabling them to make decisions and act with confidence ... the Executive team, business managers, the programme team

• Providing hands-on support and guidance to people in the programme, helping them to be successful and developing their own capability along the way

Most of all, being passionate to ensure that our client's objectives are achieved, with a determination to deliver the best possible outcome for their business

Call us in today for an informal discussion about how we can you can take advantage of our change capabilities.