The Lesson Learned from Implementation of ERP in Project-Based Holdings

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 1

MASOUD ZAKERMOSHFEGH

[email protected]

Feb,15,2015

ir.linkedin.com/pub/masoud-zakermoshfegh/36/96/628/en


Content

Enterprise Influences on ERP

Pre Implementation Processes

During Implementation Processes

Post Implementation Processes

3M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran

Holding

Project Mgmt.

Project Base

ERP

Out of Frame

• What is ERP?• Why ERP?• ERP Benefits• Detail life cycle

Discussion Frame


1. Organizational Culture & Style

• Ownership

• Business Style

• Industry Segment (Manufacturing, Operation, Project Base, etc.)

• Project Type (GC / EPC / Drilling / Construction)

2. Governance

• Authority to Change

• Decision making

• Clash of Priorities

3. Organizational Communications

• Common language

• Communication Channels

Organizational Influences on ERP Project Management


4. Organizational Structures

• Clarification of Black Connection Lines

• Pay attention to the white spaces (unofficial relationships)

Organizational Influences on ERP Project Management (2)


5. Organizational Process Assets

• BPM

• Process Diversification

7. Stakeholders

• BOD

• CEO

• Senior & Executive Managers

• ERP team members

• Key-users

• Staff

• Vendors / Contractors

• Clients / Customers

6. Enterprise Environmental Factors

• Political & Economical climate

• Enterprise Stability

• Marketplace Conditions (International & Domestic)

Organizational Influences on ERP Project Management (3)


Diagnostic Analysis DesignDevelop-

mentDeploym-

entOperation

Bid Transition

Scope Mgmt

Financial Mgmt

Work Mgmt

Risk Mgmt

Staff Mgmt

Project Preparation

Business Blueprint

Realization

Final Preparation

Go Live Support

Run

Commun-ication

Quality Mgmt

Configur-ation

Infrastruc-ture

Procure-ment

OCM

Microsoft Sure Step Methodology

SAP AG (ASAP)

ORACLE Unified Method (OUM)

ERP Project Lifecycle & Implementation Methodology


Pre-implementation Implementation Post-implementation

Project

IntegrationManagement

<<< Preliminary Studies Post Implementation SupportCutover Plan

Project Plan Technical Support

IT Strategy & Arc. Cutover

Project

ScopeManagement

<<< Business Process ManagementERP Configuration / Development

Identify Biz. Needs Blueprinting

Project

TimeManagement

Scheduling time intervals and important milestones / Schedule Control

Project

CostManagement

Cost Estimating / Budgeting / Cost Control

Project

QualityManagement

Benefits Realization Development

Quality Gates Determination Performance Mgmt. / Benefit Realization Audit

Project

Human Resources

Management

Develop Training Materials and PlanEnd-user Training

Key-user Training

Organizational Chart Re-designERP Project Team Development

Roles and Responsibilities Matrix

ProjectCommunication

Management

Communication

Data Gathering and CleansingData Migration

Project

RiskManagement

Risk Assessment and Evaluation

Project

ProcurementManagement

ERP Consultancy Service Contracting and Award

ERP Consultancy Service Contract Administration

Project

StakeholderManagement

<<< Organizational Change Management >>>

Stakeholder Analysis and Executive Alignment

Legend : Business / Managerial Activities Technical Activities

ERP PROJECT MANAGEMENT PROCESSES – PMBOK Approach

Pre-Implementation Implementation Post-Implementation



Project


<<< Preliminary Studies

IT Strategy & Arc.

Project

ScopeManagement

<<< Business Process Management

Identify Biz. Needs

Project

TimeManagement

Project

CostManagement

Project

QualityManagement

Benefits Realization Development

Project

Human Resources

Management ERP Project Team Development


Management

Project

RiskManagement

Risk Assessment and Evaluation

Project


ERP Consultancy Service Contracting and Award

Project



ERP PROJECT MANAGEMENT PROCESSES – Pre ImplementationPre-

ImplementationImplementation Post-Implementation


Statement of the problem?

Is ERP the best solution?

Readiness assessment

Identify Expectation

Choose the right ERP Software

• Functional

• Technical

• Cost

• Vendor Viability

• Risks

Develop ERP Project Charter

Pre Implementation - Preliminary Studies

Don’t forget:• Do Agile • Do Collaborative• Document Events• Benchmark similar cases


Business needs are changing, do it rapidly

Avoid Dreams

Manage Conflicts of needs

Focus on Value Chain Processes

Focus on Unique business requirements

Focus on Long-term strategic goals

Prioritize the requirements

Use Well-known Process References (APQC)

Pre Implementation – Business Needs


Do BPM regardless of ERP scope

Focus on Process pain points

Try to Simplify the processes

BPM Deliverables to ERP:

• Processes

• Workflows

• KPI

• Procedures

• Role & Responsibilities

• Forms / Reports

Pre Implementation – Business Process Management


(Available & Qualified) Resources

Clear Role & Responsibilities & Job description

Effective Communication

Staff Retention

CEO

Steering Committee

ERP Project manager

ERP Team Members

(Dedicated)

Functional members

(Part time)

ERP Implementer

ERP Consultant

• Competencies

• Knowledge (Business, Technical)

• Dedication

• Loyalty

• Motivation & Interest

• Skills

• Teamwork

• Negotiation

• Good Communication

• Effective Follow-Up

Pre Implementation – Project Team


Top Management Commitment & Support

Change of Stakeholders or their interest / power

OCM

Initial Scope

Data Migration

Competence of ERP’s consultants

Resources

Project Management

BPM

Training

. . . . .

Pre Implementation – Risk Assessment


Bid Evaluation & Prequalification

Outsourcing Strategy

Tendering Process SOW

RFP

TBE

CBE

Contract Award

Pre Implementation – ERP Service Contracting and Award


ERP PROJECT MANAGEMENT – Implementation ProcessesPre-implementation Implementation Post-implementation

Project


Cutover PlanProject Plan

Project

ScopeManagement

ERP Configuration / Development

Blueprinting

Project

TimeManagement

Scheduling time intervals and important milestones / Schedule Control

Project

CostManagement

Cost Estimating / Budgeting / Cost Control

Project

QualityManagement Quality Gates Determination

Project

Human Resources

Management

Develop Training Materials and PlanEnd-user Training

Key-user Training

Organizational Chart Re-design

Roles and Responsibilities Matrix


Management

Communication

Data Gathering and CleansingData Migration

Project

RiskManagement

Project

ProcurementManagement ERP Consultancy Service Contract Administration

Project


<<< Organizational Change Management >>>

Stakeholder Analysis and Executive Alignment


Pre-Implementation Implementation Post-Implementation


Considerations:

Rolling Wave Planning

Combination of Short-term Achievements

Be realistic despite environmental forces

Identify & Focus on the Critical Path

Implementation – Project Management Plan


What is Business Blue Print?

BPM VS BBP

Challenges

Integration of processes which are doing by others?

Endless BBP discussion

Trade off

Level of Efforts VS. Level of Control

Level of Efforts VS. Wanting every things

StandardizationVS. Flexibility

Avoid Scope Creep VS. Stockholder Satisfaction

Best Practice VS. Best Fit

Implementation – Business Blue Print


Implementation – Blue Print


Common Reasons for Timeline Overages• Scope Change

• Ineffective Issue Management

• Ignoring real critical path (e.g OCM, Data Migration)

• Unrealistic Timeline

• Inadequate Qualified Resources

• Poor BPM

2010 2011 2012 2013

14.316

17.816.3

Average duration of ERP Implementations within 2010 ~ 2013: 16.1 Months

Planned Duration(Months)

%61

%72

%61%54

Implementation – Schedule


ERP Implementation Strategy

Big bang

Pilot

Phased

– Functional Wise

– Organizational Wise

Depends on:

• Size (Functional , Organizational)

• Readiness Considerations

• Priorities (Managerial , Technical)

• Organizational Structure

• Resource Allocation

• Geographical Locations

Implementation – Schedule


Cost Breakdown: ICT Infrastructure (Network/Server/Client/Storage)

Implementation• License (less than 10%)

• BPR • Customization/Development• Test• Training• Data Migration

OCM Support

Main Reasons for Cost Overrun

Scope Change

Unrealistic Project Budget

Project Timeline Overage

2010 2011 2012 2013

5.5

10.5

7.1

2.8

Average Cost of ERP Implementations within 2010 ~ 2013: $6.5

Planned Budget…% Cost Overruns

%54%53%56%74

Implementation – Cost


Keep stakeholders informed & engaged

Change Vision

Business Change Impacts

New Processes

Procedures

MOM

Tasks

Issues

Documents (BBP, Books, Articles, etc.)

Progress Report (Monthly)

Implementation – Communication Management


Identification

Gathering

Cleansing- Validate (consistency)

- Consolidate

Convert

to Templates

Migrate

Test & Accept

Implementation – Data Gathering Migration


Types of CHANGES:

Visible – How to Work:

• Software

• BPR

• Organizational Chart redesign

• New Role & Responsibilities

Invisible – Paradigm shift:

• Integration

• Transparency

• Control

• Power shifting

Implementation – Organizational Change Management



Project


Post Implementation Support

Technical Support

Cutover

Project

ScopeManagement

Project

TimeManagement

Project

CostManagement

Project

QualityManagement Performance Mgmt. / Benefit Realization Audit

Project

Human Resources

Management


Management

Project

RiskManagement

Project


Project



ERP PROJECT MANAGEMENT – Post Implementation ProcessesPre-Implementation Implementation

Post-Implementation


Legacy system retirement or Parallel using?

Team member Motivation & Retention

Hand over the system

Closing of the implementation contract

Post Implementation – Run & Support


User Performance

Business Process Performance (KPI)

System Performance

Training needs

Reporting needs

Benefit Realization

Effective Enterprise Governance

Increase Enterprise Transparency

Increase Availability of Data

Improved Data Reliability

Improved Productivity

Less Duplication of Efforts

. . . . .

Continues Improvement

Post Implementation – Performance Management & Audit


Success Factors: (Executive point of view)

Effective Follow up

Dedication

Continuation

ERP Issues

Conclusion


MASOUD ZAKERMOSHFEGH

[email protected]

ir.linkedin.com/pub/masoud-zakermoshfegh/36/96/628/en

Thank you for your attention

M. Z. MOSHFEGH, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran,

15-16 Feb 2015

Leadership & Management

The Lesson Learned from Implementation of ERP in Project-Based Holdings