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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
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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?
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4. 36 Common Project Failure Reasons
From article “IT Project Management: Infamous Failures, Classic Mistakes, and
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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
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6. Case In Point – ERP Implementation at a
Distribution company
ACTUAL – 40+ Months
PRE-PLANNING PLANNED
PHASE DURATION – 19Months
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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
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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
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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
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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 !!
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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
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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
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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
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