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 ServicesSuresh Gopalakrishnan (sgk_00@yahoo.com), Program Manager, Fujitsu America Inc

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Approach

Objective: Highlight criticality of a thorough planning phase before embarking on large ERP/CRM initiativesCase Study Firm: Large Consumer Goods Distribution CompanySolution: A best practice approach based on benefit map

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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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36 Common Project Failure Reasons

From article “IT Project Management: Infamous Failures, Classic Mistakes, and Best Practices” by R. Ryan Nelson, University of Virginia

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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 caseExpectation is already set based on the “ESTIMATE” prepared before the project launch

Too late to correct

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Case In Point – ERP Implementation at a Distribution company

ACTUAL – 40+ Months

PLANNEDDURATION – 19Months

PRE-PLANNINGPHASE

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Case In Point – Contd..

Business spent more than a year building flow diagrams as aboveThese depicts “To Be “ state after implementation of new ERP software

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Case In Point – Contd..At the end of this exercise RFP was prepared and floatedThen months spent on

Evaluating ERP software packagesSelecting 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 totalDuring 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 requirementGaps in business processes between distribution centersBusiness processes changed as time passed making global design obsolete

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A Sample Case Of Misalignment

Assumption: System will consider 1. Inventory stocked in warehouse2. Inventory yet to be put away3. Inventory sitting in trucks yet to be received

RFP mentioned “Ability to print label

during shipping”

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Project Beginning

Most softwares available in the market meet assumption#1, but 2 and 3 were totally outside its abilityDuring discovery phase team found out it will take 3-4 months to write a program that would satisfy all the requirements of label printingThere were more than 30 cases of similar misalignments !!

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Depth of Requirement?

Level of requirement definition at RFP stage –

before project is awarded to a system integrator or

product selection

Level of requirement definition during discovery phase after project start

Level of requirement definition during design phase – just before development phase

Full project duration and

budget decided at this point (though with assumptions)

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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 detailFirm 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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Framework For Success (Not a silver bullet!)

3. Monitor & Measure

• Measure the outcome against pre-defined “To-Be”s

• Ongoing evaluation to ensure business need and solution are aligned

• People first (as always!)

2. Define & Initiate

• Generate a benefit map• Define clear guidelines to

measure the “SUCCESS”:• Bring IT and Business into

same page• Conduct business impact

assessment

1. Discover &

Align

• Bring in solution architects and conduct a high level review of business processes

• Analyze top ten business process that supports firm’s competitive edge

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Potential Benefits

Ensures there is a clear business case that justifies the projectConvert the business case to Benefit Map (see a sample slide#16)

This helps prioritization of requirementsEnsures availability of mutually agreed criteria (between IT and Business) to measure the successBusiness realizes and agrees how the new system will help them improve performance

Realistic, instead of inflated, expectation is set at the outsetBusiness understands how new software can offer additional features that could potentially improve firm’s competitive edgeMonitor continuously through surveyAbove all, no ‘unrealistic’ budget expectation is set

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Backup Slides

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Sample benefit map: Spare parts supplying

organization

Complete Project or part of a project

Outcome

Desired Result of the

program

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Project Health Check Survey

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Project Health Check Meter

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Project Health Radar Map

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Project Health Check Bubble Map

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References