1 X-Large projects are truly manageable Jaro Masar, Deloitte Consulting Lisa Cortez, ChevronTexaco.

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X-Large projects are truly manageable

Jaro Masar, Deloitte Consulting Lisa Cortez, ChevronTexaco

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In today’s market environment characterized by:► Growing globalization► Economic instability► Added local and off-shore competition

a successful implementation of a integrated information system can create significant competitive advantage

However if they are not managed well these projects are so big and complex that they pose serious risks

► Deadlines missed► Costs can sky-rocket► Business disruption

In this presentation, we will summarize the lessons learned from one such a project…and what you can take away from thissession and apply to your situation

Introduction

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Desired Outcomes

1. The use of a good methodology is critical but not sufficient in itself to ensure the success of a project.

2. It is imperative for the entire project team (employees, consultants, and contractors) to share a common goal and to find ways to focus the power of its diversity through common nomenclature, common tools and common supporting behaviors.

3. One of the most important common behaviors is to learn from experience during the course of the project — adjusting the plan, refining the measures and continuously improving the execution and processes used.

Three Key Learning Points that attendees should take away from this presentation:

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Agenda

Project background Project life cycle and its deliverables Phase specific challenges that we

faced Phase specific key success factors Conclusion

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About the Project The e-Foundation Program was a 2000-2002, multi-million dollar,

business/IT initiative executed on behalf of ChevronTexaco’s N.A. Products and N.A. Lubricants business units. The objectives of the program were to:

► Replace ChevronTexaco’s 25 year-old legacy transaction systems which were inflexible and increasingly costly to maintain.

► Streamline the business processes, reduce manual handoffs, to simplify the systems architecture and to improve access to timely and accurate information.

► Create a foundation for future customer facing and e-Business opportunities.

► Reduce total cost of ownership. SAP, the industry market share leader, built a broad and solid base for

business functions via both the industry standard and more innovative process design and external system connections.

Knowledgeable consultants and contractors weremembers of the core team. They were brought into leverage expertise and lessons learned from similar implementations.

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The Scope of e-Foundation Was Expansive

Scope covers order-to-cash, supply chain and Scope covers order-to-cash, supply chain and selected financial and reporting processesselected financial and reporting processes

GeographiesGeographies 1800 Users in 36 U.S. States 15 Users in London and Singapore Aviation transactions from 65 countries for

invoicing in e-Foundation

Business ProcessesBusiness Processes• Sales: Order Fulfillment, Pricing, Billing, Credit,

Receivables, Cash & Taxes

• Supply: Purchasing, Payables, Stock Control, Inventories, Material Movements & Exchanges

• Related Finance, Decision Support & Reporting Functions

ERP PlatformERP Platform SAP (extend): FI, CO, MM, BW SAP (new): SD, RE, TM, DCM, IS-Oil, TSW

Systems & Technical ArchitectureSystems & Technical Architecture• 70-80% of all transactions in SAP; 200+

interfaces built to 60+external systems

• TIBCO middleware and new architecture used to deliver 25% of new interfaces

• Portal for single user interface to transaction and data warehouse environments

CustomersCustomers

SuppliersSuppliers

e-e-Foundation

Foundation

REFINEREFINE/BLEND/BLEND

STORE/STORE/PIPEPIPE

TRUCKTRUCK

MARKETMARKET

OrganizationsOrganizations North America Products: Retail Marketing,

Diesel, Asphalt, limited Refining and Global Aviation

Global Lubricants: North America Lubricants and Base Oils

North America Financial Service Center

Corporate Finance / Treasury

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About the Project

9/16 5/1

BluePrint Realization Final Preparation

““Design”Design”(9½ mo)(9½ mo)

““Build”Build”(7½ mo)(7½ mo)

““Test”Test”(8 mo)(8 mo)

Jan/01Jan/01 Jan/02Jan/02 Jan/03Jan/03

12/1““Scope”Scope”(6 mo)(6 mo)6/1 1/1

ProjectProjectBeginningBeginning

Go-Live, Support

““Deploy”Deploy”(3 mo)(3 mo)

Go-LiveGo-Live

ProjectPreparation

e-Foundation utilized ASAP methodology in combination with its own proprietary project management methodology — the primary focus for the project team was ASAP.

The start to finish timeline for e-Foundation was comparable to the industry standard

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Project Preparation

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12/1““Scope”Scope”(6 mo)(6 mo)6/1 1/1


Go-Live, Support


Go-LiveGo-Live

ProjectPreparation

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Major phase deliverables:

Project management► Organizational / geographical / functional / technical scope► Preparation of program kick-off and methodology workshops

Business systems ► Scope definition, Process performance and opportunity analysis,

Quick hit opportunity assessment► SAP functional scope, Preliminary SAP gap analysis, Master scope► Inventory of As-Is reports, and Output form requirements

Technical systems ► IT strategy, Legacy system scope, Preliminary As-Is Technology

analysis, Process & Systems integrity analysis► Preliminary list of Enhancements, Interfaces, Conversions, As-Is

systems, and To-Be systems Change management

► Set of engagements with end users

Project Preparation (cont’d)

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Project Preparation (cont’d)

Key success factors:

Very detailed scope definition allowed precise forward planning; estimating tool was essential to devising baseline budget

The project leadership team established metrics for each phase

► Set targets► Measure progress ► Keep the project on track

The entire project team marched to the same drummer► Consistent messaging within the team and outbound to the

company► Cohesive single-thread plan that was uniformly adopted► To make sure that failure was not an option … although this transformation was not complete by the end of

phase 1

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Blueprint

9/16 5/1

Realization Final Preparation





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Go-Live, Support


Go-LiveGo-Live

ProjectPreparation

BluePrint

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Project management► Project team on-boarding, Sandbox preparation ► Process design principles and goals, SAP organizational hierarchy

Business systems ► As-Is process analysis, To-Be high-level and detail design (key

business events, sub-processes, activities, worksteps, roles)► SAP organizational hierarchy, 1st pass config (80% accuracy)► To-Be data design, program list► Functional specs for interfaces/reports/enhancements/conversions

Technical systems ► As-Is interface analysis, data model, To-Be system maps, list of

interfaces/reports/enhancements/conversions

Business readiness ► Process ownership model & Change Implications of Design

Blueprint (cont’d)

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Sub-process and Activity samples:Fulfill Product Delivery

L-060

L-060-020 Print LoadingPass

L-050-070 CompleteTransportation Scheduleand Transmit to Carriers

TO:

FROM:

L-060-020

Print LoadingPass

L-060-050

Record LoadInformation and

Post Goods Issue

L-060-070

Monitor Shipment

L-060-080

Monitor CarrierActivity

L-060-150

Audit and PayFreight Bills

Request togeneratecarrierreports

TE405

P-110-030 Receive PaymentRequest from Vendor

L-060-150 Audit and PayFreight Bills

TO:

FROM:

Interface To:SAP toAspentechSAP to Dynegy

Interface To NCA

Z-050-080 MonitorExchange Positions

L-060-050 Record LoadInformation and PostGoods Issue

TO:

FROM:

O-070-015 Create Invoice/Credit & Debit Memo/InvoiceAdj./Rent Invoice/RecurringInvoice


TO:

FROM:

Z-055-110 ManageThroughput Inventory


TO:

FROM:

Interface From:Rail BOL to SAP

L-090-110 Manage Goods inTransit


TO:

FROM:

O-030-030 Modify Order toaddress any edit errors

L-060-070 MonitorShipment

TO:

FROM:

Update inregulatory

requirements

BE917L-060-030

ProcessRegulatory

Documentation

L-060-140

Process DeliveryAdjustments

O-020-140 Gather data &determine order type

L-060-140 ProcessDelivery Adjustments

TO:

FROM:

O-050-140 Process ReturnOrder


TO:

FROM:

O-050-090 Change SAPOrder


TO:

FROM:

Z-060-080 Manage InventoryRebranding/Blending


TO:

FROM:

L-090-020 Establish StockTransfer Order


TO:

FROM:

O-020-070 Determine/Confirm Customer OrderRequirements

L-060-150 Audit and PayFreight Bills

TO:

FROM:

L-060-070 Monitor Shipment

K-150-050 Investigate andResolve General Inquiriesand Complaints

TO:

FROM:

O-050-010 ReceiveCustomer Order Inquiry/check order status


TO:

FROM:

Sub-process flow:- Bus Events, Activities, Connectors, Interfaces- Business units affected, Change implications (differences,

benefits, risks, requirements, implications)

TXN:PRG:INT:L-060-050-015

Generate BOLoutput

VL02N

L-060-070 Monitor Shipment


TO:

FROM:

Record Load Information and PostGoods Issue

L-060-050

L-060-050 Record LoadInformation and Post GoodsIssue

L-060-020 Print LoadingPass

TO:

FROM:


Record loadedquantity

VL02N


Process volumeconversion

VL02N

Z:V400_000Shipping DeliveryMaintainer


Post goods issue

VL02N


Cancel goodsissue

VL09

Are corrections neededon delivery?

Z-055-110 ManageThroughput Inventory


TO:

FROM:

O-070-015 Create Invoice/Credit & Debit Memo/InvoiceAdj./Rent Invoice/RecurringInvoice


TO:

FROM:



Delivery correction

VL02N



Rail BOL errorhandling

SM35

IT00450


Z:F370_000Batch InputProcessor


Post goodsreceipt for STO

MIGO

Post goods receipt for COOP delivery?

Yes

No

End

ZFORM0001

BOL-LoadingPass

Z:M300_000Goods ReceiptProcessor



L-090-110 Manage Goods inTransit


TO:

FROM:

L-060-050 Record LoadInformation and Post GoodsIssue

L-060-030 ProcessRegulatory Documentation

TO:

FROM:

BOL required?

PTD required?

ZFORM0001

BOL-LoadingPassYes


Generate PTDoutput

VL02N


Yes

No

Yes

No

NoZU Delivery Blockassigned

Can order be recalledor diverted?

Yes



Contact Driver


Yes

O-050-010 ReceiveCustomer Order Inquiry/check order status


TO:

FROM:


Replace DeliveryBlock ZU by ZT

VL02N

No

No

Activity flow:- Worksteps, SAP transaction codes, Connectors, Roles,

Custom forms- Business units affected, Volumetrics, Process gaps,

system components, business rules, triggering events

We maintained complete design details in ThreadManager, our project repository.We maintained complete design details in ThreadManager, our project repository.

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Design approval sessions: Detail process and system designs went through a two step quality assurance mechanism. The combination of Peer Reviews and more formal Monthly Design Approval sessions ensured the quality of the design deliverables despite the pressure to finish them on schedule.

The business objectives of the approval sessions were to recommend alternatives, evaluate change implications & assess business risks.

► Q&A only on pre-read design documentation & activity flows

► Design recommendations & alternatives

► Change implications & Business risks

► Completeness of design and documentation

► Activity flows► Peer review with all teams

affected► Dry-run for Approval session


PeerReview

PeerReview

Monthly Design

Approvals

Monthly Design

Approvals11 22

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Design principles and their use:

Optimize Interfaces & Tech. Design

e-e-FoundationFoundationDesignDesign

PrinciplesPrinciples

Enable e-Business

RetireSystems

EnableInformation

Access

StreamlineData

Management

ControlBudget &Timeline

MaximizeUse of SAP

StreamlineBusiness

Processes

Focus on meeting business Focus on meeting business requirements while driving down requirements while driving down

the total cost of ownership of the total cost of ownership of interfaces and system supportinterfaces and system support

Application of these actionable design Application of these actionable design principles to our technical and principles to our technical and functional design enabled the functional design enabled the

elimination of 38% of all technical elimination of 38% of all technical deliverables. deliverables.

Results

Detailed design principles behind this were: Designing for reusability and minimizing the number of

interfaces Using middleware Avoiding “black-box (translation-type) interfaces Providing automated interfaces when there is a business case

to do so Ensuring a common transaction set or file layout is used Ensuring the frequency of interfaced data meets business

requirements Designing with an eye towards simplifying batch processing Utilizing proven, real-world tested, technology

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Challenges that we faced:

Design approval consensus paralysis between project & business► Delegated design approval authority to the project team after moving key business subject matter experts on to the team.

Integration of the sales & supply teams► Sales design used by supply processes owned by Supply team.► Stock transfer process to proprietary stations owned by Sales team.

Conflict between design principles ► e.g., Control budget vs. Maximize use of SAP.

Chevron-Texaco merger midway through Blueprint► Implementation of new unclear processes during this phase caused inconsistencies and delayed design. Eventually specialists brought in and a separate project plan prepared to catch up with the rest of the project. ► Texaco/Caltex had already installed SAP in other parts of the world.

Key SAP experts were added to the project team in order to “lift” standard designs from their installed systems - along with documentation relating to master data, interfaces, and business processes.► So we were able to leverage successful existing designs, refining them where necessary to meet US business requirements.


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Key success factors: Use of key design principles

► Extremely helpful as guidelines for the core team► Strong focus on reduction of conversions, interfaces, and enhancements eventually eliminated 38% of them

Established learning look-backs► Learning look-backs after each approval cycle were critical for continuous improvements of the approval sessions

Transition to full-time process ownership► BU team members empowered to make design decisions► Validation sessions shifted to internal design walk-throughs

Insisted on high-quality design through formal approvals ► Very good flowcharting (400 bus. activities)► Early identification of business roles enabled early start of training preparation and security design► Early identification of change implications enabled early start of communication with business users

Utilized risk management, change control, and resource & planning tools & techniques to manage project on time, and at or below budget constraints


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Realization

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BluePrint Final Preparation





12/1““Scope”Scope”(6 mo)(6 mo)6/1 1/1


Go-Live, Support


Go-LiveGo-Live

ProjectPreparation

Realization

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Business & Technical systems Construction:► Pristine configuration, transaction scenarios► Manual conversions, batch job schedule preparation, functional

form/report specifications ► Technical specs, coding for interfaces/ reports/conversions/

enhancements/ forms and middleware interfaces for interface data repository

Testing:► Unit testing, Business/Technical string testing► System readiness/ conversion validations► Integrated string testing (focus on the main interfaces and limited

number of scenarios) ► Integration test scripting (all interfaces and all bus. scenarios)

Realization (cont’d)

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Combination of Integrated Business and Technical string testing► Integrated Business string test and Integrated Technical string test were integrated only after a lot of redundancies were identified. The new approach enabled more thorough testing.

Preparation of Integration test scripts ► The first IT scripts were too functionally specific. After this was realized during the first testing cycle, the scripts were enhanced by all other affected teams. The quality of testing improved.

Business string test / Transaction scenario structuring ► Our original business activity oriented approach was cumbersome.► We replaced it with business scenario / transaction code oriented approach.


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IT Governance► IT Governance Process utilized by the project team and the business allowed us to control the scope of the project and meet our deadlines. ► For example an approved Change Request was required to change any aspect of the Blueprint design. The Change Request had to demonstrate the benefits of the change and justify any increase in cost.

QA reviews► QA reviews validated all test scripts and other major deliverables.► Many had to be reworked or enhanced, but the quality improved significantly.

Integrated testing► This testing was an early assessment of our preparedness for integration testing and addressed major gaps early on.


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Final Preparation

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Go-LiveGo-Live

ProjectPreparation

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Project management► Knowledge transfer plan, off-boarding and repatriation► Development of go/ no-go criteria► Stabilization metrics

Business and Technical systems ► Integration / Parallel / Stress / Regression testing► Cutover plan and its testing► Dual data maintenance► Interface error procedures► Conversion validation reports► Interim business procedures

Business readiness ► Training (on-site, web training using full size materials and Quick

Reference Cards) ► Org and Process Design and Staffing of Production Support Team

Final Preparation (cont’d)

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“This is it”► No more time available for any changes► Often disillusioning for project team members who wanted to keep “tweaking”► Close co-ordination with Business Units required


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Parallel test execution► After difficult start, the testing results were eventually better than those from the legacy systems► Internally built Compare tool eliminated manual effort for comparison of prices and taxes

Integration test execution► Continuous improvement of IT scripts and testing by all teams affected ► Inclusion of BU users in the 3rd and 4th cycle► Brought in a team of 25 SAP-degree interns from Chico State as testers — brought enthusiasm and skill to the team at the moment when everyone else was pretty darn tired

Effective and quick issue resolution► Strong escalation process► Effective handling of both team specific and cross team issues

Go/No-Go plan► Eliminated any major surprises during the last weeks

Capability transfer from consultants and contractors to members of Production Support Team


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Go-Live and Support

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Go-Live, Support


Go-LiveGo-Live

Project Preparation

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Focus on stabilization:

Transition period (3 months)► Production support team

Remedy ticket processing with focus on critical and high priority tickets

► Mission control team Monitoring and analysis of stabilization metrics Deployment of SWAT teams to “hot spots”

► Temporary helpers Cutover validations, First run of Interfaces/Batch jobs Site support “Hot spots”, e.g., large backlog of interface errors, or unbilled orders First month end planning and execution (financial close)

Post transition period► IT governance lifted after the 1st quarter► Look back evaluation of the project to leverage the success of the

project to future projects ► Initiated business process improvement pilots to leverage new asset

Go-Live and Support (cont’d)

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The process of fixing issues was very difficult► Help Desk Level 1 was not gathering all information required.► For configuration changes a change request process was needed with many levels of approval which resulted in slow issue resolution.

Assignment of remedy tickets could have been more efficient► This was done by team leads rather than by people with deep SAP knowledge and as a result assignments were often not optimal. Sometimes it could take days until an issue was assigned to a person who could fix the issue.


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Strong connection with the business and successful change management throughout the program that made business unit employees accept new accountabilities First run execution and testing of Interface and Batch jobs Mission Control and SWAT team approach to address the major issues Continuation of IT governance Knowledge transfer execution

► Checklist and plan developed to address the gaps► Good process► Made time for sessions ► Overcame configuration teaching difficulties

Continuous process improvements to maximize the use of available SAP tools


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Conclusion

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Go-LiveGo-Live

ProjectPreparation

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Conclusion (cont’d)

Issue characteristics:► Priority: critical, high, medium, low► Status: open, work in progress, pending re-test, resolved, closed► Raised by, assigned to (individual/ sub-team)► Raised date, Required date

Regular meetings to address issues► Past due date issues and critical issues► Cross team issues vs. team specific issues

Escalation process► Past due date critical and high issues had to be explained by

accountable party to project leadership Tools

► Easy entry of an issue, reporting by accountable party, accountable team, by priority, due date

Efficient issue management is very important for the management of the project:

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Tools used to promote teamwork and to reduce stress:

Communication tools► Communication meeting (every other month) for the whole team► Weekly sub-team meetings► Emailed decision communications (e.g., to consolidate the number of materials)

Team building► Recognition & Awards program – gifts and prizes to team members who achieved special success ► Off-site sport team events (couple a year)► Special dress code for Easter, Halloween, Texan Day► Friday Hawaiian shirt days► Year-end and Go-Live celebrations► Monthly Birthday celebrations

Safety & Stress management (especially before Go-Live)► Stretch breaks, free massages, ergo reviews, stress management classes, desktop software that imposed breaks in keying, snack food ► Game room and foldable beds available

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Change in release schedule (slide in progress…):

Dual release plan changed to single release in June 2002► Original plan: Release 1 on 10/1/02 and Release 2 on 1/1/03► Revised plan: Single Release on 1/1/03

Reasons:► Know more about risks in a two release strategy then when we first started

► Interim Business Processes► Dual Data Maintenance ► Cutovers► Reporting out of two systems

► Confidence in our team track record ► Improved leadership and commitment of Guidance Board► Most one-release risks are mitigatible► Confidence in our testing plans► Multiple positive QA/Risk review results► Pros/Cons and Risks/Costs appear more balanced now with all we learned


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Impacts:► Project-related risks decrease due to decreased implementation

complexity► External Third Party-related risks decrease

► One transition to explain► Communication easier and less complex► Errors are less likely from split systems

► Business Process-related risks increase No real-life experience of new common processess Billing volume is much higher Added stress maybe placed on Finance functions for year-end close

► End user-related risks decrease► Substantially less confusion and complexity of new business processes► Provides a single reporting system for all 2003

► Estimated project costs for a single release was less than the dual release


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What made the whole project so successful? Per an independent external assessment review:

Strong sponsorship and governance► Capable, committed, and integrated Governance board► Disciplined change control strategy

Metrics-based decision making ► Status reporting and risk management that helped to focus on priorities and addressed the largest risk immediately.

Change management and communication► Project focused not only on the technical objectives but also on the management of changes that were adequately communicated.

Cohesive and experienced project team ► Strong senior leadership team and team leaders► Combined a diverse array of internal and external resources into one team.

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What made the whole project so successful? More fundamental factors: Great methodology in place

► Building of huge but efficient project database allowed to keep the complex deliverables consistent and the project under control► Mega-projects require additional attention to methodology details

The entire team shared a common goal & project “culture” ► Employees, consultants, and contractors shared common nomenclature, common tools and common goals

Desire to succeed Intent to continually improve execution and processes used Accomplish the most with the least Raising “red flags” & “bugs” was encouraged and rewarded

The project was learning by its own experience► Detailed plan, detailed measures and frequent learning look-backs continuously enabled

Recognizing and adjusting the plan Refining the true measures to evaluate success Improving the execution Keeping management abreast of “what’s happening”

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Questions?

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Thank you for attending!Please remember to complete and return your evaluation form following this session.

Session Code: 2904

1 X-Large projects are truly manageable Jaro Masar, Deloitte Consulting Lisa Cortez, ChevronTexaco.

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Transcript of 1 X-Large projects are truly manageable Jaro Masar, Deloitte Consulting Lisa Cortez, ChevronTexaco.