Big and small face same SAP hurdles

The experiences of two manufacturing businesses of vastly different scale demonstrate the value of basic guidelines for implementing SAP ERP

Companies of different sizes that implement SAP enterprise resource planning systems to improve business efficiency reveal surprising similarities.

We recently looked at two implementations: a £180m revenue organisation with 2,300 employees and 14 locations in North America, and the other a £2.6bn business headquartered in China, with 70 plants worldwide, hundreds of sales/service centres, and more than 20,000 employees.

The implementations were based on blueprints of globally standard processes, and both organisations created core teams of business experts, participants from IT, and their implementation partners.

Both firms opted for a phased implementation. It started with a pilot site that was manufacturing centric and more limited in scope and complexity than other locations. This provided an opportunity to use an environment with lower risk should they encounter problems. It also provided a process for learning and refining prior to moving to larger and more complex locations.

Although the pilot sites went live successfully, the overall complexity and advanced abilities of SAP's products were underestimated, as was the level of resources required for problem resolution.

In each case, no matter how well the teams thought they understood the system regarding transaction flows, role mapping, job design, and detail functions, putting the technology into action at the pilot site was the ultimate learning curve.

Significantly, no source code customisations were required in either case. Enhancements were limited to forms, reports, workflows, and user exit extensions - nothing that would impede or over complicate future upgrades. This is a common trend in organisations using SAP. By virtue of not customising the system, upgrades are fairly painless.

The trade-off? The initial investments in time and resources to configure SAP can be higher than investments required for smaller ERP systems. Over time, however, smaller systems tend to become heavily customised or integrated to other products in a non-standardised fashion, creating a situation that is costly to upgrade.

The £180m manufacturer invested heavily in all levels of training across each of its departments. Despite this initiative, some employees still did not understand the new processes and transaction flow once SAP went live.

The £2.6bn manufacturer felt the approach to training the core team should be flexible, with provisions made for different schedules and conflicting priorities. The team needed to be adequately trained before beginning the blueprinting phase.

For its SAP project, the £180m manufacturer assigned a dedicated team of 12 members, which included a full-time project manager and HR lead. The company also employed a consulting firm primarily for knowledge transfer.

For the roll-out itself, the ASAP methodology was followed closely, and Info Pak from RWD was incorporated for creation and storage of all documentation, training materials, and content related to the project. SAP Version 4.7 was implemented, using preconfigured templates for industrial companies.

It took 10 months between project kick-off and the pilot site going live on a full suite of modules, including Finance, Manufacturing, Sales and Distribution, Warehousing, Configurator, BW, and Portals. The internal business experts were also now experts at configuration, handling most changes required to the system themselves.

The £2.6bn manufacturer took a different path, creating an extensive core team to lead the business transformation, with the SAP deployment as part of that effort. The business experts were pulled out of IT, HR and other departments. To support the system long term, super-users were identified at each site.

The firm employed a system integrator, but levels of satisfaction have not lived up to initial expectations. The anticipated arsenal of project management and implementation tools was sorely lacking.

The service provider took the initial lead in managing the project, conducting the piloting and testing, but the business team did not feel they were getting the added value they expected and took back overall control of the project. The system integrator became a source of technical and product knowledge.

This is not uncommon. Other industrial businesses have indicated difficulty finding consultants with good SAP skills, especially on more recent releases and modules.

So whatever ERP system you are implementing, and whatever service is enlisted to assist with the process, there is a common set of phased activities that need to be completed to ensure a successful implementation.

Jane Barrett is an analyst with AMR Research. This article was co-written with Simon Jacobson

Lessons learned from SAP implementations

  • Allow sufficient time after the pilot goes live to refine processes. Continue learning SAP products to resolve issues and prepare for the next phase.
  • Segregate responsibilities to ensure that conflicting priorities or unnecessary tasks do not cause costly delays. Certain business processes may not be relevant until later in the project.
  • Change management is a big issue. People will always resist and have conflicting initiatives, including those dedicated to the project. Get people to focus on data clean-up and conversion.
  • Master data management is equally daunting. Cleansing the data, creating new data and technically migrating the data to SAP should not be underestimated.
  • Complete the global blueprint before starting the pilot and be mindful of how resources are allocated. Do not complete the global blueprint while implementing the pilot site. In AMR's study, the £2.6bn firm tried doing the two things at once and ran into unnecessary angst and shifting of priorities. It also indicted that, with hindsight, the team should have considered implementing Finance and HR globally first. Being able to segment SAP functionality and decide how best to deploy it is critical.

Source: AMR Research

Jane Barrett's research paper in full

 SAP skills gap squeezes projects

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