Project Management

1
Project Management Implementation of ERPs.
Note This lecture relates to implementation of
an ERP. Many aspects are also relevant to
implementing Workflows as well, though the scope
is much smaller.
2

• SAP R/3 is arguably the most complex of ERP
  available
• Provides competitive advantage
• Yet challenging to implement
• Number of users
• Database size
• Transaction volumes

3

• Costs
• 800,000 for a midsize firm
• (400k - 2 billion annual sales)
• 3-8,000,000 for a large corporation
• (2 billion annual sales)
• Consulting fees may be high due to shortage of
  staff.

4

• Characteristics of a SAP Implementation
• They are complex affect the entire organisation
• Long Implementation period
• Up to 5 years for a large corporation.
• Substantial reorganisation
• If the corporation does not fit/follow the
  general hierarchy that SAP is based on.
• Payback expected in 6 30 months!

5

• Problems of Implementation arise at all levels of
  the project
• Technical
• Business
• Software functionality
• Financial
• Project management
• Team membership

6

• Failure versus success
• The Typical Implementation A myth
• How quickly and well can problems be resolved is
  crucial
• Resolve problems and dont revisit them!
• Environment must facilitate resolution of
  problems
• Involve the right decision makers empowered by
  management
• A range of variables affect the cost of an
  implementation
• Scope Resources
• Methodology Management

7

• Scope
• Scope defines the boundaries of a project
• Expressed in terms of business functionality
• Scope Problems
• Controlling changes to project scope is difficult
• Changes in scope may significantly change costs

8

• Resources
• Always in limited supply
• Trained people
• The right people
• Budget constraints
• Funds allocated are inadequate

9

• Methodology Problems
• Procedure Model/Implementation Management Guide
• Vs.
• ASAP - Accelerated SAP Implementation
• It is important to get the core integrated SAP
  functionality up and running quickly then phase
  in further functionality
• Core functionality can pay back benefits
  immediately
• Cycles of learning from change rather than one
  large change may be better

10

• Management Problems
• Project must have management support
• Team must be empowered
• Decision-makers
• Issue resolution
• Management Involvement

11

• What knowledge is required
• What can SAP do?
• What are the possibilities?
• What does the business need to do?
• What techniques may be used to map SAP to the
  business?

12

• Flexibility of EAS requires a large amount of
  customisation
• Business is complex, SAP function rich.
• SAP can not meet demand for technical support.
• Support is required from outside consultants.

13

• Critical success factors(1)
• Top management support a champion
• Centralised project management with a business
  leader in charge (not an IT leader)
• Strong IT management staff support
• Heavy user involvement in project management
  implementation
• Standardise on the software rather than customise

14

• Critical success factors(2)
• Existing IT staff Retrained in ERP
  implementation.
• Use of consultants to lead in implementation
  training
• Top-notch analysts with excellent business
  knowledge and excellent technical skills.
  Retraining of these analysts throughout the
  project beyond.
• Effective continuous communication among all
  parties. Sensitivity to user resistance to new
  systems. Extensive training of end users.

15

• Impediments to R/3 Implementation
• 'As is' analysis is too excessive
• Poor change management
• Poor project organisation
• Inadequate standards.
• Modifications Enhancements
• Programs
• Screens
• Menus

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• Initial Questions
• Why?
• What are the aims objects for an ERP system?
• What?
• What will be installed? (define the scope of the
  installation)
• How?
• How will the system be implemented?
• What strategies or methods will be used?
• When?
• What are the scheduling requirements?
• When must the installation be complete?
• Who?
• Who has responsibility?
• Who are the sponsors?

17

• Selecting an ERP package
• Preliminary evaluation
• Is critical functionality available?
• The up-front costs of the package.
• The cost of ongoing support, upgrades and add ons
• Viability of the vendor
• Proven success in the business environment
• Availability of customisation tools
• Accommodation for the organisations management
  style.
• The fit between the business model of the package
  and the current processes of the organisation.

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• Detailed evaluation
• Lower-level managers
• Operating personnel
• On-Site visits
• Sites identified through own researches
• Quality of support performance and reliability
  are determined
• Customisation difficulty studied
• Hardware, software and implementation times are
  studied

19

• Final Decisions
• Criteria determined Weighting assigned
• Total score for each product is determined
• Any serious faults are noted and may disqualify
  product
• Consensus must be achieved with final decision.

20

• Project Planning
• Define appropriate goals for the project.
• Identify standards, methods, techniques
  required.
• Identify project tasks duration.
• Identify milestones (inch-pebbles?).
• Organise tasks into phases with milestones.
• Determine the skills required.
• Assign resources (people, equipment, materials
  to each task).
• Seek approval (and revise as necessary).

21

• Planning problems
• The initial phase of planning is poorly
  executed.
• Projects blow out due to
• Poorly defined scopes with fuzzy objectives
• Inappropriate strategy
• No identification of risks and appropriate
  responses.
• Getting these issues correct greatly improves the
  chances of the project being successful!

22

• Risk Assessment Objectives
• Understand the risks - identify analyse
• Quantify the risk - assess
• Minimise/reduce risk - treat the risk
• Document the risk and the safeguards.
• Prioritise work.
• Enable monitoring review.

23

• Management of Risk
• Identify the Major risks
• Identify potential impact and likelihood of risk
  eventuality.
• Manage monitor risk reduction and avoidance.
• Report on risk management to the steering
  committee.
• Note Likelihood is separate from impact.

24

• Strategies to Control Risk
• Determine how to
• Reduce risk
• Reduce impact
• Correct the impact
• ie Manage the risk reduction process.

25

• Impact of Risk Factors

Not on time Over budget Lacking
functionality Errors Ineffective Maintenance/op
eration is costly
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• Sources of Risk
• External dependencies
• Vendors, support, related projects.
• Organisational
• Number of business areas, locations, size,
  structure.
• Planning
• Complexity, imposed schedules, size, project
  management.
• Business case
• Uncontrollable costs, evolving requirements, ill
  defined benefits.
• Technical environment
• Software age, unfamiliar technology, expertise
  level.
• Technical-project
• Complexity, package tailoring.
• Operational
• Availability, response times, volume, value.

27

• Systems Development in an ERP Environment
• Large projects need to be well organised to be
  successful

28

• Organisational Structure for ERP projects

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• Oversight committee
• Monitor project
• Make key recommendations
• Representative of all users
• Project Teams workgroups formed
• Teams assigned to different development areas
• Vendor representatives
• Administrative support provided

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• Planning
• Oversight committee is formed
• Project team formed
• General purpose and scope determined
• Alternative approaches to ERP evaluated
• Initial selection made
• Determine how the project is to proceed
• Budgets, feasibility, project schedule

31

• Two key factors affect development
• The scope is very large
• Packaged software is used extensively

32

• Key Phases for ERP Projects
• Analysis
• Design
• Implementation
• Support

33

• Analysis
• Work Groups formed, Requirements determined
• Vendors evaluated, selected, but not finalised
• Business process engineering requirements
  identified
• Prototypes developed to demonstrate integration
• Alternatives reconsidered re-evaluated
• Recommendations presented to Oversight Committee

34

• Question Will the analysis phase be longer or
  shorter than that for the custom development
  approach?

35

• Design
• Varies considerably depending on approach taken
• Interface design varies according to the amount
  of customisation required
• Hardware and networks must support packages
• Training of end-users
• BPE performed, new procedures and job
  descriptions prepared

36

• Implementation
• Configuration of modules
• Integration of packages
• Prototype created and evaluated until production
  ready
• System is verified, tested tuned
• System documentation completed
• User training completed
• New system installed with rollout plan developed
  during design
• Organisational structures changed, personnel
  placed in new positions
• New procedures implemented

37

• The Configuration Process
• Configuration Customising
• Customising SAP to fit the business processes
• Customising the business to match the new
  processes!!

38

• Support
• Continued training support
• Well managed Help Desk
• Adaptive corrective maintenance

39
The SAP R/3 Procedure Model

• Provides structure for organising and managing R3
  implementation.
• Integrated within R/3 system
• Three levels of structure
• Phase, Work Package, Project Activity

40

• Each phase consists of several work packages
• Work packages are supported by the necessary
  tools.
• Phase 1 Organisational Conceptual Design
• The Business Navigator is used to determine
  process requirements
• Phase 2 Detailed Design Implementation
• The IMG (Implementation Management Guide) assists
  in determining and performing the necessary
  settings.

41

• Each work package contains
• Online Documentation -
• Describe the tasks to be performed
• Actions that can be executed -
• Customised transactions assigned to the work
  package.
• Other relevant functionality
• Status Information -
• Status information on the work package
• Project Documentation
• An editor for documenting the project.

42

• Project Activities
• The IMG is used to define the scope of a project.
• SAP reference IMG
• All components supplied by SAP.
• Enterprise IMG
• Used to determine which components to implement
  in your company.
• Project IMG
• Contains only the components which you want to
  implement within this project.

43

• The Implementation Guide
• The central element of Customizing
• Built into SAP R/3
• Leads you through all the work steps which are
  possible for the implementation
• Contains active functions to
• start Customizing transactions (when the work
  step enables system configuration)
• maintain status information (e.g. deadline)
• write project documentation
• read online the documents of the IMG

44

• The Implementation Guide displays the following
  information
• The names of the Customizing transactions and
  Customizing objects
• The existence of a note
• The existence of a release note
• The necessity of the activities
• The allocation to the Procedure Model
• The country allocation
• The title

45

• The Implementation Guide contains
• The four levels of IMG configuration
• The SAP Reference IMG (in client 000)
• The Enterprise IMG (in client 001)
• The Project IMG
• The release-specific IMG
• It also supports
• Project Documentation
• Project Management

46
The four levels of IMG configuration

• The IMG can be configured by selecting
• Countries
• Application components
• Attributes like mandatory / optional
• Release level

Project IMG 001
release-specific view
SAP ReferenceIMG
Enterprise IMG
Project IMG ...
view of manda- tory activities
Release-specific Project IMG
47

• SAP Reference IMG
• Contains all the work steps for all components
  supplied by SAP
• "R/3 Customizing Implementation Guide" library
• Organized according to the Business Application
  Components

48

• The Enterprise IMG
• Consists of segments of the SAP Reference IMG
  which only contains the work steps from the
  countries and the components which you want to
  implement.
• Exists only once in the SAP system
• Using "Business Application Components" determine
  which functions to introduce in your company.
• Function selection at any time.

49

• The Project IMG
• Consists of segments of the Enterprise IMG which
  only contain the work steps from the Enterprise
  IMG you want to implement within a Customizing
  project
• Can be a copy of the Enterprise IMG
• The Project IMG can be restricted by selecting
  one of the following attributes
• Required or optional
• Critical or non critical
• Individual selection
• All the work steps for a work package from the
  Procedure Model

50

• The release-specific IMG
• Groups all the work steps that you need for your
  Customizing work for a given release upgrade
• Derived from the Enterprise IMG or the Project
  IMG
• Every release note which affects Customizing has
  a reference to the SAP Reference IMG. The
  release-specific Implementation Guide is then
  generated via this where-used list.
• You can directly access the release notes from
  the release-specific IMG.
• You can generate the release-specific IMG for
  different release upgrades.

51

• Project Documentation
• Project documentation can be created when
  implementing the R3 system by using the Project
  IMG or a view of Project IMG.
• Two different types of project documentation
• project-specific documentation
• cross project documentation
• Project documentation can be structured with
  different note types. SAP provides note types.
  Additional note types can be defined.
• Project documentation can be prepared using
  either Microsoft Word or SAPscript.

52

• Project Management in the IMG
• Status information is maintained when
  implementing the R/3 system by using
• the Project IMG or a view of Project IMG.

53
Configuration of the IMG
Create Customizing Projects to help structure and
manage the R/3 implementation.
Select the countries, business application
components
Customizing Projects
SAP Reference IMG
Create views of Project IMG
Project IMG
Views of Project IMG
Enterprise IMG
Generate Enterprise IMG
Create Customizing Projects
Reduce the number of implementation activities by
creating special Project IMG views, such as
mandatory activities.
Create a Project IMG by selecting countries and
business application components from your
Enterprise IMG.