Transcript Document

Don’t Forget Your Business Processes!
Oracle Can’t Do it All for You!
Douglas A. Volz & Stephen F. Keefe
BearingPoint, Inc.
Agenda
• Introduction
• Common Pitfalls or Traps During or After an
Oracle Implementation or Upgrade
• Principles of Effective Business Process
Change
• Differences Between Mission, Vision, Strategy
• What is Business Process Modeling?
Agenda
(Cont’d)
• Ways to Look at Your Processes
– Activity Analysis
– Brown Paper Mapping
– Responsibility Charting
• Factors to Consider When Making Major
Changes
• References and Acknowledgements
• Conclusions
Introduction
• Why do so many Oracle Implementations not
yield the predicted benefits?
• Why are inefficient (pre-Oracle) methods still
in use after implementation?
• Learn about how you can effectively change
your business processes
• What are some of the common ways to
analyze your business processes
Common Pitfalls & Traps
What follows is a list of some common “traps”
that occur during an Oracle implementation
• It is the system’s fault; I want the Oracle System
to be like the old one
• Absolutely no customization vs. too much
• No ad-hoc reporting solution, no management
reporting solution
• Stakeholders not actively participating
• We have a budget (but no benefits case)
It is the System’s Fault
• Real case example, March – May 2003
• Blaming the 11.5.5 Oracle System and not
the underlying broken business processes
• Yet, when reviewing the Procure to Pay,
Order to Cash and Plan to Fulfill process
areas, out of the 300 issues found:
– Over 75% were caused by broken processes
– And many system issues were report related, not
core functionality
Customization Levels
• Too many customizations
– Leads to expensive upgrades or reimplementations
– Difficult to maintain – Oracle W/W Support will not
assist you if customization is involved
• Absolutely no customization
– Not viable either unless your operation is small
– Especially true for Supply Chain and CRM modules
No Ad-Hoc Reporting or Management
Reporting Solution
• Always need ad-hoc reporting
– Discoverer, Business Objects, Noetix Views, others
• Use of a report server (can double as a backup server)
• Also need to consider your management
reporting solution
– Oracle Business Intelligence modules / Oracle
Warehouse Builder
– Business Objects
– 3rd party data warehouse solutions
Stakeholders Not Actively Participating
• “The most important project for the company”,
yet:
– Stakeholders don’t attend meetings or respond
• How do you get them on board?
–
–
–
–
Engage your sponsors before the project or starts
The initial engine to motivation is involvement
Set project expectations together
Make them a “party to the crime”
We have a Budget (But no Benefits Case)
• Project budget has no relationship to the task
• Focus is on costs not on benefits
• Without a benefits case:
– Justifying the project as lower cost, not high value
– Much harder to sell internally
– Cannot get the needed resources
• Need to find the benefits
Benefits Matrix
QWs
Long
Range Benefits
Value
HRFs
Avoid!
Time wasters
Time to implement
QWs = Early wins
HRFs = Hassle reduction factors
LRBs = Medium to Long range benefits
Principles of Effective Business Change
Alignment of people, process and technology
• People
– Management sponsorship
– Skill levels and training, roles and responsibilities
– Commitment & wiliness to adopt new processes
• Process
–
–
–
–
Leading practices for your industry
Aligned with your strategic directions
Streamlined and effective
Measured and held accountable for
Principles of Effective Business Change
(Cont’d)
Alignment of people, process and technology
• Technology
– Right hammer for the right nail
– Don’t be first unless you have to!
– Choose the technology after you understand your
business requirements, not the only way around
Principles of Effective Business Change
(Cont’d)
How do you achieve this alignment?
Don’t look at the tools first!
• Find out how good you are – benchmark
• Do a high-level analysis of your business processes
and opportunities
• Then prioritize your business needs
• And last, look at the needed tools to achieve your
goals
Principles of Effective Business Change
(Cont’d)
• Find out how good you are
– Gauge yourself against your competition
– Compare current practices against leading
industry processes
– Performance benchmarks
Principles of Effective Business Change
(Cont’d)
Are we talking about financial measurements?
• Operational and financial measurements
– Not only ROI, working capital, EPS, etc. but also:
–
–
–
–
–
Purchasing spend as a % of cost of sales
No. of buyers per hundred employees
Manufacturing cycle time
Length of monthly accounting close cycle
And many others
Example:
Supply Chain Benchmark Analysis
Supply Chain SCORcard
Overview Metrics
EXTERNAL
Supply
Chain
Reliability
SCOR Level 1 Metrics
Actual
Parity
Advantage
Superior
Delivery Performance to
Commit Date
50%
85%
90%
95%
Fill Rates
63%
94%
96%
98%
Perfect Order Fulfillment
0%
80%
85%
90%
7 days
5 days
3 days
Responsiveness Order Fulfillment Lead times
Flexibility
INTERNAL
$30M Revenue
$30M Revenue
Key enabler to cost and
asset improvements
97 days
82 days
55 days
13 days
Production Flexibility
45 days
30 days
25 days
20 days
19%
13%
8%
3%
Warranty Cost
NA
NA
NA
NA
NA
Value Added Employee
Productivity
NA
$156K
$306K
$460K
NA
119 days
55 days
38 days
22 days
NA
196 days
80 days
46 days
28 days
$7 M Capital Charge
2.2 turns
8 turns
12 turns
19 turns
NA
Inventory Days of Supply
Assets
35 days
Value from Improvements
Supply Chain Response
Time
Total SCM Management
Cost
Cost
Performance Versus Competitive Population
Cash-to-Cash Cycle Time
Net Asset Turns (Working
Capital)
SCOR: Supply Chain Operations Reference Model, Supply-Chain Council
$30M Indirect Cost
Missions, Visions, Strategies and Processes
What’s the difference?
Mission
what we want to do
Vision
the size of our ambition
“To be excellent sailors”
“To sail around the world”
Strategy
how we will get there
“We will use a 45’
catamaran sailing east-to-west”
Plans & Processes
who does what when
“Detail, detail, detail”
What About Strategic Directions?
Set your strategic directions first
• Strategic direction, overall mission and vision comes
from your executive management; the overall goals
and objectives of your company or agency
• People, processes and technology support your
strategic directions
• Without it you could be solving the wrong problem!
What Are Business Processes?
You can define them as:
– A series of business activities that taken together,
transform resources into goods and services for
your customers
Source: Business Process Design Methodology, BearingPoint, Inc. April 2003
Sample Business Process
Requestor
Manual
Requisition
Process
Online
Requisition
Process
Approved
Manual
Requisition
Procure
Inventory Goods
& Services
Process
Approved
On Line or
Express
Requisitions
Inventory
Planning
Requisitions
1.0
Review
Requests
Buyer
No
New Supplier or
Requirement?
No
AutoCreate PO?
Yes
1.1 Create new
supplier or Select
existing supplier.
Negotiate Pricing.
1.2 Approve
Terms and/or
New Supplier
Request for
Quotation
Supplier
Responds
to Request
A/P
Sourcing
Yes
Source: R2i® for Oracle Release 11i, BearingPoint, Inc.
1.3 System
generates
PO or
Agreement
Release
1.4 Direct enter
Purchase Order
or Agreement
1.5 Print, Email,
Send or Fax
Purchase Order
Add New
Supplier
Process
Supplier
Ships
Product
Add New
Supplier
Process
Receiving
and
Payment
Process
What is Business Process Modeling?
• It is the simple yet time-consuming task of
asking yourself:
– can I do what I do any better?
Common goals for process modeling include:
–
–
–
–
Cost reduction and consolidation
Eliminating non-value added activities
Streamlining and improved efficiencies
Bringing up a new business unit
Approaches to Process Modeling
• Define first the business process areas
you want to address
• Find out who are the process owners &
stakeholders – get them involved
• Examine your processes & organization
– Activity analysis
– Brown Paper mapping
– RACI analysis
Activity Analysis
Activity analysis is a structured method of subdividing a large, complex organisation into a
series of activities
Example:
Purchasing
Department
Select suppliers
Negotiate annual Resolve invoice
contracts
queries
Raise purchase
orders
Expedite
orders
Activity Analysis
Helps you understand:
•
•
•
•
•
What each department actually does
Identifies gaps in the process analysis
Isolates potential opportunities
Identifies non-essential activities
The cost of doing an activity across an entire
enterprise
“Brown Paper Mapping”
• Gets the doers involved
• Shows areas of strength
• Shows areas of opportunity
• Shows the “big picture” - “Forest and trees”
• Thought provoker for system enhancements
• Can be used for a variety of workshops
Brown Paper Example
Copies of
documentation
Red flags
Note
approximate
timings
Process Title
Decision
Post-it
Notes for opportunities,
strengths, comments
Key metrics
Signatures
Responsibility Charting (RACI)
Helps determine who does what for a process
 Who is
Responsible
 Who is
Accountable
 Who is
Consulted
 Who is
Informed
-
The “doer” - the person who actually
conducts an activity
-
Ultimate ownership: the person who
carries the risk if it all goes wrong
-
A person who must be consulted
before decision/action is taken
-
A person who must be informed after
decision/action is taken
An Example of a RACI
Activity
Training
Lead
Project
Sponsor
Project
Managers
Training Needs of Project Team
- review needs
- plan training
- assign coach
Resourcing
- determine adequacy
RA
RA
RA
A
- Get departmental approval
- plan mobilization
Obtain Buy-In from stakeholders
I
I
RA
RA
I
Program Management
I
I
RA
I
C
RA
Identify Linkages/Dependencies
A
R
Report Workstream Results
A
R
Evaluate Project Progress
RA
I
Factors to Consider When Making
Major Changes
– Is making major changes a challenge?
– Reasons why projects fail
– What is resistance to change
– What strategies can you use
Major Change has Always Been
Recognized as Significant Challenge
“ It should be borne in mind that there is nothing more
difficult to arrange, more doubtful of success, and more
dangerous to carry through than initiating changes in a
state’s constitution. The innovator makes enemies of all
those who prospered under the old order and
only lukewarm support is forthcoming from those who
would prosper under the new”
Niccolo Machiavelli (1469 - 1527)
Some Key Reasons Why Projects Fail
Inexperience in
scope and
complexity 17%
Redesign of
business processes
and IT issues 14%
Lack of
communication 20%
Failure to define
objectives
17%
Project Management Problems
32%
A survey of 252 European and US companies revealed the
importance of the ‘softer’ issues. Asked what were the
main reasons why major projects they have been
involved in have failed, they answered . . .
Typical “soft” Design Issues in System
Implementation Projects
•
•
•
•
Clear vision and goals
Securing and retaining active sponsorship
Effective communications
Technical and legal barriers - habits vs
requirements
• Cultural barriers
Two Levels of Successful Change Mgmt
Change Management
Organizational change
What we need to do to
effectively design and integrate:
•
•
•
•
New work processes
New technology
New application software
New organisation
structure
• New performance
standards
People change
What we need to do to get our
people to:
• Understand and accept the
change
• Commit themselves to
preparing for it
• Be proactive in identifying &
executing all actions
necessary for success
Such strategies recognize the process that
people go through when they experience
change..
deny
commit
resist
explore
Managing implementation projects means
addressing rational, political and emotional
issues:
Rational
Rational
Political
Emotional
What will resistance look like
Don’t
understand
what I will do
Don’t have
the skills
Rational
Don’t know if
it’s worth it
Happy as I
am
Don’t
have the
time and
resource
I didn’t sign
up for this
Don’t think
this will work
Losing
control of my
destiny
Will I lose
power
Who’s
sponsoring
this
Political
How can I
regain control
Risks are too
high
You are
changing the
rules
Emotional
Can I cope?
What’s in it
for me
Organization
says project
is failing
Stupid
consultants
Too much
stress
Why do this?
Resistance to change is natural. It
needs to be acknowledged and
positively managed
Confusion
Deflection
Immediate criticism
Silence
Denial
Aggression
Malicious compliance
Avoidance
Sabotage
Leave
Early agreement
Some Examples of How to Manage
Resistance
•
•
•
•
•
Adopt a positive attitude to those who express strong
views
Ensure ‘sponsorship’ provides a strong enough force to
counter resistance
Capture the key concerns, recognize problems early
Build responses to resistance into your communications
and training
Ensure you are seen to have listened to concerns and
acted where appropriate
Change management raises business performance
by...
Right People
Right
Things
Right
Way
...ensuring that organizations have the right
people, doing the right things in the right way
References
•
Don’t Park Your Brain Outside, A Practical Guide to
Improving Shareholder Value with SMART
Management®, by Dr. Francis Hartman, ©Project
Management Institute
•
SMART Management® presentation by Ken Hanley,
BearingPoint, Inc., May 2003
•
Business Process Design Methodology,
BearingPoint, Inc., April 2003
•
R2i® (Rapid Return on Investment) implementation
toolkit, BearingPoint, Inc.
Conclusions
•
•
•
•
•
We have covered some of the common traps and
pitfalls
Discussed how to figure out your business
requirements and align it to your strategies
How to focus on business processes and business
benefits – not just project cost
Looked at how making changes can be difficult
And some techniques to managing resistance
Major changes are possible – you can transform
your company
Questions & Answers
Thank You for Your Attendance and Participation