Spend Matters welcomes a guest post from Doug Davis, Senior Consultant at The Hackett Group.
Implementing an Enterprise Resource Planning (ERP) system can be a daunting task for many organizations due to the time and effort required, not to mention the financial commitment. In an effort to mitigate the risks, understand the complexities, and identify change management issues, organizations should commit six to eight weeks prior to blueprinting to conduct a mobilization assessment. The assessment will give the organizations an opportunity to identify and mitigate potential risks before the project is formally begun.
The purpose of the mobilization effort is to thoroughly assess your core end-to-end business processes (examples provided below) using four key evaluation criteria: opportunity, risk, complexity, and change management. The output of the assessment will not only help you prioritize your focus on each process, but also provide guidance for deploying the proper resources (and inherent skill sets) to execute the implementation. For example, a highly complex process with significant change management will require additional technical rigor that may not be required for a process that presents significant risk to the organization, but is already executed in an ERP workflow. In this post, I will identify how to approach and execute a mobilization assessment project, along with how to use the results.
Step 1: Identifying and defining the core end-to-end business processes (Level 1) and sub-processes (Level 2)
Prior to conducting any mobilization assessment, it is important to document and define your core business processes (Level 1), along with the appropriate sub-processes (Level 2). Level 1 processes represent the transactional platform of standardized business process for how you execute and maintain your business. Level 2 processes identify the individual work flows (sub-processes) you execute for each of your core, standardized business processes.
It is important to keep in mind that not all of your core business process will be in-scope for your ERP implementation and to carve out processes that require a dedicated platform outside of the ERP system. Examples of processes that may not fit within your selected ERP platform are customer relationship management and hire to retire.
As you document and map your core business processes (or if you have these processes documented already), you can begin to prepare for the next phase of the assessment by identifying the functional business leaders (process owners) responsible for each Level 1 process. The functional business leaders will serve as the starting point for the mobilization assessment by providing background on the strategic direction of the process and key subject matter experts to include in workshops and discussions. Examples of functional leader titles include V.P. of Operations, Controller, Director of Sales, etc.
Level 1 and Level 2 Process Examples:
|Core - Level 1||Sub-process - Level 2|
|Procure to Pay||Process Requisition, Process P.O., Manage Compliance, etc.|
|S&OP||Plan Supply, Plan MRP, Plan Procurement, etc.|
|Record to Report||Intercompany Accounting, Cost Accounting, Close Consolidate and Report, etc.|
|Hire to Retire||Recruit, Hire, On-board, Manage Policies, Strategic Staffing Plan, etc.|
Step 2: Conduct Process and Sub-Process Specific Workshops
Upon the completion of mapping and defining your core process you can begin to engage the organization via process- and sub-process-focused workshops and discussions. The workshops should be conducted initially at the Level 1 process level with functional leaders. Functional leader workshops should be focused on identifying the most likely process and sub-process areas that will require significant process re-engineering from the process owner's perspective. This view will often align with the strategic decision for integrating the business process within an ERP workflow. Along with gaining a high-level overview of each core process from the functional leaders, these initial workshops should be used to build a list of key subject matter experts and sub-process owners to conduct the next round of workshops.
The subject matter expert / sub-process owner workshops should be focused on taking a deeper dive into how the process is currently being executed (e.g., tools, systems, custom applications), the limitations of the current process, and potential change management hurdles. Think of these workshops as a gap analysis based on the current state process and the optimal future state.
Step 3: Assess each Level 1 and Level 2 process in terms of opportunity, risk, complexity, and change management
The final stage of the mobilization assessment is to synthesize the information collected from the process and sub-process workshops to conduct an assessment of each process based on opportunity, risk, complexity, and change management.
The key assessment criteria are defined as:
- Opportunity - Degree of opportunity available to the business (e.g., revenue impact, operational efficiencies, capacity improvement, IT efficiency) for improving the current process
- Risk - Degree of potential downside risk to the business if the future state process is not effectively aligned/optimized to meet the business needs
- Complexity - Degree of process clarity / definition currently in place; degree of complexity identified in past roll-outs; degree of challenge for technical implementation (fitting process into ERP)
- Change Management - Degree of change readiness that currently exists within the organization; degree of resistance to future process changes
A good way to visualize the degree of each criterion is to use a Harvey Ball rating system. This will allow you to generate a subjective rating for each sub-process.
0 = Non-existent to very low degree | 1 = Low degree | 2 = Medium degree | 3 = High Degree | 4 = Very High Degree
Unlike the approach in Step 2, the focus of the assessment should be at the Level 2 sub-process first, followed by an aggregate assessment of the Level 1 process. The opportunities, risks, complexities, and change management requirements for each sub-process will roll up to determine the amount of focus, technical rigor, and team structure deployed to manage each process during the implementation.
By "bucketing" the processes based on their overall rating for each criterion, you will now be able to prioritize your focus and develop a tailored implementation strategy for each process. Some processes may require more strategic leadership and change management skills due to the opportunity for the business and maturity of existing processes, while others may require significant technical capabilities and numerous subject matter experts due to the inherent complexities and disparate network of systems currently used to execute the process.
The assessment should be used as a tool to guide your focus on each process and help you identify the key resources and skill sets required to address the varying opportunities, risks, complexities, and change management requirements of each process.