peter akers nov 06 managing
TRANSCRIPT
Peter Akers Nov 06
Managing Integrated Business Changein a multinational company
Peter Akers Nov 06
Goal – to give you an understanding of ….
• The power of Integration and Commonality in a modern MNC or large enterprise.
• The Challenge of Managing Major Business Change in an integrated Enterprise
• The criticality of good People Change Management to a successful business change.
• Some Key Elements of good People Change Management
Peter Akers Nov 06
My Experience
• 26 years gaining experience– Chemical engineer– Manager – production, new plant design, distribution– Director
• Customer Service & distribution• Business Administration – Supply Chain, Finance, IT, Business
Analysis• Sales
• 10 years driving major business change– Enterprise wide Re-design project– Post implementation support & improvement projects– Other major change projects
• Y2k• Euro• Several acquisitions• Change to Single Business Entity
Peter Akers Nov 06
Change Management – Different Aspects
• Managing Strategic Business change– Business sector– Strategic alliances– Acquisition, merger, divestiture– Etc
• Managing Marketing and Sales Strategies– Product, price, positioning, promotion
• Managing ERP Operations change– Sales, manufacturing, distribution, finance, etc operations– Changing Processes, Systems & People
Peter Akers Nov 06
ERP Change Management (& examples)
• Proactive– Major Re-design projects
• Enterprise re-design project– Smaller projects responding to specific opportunity
• Improve Purchables process through intelligent scanning– Drive continuous improvement
• Reactive– Respond to strategic business changes
• Integrate an acquisition– Respond to Marketing & Sales strategies
• Set up a new distribution channel– Respond to major re-organisation
• Implement a downsized organisation– Respond to legal needs
• Convert local currencies to Euro
Peter Akers Nov 06
MNCs and other major companies have undergone huge change
in the last 15 years….
From FragmentationTowards Integration and Commonality
Peter Akers Nov 06
Major Companies (MNCs) – Historical Fragmented Structures
Business 1 Business 2
Country 1
Country 2
Multiple IT systems & support teams
Multiple Data Structures
Multiple Processes & Practices
Multiple Legal Entities
Multiple Support Organisations
Multiple Customer & Vendor Relations
System
s
Data
Proce
sses
Legal
Entities
Suppor
t Tea
ms
Customer
s & V
endo
rs
Slow, costly, and difficult to manage
Peter Akers Nov 06
The Modern MNC – Integrated Enterprise
• Enterprise Commonality of Data
• Enterprise Commonality of Best Practice Processes
• Maximum use of Single Business Entities
• Shared Services across Businesses & Countries
Facilitated by ….
• Enterprise wide Integrated ERP System (e.g. SAP)
Peter Akers Nov 06
Single Integrated I.T. System – e.g. SAP
SDSD
MMMM
PPPP
QMQM
PMPM
HRHR ISIS
OCOC
PSPS
AAAA
COCO
FIFISales &Sales &
DistributionDistribution
MaterialsMaterialsMgmt.Mgmt.
ProductProductPlanningPlanning
QualityQualityAssuranceAssurance
Plant Main-Plant Main-tenancetenance
HumanHumanResourcesResources
IndustryIndustrySolutionsSolutions
Office &Office &Communi-Communi-
cationcation
ProjectProjectSystemSystem
AssetAssetAccountingAccounting
ControllingControlling
FinancialFinancialAccountingAccounting
IMIMInvestmentInvestment
ManagementManagement
INTEGRATED PACKAGE
(SAP)
Peter Akers Nov 06
Power of Integration – Example RM Purchase Order
• Sales order or Sales Forecast• Long Term Production Plan• Finite Production Scheduling• MRP requirements• Raw Material Inventory
• Raw Material Receiving• Quality Testing & Assurance• Invoice Receipt and Matching• Accounts Payable• Banking• VAT• Intrastat, Extrastat, Duties• Purchasing Analysis and Negotiation• Contract Management
In an integrated systemone transaction feeds all
=Speed & Efficiency
=Lower cost &Better Service
Raw material Purchase Order
Peter Akers Nov 06
An Integrated system requires common data, but there are other benefits of common data …
• Products– Production planning & MRP– Product availability– Quality assurance
• Customers– Managing relationships across businesses & countries– Maximising volume leverage– Managing price decisions
• Finance– Business analysis– Faster closing
• Materials & Vendors– Managing relationships across businesses & countries– Maximising volume leverage to reduce price– Reducing outage risk through clear availability
Better management information and business decisions - some examples…
Peter Akers Nov 06
“I hope they never catch on”
ACME PUMP
I wonder if the company realizes thatit qualifies for our ‘gold’ volume discount.
2278-89, 200 amp,ACME INC.P655545 200 accme
123456 a200
ACME PUMP
Peter Akers Nov 06
“Oh how I long for yesterday”
ACME PUMP
I wonder how they do it?
123456 200 ACME123456 200 ACME
123456 200 ACME
Peter Akers Nov 06
The Integrated Enterprise – Drivers & Benefits
• Integration– Speed & efficiency (one transaction drives all)– Reduced costs & improved customer service
• Process Commonality – Shared best practices– Easier to support – training, systems, backup, etc
• Data Commonality – Better & faster decisions– Maximise leverage – customers & vendors
• Single System – Facilitates all the above– Reduces systems cost and risk– Facilitates Shared Services = lower cost
Peter Akers Nov 06
Questions so far?
Peter Akers Nov 06
The Modern MNC – Integrated Enterprise
• How do you get there?– Enterprise re-design project– Gradual redesign and integration business by
business• How do you then manage change?
• Continuous improvement• Proactive projects• Response to business changes
The importance of People change Management
Peter Akers Nov 06 19
TechnologyTechnology SAP enables the
processes
Processes Deliver the result
PeoplePeople Make them both work
An Integrated Enterprise demands Integrated change …..
Peter Akers Nov 06
18
Major Business Change – Project Elements
Scope & plan
DesignVision,Target
Configure &Unit test
Integration test& user accept
Migration &Start-up
Operate
Process & Systems change
Peter Akers Nov 06
19
Major Business Change – Project Elements
Scope & plan
DesignVision,Target
Configure &Unit test
Integration test& user accept
Migration &Start-up
Operate
Process & Systems change
People Change – “Hard” Processes
Organisation design
Role design
Skills assessment
Training
Peter Akers Nov 06
People Change – The “Hard” Processes
• Role Definition– Define who does what down to script level – individual transactions– Design system access– Drive user training
• Organisational design– Define organisation structure– Define Process ownership– Define individual positions eg (role 1 + role3 + role 7)
• Individual Skills Assessment– Identify skills and gaps to perform roles– Define training requirements
• Training– Develop training materials & tools– Provide training– On-going support & re-training
Peter Akers Nov 06
Project Team Lacked Skills 44%
Source: D&T 1995 CIO Survey
IT Perspective not Integrated 36%
Process Change not integrated 41%
No Change Management Program 43%
Scope Expansion / Uncertainty 44%
Case for Change not Compelling 46%
Poor Project Management 54%
Inadequate Sponsorship 72%
Resistance to Change 82%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%% of Firms
Unrealistic Expectations 65%
Main Barriers to major change success...
Peter Akers Nov 06
22
Major Business Change – Project Elements
Scope & plan
DesignVision,Target
Configure &Unit test
Integration test& user accept
Migration &Start-up
Operate
Process & Systems change
People Change – “Hard” Processes
Organisation design
Role design
Skills assessment
Training
People Change – “Softer” Processes
Set the Climate for Change
Engage and empower the whole organisation
Implement & SUSTAIN
Peter Akers Nov 06
People Change – The “Softer” Aspects
• Top Management Commitment
• Change Readiness Assessment
• Communication (Communicate, Communicate, Communicate)
– Provide understanding– Gain acceptance– Change culture
• Process Ownership
• Project Organisation & Resources
• User Involvement
Peter Akers Nov 06
Process Ownership is Critical
• Process Owners must be at several levels…– Enterprise wide– Geographic– Business– Location
• Process Owners have several roles…– Set direction & priorities– Establish roles & resources– Take process decisions– Lead Process Improvement Teams– Ensure proper Controls
Peter Akers Nov 06
Project Organisation & User Involvement
SPONSORHIP – Bus leads, Process Owners, IT Lead
PROJECT MANAGEMENT
TECHInfrastructure
TECHDesign
USER ORG
Specialists Analyst / Programmers Key Users - by process
Power Users – by process, country, business, location
END USERS
1 - 20
5 – 100s
(part time)
100s-1000s
Pro
cess
Ow
ner
ship
def
ined
& in
volv
ed
Peter Akers Nov 06
Summary
• The power of Integration and Commonality in a modern MNC
• The Challenge of Managing Major Business Change in an integrated organisation
• The criticality of good People Change Management to a successful business change project.
• Some Key Elements of good People change Management
Peter Akers Nov 06
A lot of stuff not covered including ….
• Managing common data
• Implementing an Enterprise re-design project
• Ongoing support & improvement– Organisation– Resources– Processes
• Detailed project methodology– Design – Unit testing– Integrated testing & acceptance– Migration and start-up
Peter Akers Nov 06
Questions?
Peter Akers Nov 06
Managing Major Integrated Business Change
Life is either a daring adventureor nothing!
Peter Akers Nov 06 36
You won’t reallybelieve it untilyou’ve done it
The importance of People Change
Peter Akers Nov 06
ADDITIONAL SLIDES in support of Questions
Peter Akers Nov 06 22
Complexity Example…. Re-design of Monsanto E-A Operations
• All major processes & SAP modules• Major plant and distribution centre• Multiple guest and toll production operations• 22 Sales offices selling to 65 countries• 55 Legal entities• Complex business requirements, best practices.
Duo & trio billing Complex pricing See thru profitability Full sales & operational planning
• Full International design - language, currencies, taxes, etc.
Peter Akers Nov 06
Changing Processes & Systems
1. Develop Integrated Scenarios• As-Is Process + Best Practices = To-Be Process• Interactive with chosen system capability
Example – From order entry to cash collection for Product A from production plant B to a customer in Germany.
2. Develop detailed Scripts- Specific actions
- Specific people roles
- Defined Data
3. System Design & Configuration- Add system transactions to scripts
4. Integrated testing & User Acceptance
Peter Akers Nov 06 8
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eValue
ofIntegration
& BestPractices
Business 1 2 3 4 5 6 7 8 9 10
We can get enormous value from implementing within a single business
Integration and best practices will deliver major costs and service benefits to that business
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Valueof
Integration& Best
Practices
Business 1 2 3 4 5 6 7 8 9 10
Value of Commonality
But you won’t get the full value of commonality ...
… until you have implemented all those businesses with a common system and set of processes
Peter Akers Nov 06 10
Ord
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Valueof
Integration& Best
Practices
Business 1 2 3 4 5 6 7 8 9 10
Value of Commonality
Value ofInformation
You also won’t get the value of global and enterprise data
… until you have implemented all the businesses with a common data structure
Life Sciences Integration
ProjectCONCORD
Peter Akers Nov 06
Why Change Efforts Fail...
• Not establishing a great enough sense of urgency• Not creating a strong enough leadership group• Lacking a vision• Undercommunicating the vision • Not empowering others to act on the vision• Not planning for and creating short-term wins• Declaring victory too soon• Not anchoring changes in the corporation’s culture
Source: Harvard Business Review, March-April 1995
Peter Akers Nov 06
• Design best practice processes with enterprise level commonality• Start with a Pilot Implementation
• Pricing• Profitability analysis• Product definition• S&op• Customer hierarchy
• Warehousing• Scheduling• Costing
Global Enterprise design
InternationalDesign
SectorDesign
SiteDesign
• Integral part of global design- Currency- Languages- Ex-US legal- Inter-entity- Standards
Multiple Cutovers
Enterprise Transformation approach
Do the Process Design interactively with the chosen Enterprise system
Peter Akers Nov 06 24
Going live is only the beginning of the journey
The question is “How deep will the dip be and how long will it take to get through it ?”
PostImplementationDip
Legacy
Startup
(SAP) issues
resolution
Getting the processesand people up to full speed
Continuousimprovement &
unexpected benefits
Delivering the benefits