risk analysis toolkit

5/31/2008[Type the document subtitle] | AUTHOR

ERP PROJECT

RISK ASSESSMENT TOOLKIT

1. Using the Risk Assessment Tool

The Risk Assessment Tool should be used to assess the implementation risks created by the organization’s leadership, by the ERP implementation team, and by the organization itself. All members of the Leadership Team and Project Team should participate in the Risk Assessment process. The Organizational Risk Assessments should focus on three groups:

Priority Group 1 All people with jobs, responsibilities, and work environments that will change significantly during the ERP System implementation.

Priority Group 2 All people with jobs, responsibilities, and work environments that will change significantly after the ERP System implementation.

Priority Group 3 All people who are process and/or material dependent upon groups one and two. For example, people who either receive or provide the material and/or information inputs they need to complete their jobs from people in groups one and two.

The change team should implement organizational risk assessments by organizational unit (i.e., work teams, divisions, business units, or any other unit of organizational design). Group one should be assessed first, group two second, and group three third. To determine sample sizes for populations within organizational units, see the Risk Assessment Sample Size and Frequency Guidelines.

The change team must determine the most appropriate timing for risk assessments. Typically, Risk Assessments are completed with the Leadership Team once, during the Business Blueprint phase. The Project Team and the rest of the organization are assessed every three to four months throughout the ERP System implementation. Ultimately, the pace of the risk assessments should reflect the underlying pace of the ERP System implementation. And since the primary objective of the Risk Assessments is to anticipate implementation risks, the Risk Assessment processes will ideally begin no later than during the Business Blueprint phase of the ERP System implementation.

2

Sample Risk Assessment Schedule

Risk AssessmentsLeadership Team Risk

Assessment

Project Team Risk Assessment

Organizational Risk Assessment

Measure One Baseline measurement as Blueprinting begins.

Measure TwoAt the completion of Project Realization workplan.

Post Implementation Measure3-6 Months after Go Live date.

3

2. The Risk Assessment Tool

The Risk Assessment Tool is used to measure the project’s implementation risks at each point in the ERP System implementation.

There are two approaches that can be used to develop the ERP Risk Assessment Tool. Both approaches measure the same thing—the degree of implementation risk implicit in the ERP System implementation—but the approaches differ in how they report risk scores.

• Approach A, reports risk scores on a numeric scale that ranges from one to one-hundred. Low scores indicate a high degree of implementation risk. High scores indicate that implementation risk is being managed.

• Approach B, reports risk scores on a numeric scale that ranges from –100 to +100. Negative scores indicate a high degree of implementation risk. Scores close to 0 indicate that the organization is neutral, neither supporting nor necessarily withholding support from the ERP System implementation. Positive scores indicate that implementation risk is being managed.

Note the key difference. Approach A uses a five-point scale that measures implementation risk as low, medium, or high. Approach TB uses a seven-point scale that measures implementation risk as low, neutral, or high. A higher degree of granularity is afforded using this seven-point scale, requiring a higher degree of interpretation.

When choosing their approach, the change team should factor in their experience using and interpreting organizational metrics and the organization’s interest in and ability to understand different measures. Regardless of the approach chosen, the change team should choose one approach and adhere to that risk measurement approach throughout the ERP System implementation.

4

3. Approach A

Question Set Development

Using Approach A, the change team develops and uses a hundred point scale with which to measure and report risk scores.

The change team can use a standard set of 18 questions that cover the essential sources of project risk to implement Approach A or can prepare their own customized question set. The standard set of 18 questions assesses the perceived credibility, organizational risk, and individual risk implicit in the ERP System initiative. The customized set should also assess the perceived credibility, organizational risk, and individual risk implicit in the ERP System initiative, but can be tailored to better reflect the organization’s unique features and culture.

Regardless of whether the team chooses to use the standard question set or to construct a customized question set, a 5-point scale is used for each answer. In this 5-point answer scale, 1 is the most negative response, indicating an attitude which undermines support for the ERP System implementation, while 5 is the most positive response, indicating an attitude which advances support for the implementation.

Risk Assessment Tool , Standard Questions

Component – Category Question Answer Scale

Credibility – Ability/Skills/ResourcesTo what extent does this organization have the ability/skills/resources to complete this ERP System implementation?

Not at All ……. Very Much

1----2----3----4----5

Credibility – MotivationTo what extent does this organization have the motivation required to complete this ERP System implementation?


1----2----3----4----5

Credibility – SponsorshipTo what extent has there been visible executive sponsorship of this ERP System implementation?


1----2----3----4----5

Credibility – CommitmentTo what extent is the ERP System implementation important to management?


1----2----3----4----5

5

Risk Assessment Tool, Standard Questions (continued)

Credibility – RewardsTo what extent will people be rewarded for supporting the ERP System implementation?


1----2----3----4----5

Credibility – Measurement ChangesTo what extent does this organization’s measurement systems need to change to accommodate the ERP System implementation?

Will have Will notto have have to

change

1----2----3----4----5

Organizational – Customer ServiceTo what extent will customer service be disrupted as a result of the ERP System implementation?

Very Much ……. Not at All

1----2----3----4----5

Organizational – Process ChangeTo what extent will work processes improve as a result of the ERP System implementation?


1----2----3----4----5

Organizational – CompetitionTo what extent will this ERP System implementation improve our competitive position?


1----2----3----4----5

Organizational – CultureTo what extent is this ERP System implementation consistent with the organization’s culture?


1----2----3----4----5

Organizational – CompatibilityTo what extent is this ERP System implementation consistent with the organization’s goals?


1----2----3----4----5

Organizational – Organizational Gain/PainAfter completion, will the ERP System implementation deliver more pain or more gain to the organization?

More Pain ……. More Gain

1----2----3----4----5

Individual – Roles/ResponsibilitiesTo what extent are you concerned that your job/responsibilities will change as a result of the ERP System implementation?

Very Much ……. Not at All

1----2----3----4----5

Individual – Career OpportunitiesTo what extent will the ERP System implementation increase career opportunities for you and your co-workers?


1----2----3----4----5

6

Risk Assessment Tool, Standard Questions (continued)

Individual – Skill ChangesTo what extent are you concerned that the skills needed to succeed will change as a result of the ERP System implementation?

Not at All Very Much

1----2----3----4----5

Individual – TrainingTo what extent do you believe you will get the training you need as part of the ERP System implementation?


1----2----3----4----5

Individual – WorkloadTo what extent are you concerned that your workload will significantly increase as a result of the ERP System implementation?

Not at All Very Much

1----2----3----4----5

Individual – Individual Gain/PainAfter, completion, will this ERP System implementation deliver more pain or more gain to you personally?

More Pain ……. More Gain

1----2----3----4----5

7

Risk Assessment Tool, Customized Questions

The Question Template lists the types of questions the change team is required to ask within the three components—credibility, organizational impact, and personal impact—but does not dictate how the team should ask those questions. In addition, the customized set allows the change team to add questions at its discretion.

All scales should be ascending; that is, 1 is the most negative response, indicating an attitude which undermines support for the ERP System implementation, while 5 is the most positive response, indicating an attitude which advances support for the implementation.

8

Risk Assessment Tool – Question Template

REQUIRED CREDIBILITY QUESTIONS:

Component – CategoryAdd Question Text Answer Scale

Credibility – Ability/Skills/Resources Positive.........Negative1----2----3----4----5

Credibility – Motivation Positive.........Negative1----2----3----4----5

Credibility – Sponsorship Positive.........Negative1----2----3----4----5

Credibility – Commitment Positive.........Negative1----2----3----4----5

Credibility – Measurement Changes Positive.........Negative1----2----3----4----5

Credibility – Resources Positive.........Negative1----2----3----4----5

REQUIRED ORGANIZATIONAL QUESTIONS:

Organizational – Organizational Gain/Pain Positive.........Negative1----2----3----4----5

Organizational – Customer Service Positive.........Negative1----2----3----4----5

Organizational – Process Change Positive.........Negative1----2----3----4----5

Organizational – Competition Positive.........Negative1----2----3----4----5

Organizational – Culture Positive.........Negative1----2----3----4----5

Organizational – Compatibility Positive.........Negative1----2----3----4----5

9

REQUIRED INDIVIDUAL QUESTIONS:

Individual – Individual Gain/Pain Positive.........Negative1----2----3----4----5

Individual – Roles/Responsibilities Positive.........Negative1----2----3----4----5

Individual – Workload Positive.........Negative1----2----3----4----5

Individual – Skill Changes Positive.........Negative1----2----3----4----5

Individual – Training Positive.........Negative1----2----3----4----5

Individual – Career Opportunities Positive.........Negative1----2----3----4----5

The following optional questions can be added to the customized question set to further probe the extent to which Credibility, Organizational Impact, or Individual Impact are affected in various categories.

OPTIONAL CREDIBILITY QUESTIONS:

Credibility – Enabling TechnologyFor example, ”To what extent are you confident that this organization has the technology it needs to complete this ERP System implementation?”

Positive.........Negative1----2----3----4----5

Credibility – PartnersFor example, ”To what extent are you confident this organization has secured the outside assistance the organization needs to complete the ERP System implementation?”


Credibility – Change HistoryFor example, ”To what extent has this organization been successful completing other large-scale change projects in the past?”


Credibility – ConsequencesFor example, ”To what extent have people received benefits for supporting past large-scale change projects?”


OPTIONAL ORGANIZATIONAL QUESTIONS:

Organizational – Expectations & Metrics Positive.........Negative

10

For example, ”To what extent will this ERP System implementation actually help your organization meet performance expectations?”

1----2----3----4----5

Organizational – ResourcesFor example, ”To what extent are you concerned that the ERP System implementation will claim resources that could be used for better purposes?”


Organizational – InformationFor example, ”To what extent have you heard consistent messages about the ERP System implementation?”


OPTIONAL INDIVIDUAL QUESTIONS:

Individual – SupportFor example, ”Are managers providing the support this organization needs during this ERP System implementation?”


Individual – Job SecurityFor example, ”To what extent are you concerned that the ERP System implementation will cause downsizing in your organization?”


Individual – RewardsFor example, ”To what extent are you confident you will be rewarded when you do a better job for your customers?”


Individual – Staffing ChangesFor example, ”To what extent are you concerned that the staffing of your department will change as a result of the ERP System implementation?”


11

Risk Scoring

Under Approach A, risk assessment scoring is done in several steps to provide various views of the data and allow the Core Change Team to gain as much useful information as possible from the process.

Step A: Risk Score Calculations

(1) Develop an average total score for each question by adding all of the individual responses to each question and then dividing the total by the number of respondents. Note: Remember that in the 5-point answer scale, 1 is the most negative response, while 5 is the most positive.

Example: In a risk assessment session, 15 people respond to the credibility question ”To what extent is the ERP System implementation important to management?” Three respondents answer 1, five answer 2, three answer 3, one answers 4, and three answer 5 for a total score of 41 and an average score of 2.73.

(2) Develop an average score for each of the components (credibility, organizational impact, and personal impact). To do this, add the average question scores for all questions within each component and divide the total by the number of questions in that component. These scores can be compared to one another to identify areas that should be leveraged and areas which need more attention, and can also be tracked over time to measure the impact of project activities.

Example: The average scores for each of the six credibility questions are 2.73, 2.45, 3.78, 3.21, 4.12, and 2.03 for an average credibility score of 3.05.

12

(3) Add the three component scores and divide the total by three. Then multiply the resulting number by twenty to adjust the score to fit a 100-point scale. This is the Risk Score. This score serves as a benchmark for project progress and may be tracked over time.

Example: The three component scores are; Credibility 3.05, Organizational Impact 2.89, and Personal Impact 2.30. The average of these three components is 2.75. Multiplied by twenty this yields a Risk Score of 55.

Step Two: Question Ranking

Once the risk score has been calculated, rank the individual questions from highest to lowest according to their average score. The three lowest ranked questions are potential implementation risks and will be used as the discussion points in the Risk Workshop.

Example: The average scores for the 18 questions in the risk assessment range from 1.84 to 4.64. The three lowest averages are; 1.84 for ”To what extent do you believe you will get the training you need as part of the ERP System implementation? , 1.90 for ”To what extent are you concerned that the skills needed to succeed will change as a result of the ERP System implementation?”; and 2.03 for ”To what extent do this organization’s measurement systems need to change to accommodate the ERP System implementation?”.

13

Risk Assessment Results

Using Approach A, the Risk Score indicates the degree to which the project is at risk based upon people’s perceptions of project credibility, organizational impact, and individual impact. This score ranges from 0 to 100.

The highest and lowest ranked questions from the risk assessment (see above) are the specific views that build or undermine organizational support for the ERP System implementation. The change team should focus in particular on the perceptions that undermine the Risk Score. These negative perceptions are the implementation risks that need to be the central focus of the change program. Subsequent measures will show the extent to which the change program addresses these key concerns.

The degree of implementation risk attached to each range of risk scores produced by Approach One is shown in the following table.

Range of Risk Scores Implementation Risk Level and Action Implication

Low Range

Scores from 0 to 40

High

Change program needsto focus on the key

negative perceptions

Middle Range

Scores from 41 to 70

Moderate

Change program needs to keep negatives in check

and build on positive views

High Range

Scores from 71 to 100

Low

Change program needs to continue to build on

positive views

14

4. Approach B

Question Set Development

Using Approach B, the change team develops and uses a numeric scale ranging from –100 to +100 with which to measure and report risk scores.

As with Approach A, the change team can use a standard set of 18 questions that cover the essential sources of project risk to implement Approach B or can prepare their own customized question set. The standard set of 18 questions assesses the perceived credibility, organizational risk, and individual risk implicit in the ERP System initiative. The customized set should also assess the perceived credibility, organizational risk, and individual risk implicit in the ERP System initiative but can be tailored to reflect the organization’s unique features and culture better.

Regardless of whether the team chooses to use the standard question set or to construct a customized question set, a 7-point scale is used for each answer. In this 7-point answer scale, 1 is the most negative response, indicating an attitude which undermines support for the ERP System implementation; 4 is a neutral response, indicating that survey respondents do not know or have not yet formed an attitude or opinion about that question; and 7 is the most positive response, indicating an attitude which advances support for the implementation.

15

Risk Assessment Tool , Standard Questions

Component – Category Question Answer Scale

Credibility – Ability/Skills/ResourcesTo what extent does this organization have the ability/skills/resources to complete this ERP System implementation?

Not…….. ….No…………Very

At All.... ….View……..…Much

1---2---3---4---5---6---7

Credibility – MotivationTo what extent does this organization have the motivation required to complete this ERP System implementation?



1---2---3---4---5---6---7

Credibility – SponsorshipTo what extent has there been visible executive sponsorship of this ERP System implementation?



1---2---3---4---5---6---7

Credibility – CommitmentTo what extent is the ERP System implementation important to management?



1---2---3---4---5---6---7

Credibility – RewardsTo what extent will people be rewarded for supporting the ERP System implementation?



1---2---3---4---5---6---7

Credibility – Measurement ChangesTo what extent does the organization’s performance measurement system need to change to accommodate the ERP System implementation?

Very…….. ….No…………Not

Much.... ….View……..…At All

1---2---3---4---5---6---7

Organizational – Customer ServiceTo what extent will customer service be disrupted as a result of the ERP System implementation?



1---2---3---4---5---6---7

Organizational – Process ChangeTo what extent will work processes improve as a result of the ERP System implementation?



1---2---3---4---5---6---7

16

Risk Assessment Tool , Standard Questions (continued)

Organizational – CompetitionTo what extent will this ERP System implementation improve our competitive position?



1---2---3---4---5---6---7

Organizational – CultureTo what extent is this ERP System implementation consistent with the organization’s culture?



1---2---3---4---5---6---7

Organizational – CompatibilityTo what extent is this ERP System implementation consistent with the organization’s goals?



1---2---3---4---5---6---7

Organizational – Organizational Gain/PainAfter completion, will the ERP System implementation deliver more pain or more gain to the organization?

More……………..……. More

Pain……………………Gain

1---2---3---4---5---6---7

Individual – Roles/ResponsibilitiesTo what extent are you concerned that your job/responsibilities will change as a result of the ERP System implementation?



1---2---3---4---5---6---7

Individual – Career OpportunitiesTo what extent will the ERP System implementation increase career opportunities for you and your co-workers?



1---2---3---4---5---6---7

Individual – Skill ChangesTo what extent are you concerned that the skills needed to succeed will change as a result of the ERP System implementation?



1---2---3---4---5---6---7

Individual – TrainingTo what extent are you confident that you will receive the training you need as part of the ERP System implementation?



1---2---3---4---5---6---7

Individual – WorkloadTo what extent are you concerned that your workload will significantly increase as a result of the ERP System implementation?



1---2---3---4---5---6---7

Individual – Individual Gain/PainAfter, completion, will this ERP System implementation deliver more pain or more gain to you personally?

More……………..……. More

Pain……………………Gain

1---2---3---4---5---6---7

17

Risk Assessment Tool, Customized Questions

The Question Template lists the types of questions the change team is required to ask but does not dictate how the team should ask those questions. In addition, the customized set allows the change team to add questions at its discretion.

All scales should be balanced; that is, 1 is the most negative response, indicating an attitude which undermines support for the ERP System implementation; 4 is a neutral response, indicating that survey respondents do not know or have not yet formed an attitude or opinion about that question; and 7 is the most positive response, indicating an attitude which advances support for the implementation.

Risk Assessment Tool – Question Template

REQUIRED CREDIBILITY QUESTIONS:

Component – CategoryAdd Question Text Answer Scale

Credibility – Ability/Skills/Resources1---2---3---4---5---6---7

Credibility – Motivation1---2---3---4---5---6---7

Credibility – Sponsorship1---2---3---4---5---6---7

Credibility – Commitment1---2---3---4---5---6---7

Credibility – Measurement Changes1---2---3---4---5---6---7

Credibility – Resources1---2---3---4---5---6---7

18

REQUIRED ORGANIZATIONAL QUESTIONS:

Organizational – Organizational Gain/Pain1---2---3---4---5---6---7

Organizational – Customer Service1---2---3---4---5---6---7

Organizational – Process Change1---2---3---4---5---6---7

Organizational – Competition1---2---3---4---5---6---7

Organizational – Culture1---2---3---4---5---6---7

Organizational – Compatibility1---2---3---4---5---6---7

REQUIRED INDIVIDUAL QUESTIONS:

Individual – Individual Gain/Pain1---2---3---4---5---6---7

Individual – Roles/Responsibilities1---2---3---4---5---6---7

Individual – Workload1---2---3---4---5---6---7

Individual – Skill Changes1---2---3---4---5---6---7

Individual – Training1---2---3---4---5---6---7

Individual – Career Opportunities1---2---3---4---5---6---7

19

The following optional questions can be added to the customized question set to further probe the extent to which Credibility, Organizational Impact, or Individual Impact are affected in various categories.

OPTIONAL CREDIBILITY QUESTIONS:

Credibility – Enabling TechnologyFor example, ”To what extent are you confident that this organization has the technology it needs to complete this ERP System implementation?” 1---2---3---4---5---6---7

Credibility – PartnersFor example, ”To what extent are you confident this organization has secured the outside assistance the organization needs to complete the ERP System implementation?”

1---2---3---4---5---6---7

Credibility – Change HistoryFor example, ”To what extent has this organization been successful completing other large-scale change projects in the past?” 1---2---3---4---5---6---7

Credibility – ConsequencesFor example, ”To what extent have people received benefits for supporting past large-scale change projects?” 1---2---3---4---5---6---7

OPTIONAL ORGANIZATIONAL QUESTIONS:

Organizational – Expectations & MetricsFor example, ”To what extent will this ERP System implementation actually help your organization meet performance expectations?” 1---2---3---4---5---6---7

Organizational – ResourcesFor example, ”To what extent are you concerned that the ERP System implementation will claim resources that could be used for better purposes?”

1---2---3---4---5---6---7

Organizational – InformationFor example, ”To what extent have you heard consistent messages about the ERP System implementation?” 1---2---3---4---5---6---7

20

OPTIONAL INDIVIDUAL QUESTIONS:

Individual – SupportFor example, ”Are managers providing the support this organization needs during this ERP System implementation?” 1---2---3---4---5---6---7

Individual – Job SecurityFor example, ”To what extent are you concerned that the ERP System implementation will cause downsizing in your organization?” 1---2---3---4---5---6---7

Individual – RewardsFor example, ”To what extent are you confident you will be rewarded when you do a better job for your customers?” 1---2---3---4---5---6---7

Individual – Staffing ChangesFor example, ”To what extent are you concerned that the staffing of your department will change as a result of the ERP System implementation?” 1---2---3---4---5---6---7

Risk Scoring

Step One: Risk Score Calculations

Under Approach B, risk assessment scoring is done in several steps to provide various views of the data and to help the Core Change Team gain as much useful information as possible.

1. Re-scale responses for each question so that all responses equal to 1 are now given the value –3; all responses equal to 2 are now given the value –2; all responses equal to 3 are now given the value –1; all responses equal to 4 are now given the value 0; all responses equal to 5 are now given the value 1; all responses equal to 6 are now given the value 2; all responses equal to 7 are now given the value 3. Example: Ten survey respondents provided numeric responses to the first question on the risk assessment as follows. The change team re-scaled the seven responses as follows:

Respondent #Original

Response, 7-point scale

Re-scaledResponses To The

First Question

Respondent 1 1 -3

Respondent 2 2 -2

Respondent 3 3 -1

Respondent 4 4 0

Respondent 5 5 1

Respondent 6 6 221

Respondent 7 6 2

Respondent 8 7 3

Respondent 9 1 -3

Respondent 10 4 0

2. Average the re-scaled responses for each question.

Example: The average re-scaled score for the first question on this illustrative risk survey is shown at the bottom of the following table.

Respondent #Original

Response, 7-point scale

Re-scaledResponses, scale

–3 to +3

Respondent 1 1 -3

Respondent 2 2 -2

Respondent 3 3 -1

Respondent 4 4 0

Respondent 5 5 1

Respondent 6 6 2

Respondent 7 6 2

Respondent 8 7 3

Respondent 9 1 -3

Respondent 10 4 0

AVERAGE -- -0.1

3. The average re-scaled score for each question must range from –3 to +3. If average re-scaled scores are found outside of this range, repeat steps one and two. Add the average re-scaled scores for each question together to produce a summary score.

Example: The illustrative risk survey had five questions. Average re-scaled scores for each of these five questions are included in the following table. The net, or summary score, is shown as well.

22

Question Number

Average Re-scaled Score

1 -0.1

2 1.3

3 2.4

4 -1.8

5 -0.6

Summary Score 1.2

4. Produce a risk score by dividing the Summary Score produced in step three by the maximum possible re-scaled score. The maximum possible re-scaled score is calculated by multiplying the number of questions included in the survey by 3, since 3 is the maximum score for each re-scaled question.

Risk scores are typically reported as whole numbers, not fractions. As a final step multiply the decimal risk score by 100 in order to convert the decimal value to a whole number.

Example: The net, or summary of re-scaled scores for the five questions on our illustrative survey was 1.2. The maximum possible re-scaled score equals 15 (5 questions x 3).

Question Number


1 -0.1

2 1.3

3 2.4

4 -1.8

5 -0.6

Summary of Re-scaled Scores 1.2

Risk Score Decimal Value

1.2 15 = 0.08

23

Re-stated Risk Score

0.08 * 100 = + 8

5. Develop a risk score for each of the components (credibility, organizational impact, and personal impact). To do this, add the average re-scaled scores for all questions within each component. Divide these sums by the maximum possible re-scaled score developed in step four.

Example: Of the five questions in our illustrative survey, questions 1 and 2 probe the perceived credibility of the ERP System implementation; question 3 probes the perceived organizational impact of the ERP System implementation; and questions 4 and 5 probe the perceived personal impact of the ERP System implementation.

The average re-scaled scores for questions 1 and 2 are added together (-.1+ 1.3= 1.2) and divided by 15 (15 is the maximum possible re-scaled score developed in step 4) and multiplied by 100, producing a credibility score equal to +8; the average re-scaled score for question 3 (2.4) is divided by 15 and multiplied by 100, producing an organizational impact score of +16; the average re-scaled scores for questions 4 and 5 are added together (-1.8+ -0.6) is divided by 15 and multiplied by 100, producing a personal impact score of –16.

As a final check, we add the three component scores together to ensure that this sum equals the overall risk assessment score of +8.

Question Number


1: Credibility -0.1

2: Credibility 1.3

3: Organizational 2.4

4: Personal -1.8

5: Personal -0.6

Component Scores

Risk Score, Credibility Questions

((-0.1+1.3) 15) x 100 = +8

Risk Score Organizational Impact Questions

(2.4 15) x 100 = + 16

Risk Score Personal Impact Questions

((-1.8+ -0.6) 15) x 100 = -16

24

Overall Risk Score + 8 +16 –16 = +8

Step Two: Question Rankings

Once the risk score has been calculated, rank the individual questions from highest to lowest according to their average re-scaled scores. The three lowest ranked questions are potential implementation risks and will be used as the discussion points in the Risk Workshop.

Example: The average scores of the 18 questions over all three components in the risk assessment range from –2.3 to 1.85. The three lowest averages are; -2.3 for ”To what extent do you believe you will get the training you need as part of the ERP System implementation? , -1.9 for ”To what extent are you concerned that the skills needed to succeed will change as a result of the ERP System implementation?”; and –1.8 for ”To what extent does this organization’s measurement system need to change to accommodate the ERP System implementation?”.

3. Risk Assessment Results

Using Approach B, the Risk Score indicates the degree to which the project is at risk based upon people’s perceptions of project credibility, organizational impact, and individual impact. This score ranges from -100 to +100.

• Negative scores (risk scores from –100 to –10) indicate a high degree of implementation risk.

• Scores bracketing 0 (risk scores from –10 to +30) indicate that the organization is neutral, neither supporting nor necessarily withholding support from the ERP System implementation.

• Positive scores (risk scores from +31 to +100) indicate that implementation risk is being managed.

The highest and lowest ranked re-scaled questions from the risk assessment (see above) are the specific views that build or undermine organizational support for the ERP System implementation. The change team should focus in particular on the perceptions that undermine the Risk Score. These negative perceptions are the implementation risks that need to be the central focus of the change program. Subsequent measures will show the extent to which the change program addresses these key concerns.

25

The degree of implementation risk attached to each range of risk scores produced by Approach B is shown in the following table.

Range of Risk Scores Implementation Risk Level & Action Implication

Low Range

Scores from –100 to -10

HighChange program needs

to focus on the keynegative perceptions

Middle Range

Scores from –10 to +30

ModerateChange program needs to

keep negatives in checkand build on positive views

High Range

Scores from +31 to +100

LowChange program needs to

continue to build onpositive views

Applying the Risk Assessment Results

The process of applying Risk Assessment results is the same regardless of the risk measurement approach used by the change team.Implementation risks identified in the Risk Assessment are primary inputs to the Risk Workshops and are used to drive action planning.The Change Team uses Risk Assessment and Risk Workshop results to shape the communications and sponsorship programs. Results pinpoint how project sponsors should spend their time as well as clarify project messages to ensure relevancy and credibility.It is important to note that Risk Assessment is an ongoing process. Repeated measures give the Core and Extended Change Team the real-time insight needed to accelerate organizational acceptance of ERP. Repeated Risk Assessment sessions also provide an objective measurement of the effectiveness of the team’s change management activities.

26

risk analysis toolkit

Business

heard consistent

erp system

business blueprint

erp system

visible executive

potential

organizations

work processes