SAP Project Management Best Practices

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1 Implementing SAP R/3 in 21st Century: Methodology and Case Studies Assist.Prof.Dr. Arzu Baloğlu Marmara University Computer Engineering abaloglueng.marmara.edu.tr arzubaloglusuperonline.com 2 Implementing SAP R/3 in 21st Century: Methodology and Case Studies Introduction st C1 Projects and Trends in the 21 Century 1.1. Introduction 1.2. What is SAP 1.3. Needs of the next century 1.4. What is Accelerated SAP (ASAP) 1.4.1 SAP R/3 system 1.4.2 ASAP implementation and some challenges 1.4.3 Conclusion C2 Introduction to SAP Project Management 2.1 Basic definitions: Project and project management 2.2 SAP Implementation Methodologies and Strategies 2.2.1 Step by step 2.2.2 Roll-out 2.2.3 Big Bang 2.3 Accelerated SAP: An overview 2.3.1 ASAP roadmap 2.3.2 Current changes with value SAP C3 An Efficient Tool for SAP Project Management : Internet Services 3.1 Internet programs for integral culture 3.2 Internet as project infrastructure 3.3 Using internet in project management 3.4 Checklist before installing implementation tools C4 How to Implement SAP 4.1 Project preparation 4.1.1 Project goals and objectives 4.1.2 Roles and key focus 4.1.3 Determining the implementation strategy 4.1.4 Developing a project budget 4.1.5 Setting up the program organization 4.1.6 Developing a charter 4.1.7 Creating the project team training plan 4.1.8 Determining the technical requirements 4.1.9 Setting up the project authority 4.1.10 Activity and project planning 4.1.11 Investigating the innovations in the project management practices 4.2 Solution definition 4.2.1 Designing the training plan 4.2.2 Technical design planning 4.2.3 Realization of some assessments 4.2.3.1 Focused current state assessment 4.2.3.2 Customer requirements assessment 4.2.3.3 Process performance assessment 4.2.3.4 Sub-process assessment 4.2.3.5 Human organization assessment 3 4.2.3.6 Current state technology performance assessment 4.2.4 Business process definition 4.2.5 Business case development 4.2.6 How to set up value driven method 4.2.7 Final definition of the solution model 4.3 Solution development and realization 4.3.1 Roles and key focus 4.3.2 Main activities in the realization phase 4.3.3 Project team training 4.3.4 Conversion and interfaces 4.3.5 Final configuration 4.3.6 Tests 4.3.7 Final integration test 4.3.8 Authorization 4.3.9 Prototyping 4.4 Final preparation 4.4.1 User manual and support 4.4.2 End user training 4.4.3 System management and system test 4.4.4 Cut-over plan 4.4.5 Final approval and validations 4.4.6 Going live check 4.4.7 Data transfer C5 How to maintain SAP 5.1. Post implementation maintenance 5.2. Completion: Analysis and documentation 5.3. Providing live system support 5.4. Managing the scope 5.4.1 Managing change request 5.4.2 Closing the change requests 5.5 Project auditing 5.6 Structuring the improvement activities 5.6.1 SAP and process consultants 5.6.2 BPR (Business Process Reengineering) C6 Importance of Local Culture 6.1 Cultural aspects of communication and teamwork 6.2 SAP in Turkish cultural context C7 Case Studies Case Study 1 Philip Morris, Turkey Case Study 2 Yasar Holding, Turkey Case Study 3 Basari Holding, Turkey Case Study 4 Project Experiences from the World Literature Case Study 5 Project Experiences from the SAP Project Managers C8 Conclusion 4 FOREWORD SAP is the most common ERP system all over the world as well as in Turkey. I worked for many companies, some of which were using and most of which were implementing SAP. I have experienced problems and successes with the projects I have been involved over the past years. However, based on my business experience on SAP projects I realized that useful documentation and reference books about SAP project management and approach were currently not available in Turkey or elsewhere, although project management is the most critical part of SAP implementations. Additionally, from both successful and unsuccessful implementations we keep on getting feedback about lack of reference books, written documentation and experience in these areas. SAP implementations require strong expertise and powerful project management. Furthermore, as far as we experienced, there are no satisfactory reference books about SAP project management in the universities where we teach ERP systems and implementations, either. Books related to SAP modules, technologies and ABAP are available in most places, but the subject of project management is generally addressed inadequately, in reference to SAP implementations. It is also a subject that is transforming over the years as new methodologies are introduced and new SAP products are integrated to existing modules. Yet I think that there is enough material about SAP implementation and project management to fill a book. All these issues point to the need for a methodological system approach. Particularly, implementations in Turkey require a methodology that supports the business processes that might be specific to Turkey and its legal requirements, and focuses on Turkish teamwork habits and work culture. This book does not claim to introduce a new methodology. Rather than that it is intended to provide a redesign in the methodology integrated with proven experiences, various company approaches, SAP implementation methods, my own experiences and information, and also elaborate case studies. I think that company case studies are especially valuable, so readers might be more interested in Chapter 7 where these are presented. The redesigned methodology, which is based on a new system approach, is supposed to improve the conventional methods integrating them with new technological tools. For instance, internet has been highlighted as a perfect tool for project management. We also provide two appendices, which might be helpful in implementation: Some project control table examples, which you can customize and improve within the realm of your project, and a detailed key project team profiles, which are hoped to assist you regarding your project team specifications. This book integrates various methods on basis of a common language, analyzing some experiences and methodologies in worldwide SAP implementations for the use of both academic and business communities, and is hoped to meet an essential need of current and potential SAP clients, available industrial users, SAP business partners, consultants, students and the academic community and new users in future. 5 ACKNOWLEDGMENTS I thank my family for their everlasting support and for coping with my problems during the writing process. Their support motivated me to continue this book. Particularly, I want to thank my mother because she has always pressed me in writing like a coach and made me calm whenever I was stressed. Her love, motivation and coaching have been incredible. Next, my gratitude goes to the my partner for co-authoring this book, Anil Ozkaynak, SAP Consultant from Innova Consulting in USA. Thank you soo much for your excellent values. Special thanks are due to those who have significantly influenced my thinking about supplied materials to help us write this book: Iffet Aybey – Philip Morris Turkey; Tayyar Bacak - Anadolu Endustri Holding AS, Burak Uzkan - Anadolu Endustri Holding ; Can Ulver,.- Yasar Holding AS, Astron Yazilim. Cihat Onbasi - Basari Group and to my other valuable collegues. Furthermore, I thank my students who helped us relating case studies: especially, Tamay Cilasun and Silan Dogan - Bilgi University; and my managers and colleagues who supported me with documentation and ideas about project methods for managing projects. Another thanks to my dear friend, Fred Keultjes - Computer Engineer, Netherlands. My final thanks to dear SAP employees Ozan Ersen, Sebla Salkur and Safa Haktanir from SAP Turkey Inc. Enjoy the book and please send me your feedbacks. For any inaccuracies, please accept my sincere apologies and forgive me until the next book. Dear Friends, Thank you all of you again. Arzu Baloglu 6 Figure List Figure 1.1. Linking the extended supply chain – SAP user day Figure 1.2. Integrating Back Office and Front Office Figure 1.3. SAP Product Family Figure 1.4. SAP R/3 Modules Figure 1.5. SAP Basis Figure 1.6. SAP Master Data Figure 2.1. Accelerated SAP – Implementation Solution Figure 2.2. Defining the points on the ASAP Upgrade Roadmap. Figure 2.3. Documents of an ASAP Project Figure 4.1. Project Preparation – work pacakages Figure 4.2. Define Project Goals and Objecticves Figure 4.3. Roles and Key Focus Figure 4.4. Review and confirm implementation plan Figure 4.5. Determine Project Organization Figure 4.6. Project Team Organization Chart Figure 4.7. Efficient project organization Figure 4.8. The initial project charter and the project charter Figure 4.9. Create and Issue Project Charter Figure 4.10. Create Project Team Training Plan Figure 4.11. End User Training and Documentation Strategy Figure 4.12. Technical Requirements planning for Local Projects Figure 4.13. A fragment of an activity-based work breakdown structure Figure 4.14. SAP Project Plan Figure 4.15. Design Training Plans Figure 4.16. Technical Design Planning Figure 4.17. Business Blueprint Figure 4.18. Business Process Definition Reports Figure4.19. Business Process Innovation Profile Structure Figure 4.20. Dependency of Activities in Business Case Development Figure 4.21. Dependency of Activities in Pilot Planning Figure 4.22. Dependency of activities in Review and Assessment Figure 4.23. Value/Time View Figure 4.24. Realization - Roles and Key Focus Figure 4.25. Project Team Training Figure 4.26. Business Process Master List Figure 4.27. Final Configuration Figure 4.28. Testing Figure 4.29. Final Preparation Phase Figure 5.1. The Business Process Intelligence Life Cycle Figure 5.2. ARIS Product/Service View Figure 5.3. Process World TABLE LISTS: Table 3.1 Checklist before implementation Table 4.1 A SAP Cost/Benefit Analysis Table 5.1 Follow up project examples Table 6.1 Norms Differentiating Collectivist and Individualist Cultures INTRODUCTION 7 What has changed in business life in the information age we are experiencing and what is the required transformation businesses and organizations need to pursue? This transformation needs to be well defined and adapted appropriately to the corporation. A flexible, strong and corporate business environment needs to be established in order to reach comptetitiveness and to build a dynamic business. As the business life transforms continuously the amount of project-based work increases significantly in every industry. A new project often means a new target requiring a task list with new resources, a new organization, a new mission and and a vision. The enterprise needs to build models which meet today’s requirements and support tomorrow’s competitive environment. However, these systems work within a relevant methodology. The task is to develop a prototype, project procedures and so methodologies in order to execute the projects. Project management covers these specific topics and investigates continuously what the innovations and improvements are. Numerous traditional project management methods have been tried and succeeded in software implementation projects do far. Most software implementation projects until the introduction of large- scale ERP systems however have been limited to converting data from legacy systems to new systems to be implemented. This approach defined the project as an information technology project and it was mostly owned by IT departments. Projects failed, new systems were not up to their task, and this meant additional cost, and insufficient systems, often loss of business, not to mention employee satisfaction. As a result, these isolated legacy systems were not efficient enough to meet the requirements of today’s business and technology environment. They have been replaced by flexible, integrated, open and user- friendly products. The challenge of implementing company-wide ERP systems, covering all the functions of a company, and integrating processes in a customer oriented way has improved the project management approaches with the introduction of of new tools, internet technologies, groupware, custom methodology databases and application. Resources and systems have been utilized in a more efficient way and has led to higher overall productivity. Motivation of employees as well as consultants have been improved, focus on budget made the executive level sponsor with more enthusiasm. Over the past few years, in order to prepare for the arrival of the year 2000 (Y2K) many companies were engaged in implementations of standard business software applications, the enterprise systems particularly such as ERP, and supply chain management systems. While these software systems solved the immediate problem of Y2K compliance, they were typically implemented with an emphasis on speed and the need to fix the Y2K problems. The scope of data conversion from the legacy to the new systems was not sufficient. Focus on business processes was required in order to leverage the capabilities of the software to a maximum. There was also a very common requirement to re-engineer the business processes completely for technology-driven business dynamics, such as the implementation of e-business applications, ERP, B2B, SCM or Data Warehousing applications. As a result, many companies have invested in expensive software applications, without receiving adequate returns on investments (ROI) so far. In fact, most of such implementations have either failed to return the expected ROI, or have cost much more money and time to implement than expected. In addition to acquiring the ability to master the challenges of Y2K, e-business etc., the following objectives have generally been of primary importance to companies which are implementing integrated systems: • Reducing maintenance costs for old systems • Replacing “home made” applications that have proven too difficult and too expensive to maintain • Reducing redundant data inventories • Standardizing business requirements and related processes for multiple locations • Integrating standard software to accelerate business processes 8 While the first two items have been accomplished by most companies, optimization of business processes cannot be automatically achieved by implementing a software system, even a system as comprehensive as ERP, e-business or supply chain management. In today’s business environment, change is constant and stakes are high. Key decisions have the power to create a tremendous ripple effect not only throughout the organization. And as soon as a process has been updated or a new system implemented, a rapid cycle of obsolescence begins. In an environment like this, there is need for flexibility to change as new opportunities arise. More specifically, when making decisions companies need: • To determine which enterprise products are more convenient to implement, • To determine their actual requirements and expectations before the system selection, • To verify that scheduled process throughput times are being met (and how consistently those times are met), • To detect points where a potential for time and/or cost saving improvements exist, • To verify that process capacities correspond accurately to the amount of work that needs to be accomplished to meet customer demands, • To verify that proposed process costs are being adhered to, • To ascertain whether planning premises were correct, • To ensure that the business processes currently being implemented are resulting in desired levels of customer satisfaction. In summary, this book is generally focused on the impacts of new technologies in today’s ERP project management. C1 Projects and Trends in the New Millennium 1.1 Introduction The new millennium focuses on proven methods and lessons learned from dealing with projects in diverse industries and settings. It brings new technology opportunities to the industrial environment. Projects like implementing SAP should address issues of organization, process, and technology, and explore how modern technology tools such as the internet and world wide web can support effective project management and project success. This chapter addresses current trends in collaborative project management, conflicts and resolutions concerning team work, and information sharing. Especially SAP Projects will have to benefit from the technological opportunities of the new millennium. It expands the guidelines and the use of modern technology, and spends more time on project analysis and costing and issue management. Monitoring the latest technological progress helps improve SAP project implementations and projects are implemented using internet tools and cutting the time of the implementation. This becomes a very important advantage for project managers, consultants, clients and business partners. Today’s trend in software management is performance and speed. That is why, implementation using internet technology will be the most efficient technique in future, we believe. In this book we will try to suggest ways to use the internet, intranet, database management systems and project management in order to complete a project in the most efficient way possible. We will focus on managerial, technical and human aspects of a project. 1.2 What is SAP The company SAP was founded in Waldorf, Germany, in 1972 by five ex-IBM engineers. SAP stands for System, Anwendungen, Produkte in der Datenverarbeitung (Systems, Applications, Products in Data 9 Processing). Headquartered in Waldorf, Germany, SAP employs 29,000 people in more than 50 countries. The original founders have been so successful in growing SAP into a global player such that SAP AG is now the third-largest independent software supplier in the world, with over 19,300 customers, 10 million users and 60,100 installations, including more than half of the world’s top 500 companies. SAP had revenues of €7.4 billion and net income of €509 million in the year 2002 SAP Annual Report 2002 . What made this company so successful? The first big scale product SAP launched in 1979 was SAP R/2. Running on mainframe computers, R/2 was the first integrated, enterprise wide packaged software and it was an immediate success in Germany. For years SAP stayed within the German borders until it had penetrated practically every large German company. Looking for more growth, SAP expanded into the remainder of Europe during the 80's. Towards the end of the 80's, client-server architecture became popular and SAP responded with the release of SAP R/3 (in 1992). This turned out to be another success for SAP, especially in the North American region into which SAP had expanded in 1988. The growth of SAP R/3 in North America has been nothing short of stunning. Within a 5 year period, the North American market went from virtually zero to 44% of total SAP worldwide sales. SAP America alone employs more than 3,000 people and has added the names of many of the Fortune 500 to it’s customer list (8 of the top 10 semiconductor companies, 7 of the top 10 pharmaceutical companies etc). SAP today is available in 46 country-specific versions, incorporating 28 languages. These solutions are tailored to meet the specific requirements of 23 different industry categories, from aerospace and defense to utilities, giving SAP a competitive advantage that no other company can match. SAP R/3 is delivered to a customer with selected standard processes turned on, and many other optional processes and features turned off. At the heart of SAP R/3 are about 10,000 tables which control the way the processes are executed. Configuration is the process of adjusting the settings of these tables to get SAP to run the way you want it to. Functionality included ranges from financial accounting (e.g. general ledger, accounts receivable, accounts payable etc) and controlling (e.g. cost centers, profitability analysis etc) to sales and distribution, production planning and manufacturing, procurement and inventory management, and human resources. The start of the internet age at the end of the 90’s was a big challenge for the big players of the enterprise software industry. While trying to grow at a high speed, the companies, SAP included, were racing not to miss the internet train. Businesses had to be internet-enabled, e-business quickly became the buzzword of the decade, and the software companies introduced new concepts, new products. Today, SAP offers solutions that improve virtually every aspect of business, government, and education. For example, mySAP Business Suite allows employees, customers, and business partners to work together from anywhere, at any time. SAP’s customer relationship management, supply chain management, and product life-cycle management solutions help streamline critical business processes. Leading-edge technologies in such areas as technology platforms, enterprise portals, and mobility provide customers with the tools they need to work more efficiently and profitably. SAP Annual Report 2002 1.3 Future Requirements and New Products Customers are increasingly looking for solutions that not only support their critical business processes and minimize risks but also deliver fast ROI and lead to a lasting reduction in IT total cost of ownership. SAP’s focus has been on solutions designed for specific processes – predefined combinations of applications, services, and content for resolving urgent business problems. Trends always change according to new requirements so that software developers and companies have to work on products continuously in order to meet these requirements. What is the progress with SAP technologies? What are the new requirements and the expectations of the business in the new millennium? 10 • The new business environment • SAP’S product strategy for next millennium • Sap’s Business strategy: Assuring customer success • A Family of empowered end users Nowadays, trends are going that products should support multi currencies also for the legal framework of monetary union. Product should have euro and integrated solution. Otherwise, it can have a less of market share because of lack of euro-compliant. Other application areas are related to new business environments. 1. Link the extended supply chain with the financial value line. 2. Integrate back office and front office. 3. Manage the extended enterprise-Real time. The financial value line Capital Investement Treasury Financial Bank Finance-to- supply-chain Supplier Manufacturing Distribution Sales Customer Figure 1.1. Linking the Extended Supply Chain 11 Sh Shar areh ehol olde de rr ss • V•a lue bas Value ed m base ana d gem mana eng t eme • Q•u arter Qu lyar su ter ppo ly s rtu pport E Em mpl plo oy y ee ees s • Persona So Soc ci iet ety y l informat ion • Training courses • Press • Press releases releases ERP “Back Office” Pa Par rt tn ne er rs s Cu Custo stom mers ers • Product • Solutions knowledge • Product • Project support • Service 1.2. Integrating Back Office and Front Office Figure 1.2 Integrating Back Office and Front Office SAP has introduced new products parallel to new trends. Some of them such as SFA, HR, APO, and B2B can be seen in Figure 1.3 Ta Relationship SF B2 Inf B SE H DB Resource (ERP) S AP M F M Transactional Analytical Knowledge Product: a sellable entity, which can seperately be upgraded Figure 1.3. SAP Product Family One of the important concepts of today’s IT world is to provide low cost of ownership. There are several approaches to improve this metrics during evaluation, implementation and after go-live: 12 • Coordination of all solution components • Feasibility study • Accelerated implementation • Ready-to-run R/3 • Separate upgrades for legal changes • Upgrade roadmap Empowerment is another aspect of improving the human resource factor of a project. These are the components of empowerment of people: • Self service Employee self service Purchasing of services and direct supply • Self-education Easy to learn end user training Commonality: corporate language • Self-management Development of employee’s skills and potentials Team-oriented performance indicators • Self-motivation A human interface for everyone to enjoy 1.4 What is Accelerated SAP (ASAP) 1.4.1. SAP R/3 System SAP R/3 pursues a flexible and modular structure of individual components. In previous page you have reviewed the general module groups such financials. If we would like to see them altogether in terms of sub modules, these individual components are as follows: • Basic System: o Basic components (BC) o Advanced business application programming (ABAP4) • Accounting System o Financial accounting (FI) o Controlling (CO) o Asset Management (AM) • Production and logistics o Sales and Distribution (SD) o Materials Management (MM) o Production Planning (PP) o Quality Management (QM) o Plant Management (PM) • Others o Project System (PS) o Human Resources (HR) o Workflow (WF) o Industry Solutions (IS) 13 SAP R/3 Functional Modules Figure 1.4. SAP R/3 Modules SAP R/3 Software „ Basis (the blue blob) „ Middleware that enables R/3 to run on various platforms „ Operating systems „ Major UNIX platforms (e.g., AIX) „ Windows NT „ IBM’s AS/400 and S/390 platforms „ Database Management Systems „ IBM’s DB2 „ Oracle „ Microsoft SQL Server „ Functional Modules . . . Figure 1.5. SAP Basis 14 SAP R/3 “Master Data” Figure 1.6. SAP Master Data 1.4.2. Global Implementations and Global ASAP There are some challenges for companies planning to implement globally or at more than one site: • Global business processes and data issues - Business standardization, Legal requirements • Geography and cultural issues - Geographical spread and time-zone differences, cultural differences between international sites, communication challenges and local acceptance/buy-in, diversity within regional IT systems in use • International team structure and program organization - Geographical spread and time-zone differences, internationally balanced teams, distributed support over regions/continents, change management, coordination of rollouts in multiple regions/countries • Diversity within regional IT system in use - More complex configuration management; variations in regional IT infrastructures Global ASAP is the SAP solution designed to facilitate meeting these challenges. It both builds upon and coordinates with the ASAP implementation methodology. It represents a new implementation layer above the standard accelaratedSAP and uses a centralized approach with the global template rollout as its main focus. Global ASAP comprises a roadmap structured according to the ASAP principle including step-by-step instructions, accelerators and tools. The focus is to address global or multi-site as opposed to local level activity. Global corporate level strategy is defined and used to prepare and set up a global template project. This project prepares, configures, confirms, and tests a global template, which it rolls out for use in each local implementation. The global template project supports the local implementations. There is also continuity between the Global ASAP methodology and the ASAP methodology and the ASAP methodology used for each local implementation. 15 1.4.3 Conclusion This chapter has focused on new trends in ERP, SAP or project management and an introduction to SAP components. Which approaches have been involved in the new products of today’s enterprise software technologies? Some of the important points made are as following: • Today’s trend in software management is performance and speed • SAP Projects will have to benefit from new technology opportunities • One of the new trends is to provide low cost of ownership. • The next challenge – Optimizing the human factor • Empowerment: Self-service, self-education, self-management, self-motivation • Team SAP: Assuring customer success throughout the entire life cycle • Global implementations bring additional challenges for project management. Global ASAP to support global implementations C2 Introduction of SAP Project Management Why do information technology projects fail? Depending on how you define project failure Boltman, 2002, it tends to run at the level of 30 per cent outright failure and this has not changed much in decades, despite the advent of many new software technologies and techniques. It is argued that given this pattern, the expected benefits need to be between nine and ten times greater than the cost of the project for the return on investment (ROI) to be positive. What are the characteristics of an SAP project that differentiate it from other software implementations? What methodologies are used? To understand what makes an SAP implementation project a success, and to answer these questions we will focus on some key concepts of project management, such as planning, organizing, monitoring and controlling a project. 2.1 Basic definitions: Project, Project Management, Project Manager As a general approach, a project is a group of related work activities, organized under the direction of a project manager, which when carried out, will achieve certain objectives. (Ernst&Young, 1999) A project has a project charter, defining project scope, deliverables, tasks, duration and budget. Existing work is examined as a project and completed with a project deliverables. The basic driver for a project- based work has been our transformation to a knowledge society. As part of this knowledge society we have to understand the project concept and terminologies. Furthermore, we have to acknowledge a project methodology and standards. Regarding project and project management approaches there are certainly various definitions within literature. But we would prefer to cover the above in terms of projects components: There are obviously several definitions for a project. A project is defined as following by its components in general: • It has a beginning and an end • It is defined by specific goals and objectives • It is usually conducted by a well-defined organization • It has a single project manager who is responsible for its success, failures and risks • It can be expressed by identifying the starting point and the goal and the route between them 16 Project Management covers the following functions: • Planning-deciding what is to be done • Organizing-making arrangements • Staffing-selecting the right people • Directing-giving instructions • Monitoring-checking on progress • Controlling-taking action • Innovating-coming up with new solutions • Representing-liaising with users Program and Program Management In certain literature (especially US), project is referred to as a program and project management as program management. As defined in Ernst&Young, 1999, “a business program or program is a group of related projects that address a common business objective or initiative. All the individual projects that are contained within a program must be successfully completed for the business program to meet its objectives. Business programs provide a means of organizing and managing large or long-term project efforts.” It may consist of both IS projects and non-IS projects, such as a business process redesign project, sales, procurement, marketing or a manufacturing project. All the constituent projects must be successfully completed for the program to meet its objectives. The methodology of the program management is an extension of the methodology of the project management. The program management is usually covered by the project management timetable. It is designed to support the management of efforts that exceed the standard project guidelines. The program management method has usually been implemented as a single phase but in fact it includes three basic stages: 1- Program start up and preparation, 2- Program monitoring and control, and 3- Program review and assessment. Generally, the program start-up and preparation stage involves all start up activities, which we will review in the next sections of the book. Secondly, program monitoring and control stage involves problem management and solution design. In the last stage the goal is to improve all the critical processes and tasks within the program. The Role of the Project Manager The role of the project manager is one of the most critical roles in the project. As defined in Ernst & Young Navigator Series, Release 3.1.1996 the project manager leads the project as both a friendly leader and also a process manager, who handles the all work flow diagrams. As a leader the project manager is responsible for managing and communicating a clear vision of the project and motivating the project team to achieve them. A project manager shouldn’t require a strong technical background but only needs the authority to assign and approve project activities that will be carried out by the technical staff. The project manager might facilitate inevitable changes and processes with well-defined scope management procedures, and also provide continuos leadership for the development team and motivate a productive project environment. As a result, the project manager needs to be a very good communicator, an experienced negotiator and also a perfect leader. 17 Key Principles of Project Management Many consulting companies work on methodologies on how to implement and how to support an SAP system. That is why there are numerous project management and SAP implementation methodologies. Usually, consulting companies such as Accenture, Ernst & Young, PWC design and improved them after years and years of using and validating the tools and techniques. Project Sponsor In fact first let us start defining what the executive sponsor’s responsibilities and than let us be back to project sponsor; Executive Sponsor’ Responsilibities: • Funds the project and selects project sponsor • Resolves change requests and issues, as needed • Validates and ensures project benefits are attained • Approves all deliverables, starting with initial project charter • High involvement during the structure and plan processes Project Sponsor’s Responsibilities: • Representative of the executive sponsor • Business decision-maker of the project • Coordinates all requests for time with the business community • Requires considerable/day-to-day involvement Project Stakeholders Stakeholders of a project are the people who have a stake or interest in the project. Stakeholders might be internal to the project team, external to the project team but in the same organization, or totally external to the organization. Stakeholders should be carefully selected. Stakeholders can have the following roles: • Internal to the project team. This means that will be under the direct managerial control of the project leader • External to the project team but within the same organization. For example, the project leader might need the assistance of the information management group • External both the project team and organization. External stakeholders may be customers who will benefit from the system that the project implements or contractors who will carry out work for the project. A project needs to decide what kind of stakeholders it will need. Choosing them might cause a budgetary challenge as well. Also, different types of stakeholders may have different goals and objectives and one of the jobs of the successful project manager is to recognize these different approaches. Project Management Life Cycle The project management process is usually expressed based on a route map via three project management stages. As mentioned before, the project management stages basically describe the detailed work flow by the project manager. They are designed for integration with the project-specific development work. In each phase of a methodology route map, the project management stages are integrated with phase-specific development stages so that each phase represents a complete project. 18 Therefore, the set of project management stages is called “The project management life cycle’’. In the first stage, which is the start up and preparation, it is important to set up a steering committee, the project management team and the most appropriate stakeholders. These are the people who will provide sponsorship, partnership and so that key decisions can be made easier throughout the life of the project. It is important that this structure is set up in addition to the core team structure and that these people are well aware of their roles and objectives. Additionally, it is also important that the project manager ensures that all of the core team is trained at the appropriate times during the project. This activity is coordinated through the project life cycle and the development process. These training activities and needs continue during the project. Project Management Deliverables The benefits of the defining and focusing on project deliverables include: • Expectations can be managed based on a clear definition of what the project will produce • Deliverables are usually tangibles that can be tracked, reviewed, improved, and accepted • Team members have clear goals, stated in terms of the work outputs that must be produced • Estimates, actual, reports, costs, performance, risks, and quality are anymore easier to define, measure, and manage Basically, project management deliverables are the results of the project management processes. As an example, the structure of the project processes is created by the initial project charter. Some of the deliverables are as follows: Information System (IS ) Master Project Plan These new projects, tasks or activities are incorporated into the IS master project plan, which contains the entire current project template for an IS organization. From a business perspective, it is facilitating the controlled shifting of IS investment priorities based on the business climate at the time, when each project is completed. The project plan is very flexible and it needs to be updated whenever necessary. Project Charter The project charter is defined as a discrete unit of work that can be independently staffed and managed. The charter particularly specifies the scope of the project and its completion criteria. It provides a contract of what the project is committed to deliver, to control, to train, time constraint, resources, cost control and standards within it must be completed. The project charter is used as the proposal for preparing detailed plans to be used throughout the project life cycle. It also serves as a statement of the commitment of an organization to a particular project. Project Plan The purpose of project plan is basically to define the particular tasks for managing the project. It contains a detailed list of deliverables, a detailed work plan, task-level effort and duration estimates, and the project budget. In the project plan is estimated costs, activities, problems and time requirements for the project in order to determine its viability. Project Status When project work plan is active, actual work force must be recorded against the work plan in order to monitor and control progress. So it will be reported the comparative table. This allows adjustment of the work plan if the actual performance intend to decrease. If they have close scores, then it can be said that it is in the defined limit in the project charter. 19 This deliverable helps the project manager to adjust some variables. Project Assessment In the beginning, when the project deliverables have been produced and accepted, a project assessment is performed. This deliverable documents the evaluations, recommendations and opportunities for future process improvement. Project Management Infrastructure In order to manage a project successfully, standards and procedures need to be defined. The technological environment must also establish for effective and efficient running of the project. The purpose of the project management infrastructure is divided into two category . Firstly, the standards and procedures for issues management, scope management, quality management, risk management, knowledge coordination, status reporting should be defined. Secondly, a technology plan should be developed, and the necessary hardware, software, and office equipment should be obtained. 2.2 SAP Implementation Methodologies and Strategies Project management seeks to reach a previously defined result within the context of a given schedule, specific costs, and in the required quality. Within this definition, SAP Project Management provides an implementation methodology that adapts SAP functionality into the organization and its businesses. Various implementation methodologies and models have been developed over the years by SAP, the “Big 4” and other SAP business partners, customers and consultants. Many projects take an existing methodology one step further and adopt it to their organization, introduce improvements and new tools to make the implementation task more efficient. The benefit of using a methodology is the risk reduction that comes from using a proven approach. Another benefit is the creation of a common framework for all teams to work with. This includes standard terms and the coordination of time lines. It also provides a rough guide as the overall work effort that will be needed. This breakdown of tasks is very important for a smooth implementation. Most methodologies includes templates that show examples of normal project deliverables., which provide project teams with guidance for their detailed work. Finally a methodology contains the collective wisdom of those who produced it, and may even contain this wisdom in the form if helpful tips. According to Norris, 1998 the top 10 risks to an SAP R/3 project are: 1. Inadequate sponsorship 2. Poor/slow decision making 3. Poor/no scope definition 4. Inadequate attention to change management 5. Lack of cooperation between business areas/departments 6. Poor use of consultants 7. Inappropriate resources 8. Unrealistic expectations 9. Inadequate knowledge transfer to your people 10. Poor project management There are certain important things to remember when using a methodology. 1. A methodology is a generic approach. It will not prescriptively solve all of a company’s problems because, while it is generally true, it is never specifically accurate. Each company has some 20 unique aspects, and every R/3 implementation will be affected by the particulars of the organization. 2. Because every organization is different in both its makeup and its reasons for implementing R/3, a methodology cannot be relied on to such a degree that flexibility is lost. 3. On the other hand, a methodology will not describe every necessary task; on the other hand following every detail of the methodology may result in unnecessary work. In short a methodology must be put into context of the business and its needs. It should be used with an understanding of the needs by adopting those aspects that support the goals and by discarding those that do not. Similarities in All R/3 Methodologies All methodologies for implementing SAP software have a few common elements. First and most important, they are all structured. They consist of phases, which are broken down into tasks, further broken down into activities and finally into work steps. Almost all methodologies have four phases that can generally be thought of as follows, although with different names: 1- Initiate: This phase includes planning and costing the effort, determining the internal staff and outside help necessary, defining the scope of the implementation, and doing the initial business case justification for the undertaking. 2- Think: This is the phase in which the current or “as-is” state of both systems and processes is analyzed and what is wanted from the “to-be” state determined. 3- Work: In this phase, the R/3 program is actually configured to the specifics of a company’s business, then tested and deployed. 4- Watch: The watch phase entails measuring the results achieved against the expectations, and supporting , maintaining, and upgrading the system as necessary. Accelerated SAP (ASAP) is SAP’s current standard implementation methodology. It contains a roadmap, a step-by step guide that incorporates experience from many years of implementing SAP. Quality checks are incorporated at end of each phase to ensure quality of deliverables and monitor critical success factors. Another important aspect of an SAP implementation is the implementation strategy the business decides to pursue. A strategy defining the functional scope and regional coverage of the implementation is chosen by analyzing the cost, resource requirements, risks and expected returns of the implementation. At a high level, we can define three implementation strategies: Step-by-step functional implementation, Big Bang, and site rollout. Each one has its pros and cons, and selecting a strategy requires an in depth analysis of the above mentioned criteria. The strategy should also define the business’ approach and preference for technical development, i.e. adding customized code to core SAP, in form of user exits, custom transactions, and modifications. The quite opposite implementation strategy of using SAP as delivered is often referred to as “Vanilla SAP”. This is a big challenge for the business to adapt the processes to the software, but results generally in minimum cost and risk for the implementation, and minimum maintenance after go-live. Let us compare the three major implementation strategies, by its advantages and disadvantages. Step-by-step implementation

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