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Don’t Forget Your Business Processes! Oracle Can’t Do it All for You! Douglas A. Volz & Stephen F. Keefe BearingPoint, Inc.

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Presentation on theme: "Don’t Forget Your Business Processes! Oracle Can’t Do it All for You! Douglas A. Volz & Stephen F. Keefe BearingPoint, Inc."— Presentation transcript:

1 Don’t Forget Your Business Processes! Oracle Can’t Do it All for You! Douglas A. Volz & Stephen F. Keefe BearingPoint, Inc.

2 Agenda Introduction Common Pitfalls or Traps During or After an Oracle Implementation or Upgrade Principles of Effective Business Process Change Differences Between Mission, Vision, Strategy What is Business Process Modeling?

3 Agenda (Cont’d) Ways to Look at Your Processes –Activity Analysis –Brown Paper Mapping –Responsibility Charting Factors to Consider When Making Major Changes References and Acknowledgements Conclusions

4 Introduction Why do so many Oracle Implementations not yield the predicted benefits? Why are inefficient (pre-Oracle) methods still in use after implementation? Learn about how you can effectively change your business processes What are some of the common ways to analyze your business processes

5 Common Pitfalls & Traps What follows is a list of some common “traps” that occur during an Oracle implementation It is the system’s fault; I want the Oracle System to be like the old one Absolutely no customization vs. too much No ad-hoc reporting solution, no management reporting solution Stakeholders not actively participating We have a budget (but no benefits case)

6 It is the System’s Fault Real case example, March – May 2003 Blaming the 11.5.5 Oracle System and not the underlying broken business processes Yet, when reviewing the Procure to Pay, Order to Cash and Plan to Fulfill process areas, out of the 300 issues found: –Over 75% were caused by broken processes –And many system issues were report related, not core functionality

7 Customization Levels Too many customizations –Leads to expensive upgrades or re- implementations –Difficult to maintain – Oracle W/W Support will not assist you if customization is involved Absolutely no customization –Not viable either unless your operation is small –Especially true for Supply Chain and CRM modules

8 No Ad-Hoc Reporting or Management Reporting Solution Always need ad-hoc reporting –Discoverer, Business Objects, Noetix Views, others Use of a report server (can double as a back- up server) Also need to consider your management reporting solution –Oracle Business Intelligence modules / Oracle Warehouse Builder –Business Objects –3 rd party data warehouse solutions

9 Stakeholders Not Actively Participating “The most important project for the company”, yet: –Stakeholders don’t attend meetings or respond How do you get them on board? –Engage your sponsors before the project or starts –The initial engine to motivation is involvement –Set project expectations together –Make them a “party to the crime”

10 We have a Budget (But no Benefits Case) Project budget has no relationship to the task Focus is on costs not on benefits Without a benefits case: –Justifying the project as lower cost, not high value –Much harder to sell internally –Cannot get the needed resources Need to find the benefits

11 Benefits Matrix Time to implement Value QWs Long Range Benefits Avoid! Time wasters HRFs QWs= Early wins HRFs= Hassle reduction factors LRBs= Medium to Long range benefits

12 Principles of Effective Business Change Alignment of people, process and technology People –Management sponsorship –Skill levels and training, roles and responsibilities –Commitment & wiliness to adopt new processes Process –Leading practices for your industry –Aligned with your strategic directions –Streamlined and effective –Measured and held accountable for

13 Principles of Effective Business Change (Cont’d) Alignment of people, process and technology Technology –Right hammer for the right nail –Don’t be first unless you have to! –Choose the technology after you understand your business requirements, not the only way around

14 Principles of Effective Business Change (Cont’d) How do you achieve this alignment? Don’t look at the tools first! Find out how good you are – benchmark Do a high-level analysis of your business processes and opportunities Then prioritize your business needs And last, look at the needed tools to achieve your goals

15 Principles of Effective Business Change (Cont’d) Find out how good you are –Gauge yourself against your competition –Compare current practices against leading industry processes –Performance benchmarks

16 Principles of Effective Business Change (Cont’d) Are we talking about financial measurements? Operational and financial measurements –Not only ROI, working capital, EPS, etc. but also: –Purchasing spend as a % of cost of sales –No. of buyers per hundred employees –Manufacturing cycle time –Length of monthly accounting close cycle –And many others

17 Example: Supply Chain Benchmark Analysis 50% $30M Revenue $30M Indirect Cost 35 days 97 days 0% 63% Supply Chain SCORcard Performance Versus Competitive Population Overview MetricsSCOR Level 1 MetricsActualParityAdvantageSuperiorValue from Improvements Delivery Performance to Commit Date 85%90%95% Fill Rates 94%96%98% EXTERNAL SupplyChainReliability Perfect Order Fulfillment 80%85%90% Order Fulfillment Lead times 7 days5 days3 days Flexibility Responsiveness Production Flexibility 30 days25 days20 days Total SCM Management Cost 19%13%8%3% INTERNAL Cost Warranty Cost NA Value Added Employee Productivity NA$156K$306K$460KNA Inventory Days of Supply 119 days55 days38 days22 daysNA Assets Cash-to-Cash Cycle Time 196 days80 days46 days28 days Net Asset Turns (Working Capital) 2.2 turns8 turns12 turns19 turnsNA Supply Chain Response Time 82 days55 days13 days 45 days $7 M Capital Charge Key enabler to cost and asset improvements $30M Revenue SCOR: Supply Chain Operations Reference Model, Supply-Chain Council

18 Missions, Visions, Strategies and Processes What’s the difference? Mission what we want to do Vision the size of our ambition Strategy how we will get there Plans & Processes who does what when “To be excellent sailors” “To sail around the world” “We will use a 45’ catamaran sailing east-to-west” “Detail, detail, detail”

19 What About Strategic Directions? Set your strategic directions first Strategic direction, overall mission and vision comes from your executive management; the overall goals and objectives of your company or agency People, processes and technology support your strategic directions Without it you could be solving the wrong problem!

20 What Are Business Processes? You can define them as: –A series of business activities that taken together, transform resources into goods and services for your customers Source: Business Process Design Methodology, BearingPoint, Inc. April 2003

21 Sample Business Process Source: R2i® for Oracle Release 11i, BearingPoint, Inc.

22 It is the simple yet time-consuming task of asking yourself: –can I do what I do any better? Common goals for process modeling include: –Cost reduction and consolidation –Eliminating non-value added activities –Streamlining and improved efficiencies –Bringing up a new business unit What is Business Process Modeling?

23 Define first the business process areas you want to address Find out who are the process owners & stakeholders – get them involved Examine your processes & organization –Activity analysis –Brown Paper mapping –RACI analysis Approaches to Process Modeling

24 Activity Analysis Purchasing Department Raise purchase orders Expedite orders Select suppliers Resolve invoice queries Negotiate annual contracts Example: Activity analysis is a structured method of sub- dividing a large, complex organisation into a series of activities

25 Activity Analysis Helps you understand: What each department actually does Identifies gaps in the process analysis Isolates potential opportunities Identifies non-essential activities The cost of doing an activity across an entire enterprise

26 “Brown Paper Mapping” Gets the doers involved Shows areas of strength Shows areas of opportunity Shows the “big picture” - “Forest and trees” Thought provoker for system enhancements Can be used for a variety of workshops

27 Brown Paper Example Decision Process Title Post-it Notes for opportunities, strengths, comments Signatures Note approximate timings Copies of documentation Key metrics Red flags

28 Responsibility Charting (RACI) Who is Responsible Who is Accountable Who is Consulted Who is Informed -The “doer” - the person who actually conducts an activity -Ultimate ownership: the person who carries the risk if it all goes wrong -A person who must be consulted before decision/action is taken -A person who must be informed after decision/action is taken Helps determine who does what for a process

29 An Example of a RACI Activity Training Lead Project Sponsor Project Managers Training Needs of Project Team - review needs RA - plan training RA I - assign coach RA I Resourcing - determine adequacy A - Get departmental approval RAI - plan mobilization RAI Obtain Buy-In from stakeholdersIRA I Program ManagementCRA Identify Linkages/DependenciesAR Report Workstream ResultsAR Evaluate Project ProgressRAI

30 –Is making major changes a challenge? –Reasons why projects fail –What is resistance to change –What strategies can you use Factors to Consider When Making Major Changes

31 Major Change has Always Been Recognized as Significant Challenge “It should be borne in mind that there is nothing more difficult to arrange, more doubtful of success, and more dangerous to carry through than initiating changes in a state’s constitution. The innovator makes enemies of all those who prospered under the old order and only lukewarm support is forthcoming from those who would prosper under the new” Niccolo Machiavelli (1469 - 1527)

32 Some Key Reasons Why Projects Fail Failure to define objectives 17% Project Management Problems 32% Redesign of business processes and IT issues 14% Inexperience in scope and complexity 17% Lack of communication 20% A survey of 252 European and US companies revealed the importance of the ‘softer’ issues. Asked what were the main reasons why major projects they have been involved in have failed, they answered...

33 Typical “soft” Design Issues in System Implementation Projects Clear vision and goals Securing and retaining active sponsorship Effective communications Technical and legal barriers - habits vs requirements Cultural barriers

34 Two Levels of Successful Change Mgmt New work processes New technology New application software New organisation structure New performance standards Understand and accept the change Commit themselves to preparing for it Be proactive in identifying & executing all actions necessary for success What we need to do to effectively design and integrate: What we need to do to get our people to: People change Organizational change Change Management

35 Such strategies recognize the process that people go through when they experience change.. deny commit resist explore

36 Managing implementation projects means addressing rational, political and emotional issues: Rational Political Emotional Rational

37 What will resistance look like Rational Emotional Political Don’t have the skills Don’t understand what I will do Don’t know if it’s worth it Don’t think this will work Don’t have thetime and resource Happy as I am You are changing the rules Too much stress Why do this? Stupid consultants Can I cope? I didn’t sign up for this Will I lose power Losing control of my destiny What’s in it for me Organization says project is failing Risks are too high How can I regain control Who’s sponsoring this

38 Resistance to change is natural. It needs to be acknowledged and positively managed ConfusionDeflection Immediate criticismSilence DenialAggression Malicious complianceAvoidance SabotageLeave Early agreement

39 Some Examples of How to Manage Resistance Adopt a positive attitude to those who express strong views Ensure ‘sponsorship’ provides a strong enough force to counter resistance Capture the key concerns, recognize problems early Build responses to resistance into your communications and training Ensure you are seen to have listened to concerns and acted where appropriate

40 Right People Right Things Right Way Performance Strategy Culture...ensuring that organizations have the right people, doing the right things in the right way Change management raises business performance by...

41 References Don’t Park Your Brain Outside, A Practical Guide to Improving Shareholder Value with SMART Management®, by Dr. Francis Hartman, ©Project Management Institute SMART Management® presentation by Ken Hanley, BearingPoint, Inc., May 2003 Business Process Design Methodology, BearingPoint, Inc., April 2003 R 2 i® (Rapid Return on Investment) implementation toolkit, BearingPoint, Inc.

42 Conclusions We have covered some of the common traps and pitfalls Discussed how to figure out your business requirements and align it to your strategies How to focus on business processes and business benefits – not just project cost Looked at how making changes can be difficult And some techniques to managing resistance Major changes are possible – you can transform your company

43 Questions & Answers Thank You for Your Attendance and Participation

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