I am having another question where I would like to use your experience/guidelines.
I am now in preparation of a "queen of projects" where we will migrate our current ERP application to a new Application
Current landscape:
a) FICO is hosted in SAP 6.0
b) other processes like MM, Contracts, Invoicing, Order mgmt, other specific functionalities are hosted inhouse-built application
Reason to leave inhouse-built application: the app started ~25 ago and it is written in language, which is not supported by many developers nowadays, which usually delays enhancements/new projects
Do you think it is appropriate to delegate new application selection process to specialized consultancy company, which could see the list of our company processes and assess which other app makes best fit
As of now we mention as potential targets S4Hana, Oracle, Dynamics but might be as well any other - if good enough
Or would you rather recommend to run selection process of a new application on "my" own without involving "agent" company Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
Lukasz,
I would see there is benefit of getting outside expertise, but maybe you need be specific what you want at each phase of your tobe design.
I see a danger in trying to reinstall all the processes supported by the inhouse apps and would recommend to look at a greenfield approach starting with the process landscape.
Also, if you change not only apps, not only processes you also change roles of employees and their behaviours. For example they learned how to tweak and bypass the old processes and now you would want to make them follow the new processes. So include a change management team/task/project from the beginning.
Seen it before.
Thomas Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
I was in charge of the whole migration project to SAP for the company where I am working today. And from that, to the next versions. Key points are requirements. To use or not to use an external consulting service does not matter.
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1 reply by Lukasz Pawelec
Dec 02, 2021 6:50 AM
Lukasz Pawelec
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SAP is one the main contender in our selection process as we have already FiCo module in, and our Mother-company in US as well recommends SAP - as they consider it less implementation risky as they have it themselves as well (they know it compared to other apps which are unknown)
How long took your SAP implementation process?
My company as of now like to have very safe module by module migration ~3 years, however, as I talked with SAP implementation vendors they usually prefer ~1 year big-bang approach as overall effort is lower and it is as well not good to spread project too long / built new interfaces in transition period
I would echo Thomas's caveat as I've seen too many ERP implementations get into trouble when trying to recreate the existing processes & procedures baked into in-house created applications.
Most ERP platforms support extensive configuration but when it comes to customization, there are limitations.
As far as selecting a platform, while you could outsource the bulk of the research effort, the decision has to be made by your leadership team as they have to live with it and its consequences...
Kiron Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
The fact that you are asking here is indicative that you probably cannot come to the best solution by yourself.
Requirements depend on whom you ask, they are never a fact. If you ask your own managers and staff they will tell you what they know. It is good to take different perspectives, widen your solution space and look at how others dealt with such a project.
I agree with you that it is risky to try to reinstall current processes to the new system
In fact I would say my organization/users are a bit used that we fulfil their wishes and see it as personal/project challenge to re-setup processes to world-standards and so as well adjust/push a bit on users mentality Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
Lukasz, this is not primarily an IT project.
Best is you have a business sponsor.
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1 reply by Lukasz Pawelec
Dec 02, 2021 7:01 AM
Lukasz Pawelec
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Thomas,
now you touched the Hottest part of the "my" Project, as every Project has its Specific - that is the No 1. Specific of this one.
as of now there is no Business support for the project
- Business have their own pure Business related objectives
- They got used to the current app (although it is quite old)
- In the current app is is home-made many user-wishes in slow-speed but were implemented
- we failed SAP migration project ~10 years ago and people remember it
So it is as of now IT team to:
- build awareness & educate Business Leading team
- prepare step by step for the change
And I am still not sure who could be Business Owner for ERP migration project but you are right - usually the Project should be driven by Business Owner and "only" executed by IT (not our case yet)
So currently we formulated that as official/primary corporate goal for 2022 on the level of Executive Team, so the question would be now how in organic / correct way translate it so that some senior manager from Business would take over the Business Owner role with natural Buy-In.
Saving Changes...
George FreemanThought Leader | Author | Architect| Florida, United States
Lukasz,
Financials, Materials Management, Order Management, and Invoicing are generally handled well by the big players you mentioned (i.e., SAP, Oracle, Microsoft) due to their adaptive configuration capabilities, and the cross-industry compatibility of these modules.
However, Contract Management is usually a different beast, and when coupled with Leasing, becomes a black hole of complexity. For instance, is your leasing division a captive entity that funds your division? Do you have third-party leasing requirements, what are the regulatory concerns, etc. Does your system need to handle automated buyouts, refinancing, trade-in’s, competitive churns, etc. The list, which I’m sure you are aware of, goes on and on.
The big players have traditionally struggled with contract modules, and they may have reservations if you genuinely need a full-blown end-to-end leasing system. Although they may try to draft you into a custom development arrangement wherein they develop/customize a module for your market.
Bottom Line: You need an experienced enterprise architect who can “truly” navigate the business and IT domains of your extended enterprise and work with you to “challenge out” the requirements and package(s) selection. This can obviously be done through a specialized consulting firm, but even then, I would recommend having your own EA to challenge that.
George
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1 reply by Lukasz Pawelec
Dec 02, 2021 7:12 AM
Lukasz Pawelec
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George,
i take 2 points from your side
a) did not consider Contract module so far as the one, which might be more problematic compared to others
b) good to have strong architect internally (I have 1 person in mind but will make internal consideration about it)
regarding contract module:
our specific is that company A may lease the product to company B who lease it to customer - so we have inter-company transactions
others:
a) we are leasing our product for yearly contracts
b) we do so acc. to general terms & conditions (couple of versions)
c) contract may include costomer specific requirements incl discounts
d) as of now we do have "captive" divisions but rather all entities work equal
e) based on contract - rental invoices are produced
f) we do not use: automated buyouts, refinancing, trade-in’s, competitive churns
Dear Lukasz
The processes you mentioned are crucial in the ERP, mainly because of the interrelation and interfaces between the FICO processes with contracting-supply chain -MM in terms of governance system, inputs, and outputs. So, when it implements the new software, the final users and key stakeholders involved in the governance system shall work with new processes. Those changes will bring a lot of uncertainty throughout all processes for everyone. Indeed, if the risk evaluation and stakeholders’ management are not appropriate, the operation will be impacted. So, I recommend using a consultancy company with experience in SAP and those processes to migrate to maximize your investment and time. With this, the organization can minimize the impact during the migration, designing a transition plan for preventing loss of time and rejection of users and stakeholders.
Besides, it should create an internal group formed by experts, final users and key stakeholders to work in collaboration with the consultant for searching a way of work that reduce the impact of failure during the migration and ensure the scalability of the product.
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1 reply by Lukasz Pawelec
Dec 02, 2021 7:17 AM
Lukasz Pawelec
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Elena,
yes, as of now we at the beginning of our journey with one consultancy company from Germany who will advise us on potential COTS which could be best fit for us
we did not decide yet about how to do change management, which is more for the future
Referring to Elena's points: I have good experience with an external consulting company, too, especially when it came to challenging statutory requirements: EMEA vs. the U.S., and Russia, and the Middle East (consultants' comprehensive experience and knowledge). In addition, it was an integrated project delivery: project management + change management (a consulting firm + internal SMEs and process owners covering all functions of the value chain). But, of course, there are some pitfalls of working with consulting firms, e.g., optimistic project planning, etc.
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1 reply by Lukasz Pawelec
Dec 02, 2021 7:20 AM
Lukasz Pawelec
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Maria,
yeah, I like it that external consultancy can give us good input, but personally I am sceptic, quite balanced as it is still on 'us' to trust external company did good work and we can transfer that to our organization. I will always question & try validate it to the level possible.
If your applications were written based on the work flow 25 years ago, the software and processes probably evolved together over time without thought to digitally integrating data sources later.
One reason is that newer systems will likely have data more structured so the information can be found in the right place and with a consistent format. Older systems tend to use more free-form data entry and the same type of information could exist in multiple possible location and formats.
Trying to merge new COTS systems with old homegrown systems may become difficult. Data migration may require some reformatting so the conversion scripts can find the right data in the right place. In a text field, Part Number 123, P/N 123, Part # 123, and just the 123 all mean the same but may cause data conversion issues. There will likely be process changes required as well.
Unless you have very knowledgeable people in the before, after, and how to transition you are likely to encounter many surprises and you may lose significant functionality advertised by the software vendors.
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1 reply by Lukasz Pawelec
Dec 02, 2021 7:24 AM
Lukasz Pawelec
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Keith,
I am not sure if I understood the last part. What would be the background reason to potentially lose significant functionality or have surpises? I mean still due to data migration issues..?
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