Reducing Operational Risk with SAP Management of Change
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1 SAP Solution in Detail SAP Solutions for Sustainability SAP Management of Change Reducing Operational Risk with SAP Management of Change
2 Table of Contents 3 Quick Facts 4 Improve Safety with Flexible and Robust Management of Change Management of Change: Critical Impact to Avert Catastrophe Beyond Compliance to Proactive Operational Risk Management 6 The Five Key Phases of a Change Request Submitting a Change Request Reviewing and Evaluating a Change Approving or Rejecting a Change Request Releasing a Change Request and Driving the Change Process Executing Change Request Activities Learning from Analytics and Reporting Find Out More
3 Quick Facts Summary The SAP Management of Change application lets companies make operational changes with confidence. Users can mitigate risk by monitoring changes made to equipment, materials, chemicals, operating conditions, procedures, and organizational structure. They can document assessments, approvals, and task completion throughout the process. As a result, the business can make changes that facilitate growth without disrupting operations or harming employees, assets, or the environment. Business Challenges Conform to regulations and voluntary standards when evaluating process changes Monitor change so that it does not lead to unknown or uncontrolled operational risk Eliminate burdensome change and approval processes that tempt staff to make changes without review or approval Involve the right experts, approvers, and technical staff automatically Document and track follow-up actions so temporary changes do not unintentionally become permanent Key Features Simple change request Let employees and contractors request changes easily Automatic assignment Automate identification of risk experts, approvers, and subject-matter experts Business rules and checklists Streamline the change process and drive consistency Task management Provide workflow and status management to ensure task completion Integration Integrate with asset management and environment, health, and safety processes Business Benefits Meet regulatory requirements and industry best practices by thoroughly assessing impacts before approving changes Improve executive supervision by providing insight into change management performance Maintain safe operations by mitigating risk caused by change Grow with confidence by safely pursuing business improvements and new opportunities For More Information Call your SAP representative, or visit us online at SAP Solution in Detail Reducing Operational Risk with SAP Management of Change 3
4 Improve Safety with Flexible and Robust Management of Change Operational risk management is high on the agenda of responsible companies that deal with hazardous substances and processes in their production environment. Such companies have long recognized that change in procedures, raw materials, staff, or assets can introduce unexpected risk. Protecting employees and the environment from workplace hazards is key. Many companies are also required by process safety management regulations to follow specific procedures to manage change. Management of Change: Critical Impact to Avert Catastrophe Perhaps no industry understands the need for effective management of change better than the chemical industry. After the disaster in Bhopal, India, in 1985, the industry voluntarily created the Responsible Care program, and management of change was a key component. The American Institute of Chemical Engineers founded the Center for Chemical Process Safety and has created an effective community focused on this topic. The American Petroleum Institute likewise created voluntary standards such as its Recommended Practice 75. The NORSOK standards developed by the Norwegian petroleum industry are similar standards that apply to oil exploration in the North Sea. In addition, many countries have imposed regulations like OSHA s process safety management of highly hazardous chemicals standard in the United States. From these beginnings, more and more companies have come to rely on management of change as a best practice. They realize that changes can have a negative impact not just on people or the environment but on the business itself. A change to improve one business objective often has unintended negative consequences on another business objective, be it product quality, safety, or operational costs. For these reasons, a holistic approach that evaluates all impacts a change may have is essential to carefully balance the pros and cons. Through effective management of the change process, companies can grow their business with confidence. Beyond Compliance to Proactive Operational Risk Management The SAP Management of Change application, a part of SAP solutions for sustainability, can help your organization establish an effective change management program, meet stringent compliance standards, and manage operational risk proactively. With the support of the software, you will be able to apply changes to your operation confidently because you monitor potential risks associated with any change before the change is made. A Rigorous Yet Straightforward Process The first challenge in change management is that you cannot manage changes you know nothing about. The fact is, a multitude of changes may be made without a manager s knowledge because employees bypass what they perceive as cumbersome change management procedures. To resolve this, the SAP application makes the change request process as straightforward as possible; it is based on simple change request forms that encourage employees to participate. 4 SAP Solution in Detail Reducing Operational Risk with SAP Management of Change
5 Once a change request is submitted, the process must expedite that particular type of change intelligently, even though different types of changes are handled differently. Small changes should not be delayed by exacting analyses, although potential adverse effects of making such changes must be considered. Complex changes should undergo extensive reviews by multiple disciplines. Temporary changes may be handled differently than permanent changes, while all changes require various pre- and post-start-up activities. The SAP application can standardize all these different procedures, relieving staff of any unnecessary burden. The software supports an efficient, effective business process by applying case-specific checklists and rules, which can automatically create activities and assign the appropriate resources. Because your processes evolve over time, the software moves with you, supporting such different options as ad hoc task creation, manual selection of templates, and fully automated rule-based processing. Only the relevant stakeholders and contributors are assigned to tasks, which avoids confusion and minimizes workloads. Individual contributors are notified via and can jump directly to their work without complex navigation. The workload on change coordinators is greatly reduced, so they can focus on monitoring the meticulous execution of change-related tasks. Because too much change at one time can itself be a source of risk, it is important for management to monitor the overall process. Questions such as How many changes were made this year? and Are activities being completed in a timely manner? are essential to understanding the maturity of the change management process and the degree to which it has been accepted by employees throughout the company. Workflow notifications and status reports help managers supervise all activities related to the assessment and implementation of changes. Flexible analytics can monitor key performance indicators (KPIs) to give executives insight. SAP Management of Change lets companies make operational changes with confidence. Users can mitigate risk by monitoring changes made to equipment, materials, chemicals, operating conditions, procedures, and organizational structure. SAP Solution in Detail Reducing Operational Risk with SAP Management of Change 5
6 The Five Key Phases of a Change Request Making changes to processes and assets is a multistep process that may be performed over days, weeks, or months. That makes it easy to forget an important interim review, leave out an approval step, and lose track of close-out activities. Which reviews and activities are appropriate depends on the type of change to be made. To map out all possible if-then statements is impracticable. You need a manageable way to ensure that the issues that need to be considered are considered and that the people who need to be involved are involved. But no more. The SAP Management of Change application supports this variable, conditional, iterative process. As you work through review and approval processes, and as activities are executed, additional reviews and activities can be triggered based on previous responses. This dynamic approach models the real-world process, but does so in a way that brings order to the chaos. SAP Management of Change supports the five main phases of the change management process as shown in Figure 1: submission of a request, review, approval, release, and execution. Throughout these phases, tasks are assigned to the appropriate specialists. Activities carried out frequently can be predefined in standardized templates, which can be modeled to reflect your business needs. The SAP software can then generate an activity according to your business rules, so it happens only when required. For example, when a change is in review, follow-up activities are triggered only for the positive responses. This minimizes staff involvement to just what s required. Submitting a Change Request To manage changes, the changes requested must be entered into the software. However, initial data entry for SAP Management of Change is minimal. The requestor selects what type of change is involved (see Figure 2) and uses data that other SAP solutions use, for example, the data describing people, assets, or materials. Later in the change process, additional data can be entered as needed and parameters set, such as planned dates or an emergency flag. Most data in SAP Management of Change is captured through the input of textual comments and selectable response codes set up in questionnaire format based on your requirements. The fields used frequently like the emergency flag can be predefined in the software. Figure 1: Support for Five Key Phases of a Change Request Submit change request Review and evaluate Approve Release change request and drive change processes Execute activities Requester Person who creates change request Reviewer Experts or supervisor Approver Supervisor or manager Coordinator Person who manages and drives the change Activity owners Approver, reviewer, task owner 6 SAP Solution in Detail Reducing Operational Risk with SAP Management of Change
7 Contractors and employees who have no SAP user account can enter a change request. In this case, they would use a generic system user ID and specify their own ID in a requester field. Change requests are often made by line workers who may need additional technical support to properly document their request. To give them help, the software helps them generate an to an expert they can pick from a predefined list, requesting a review or additional information. Figure 2: Entry Screen for Change Requests More and more companies have come to rely on management of change as a best practice. They realize that changes can have a negative impact not just on people or the environment but on the business itself. SAP Solution in Detail Reducing Operational Risk with SAP Management of Change 7
8 Reviewing and Evaluating a Change A change must be assessed to make sure it will bring sufficient benefits to the company and that the risk can be managed. The assessment process can vary greatly depending on the type of change, the complexity of the environment, and the urgency of the request. Many companies distinguish between minor and complex changes, with a clear checklist of items to check for each type. The SAP software can be modeled to support each change type. For example, task management for minor changes is not necessary prior to implementation, while a risk assessment questionnaire could be displayed directly from the change request screen. The questions would have to determine how well the user understands the change being requested, whether the change intrudes into uncharted territory, and if the change brings hidden complexities with it. Figure 3 shows a sample configuration of a risk assessment questionnaire. A complex change, on the other hand, could require expert analysis, potentially involving multiple disciplines, for example, environment, health, and safety (EHS) management personnel and engineering. The SAP software can be configured to generate a single task to handle an entire assessment or more than one task, with each task handling a portion of the assessment. The tasks are based on templates that specify roles. The people registered in the software who fulfill those roles will then be notified automatically via , which includes a link taking them directly to the task they have to perform. Figure 3: Risk Assessment Questionnaire (Sample Configuration) 8 SAP Solution in Detail Reducing Operational Risk with SAP Management of Change
9 Approving or Rejecting a Change Request After all review tasks have been completed, the change coordinator sets the change request status to review complete. When multiple approvals are needed, the individual subject-matter experts provide their approvals during the evaluation phase. Now, before the implementation phase can start, the change request must be given a final approval or rejection. Digital Signatures If a certain approval is highly critical, for example, when the environment is highly hazardous, the task can be configured to require a digital signature. In extreme cases, a signature strategy requiring multiple digital sign-offs may be defined. Digital signatures can be required by the SAP Management of Change application at any time in the change management process. For example, you may want to require digital signatures for overall status changes or on completion of individual tasks of certain types (see Figure 4). Figure 4: SAP Management of Change Digital Signature SAP Solution in Detail Reducing Operational Risk with SAP Management of Change 9
10 Releasing a Change Request and Driving the Change Process The fourth phase of the change management process involves, first, releasing a change request that was approved. Thereafter, the actual implementation of the change happens in tandem with the fifth phase: the coordinator drives the completion of all tasks by different owners. Businesses often divide the implementation activities into subphases: pre-startup, implementation, and post-startup. You can group your activities into subphases in the software by arranging them in task hierarchies that you define in templates. The software then includes the appropriate template based on your business rules. You can define templates to cover any degree of complexity or criticality a review might warrant (see Figure 5). Figure 5: Complex Pre-Start-Up Safety Review with Multiple Tasks 10 SAP Solution in Detail Reducing Operational Risk with SAP Management of Change
11 You monitor task status from the task hierarchy, with statuses represented as traffic lights. When all tasks have been completed, including post-start-up activities, the overall status is set to complete, which concludes the change process. In exceptional cases a change request can be reopened, for example, to correct entries. As with all softwaresupported actions, the authorization for this can be restricted to a specific profile. When a due date and responsible person is fixed, the system automatically generates notifications. When deadlines or people responsible cannot be ascertained ahead of time, you fill in the person and date and trigger the notification. You can also create an ad hoc activity and trigger the associated notifications. This gives you great flexibility to anticipate and cover every situation. By adding templates and rules gradually over time, you can extend the software configuration until it covers the great majority of your processes. As an example, a common implementation task could be the pre-start-up safety review (PSSR), which is modeled in the software with questionnaires, including a comment section and a full history log of comments per question. For each area of the PSSR requiring an explicit sign-off, the software generates a separate task and provides individual status management for each task. Because your processes evolve over time, SAP Management of Change moves with you, supporting such different options as ad hoc task creation, manual selection of templates, and fully automated rule-based processing. SAP Solution in Detail Reducing Operational Risk with SAP Management of Change 11
12 Executing Change Request Activities Executing a change typically requires the completion of a number of implementation activities that the software generates based on the rules set. When an activity is triggered, the activity owner assigned to that activity receives an e- mail with a link providing direct access to the task. There is no need for the activity owner to view the entire change request. However, if the need arises, he or she can readily navigate to the change request itself. Alternatively, activity owners can work from personal work lists within SAP Management of Change (see Figure 6). Work lists can filter items by user or status, so an activity owner can display, for example, just the open work items assigned to him or her. Work lists are very useful for users who have multiple task assignments. Figure 6: SAP Management of Change Personal Work List 12 SAP Solution in Detail Reducing Operational Risk with SAP Management of Change
13 Integration of the SAP Business Workflow Tool For casual users, the most convenient way to access a task is through the link embedded in the notification , which takes them directly to the task in the workflow. This eliminates any need for them to search or navigate. However, through integration with the SAP Business Workflow tool, you gain much greater functionality than can offer. Using its intelligent workflow in-box, a task can be sent to multiple alternative assignees, which appears in the in-boxes of all those users. However, as soon as one person accepts the task, the item is removed from the in-boxes of the other assignees. Using this tool, you can configure a workflow to forward work to substitute activity owners during absences of regular activity owners. You can also set up a workflow to execute escalations based on time frames. Integration with SAP EHS Management SAP Management of Change integrates with the SAP EHS Management application to leverage expert EHS risk assessment functionality. A risk assessment request can be created directly in SAP Management of Change, establishing a link between the applications. Once the assessment has been completed in SAP EHS Management, the results are sent back to SAP Management of Change and attached as a PDF that documents the analysis performed. Integration of the SAP Enterprise Asset Management Solution If you use the SAP Enterprise Asset Management (SAP EAM) solution, you can benefit from closed-loop integration between it and SAP Management of Change. You can configure task types in SAP Management of Change to trigger follow-up actions in SAP EAM by creating, for example, a maintenance notification or order within the task. This links a follow-up action to the task, and SAP Management of Change will check against status when you complete the task in SAP Management of Change. Many times, a maintenance notification is created before the change request. This may happen when the original change request is for a repair but later it is realized that an upgrade rather than a replacement in kind is preferred. In this case, you can link one or more existing orders to a management of change task. SAP provides a Web service, which can be used to create a new change request from SAP EAM or from any other application. SAP Management of Change integrates with SAP EHS Management to leverage expert EHS risk assessment functionality. A risk assessment request can be created directly in SAP Management of Change, establishing a link between the applications. SAP Solution in Detail Reducing Operational Risk with SAP Management of Change 13
14 Learning from Analytics and Reporting Executives need to understand how the organization is performing with regard to safety, quality, maintenance, and productivity. They must also gauge the degree of adoption and effectiveness of the management of change program itself, comparing how different business units fare with it and watching trends. Informative KPIs may reflect the number of change requests per type, emergency versus planned changes, or the percentage of temporary changes. Managers will be particularly interested in incidents and near misses in cases where an inadequate management of change process was a causal factor. For operations and EHS managers, the focus is typically more granular. They will more likely be looking at overdue tasks and time to completion for both tasks and entire change requests. They will have keen interest in monitoring temporary changes to see how long they stay open, aware that if they stay open too long, there is a risk that they will inadvertently become permanent. Most of these analyses can be made based on the search functionality of the personal work lists. Detailed analyses, including a wider range of attributes, are typically made using analytical tools. SAP Management of Change stores its data in structures specifically optimized Figure 7: Predefined Dashboard in SAP Management of Change 14 SAP Solution in Detail Reducing Operational Risk with SAP Management of Change
15 for analytical purposes. Because your change types can be modeled using questionnaires, useful evaluation criteria for analytics may draw on the custom questions in your templates. All response codes can be made available for analytical purposes as well. Expert users can run dynamic queries with drill-down functions often referred to as slicing and dicing using SAP Business Explorer tools or SAP BusinessObjects Explorer software, for example. SAP Management of Change contains a predefined dashboard (see Figure 7). Custom dashboards can be built using tools like SAP BusinessObjects Dashboards software. Release Information The SAP Management of Change application is a networked application that can be deployed on the SAP NetWeaver 7.31 technology platform with integration to the SAP ERP 6.0 application, with no enhancement package required. Alternatively, SAP Management of Change can be deployed directly on SAP ERP 6.0, provided SAP ERP is running with enhancement package 6. Integration with the environment, health, and safety risk assessment functionality requires version 3.0 of the component extension for the SAP Environment, Health, and Safety Management application, which can be installed on SAP ERP 6.0 running with enhancement package 6. Find Out More For more information about operational risk management, the SAP Management of Change application, and the SAP EHS Management application, please visit Executives need to understand how the organization is performing with regard to safety, quality, maintenance, and productivity. They must also gauge the degree of adoption and effectiveness of the management of change program itself. SAP Solution in Detail Reducing Operational Risk with SAP Management of Change 15
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