Learning From a Failed ERP Implementation
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1 Learning From a Failed ERP Implementation
2 About the Presenter Bob Burchfield CIO Hearthside Food Solutions
3 About Hearthside Foods Contract Manufacturer to the World s Greatest Food Companies Snack and Grain Based Foods Private Equity Based Acquisition Driven Today, 13 Plants in 6 States Employees Five of Those in Grand Rapids
4
5 ERP Failures Too Common 2 Out of 3 Projects Overrun Cost or Time Over Half Fail to Deliver Expected Results Source: Krigsman, Michael, 2011 ERP survey: New IT failure research and statistics, March 2011
6 Why This Presentation? We Experienced ERP Failure We Made Common Mistakes We Learned from Them We ve Developed a Successful, Repeatable Process I Will Share 8 Keys to Our Success
7 What s Not at Fault?
8 OUR STORY
9 Our Story Begins Hearthside Started in April, 2009 Four Plant Carve Out from Local Company Six Months to Select an ERP System and Integrator Seven Months to Implement And
10
11 Selected Go Live Issues Technical Issues Duplicate Pallet ID s Ingredient Consumption Failures Pallet Labels Randomly Failed to Print Broken EDI Relationships Unable to Recognize Receipts at 3PL Overwhelmed 3PL EDI System Bad/Missing Data in Customer EDI
12 Selected Go Live Issues Process & Training Issues Users Not Equipped to Problem Solve Insufficient Support Resources Users Stopped Sending Customer Reports
13 Root Causes Failure to Formally Map Business Processes Inadequate Testing Inadequate Training Ineffective Expert Resources Insufficient Resources
14 The Rest of the Story Three Months to Reach Stability Post Mortem Conducted 5 Key Design Changes Reduce Customization/Complexity Change Management Emphasis Project Management Emphasis
15 The Rest of the Story Realignment Project Kick Off Highly Successful Go Live Successfully Repeated in 3 More Plants
16 KEY LEARNING #1 CHANGE MANAGEMENT MATTERS!
17
18 How Can Gains Be Realized Faster? How Can The Duration Be Reduced? How Can The Severity Be Reduced?
19 KEY LEARNING #2 MANAGE EMPLOYEE FEARS
20 The Three Questions Employees Want to Know Three Things Will I Still Have a Job? Will I Be Able to Use the New System? Will I Get Training?
21 Communication Strategies Emphasize What Won t Change Emphasize What Will Improve Develop Consistent, Positive Message with Location Management Communicate the Why
22 Communication Strategies Visit Existing Implementations with Select Employees Interview/Quote Users from Existing Locations Be Honest About Negative Changes Start General, Progress to Targeted
23 Sample Message The SAP Implementation will help us make better business decisions by putting much more useful information at our fingertips. This will make our organization more efficient and profitable and give us greater job security. We expect there to be some challenges and we are going to make sure people are supported through the transformation. This means taking advantage of existing Hearthside SAP users and training the right people on the right transaction, at the right time. 23 We need you to have a positive, confident, and enthusiastic attitude. We also need your support and commitment to help get others there as well.
24 KEY LEARNING #3 DEVELOP LOCATION SUPER USERS
25 Super User Strategy Dedicate a Group of Location Users to the Project 4-5% of Total Users Key Functional Roles Give Them Train-the-Trainer and Presentation Skills Training Use the Testing Process to Give Them Advanced Training Have Them Deliver the End User Training
26 Super User Strategy Use Them to Influence End Users Use Them for Go-Live Support Use Them for Front Line Support Use Them for Ongoing Training Program
27 KEY LEARNING #4 MAP BUSINESS PROCESSES
28 Mapping Processes Time Consuming Potentially Expensive To Develop To Maintain One of the Most Valuable Contributions to an ERP Project
29 Mapping Processes Two Primary Tools BPM: Business Process Model BPP: Business Process Procedure BPM Swim Lane Diagram Process Flow Combined with Ownership BPP Specific Instructions to Execute Process Screen Shots Specifics on Field Level Information
30 Example BPM
31 Example BPP
32 Mapping Processes Basis for Test Scripts Basis for Training Documents Basis for User Documentation Basis for Process Improvement Checkpoint for Business Agreement on Ownership Unearths Small Details
33 KEY LEARNING #5 TESTING STRATEGIES
34 Testing Strategies Use Business Process Models to Design Testing Design Scenarios to Account for Process Differences Perform End-to-End Testing Do Three Rounds of Testing Incorporate Negative Testing
35 Testing Strategies Incorporate Your Business Partners Formalize Test Scripts and Results Tracking Use Code/Config Freezes to Minimize Regression Testing Stress Test
36 KEY LEARNING #6 TRAINING STRATEGIES
37 Training Strategies Consider Adult Learning Methods As Is => To Be Tell, Show, Do Max Class Size of 8 2 Trainers Everyone Gets a PC Make It Modular One Module = One Process Taught in <30 Minutes Plug Modules Into Needed Business Functions
38 Training Strategies Delivered by Local Super Users Influence Answer Location-Specific Questions Skills Checks Employee Performs 5-10 of the Actions Being Taught Confirms Training Effectiveness Ingrains the Process Builds Confidence! Requires Prep and Data Creation Take Care with Positioning
39 Training Sizing Position Estimated Trainees Approach Length (Hrs) 4/6 Hour Slots Trainers Needed Forklift 58 Classroom T&W Office 22 Classroom Core + 2 CSR 4 S2S NA NA Core Crème Mixer 30 Classroom Mixer/Scaler 133 Classroom Machine Operator/Dumper 80 Classroom Supervisor/Manager/Leads 61 Classroom Skid Loader 70 Classroom QA Hold/Release 8 Classroom 3 2 Core + 1 QA Office/Lab 4 Classroom 4 2 Core + 1 QA Master Data 1 S2S NA NA Core Planners 3 S2S NA NA Core Procurement 6 S2S NA NA Core Food Safety - Schedules Prod Orders 1 S2S NA NA Core Food Safety - Open/Produce/Close Orders 10 Classroom 2 2 Core Food Safety - SO Load/Bin2Bin 30 Classroom Inventory Control 10 Classroom 12 6 Core + 1 Totals Key Inputs to Number of Training Rooms and Trainers Required!
40 KEY LEARNING #7 EXPERT RESOURCES
41 Project Resources
42 Expert Resources Use a 3 rd Party To Review Project Design Configuration Go Live Readiness Get Your Own Project Manager Experienced with Your System Accountable to You, Not Integrator Use a Solution Architect Expert Knowledge of Multiple System Areas Technical Team Accountable to SA
43 Expert Resources Hearthside Avoids Offshore and Landed Consultants Not Familiar with Operations Unable to Provide Functional Leadership and Best Practices Language Barriers Requires Extreme Precision in Communication Exception: Clearly Definable Technical Tasks Organizational Change Consultant
44 KEY LEARNING #8 GO LIVE STRATEGIES
45 Go Live Strategies Stabilize the Business Master Data Freeze Production Schedule Freeze Halt Trials and New Product Intros Establish Hypercare Utilize Super Users Immediate In-Person Response Establish Supportable Startup Plan Ramp Up Operations Schedule Based on Lower Efficiency
46 Go Live Strategies Build a Technical Cutover Plan Incorporate into Testing 20 Build 0.58 days hrs 7/23/2012 9:00 7/24/ :50 21 Configuration 0.04 days 2 hrs 7/23/2012 9:00 7/23/ :00 22 Transports 0.03 days 1.17 hrs 7/23/2012 9:00 7/23/2012 9:40 23 System Build Configuration 1 Transport Run 1 30 mins 1 hr 7/23/2012 9:00 7/23/2012 9:30 24 System Build Basis Transport Core Team Acquisition Role into PRD mins 0.17 hrs 7/23/2012 9:30 7/23/2012 9:40 25 Manual Config 0.02 days 0.83 hrs 7/23/2012 9:30 7/23/ :00 26 System Build Basis Assign Acquisistion Role to Core Team mins 0.17 hrs 7/23/2012 9:30 7/23/2012 9:40 27 System Build Configuration 1 Configure IM - WA03 for 2040 (QM config) 23 5 mins 0.08 hrs 7/23/2012 9:30 7/23/2012 9:35 28 System Build Configuration 1 Activate ML 26 5 mins 0.08 hrs 7/23/2012 9:40 7/23/2012 9:45 29 System Build Configuration 1 Configure RF profiles for Core mins 0.17 hrs 7/23/2012 9:40 7/23/2012 9:50 30 System Build Configuration 1 Create Activity Types mins 0.33 hrs 7/23/2012 9:40 7/23/ :00 31 System Build CheckPoint Sign Off - Configuration Complete 28,29 0 days 0 hrs 7/23/2012 9:50 7/23/2012 9:50 32 Master Data days hrs 7/23/ :00 7/24/2012 9: Customer/Vendor Link 0.02 days 1 hr 7/23/ :00 7/23/ :30 34 System Build Master Data 1 Create Vendor Master record for mins 0.33 hrs 7/23/ :00 7/23/ :20 35 System Build Master Data 1 Create Customer Master record for mins 0.33 hrs 7/23/ :00 7/23/ :20 36 System Build Master Data 1 Link Customer to Vendor for ,35 10 mins 0.33 hrs 7/23/ :20 7/23/ :30 37 Load Warehouse Locations 0 days 0.65 hrs 7/23/ :00 7/23/ :07 38 System Build Master Data 1 S/T Bins 2 mins 0.1 hrs 7/23/ :00 7/23/ :02 39 System Build Master Data 1 S/T Bins 2 mins 0.1 hrs 7/23/ :00 7/23/ :02 40 System Build Master Data 1 S/T - PRD Bins - xxxfin 2 mins 0.1 hrs 7/23/ :00 7/23/ :02 41 System Build Master Data 1 Interim Bins (S/T - 9xx) - Copy from mins 0.1 hrs 7/23/ :00 7/23/ :02 42 System Build Master Data 1 Validate Warehouse Bins 38,39,40,41 5 mins 0.25 hrs 7/23/ :02 7/23/ :07
47 Go Live Strategies Establish a Business Cutover Plan Link Key Points into Tech Cutover Plan Activity Decsription Responsible Support Completion Date Completion Time Notify Key Customers of SAP Cutover Dates Brian M Sales Team Mon, Dec 03 EOD Complete End to End Testing Bob B Andrew / Robb Mon, Dec 10 EOD Publish End User Training Schedule Bob B Mike J / Brian A / Lauren VH Mon, Dec 17 EOD Complete Training Materials - End User Training Bob B Mike J / Brian A / Lauren VH Fri, Jan 04 EOD Friday, January 11, 2013 Validate Sufficient Raw/Pack/WIP Inventory for Locked Schedule Tim R/Jeff L Rob D/Jeff/Connie Fri, Jan 11 EOD Lock Production Schedule for 2 Week Prior and 1 Week After Jeff L. Fri, Jan 11 EOD Complete User Acceptance Testing Bob B Core Team/Plant Testing Team Fri, Jan 11 EOD Complete Pending Master Data Changes to Prism John A Lois S Fri, Jan noon Lock Master Data Changes John A Lois S Fri, Jan 11 EOD Training Test Data Ready Bob B Mike J / Brian A / Lauren VH Fri, Jan 11 EOD Training Materials Copied/Ready - End User Training Bob B Mike J / Brian A / Lauren VH Fri, Jan 11 EOD Get PO's from Kraft to Ship All Possible Product to Findlay Jeff L. CSR's Fri, Jan 11 EOD Determined Detailed Startup Schedule Rob D Planners Fri, Jan 11 EOD January 16, Start Go Live Go / No Go Decision Rich S. SLT Fri, Jan 11 EOD Execute Transports,Configuration, and Master Data Loads Bob B Core Team Mon, Jan 14 8:00 AM Begin 2 a Day Cutover Meetings Bob B / John A Mon, Jan 14 EOD Finance Review of Cost Estimates Sheryl J Wed, Jan 16 5:00 PM Execute and Confirm all GOLDEN Transactions Bob B Core Team Fri, Jan 18 7:00 PM
48 Questions
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