Enterprise Resource Planning Organizational Readiness & Risk Assessment Workbook Prepared for: Copyright S.S. Inc. 1986 2009
Table of Contents OVERVIEW... 2 SECTION A: EXECUTIVE MANAGEMENT S GOALS & COMMITMENT... 3 SECTION B: USER ENVIRONMENT... 6 SECTION C: TECHNICAL ENVIRONMENT... 8 SECTION D: ALIGNMENT OF GOALS... 11 SECTION E: ORGANIZATIONAL CULTURE... 12 SECTION F: EXISTING CONTROLS & PROCESSES... 13 SECTION G: TRAINING... 14 SECTION H: PROJECT TEAM... 16 SECTION I: PROJECT TIMING... 17 SECTION J: FEASIBILITY... 18 Page 1 of 19 ERP Readiness Assessment Workbook
OVERVIEW I.B.I.S. Inc s Readiness Assessment Workbook is a guide for Enterprise Resource Planning (ERP) project leaders who want to determine their company s readiness for an ERP project. A Readiness Assessment should be completed prior to investing time and money analyzing your internal business processes s and evaluating commercial software applications. This workbook contains a series of tough questions that should be asked of senior management, anticipated user groups, IT and project leaders prior to embarking on a challenging Enterprise Resource Planning path. These responses will not only assist the project leader assess their organizational readiness, it will also provide critical inputs into follow-on on analysis, design and software selection phases of your project. Accompanying the Readiness Assessment Workbook is a Readiness Assessment Scorecard. The answers to the questions posed in the Workbook will enable you to measure your organization s readiness on a series of established success criteria. Most importantly, this exercise will highlight risk factors that will need to be addressed prior to (or in concert with) moving forward with the ERP project. Most of the questions in the Workbook should be asked of multiple stakeholders. It is critical that all relevant members of the management team and IT, as well as a good cross section of the impacted user groups participate in the Readiness Assessment exercise. In many cases the degree of consistency (or inconsistency) across responses is more illuminating than the responses themselves. Project leaders should never assume they know the answers to these questions before consulting others. Page 2 of 19 ERP Readiness Assessment Workbook
SECTION A: EXECUTIVE MANAGEMENT S GOALS & COMMITMENT Objective: Assess the degree to which executive management s ERP project goals are defined and measurable. Determine the degree of executive management commitment to the ERP initiative. Interviews with each of the following Senior Managers: CEO CFO VP or Director of Operations VP Manufacturing Controller Outside CPA Partner/Financial Consultant Scoring: This section requires you to make an overall assessment of the executive management team s goals and commitment to the project and to assign one score for each item on the scorecard. If you receive 4 different answers to a question then a high score cannot be given (e.g. the project scope is poorly defined if various members of the executive management team hold differing views on business priorities and project objectives). Low scores should be given if interviewees have difficulty answering questions. Sample Interview Questions: 1. Scope of Project What is the proposed scope of the ERP project? User communities to be included? Page 3 of 19 ERP Readiness Assessment Workbook
Functional areas to be included? Total number of users involved by functional group? 2. Project Goals Describe the four primary Enterprise Resource Planning project goals? Can you quantify (in terms of strategic advantage, increased revenue, reduced operating expense, cash-flow improvements, etc) the anticipated project benefit? Has a business case, payback analysis or ROI criteria been established for the project? 3. Project Priority How urgent is the requirement for a new/improved ERP business system? What are the implications of not funding or proceeding with this initiative? Are there other business or capital projects that should be funded in advance of this project? Page 4 of 19 ERP Readiness Assessment Workbook
4. Commitment & Sponsorship Has an executive sponsor been identified for this project? Who is it? Will they benefit directly from its successful completion? Will the executive sponsor or other senior manager be an active user of the system? Is there a Budget for this project? How much has been budgeted? Is this budget consistent with previous business projects with similar requirements? Who controls this capital budget? Page 5 of 19 ERP Readiness Assessment Workbook
SECTION B: USER ENVIRONMENT Objective: The objective of this section is to determine how prepared the user community is to accept and/or embrace the proposed ERP system. Interview a representative cross section of functional users in each of the departments impacted by the ERP project. These often include (but are not limited to): Controller and Administrative group Payables & Receivables Order Processing Inventory and Warehouse Manufacturing Scoring: Each Department should be scored individually based on the responses of the individuals from that department. Sample Interview Questions 1. Experience Level What is the average work experience and competence level of your department staff? Have the work descriptions or responsibilities within your department changed recently? Does this happen frequently? Page 6 of 19 ERP Readiness Assessment Workbook
2. Perceived Benefit of the System What are the top three features or benefits you anticipate receiving from the proposed ERP system? 1. 2. 3. Do you believe the proposed system is a good idea? 3. Aptitude for Technology Do you use a computer now? How often? What software programs do you currently use? Have you used ERP software in the past? Page 7 of 19 ERP Readiness Assessment Workbook
SECTION C: TECHNICAL ENVIRONMENT Objective: The objective of this section is to determine an organization s technical readiness for, as well as the IT department s attitude towards, the Enterprise Resource Planning initiative. Further questions pertaining to the technical environment will be addressed in later sections. Interview the Chief Information Officer, IT manager or other individual responsible for the internal technology group within the company. Sample Interview Questions: 1. Commitment Does the IT department believe in the value of implementing an ERP system at this time? Are there other projects you believe should precede the ERP project from an impact or value perspective? Does the IT department have the available and necessary resources to support this initiative? Have you, or anyone within the IT department participated in an ERP project before? Page 8 of 19 ERP Readiness Assessment Workbook
2. Technology Please describe the current technical environment. Described the desktop hardware currently used by the proposed ERP system s user community? Is the desktop hardware owned or leased? Which e-mail/communications systems are deployed for the proposed user community? What is the primary network operating system? Which databases are currently supported? Are there any significant technology initiatives currently in process? Please describe. Are there any other major technology projects planned in the near future? Please describe. Are you planning a significant technical environment/infrastructure change in the foreseeable future? If yes, please describe. Page 9 of 19 ERP Readiness Assessment Workbook
3. Data In your opinion, is your organization s financial and customer data sufficiently clean (i.e.: well organized, current, minimal duplicates)? Would the data require scrubbing prior to conversion into a new system? Who is currently responsible for your organization s financial and customer data? Page 10 of 19 ERP Readiness Assessment Workbook
SECTION D: ALIGNMENT OF GOALS Objective: The objective of this section is to determine the extent to which Executive Management goals are aligned with each other, the user community, and with IT. Analyze the responses from the interviews in Sections A, B and C to determine if all parties have similar or compatible project goals. Page 11 of 19 ERP Readiness Assessment Workbook
SECTION E: ORGANIZATIONAL CULTURE Objective: To assess an organizations adaptability and appetite for risk and change, as well as determine if there are any upcoming events which could adversely ERP project s success. Interview the Executive Sponsor and Project Leader Sample Interview Questions: Is your industry known for rapid change? Does your organization have a history of taking risks? Is your organization recognized as an industry leader? Has your organization historically grown organically or through acquisition? Are you anticipating the acquisition of another company within the next year? Does your organization engage in frequent reorganizations? Is your organization likely to restructure in the next year? Page 12 of 19 ERP Readiness Assessment Workbook
SECTION F: EXISTING CONTROLS & PROCESSES Objective: To determine the degree of standardization and effectiveness of existing controls and processes. Interview the Chief Financial Officer and Controller Sample Interview Questions: Does the organization have well-documented controls and processes? Please describe. Do you believe they are widely followed? Should controls and processes be improved prior to implementing a new ERP system? Do you believe the proposed ERP initiative will support and enhance existing controls & processes? Have you consulted with your CPA on the controls and processes? What were their comments? Page 13 of 19 ERP Readiness Assessment Workbook
SECTION G: TRAINING Objectives: To assess the organization s overall commitment to training. To determine the ERP project s training requirements. Interview the Project Leader and/or internal technology training department. Sample Interview Questions: 1. Commitment On average, how many training hours per year do individuals in the sales department receive for: o Finance application training o Technology training Which department within your organization is responsible for training? In general, what is the organization s overall commitment to training? Page 14 of 19 ERP Readiness Assessment Workbook
2. Training Plans Does your IT department have a training plan and budget for this project? If yes, please describe. Does your organization s Help Desk have a training plan and budget for this project? If yes, please describe. Do the finance and manufacturing departments have training plans and budget for this initiative? If yes, please describe. Page 15 of 19 ERP Readiness Assessment Workbook
SECTION H: PROJECT TEAM Objective: To determine project team readiness. To determine if the proposed project team represents all stakeholder departments. Interview the Executive Sponsor and Project Leader. Sample Interview Questions: Has a Project Team been selected? Who is on the Project Team? How much of the Project Team members time will be allocated to the project? Has anyone on the Project Team participated in an ERP project before? Page 16 of 19 ERP Readiness Assessment Workbook
SECTION I: PROJECT TIMING Objective: To understand project timing and scheduling expectations. To uncover potential project timing challenges. Interview the Executive Sponsor and Project Leader. Sample Interview Questions: When is fiscal year end? When will the Enterprise Resource Planning project commence? How confident are you in this date? When do you anticipate launching the Enterprise Resource Planning pilot project? When do you anticipate deploying the ERP system to the balance of the user community? How critical is this deployment date, and why? Page 17 of 19 ERP Readiness Assessment Workbook
SECTION J: FEASIBILITY Objective: To assess the likelihood the project goals will be achieved given the organization s current technical platform, allocated budget, available resources and desired deployment date. This section requires some analysis. Extensive experience with Enterprise Resource Planning software vendor options must be applied to determine which software systems will best meet the Executive Management team, User Community and IT goals and objectives. System costs can be secured based on current technical platform and anticipated user s counts, but implementation costs can only be estimated. This combined cost can then be measured against the allocated budget, if defined at this point. The time to deploy can also be estimated given the complexity of the project and the software vendors likely to be considered. This can be measured ed against desired timelines to determine if the desired project schedule is realistic. Page 18 of 19 ERP Readiness Assessment Workbook