Global ERP Course to Open in Summer 2012 at Bilkent University

COURSE DESCRIPTION

This is a managerial overview course for Enterprise Resource Planning Systems (ERP) implementations and other similar large scale technology implementations. With this course, you will familiarize yourself with a whole Enterprise Systems implementation life cycle. We will explore the ERP implementations starting with how companies decide to implement ERP systems until after go-live support.

You will get hands on exposure to SAP system, Accelerated SAP implementation methodology (ASAP) and key implementation issues. Some of these strategic issues that will be covered are implementation planning, organizational readiness, knowledge management, business process reengineering, best practices and project management within the ERP system implementation context.

This course is to the first step to prepare you to take part in ERP implementation projects as a business user, business manager, implementation team member or to consider other ERP related careers.

This course DOESN’T require any technical background, or any prior knowledge of ERP systems. Students with all backgrounds are welcome. The course contents might change during the course to fit the students’ needs.

COURSE LEARNING OBJECTIVES

• Learn about ERP Systems and understand the key issues surrounding ERP implementations.

• Become familiar with the SAP system and SAP implementation methodology.

• Obtain a real-life perspective of ERP implementations as well as the ability to learn from current trade articles and ERP research literature for practical purposes.

• Learn/Practice key skills on business analysis, reporting, team collaboration, decision making with limited information, virtual collaboration and professional presentation that can be utilized in real world ERP implementation settings.

INSTRUCTOR BIO
U. Yeliz Eseryel is an assistant professor at the University of Groningen in Holland. She has an MBA, Master’s degree in Information Management and PhD in Information Science and Technology from Syracuse University in Syracuse, New York.

Yeliz’s industry experiences include project management in ERP implementations and Information Technology Consulting for Booz Allen Hamilton as well as collaboration with other consulting firms such as PricewaterhouseCoopers and CapGemini. Most recently she lead the successful implementation of SAP SEM module at Welch Allyn, an international medical device manufacturer headquartered in Syracuse. As well, she managed the go-live testing for Welch Allyn’s European SAP roll-out of Ireland office, which included the MM, PP, SD, CS, FI, CO and PLM modules.

Yeliz teaches courses on Information Technologies, ERP Systems, Enterprise Technologies, , Enterprise Architecture, Virtual Teams & Emerging Technologies and IT Governance at Master’s and Executive Master’s programs at Syracuse University (USA), University of Groningen (Netherlands), Bilkent University (Turkey), IESEG Management School (France), Aarhus School of Business (Denmark) and E-Gov Executive Master’s Program (USA/Switzerland). Her research interests are leadership dynamics in virtual and Open Source Software Development teams.

BilkentMBA2010, Lessons learned, Week 4, Derya Kaya

ERP Implementation Strategy
Big Bang and Phased Implementation

• Big bang: There is focus in the organization. It is needed to take too much attention Phased: Phased implementation doesn't take too much attention.
• Big bang: It provides integrity; because all the modules are implemented together. Phased: In case of conflict, it is necessary to go back to old system. Because each module is implemented separetely.
• Big bang: Huge change might be difficult to handle with
• Phased: There is learning and the first one will help to second round.

Staff/Resources (Outsourcing/In-house)

• It should be get consultants for their expertise but ERP experts should be kept for in-house support. (after go live)

Customization Level
Customization level should be decided well before customize the system. If it is strongly needed to customize, then it should be done. Because everything you customize, you change yourself. It is not easy to handle very much customization. Customization brings higher implementation and maintenance costs including more time with itself.

Leadership
In the new leadership approach, the important thing is 'extending the pie not sharing the pie.' There are two kinds of leadership behaviours: Task Oriented Leadership and Relationship Oriented Leadership. In addition to those terms, it was interesting to learn that at this era, the leaders were just showing themselves without being pointed as leader, and they had different points for leadership. They did not have all the leadership features but they had some of them. Therefore, it could help to create value in the organizations more than before.

ASAP Methodology (Accelarated SAP)
ASAP methodology has five phases:

• Phase 1- Project Preparation (Obejctives, key activities, key deliverables should be defined)
  
• Phase 2- Business Blueprint (Business process documentation) (This could be old documentation+ BPR)
  
• Phase 3- Realization (Unit tests, Integration test, Stress Testing)
  
• Phase 4- Final Preparation
• Phase 5- Go Live&Support (The new system is active and post-implementation support is provided) (Parallel processing is good way to survive on crashes if something goes wrong; but the disadvantage is double maintain and it is costly.)

!The organizations should always think about continuous improvement. It should be asked to consultant: 'What other functions there are that could be useful?

BilkentMBA2010, Lessons Learned, Week 4, Gun Gokmen

Leadership Behaviors and Perception in Self-Managing Virtual Teams

• Leadership are two distinct concepts. We discussed the differences of each other.
• Our project teams sre examples of "Self-Managing Virtual Teams" (SMV) Leadership is more challenging here, since there is no defined leader and one should grab it himself.
• The important point is that, what people observe is behaviors. Two concepts here: task-oriented (getting work done) and relationship oriented (knowing who knows what, directs you to the right person; for example our department secretary).
• IBM Sametime is a similar program to Teamviewer
• Emergent leadership: becoming a leader later, emerging yourself.

Guest Speaker: ERP Implementation in FNSS Defense Industries

• Cigdem came to talk, she's an HR specialist in the company.
• FNSS had MRP systems before, making one think that change would be easier. But turned out to be not, end user resistance was high.
• The selected ERP system was IFS from Sweden for its flexibility and defense industry experience. (FNSS's designs changed frequently, was doing engineer-to-order) They went live on May 2009
• The most important thing is a dedicated team for implementation.
• It was expected 8 months, but turned out to be 13 months.
• the biggest problem with HR process was the organization chart. The relations were very hard to link, it took3 months.
• Choosing consultants is very important. "You have to love them, you spend too much time with them. They shoould be flexible, should know empathy."
• The benefits of the system won't be well understood until 18 months after implementation.
• According to Cigdem, it is not good to change everything at once, go one by one.
• 2 important points: Customization is expensive, master data cannot be changed.

The Lecture:

• Cost ingredients for Cisco: software, hardware, integration, headcount. The biggest cost was integration at Cisco.
• We should be prepared to pay twice the budget we estimated.
• Three trade-offs in ERP implementation:
• big-bang vs. phased (roll out) implementation
• outsourcing vs. in-housing staff and resources (cannot do full in-house, must outsource to some extent)
• high vs. low customization level (must be closer to implementing as is. )
• Also there is customization vs. business process reengineering. (changing the company for the program)
• We also talked about Accelerated SAP methodology and support pack upgrade.
• Realization: unit test - you only test ones that are critical.
• Final system cutover: switch from old to new system. Old system is shut off. It can also go in parallel for some time, but is more costly and time consuming.

BilkentMBA2010, Lessons learned, week 4, Rostislav Smolin

Three big considerations must be taken into account in ERP implementation:
- Big Bang or Phased Implementation: Big Bang (all at once) minimizes risks of integration issues at a higher cost. Phased Implementation (one by one) allows real options on each stage, allowing managers to “pull the plug” if the project goes the wrong way and minimize losses, but at increased integration risks.
- Outsource / In-house: Outsourcing may lower need for internal resources but increase dependency on outside consultants. In-house may increase dependency on key personnel if, for example, no succession plans are in place or knowledge management is not facilitated.
- Customization Level: Higher customization mean higher implementation and maintenance costs. If possible, customization must be kept to the minimum, while satisfying business needs and retaining sponsor support.

All three considerations are in continuous. For example, in one company big bang may be used for financial module, but production is implemented factory by factory.

One of popular SAP implementation methodologies meant to minimize costs and risks is ASAP. It contains 5 stages: project preparation, business blueprint, realization, final preparation and go live & support. Continuous improvement can be considered as 6th phase.

Leadership behaviors exist in real as well as virtual teams. Leaders manifest themselves in communication (babble hypothesis) as well as activity (activity hypothesis). To be perceived as leaders, participants must exhibit communication and work activity. Temporal lag exists in the process, and perceived leaders exhibit leadership behavior over a period of time. However, perceived leaders exhibit less than half of all leadership activity in the team, because the whole team participates in the process.

BilkentMBA2010, Lessons learned, week 4, Nurcan Bozkaya

In the 4rd week we discussed about the strategic ERP implementation types such that;
• The Big Bang Method:
This method requires that doing the implementation one at a time in whole company. It requires relatively shorter time period than phased method of implementation. This generally helps to the long term cost shortages. Doing the implementation shortly also leads to less painful adaptation period. But also since it is a shorter time adaptation, the intensity of the pain might be more. Additionally this method is more risky than phased method and the result is less satisfaction with the crucial system’s abilities. Generally, applying this method can cause extra working costs and opportunity cost of not working since while implementing this method very fast might require most of the employees to have their full concentration to that job.
• Phased Method:
This method is followed slowly relative to Big Bang Method. This method is less risky than Big Bang method since it consists of the steps of implementation in a long term. Thus, if there is a big problem with the project, it allows stopping the project, and with this way the company can avoid from extra cost. On the other hand, making the implementation slowly may cause “change fatigue”, and employees may lose their interests about change.
Moreover we discussed about leadership, “what is leadership and what is leadership different than management?” subjects. And also we talked about the shared leadership concept;
First of all leadership is defined as “influencing others understand and agree about what should have been done, how this can be done effectively, and it is a process of facilitating individual and collective efforts to accomplish a shared objective” by Yukl. The difference between leadears and managers are; managers have formal authority but leaders do not, they have the inspire and influential affect on their employees. From the point of Global ERP implementations’ view, in global teams there are issues we should have to deal with. For that reason Self-managing virtual teams (SMV) are becoming more and more common. SMV team members have abilities on work methods, task assignments and schedules and also compensation and feedback.
There are 2 types of leadership behaviours which are:
1. Task-Oriented Leadership: Task-oriented leaders are focused on accomplishments. At this type of leadership the success depends on to the leader’s ability about demonstrating the competence and commitments to the team members.
2. Relationship-Oriented Leadership: Relationship-oriented leaders focus on the relationships among the team's members. At this type of leaders creates an atmosphere which formed by trust, dignity and respect. The leader encourages the members to build constructive relationships with each other also.
The other subject we discussed is about ASAP methodology. ASAP means Accelerated SAP which is proven and successful approach to implement SAP solutions across industries and customer environments.And also ASAP provides content, tools, and expertise from former successful implementations. ASAP methodology has 5 phases:
1. Project preparation:
In this step the objective is to provide initial planning and preparation for the project. At this stage project team trained and the initial hardware is ordered. The output of this stage is the high level project plan and the project team organization.
2. Business blueprint:
This stage is the documentation step which will be used while doing configuration in the realization phase. Blueprint workshops and prototypes are being done at this stage. FRICE (Form, Report, Interface, Conversion & Enhancement) control list and the business process definitions are the outputs of this step.
3. Realization: The purpose of this phase is to implement all the business process requirements based on the previous stages outputs. Unit tests, training the process owners, FRICE developments, integration tests, and data activities are being done at this stage. Final user acceptance is the output of realization.
4. Final preparation: The purpose of this phase is to complete testing, end-user training and finalize the readiness of the company before go live. During this phase, final system rehearsal, help desk support preparation and cutover should have been done.
5. Go Live & Support: At this stage the data is migrated from the legacy systems, the new system is activated, and post-implementation support is provided. During this stage, review system processes and continuos improvement, help desk support and review issue log should have been done.

Lessons Learnt - Week 4

Leadership

The first topic discussed this week was the concept of leadership, and how specifically this relates to the environment of self managing virtual teams (SMV teams). In these environments there is often no assigned leader. However, natural leaders will always begin to emerge. An interesting finding of the study was that although leaders are often perceived as showing more ‘leadership’, actual leadership is performed by many different team members; with ‘non-leaders’ often contributing more real leadership.

Strategic ERP implementation

Big Bang vs. Phased: is it better to implement in one big hit? Or one business unit at a time?

Big Bang implementation carries significant risk. If something goes wrong, the consequences are significant. However, Big Bang may be less costly than a phased implementation and the momentum and significance of the event can help motivate to employees.

Under this phased implementation, the ERP system is introduced to one unit of the business at a time. Phased implementation is significantly less risky and allows the business time to make adjustments to the system over the course of the implementation. However, there are some significant drawbacks. Phased implementation may have higher costs and users may have to use both the old system and new ERP system simultaneously (double entry). In addition, temporary networks between the old and new systems may have to be created. Also, during the implementation, the company does not benefit from the value of ERP integration (different units are still using different systems).

Implementing with ASAP method

Accelerated SAP methodology is a systematic approach for implementing SAP systems. It works on a 5 stage process:

1. Project Preparation: This is the high-level planning stage. Teams are trained, hardware is ordered. Deliverables are set.
2. Business Blue Print: This stage is concerned with the determining the details of how the business functions; it’s processes, work flows, etc.
3. Realisation: Training begins in this stage. Business process developments from the blue print stage are also implemented.
4. Final Preparation: Testing, rehearsal and end user training in preparation for go-live
5. Go-Live and Support: This phase encompasses the launch and the period immediately following. The system should be carefully analysed after go-live to monitor and address any issues.

Finally, the company should plan for continuous improvement, where systems and processes are periodically reviewed and updated.

BilkentMBA2010, Lessons Learned, Week 4

The difference between leadership and management can be summarized as follows: leadership is the process of influencing others, and facilitating collective efforts to achieve objectives. A leader should also consider what the team members want, and should have followers. Management is more related to work structure and systems, he has formal authority and subordinates. As a part of Global ERP Implementations, Self-Managing Virtual (SMV) Teams can be analyzed. They are not leader dependent teams but decision making is done collectively by team members. Besides showing leadership in virtual teams is harder. In shared Leadership individuals share the leader role. In self-leadership, you get yourself do something. These leaders create role-models for their teams.

There are 2 kinds of leadership behaviors: Task- oriented and Relationship oriented. Task- oriented leaders configure how to change processes. Relationship oriented leadership can be also used in SMV’s on e-mails, with a positive group atmosphere being created and asking people’s opinions and encouraging outsiders to participate. Relationship oriented leaders may also use boundary spanning which means they connect team to outsiders and act as knowledge brokers.

During the FNSS company presentation, we learned that ERP implementation may not necessarily reduce the number of processes or reduce the workload in a company. Rather it would be more useful in increasing the quality of data and quality of the processes in the company.

ERP Options in implementation strategy can be discussed under the following dimensions:
a. Timeline: In Big-Bang Implementation, the system changes all at once. The advantage is that it offers a shorter period of uncertainty. Phased implementation’s advantage is that it becomes easier for the employees to adapt themselves and through learning effects, each round there is an increasing performance of adaptation. Another advantage of phased implementation is that is easier to finance because you can make incremental payments. In fact this 2 approaches are two ends of a spectrum and companies should use a combination of both according to their specific conditions and needs.

b. Staff/Resources: Resources can be obtained by outsourcing or in-house. However, it is advised that using a combination of them. For instance, a company cannot do whole process by in-house, because everyone cannot be IT specialists, some consultants will be needed. On the other hand, it cannot be 100% outsourced, because some in-house knowledge will be always necessary.

c. Customization Level: should also be managed. The original ERP software can be added some modules or some integration points can be added to combine company’s old software with the new. However, it is costly to upgrade them and to use patchs; therefore, customization should be used only if it is absolutely necessary. Being somewhere in between fully customized system and as-is Implementation; and preferably being closer to As-Is implementation on the continuum is the best.
There is also a second continuum in this dimension. Customization takes place on one side and Business Process Reengineering (BPR) on the other side. If you do not customize, you need to change your own processes and it is better to be close to BPR side of the continuum while using a combination of both.

ASAP (Accelerated ASAP) Methodology includes the following steps:
1. Project Preparation: high level plan is prepared, project team is organized.

2. Business Blueprint preparation: Business processes are defined. FRICE control list is used in this phase (Form, Report, Interface, Conversion & Enhancement)

3. Realization : This step has a heavy workload including unit test (for individual transactions), integration test (testing for coherence among all business processes working together), stress test (to see whether the system can handle full-capacity workload), and support packs- upgrading testing (done after implementation a few times a year to detect bugs in critical cycles). Using simulation tools is recommended in this stress test. The realization phase ends after final-user acceptance is obtained.

4. Final Preparation: Final system rehearsal should be made in this phase and it is better to simulate how you would go-live. Final-system cutover should be decided, meaning a time to go-live should be scheduled to shut down old and to move to the new system. This cutover time should be chosen so that it does not disturb work-flow. For instance, it can be performed at the weekend. In this phase there is possibility of having parallel systems: old and new systems being used together for a certain time period to avoid risk of failure. However, this parallel structure is time-consuming and costly therefore, it should last only for a short period.

5. Go-Live &Support: There is a move from project environment to live production environment in this phase. For the first 1-2 weeks there should be a review of issue log, meaning periodic meetings at the beginning of implementation as status update. Help desk support by super-users should be provided.

6. Continuous Improvement and process reviews should be performed.

BilkentMBA2010, Lessons Learned- Week 4

During the fourth week of the class, we discussed about the new concept of shared leadership, some ERP implementation strategies, and Accelerated SAP implementation methodology.

We learned that there are open source development teams that work on a virtual space without any face-to-face interaction. In these self managing teams, there is this concept called shared leadership and in this new management style, the leadership responsibilities are distributed between the team mates.

Apart from self management teams, we talked about some ERP implementation strategies. Companies can either go with a Big Bang implementation or a Phased Out implementation. Big Bang implementation happens when everybody in the organization goes live at the same time. Phased Out implementation occurs when the company switches to the new system step by step. Although most of the people in the class agreed that Big Bang implementation is better and prefer Big Bang over Phased Out, I still believe that Phased Out is a better approach since it gives time for users/ organizations to get used to the new system. In addition, the organization gains some sort of an expertise in implementing one phase and see what the problems and the difficulties are, so that they can be aware of those difficulties and take corrective action when implementing subsequent phases. Also, I think companies can have a better understanding of their needs after they start the implementation. As the guest speaker, Çiğdem, mentioned, it is like a continuum and companies want to implement more modules as they get into this ERP system. On top of that, the upfront costs in Big Bang are much higher than Phased Out implementation, and can be a burden for most companies. On the other hand, I agree that in Big Bang, the transition period is shorter and it is less painful. But the company has to manage all the problems that arise after it goes live, at the same time, and it may be too difficult to manage all at once. Another drawback of Phased Out is that companies need to create temporary bridges to connect the new system and the old one. But I believe companies need to go through this challenge and show determination during the longer transition period in order to get better results.

We also talked about the strategies in resourcing, whether outsource the staff or allocate in-house staff for the implementation. In order companies to not outsource, they have to have necessary technical skills to implement.

In addition, we talked about customization and how it is difficult to maintain once it is implemented since every customization brings its problems. It is also like a continuum between as-is implementation and full customization, and the optimum would be sticking in the middle by making compromises from your own business processes. In addition, customization is also like a continuum between full customization and BPR for the same reasons.

Another subject we discussed is ASAP- Accelerated SAP methodology, which is a proven and successful approach to implement SAP, and provides content, tools, and expertise from other successful implementations. This method has 5 phases:
• Project preparation- In this phase, the scope of the implementation such as which modules to be implemented are defined.
• Business blueprint- This phase is concerned with the documentation of the business processes and what is going to be implemented. The key deliverable in this phase is FRICE.
• Realization- In this phase, the output from Business Blueprint stage is used to configure the system. During this phase several tests are done to check the individual transactions (unit test), and the means (integration test). Stress testing can also be done with simulation tools.
• Final preparation- This stage is for preparing the organization to go live. In this phase, end-user trainings are completed and the cutover process is defined. (Cutover: Depending on the risk evasiveness of the company, it can run the old system in parallel to the new one or stop the old one and continue with the new one.)
• Go Live & Support- This stage is concerned with after-go-live support. Generally, it is recommended that consultants stay in the company for around 2 more months to resolve issues. Also, in emergency situations, it is important to identify and resolve the critical issues before the others.

Furthermore, there is actually another phase called Continuous Improvement, in which the company reviews its processes periodically and try to improve itself by getting extra support, implementing new modules, etc.

BilkentMBA2010, Lessons learned, week 3, Nurcan Bozkaya

The Organizational change management has five initiatives. The OCM is consisted of both the hard (Blueprinting, configuring, client strategy, transports, testing, code changes, more transports, more testing, etc.)and soft stuff (Training, communications, security authorization, super user organization, business process procedures).

Here are the initiatives of the OCM;

· Business Process Procedures: is the documentation process of business. How each transaction is going to used in ERP system? Each documentation processes should be done properly and data should be stored also it should also be easily reachable.

· Communications: Communication is one of the most important part of the OCM. A good communication plan should involve these topics;

§ What is the content/ message?

§ Who is the audience?

§ How do we tell them?

§ What is frequency of the communication?

§ Who will deliver?

§ Where will it come from?

§ When are delivery dates?

· Training: training involves the core team training, management seminar, and end user trainings. The most of the budget which allocated to training is used for end user trainings. The core team training and management seminar tools are being done before the end user training. Also the end user training involves some analysis, their course contents must be developed well, after they deliver the training courses they should have done practices before they go live. Training has also several elements as follows;

· Core team training

· Management “seminar”

· End user training:

o Training needs analysis

o Develop course contents

o Deliver training courses

o After training - practice before go live

· Super User Development: For super user development firstly we should determine the objectives of the super users, and then identify the criteria. Super users has to good communication skills and they should be volunteer. %10 of the end users must be identified as super users. Super users are the links between the core team managers and end users so they know how and where they can get help.

· Security/ Role Development: The role developers role is to determine who will authorized to access the data and how many data that they can access according to the needs of implementation.

Risk Assessment is one of the most necessary element in a project. According to the results of the risk assessment we are going to give colors about how the risk of the project is high and take the precautions to lower the risk or leave off the project.

Risk assessment involves these steps;

1. What is the risk?

2. What is the impact of the?When it happens, what would be the damage?

3. What is the probability of the risk?

4. What is the risk index?

5. Create a mitigation plan

Resistance to change & Culture:

To overcome to change resistance it is very important to give information to the employees about the benefits of the new system. With this way they will be willing to do change management and they will be the part of the change management. Additionally company culture must also be take into the consideration while doing change management in the company. Because of the culture the viewpoints of the organization changes. Company’s culture is formed by the values, behaviors, beliefs and norms (norm means the unspoken rule of the culture) that permeate the group, for example entrepreneurial vs. bureaucratic. And it influences the companies approach and the way that they solve the problem. Also by the customers behaviours affects to companies culture.

Additionally communication is one of the other important way to deal with resistance to change in the organization. With good communication skills people can be convinced about the benefits of the new system and it is also important for understanding the employees needs and satisfy their demands.