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 3, Gun Gokmen

Week 3 started with the concept of change management.

• As an introduction, we started with the source of resistance: why do people resist to changes in their workplaces, and we talked about some instances. A salesman, for example resists to an ERP system because entering the information to the system requires time, which can be traced to lost sales eventually. Or they may not want to share their sales or customer information with the others. There ale solutions to this problem, like communicating and convincing them that the system will benefit them eventually, and to show them how to get benefit from the system as a tool. Or these people could be given incentives to use the system.
• Norm is a culture, which is not written. This affects the change efforts.
• The change management also involves trainings for different levels in a company: Core team training, management seminar, end user training. I used to give end user trainings and remember my hard times because of the resistance of the users. They looked forward to seeing some problems with the software and not to use it. I learned that training the trainers sessions I've once attended was a mean of change management concept.
• Business process reengineering makes business processes leaner.
• Do biz process optimization or ERP implementation first? Best to do hand in hand, but getting ERP before could be better because ERP already provides "best practices"
• Business process procedures (BPP): documents to define steps in processes. They also represent the actual business processes of a company because ERP processes REPLACE the old processes. A good transactional document also includes clues of the actual process.
• The Silo Problem: Departments working distinctly of each other, doing their own work and "throwing off the wall" But they should work together.

Then we did Risk Assessment and analysis

• 1. identify the risk 2. identify impact 3. identify probability 4. Risk index 5. Find its mitigation
• Risks: technical or related to people
• We did an example of network down for a day... Red index.
• Risk assessment can be used as a project management tool. Could be done monthly, twice a year, in the phases of a project, etc.

BilkentMBA2010, Lessons Learned, Week 3, Rostislav Smolin

OCM

One of most valuable assets to an ERP project is sponsorship. Project managers must involve and support sponsors from day one. Even a seemingly successful implementation can be halted if sponsors lose their influencein the company, so project team must inform executives about project successes allowing sponsors to maintain and grow their pro-ERP coalition.

Next in order of importance is the communication with the core team. These people will, hopefully, work long and stressful hours to make the implementation happen. They need to be trained, supports and informed about flow of the project.

End users training can be the most expensive item on the OCM budget, depending on the number of people trained. Effective training schedule can minimize costs as courses are grouped in related topics.

One important aspect of OCM is mitigating the risks associated with company culture. “Culture eats strategy for breakfast every day”, and sometimes cultural and structural changes in the company must be implemented in parallel with ERP.

ERP specialists can backup themselves politically by timely informing management of arising risks. The usual way to present risk is to follow risk, impact, probability and mitigation sequence.

BilkentMBA2010, Lessons Learned, Week 2, Rostislav Smolin

Back in yearly 2000s when the demand for ERP consulting in Russia was high my future employer, now a leading consulting company, would walk away from projects in which the client could not clearly define the (strategic) objectives of implementation. This tactics allowed the company to maintain a perfect project success rate (although as we have learned in class, the success itself is rather subjective). If you are an outside consultant, or a company employee, remembering that “no is always a possible answer” is good to keep the options open.

There are good reasons to implement ERP (business growth, increased complexity, improving financial control) and good reasons not to (high cost, resistance to change, insufficient staff, strategic misalignment).

Resistance to change is almost always an issue. I remember meeting a colleague on a parallel implementation project and ask him which stage of they are on. “Sabotage” – he answered rater casually. Employee age, in my experience, is not a defining factor: I’ve seen old inefficient government owned firms embrace change with enthusiasm, and young and seemingly dynamic companies create political barriers to implementation.

If the organization processes grow complex and diverse Enterprise Architecture framework can be employed (in parallel with ERP) to understand how organization functions and how processes can be improved. Since 1987 when John Zachman introduced his framework many alternatives appeared; some were developed specifically for the needs of government organizations, others are for use in business companies.

Typically, analysis on EA is done in context of following components: Goals and Initiatives, Products and Services, Data and Information, Systems and Applications and Networks and Infrastructure. The process is repeated for each business unit of a company.

Business problems that can be solved with either ERP or EA may have similarities. Given that implementation of wither ERP or EA requires significant resources, a choice can be made between the two by carefully analyzing business requirements.

BilkentMBA2010 Lessons Learned Week2

We learnt that what are the inital needs of an implementation phase of ERP systems and why does a company needs an integrated system?

The initial needs of a company before implementation of an ERP system are,

- Aim of growth

- Current systems’ incapability of handling the loads

- Higher complexity

- The opportunities to improve processes and reduce the costs

- To improve the financial control of the company

- Have a better information about the processes

- Share information between departments easily

- To gain competitive strength

- Data integrality

Why should a company not implement an ERP system?

- Resistance to change

- May be the strategy of the company is not in the line with ERP, the need of company can met with a cheaper alternatives

- The cost of implementing an ERP system is so high

- Implementing an ERP system may not met the demand of the firm

- May be the organisation is not ready to implement such a system

- Company may not want to grow anymore

What is the success of company?

Success means the customer satisfaction:

-how you meet the requirements (recuirement functionality),

-how you meet the budget

And how you meet the timeline

What should be done before implementing an ERP system?

Some analysis should be done before implementing an ERP system. These analysis are,

GAP analysis; this analysis determines that where I am as a company now? And where should I be as a company? AS-IS and To Be sitiuations.

SWOT analysis; Strengths, weaknesses, oppurtunities and treatments of the company. Oppurtunities and Treatments form the external environment of the company and Strengths, weaknesses form the internal environment of the company.

Elevator speech; we can also use the elavotor speech to improve the companies benefits.

KEIRETSU: the way that Japanese organisations work. In this concept suppliers of the company work closely with each other.

Organisational Change Management:

%20 budget should be allocated to Organisational Change Management since Organisational change management is an initiative that aims to improve the success of the company.

There are 5 different needs for Organizational Change Management:

-Training; employees should be trained fort he new system adaptation.

- Business Process Procedures, documentations of processes should be managed

-Super user development: Super users are the workers who are trained earlier for helping to train his/her Colleagues . This users should be good at communication skills.

-Communications, for achieving the success we should be sure about all of the employees understands the ERP concepts , since misunderstanding can cause to failure.

-Security and role development; there should be given an authorization to the employees not any more then they need on the system.

What is the difference between the concept of Enterprise Architecture and ERP Business Case?

They are not the same concepts, but they complement each other. EA is a framework for strategy, business and technology planning. ERP systems are tools for integration that EA helps to meet the requirements and achieve strategic goals.ERP implementations should be ERP planned in the context of EA management since EA concept helps to reduce the risk of ERP implementation failure by using some tools to view the current and future conditions. EA is a complementary of ERP system. It makes you see the gaps of ERP implementations. First we should apply the EA concept then decide whether ERP could be the solution system or not. ERP system can be used to support the strategic plans but in fact, ERP should be the reason of the strategic plans.

EA concept was put forward by John Zachman in 1987 and 5 years later Spewack published a book about this concept.

How would we choose EA type?

Zachman’s type of EA, EA^3(Scott Bernard’s concept) and the company should choose the EA type which it fits with company’s demands, also which can be applicable for that company. Additionally the level of detail should also be concerned.

Lessons Learnt - Week 2

To ERP or not to ERP

Why does a company need ERP?

The need for ERP can be driven by several factors. Some of these reasons include:

• Company growth
• Current systems are inadequate
• Changes in competitive environment
• Company needs better internal controls
• The need to share information

Why shouldn't a company implement ERP?

• Costs – upfront, ongoing and hidden costs.
• ERP is no aligned with company strategy
• Company’s needs can be met with a cheaper or easier solutions (can the same task be performed with Excel?)

Tools to help help decide whether to implement ERP:

• SWOT: Strengths, weaknesses, opportunities, threats. This analysis will help a company to better understand its internal and external environment; from this, the need for ERP may be identified.
• GAP Analysis: Current performance vs. desired performance. By using this tool, companies my first identify the current situation of the business vs. the desired position of the business, and then undertake and assessment of options and strategies to get from one to the other. Companies should ask: is ERP the answer to get the company to where we want it to be?

In deciding whether to implement ERP, the final decision criteria should be: is there a strategic need?

What defines a successful implementation?

And implementation is successful when the customer’s expectations are met or exceeded:

• System meets requirements
• Is on time
• Is on budget

Enterprise Architecture

What’s the difference between EA and ERP?

EA is a framework; a tool for strategic planning

ERP is a system; a tool for integration

Both are business initiatives and not IT initiatives. It is unwise to allow IT to oversee the implementation of these projects as IT often does not fully understand the business processes, the project may not get the proper support it needs, and many levels of the organisation may not see the strategic value of the project.

Selecting an EA framework:

A company should pick a framework that...

• It understands
• Suits the business type
• Has an appropriate level of detail

Change management:

In both ERP and EA, change management is essential. This critical section of the project requires approx 20% of the overall budget.

ERP change management includes:

• Training (staff need to know how to use the new system)
• Business process procedures (development and management of the migration from old to new processes)
• Communications (making sure everyone knows the systems, how it works, why it is being implemented, and the strategic value of the new system)
• Security and role development (ensuring the protection of sensitive data)
• Super user development (training key employees who will be champions of their functional areas. they will serve as internal trainers themselves, and as go-to help for others that need assistance with the system)

In EA, excluding the need for security and super users, the areas of change management are similar.

Both EA and ERP requite support from the top levels for change management to be effective.

BilkentMBA2010, Lessons Learned, Week 2

This week, we are taught about building the ERP business case and the concept of Enterprise Architecture.

• The initial need for ERP originates from company growth, current systems not handling the load, higher complexity of operations, to improve processes and reduce costs, collecting better information about processes etc.
• There are also reasons NOT to implement an ERP system: high resistance to change, high integration and development costs, being not in line with company strategy, problem can be solved with cheaper alternatives etc.
• Success means customer satisfaction in business basically. This passes through meeting their needs, within the budget and appropriate time.
• ERP is a good market since because most top 500 companies already have ERP systems, the market goes towards medium-sized companies.
• Before implementing ERP, analyses should be made like SWOT, GAP, ...)
• We talked bout GAP analysis and then Enterprise Architecture, critical success factors.
• With GAP analysis, we can determine the current situation (as-is) and the future system (to-be). The difference between the two is the GAP, and it could be filled in some ways. ERP implementation could be one of the ways.
• I learned Japan's "Keiretsu" concept, working with their suppliers.
• Enterprise architecture: Zachman invented it, Spevack studied it further and made it more basic. U.S. federal govt. implemented its own architecture and applied widely.
• We discussed whether EA and ERP are competing solutions or not. EA finds out the gaps, ERP might be ONE solution. But they have common points.
• Process owner: The responsible of a business process. They are mostly seniors in the company, and they can proopse changes in the process.
• Power user: The users that are trained before the others. This is a part of change management. They must have good communication skills.
• Role profile owner: Decides on and arrange who accesses what in the system.
• 20% of the ERP implementation budget should be allocated to change management.

BilkentMBA2010, Lessons Learned, Week 1

The first week was an introduction to the ERP systems and some providers of them.

• ERP systems are categorized into major ("best practice", less development expenses), smaller (simpler processes, niche software, lower price) and open source (free licensing, high security, accessible to community) ones.


• BPR stands for business process re-engineering, which is done for improving processes.


• Each SAP module has its experts, like FICO (finance and controlling), One consultant cannot be an expert of all modules. These consultants could be for implementation or for ongoing maintenance.
• The concept of audit trail: anything you do in the system is tracked with your user-ID.
• GIGO: Garbage in - garbage out.