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

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.