The Lesson Learned from Implementation of ERP in Project-Based Holdings

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 1 MASOUD ZAKERMOSHFEGH mmoshfegh@yahoo.com Feb,15,2015 ir.linkedin.com/pub/masoud-zakermoshfegh/36/96/628/en

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 2 Content  Enterprise Influences on ERP  Pre Implementation Processes  During Implementation Processes  Post Implementation Processes

3M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran Holding Project Mgmt. Project Base ERP Out of Frame • What is ERP? • Why ERP? • ERP Benefits • Detail life cycle Discussion Frame

4M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 1. Organizational Culture & Style • Ownership • Business Style • Industry Segment (Manufacturing, Operation, Project Base, etc.) • Project Type (GC / EPC / Drilling / Construction) 2. Governance • Authority to Change • Decision making • Clash of Priorities 3. Organizational Communications • Common language • Communication Channels Organizational Influences on ERP Project Management

5M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 4. Organizational Structures • Clarification of Black Connection Lines • Pay attention to the white spaces (unofficial relationships) Organizational Influences on ERP Project Management (2)

6M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 5. Organizational Process Assets • BPM • Process Diversification 7. Stakeholders • BOD • CEO • Senior & Executive Managers • ERP team members • Key-users • Staff • Vendors / Contractors • Clients / Customers 6. Enterprise Environmental Factors • Political & Economical climate • Enterprise Stability • Marketplace Conditions (International & Domestic) Organizational Influences on ERP Project Management (3)

7M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran Diagnostic Analysis Design Develop- ment Deploym- ent Operation Bid Transition Scope Mgmt Financial Mgmt Work Mgmt Risk Mgmt Staff Mgmt Project Preparation Business Blueprint Realizatio n Final Preparation Go Live Support Run Commun- ication Quality Mgmt Configur- ation Infrastruc- ture Procure- ment OCM Microsoft Sure Step Methodology SAP AG (ASAP) ORACLE Unified Method (OUM) ERP Project Lifecycle & Implementation Methodology

8M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran Pre-implementation Implementation Post-implementation Project Integration Management <<< Preliminary Studies Post Implementation Support Cutover Plan Project Plan Technical Support IT Strategy & Arc. Cutover Project Scope Management <<< Business Process Management ERP Configuration / Development Identify Biz. Needs Blueprinting Project Time Management Scheduling time intervals and important milestones / Schedule Control Project Cost Management Cost Estimating / Budgeting / Cost Control Project Quality Management Benefits Realization Development Quality Gates Determination Performance Mgmt. / Benefit Realization Audit Project Human Resources Management Develop Training Materials and Plan End-user Training Key-user Training Organizational Chart Re-design ERP Project Team Development Roles and Responsibilities Matrix Project Communication Management Communication Data Gathering and Cleansing Data Migration Project Risk Management Risk Assessment and Evaluation Project Procurement Management ERP Consultancy Service Contracting and Award ERP Consultancy Service Contract Administration Project Stakeholder Management <<< Organizational Change Management >>> Stakeholder Analysis and Executive Alignment Legend : Business / Managerial Activities Technical Activities ERP PROJECT MANAGEMENT PROCESSES – PMBOK Approach Pre-Implementation Implementation Post-Implementation

9M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran Pre-implementation Implementation Post-implementation Project Integration Management <<< Preliminary Studies IT Strategy & Arc. Project Scope Management <<< Business Process Management Identify Biz. Needs Project Time Management Project Cost Management Project Quality Management Benefits Realization Development Project Human Resources Management ERP Project Team Development Project Communication Management Project Risk Management Risk Assessment and Evaluation Project Procurement Management ERP Consultancy Service Contracting and Award Project Stakeholder Management Legend : Business / Managerial Activities Technical Activities ERP PROJECT MANAGEMENT PROCESSES – Pre Implementation Pre- Implementation Implementation Post-Implementation

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 10  Statement of the problem?  Is ERP the best solution?  Readiness assessment  Identify Expectation  Choose the right ERP Software • Functional • Technical • Cost • Vendor Viability • Risks  Develop ERP Project Charter Pre Implementation - Preliminary Studies Don’t forget: • Do Agile • Do Collaborative • Document Events • Benchmark similar cases

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 11  Business needs are changing, do it rapidly  Avoid Dreams  Manage Conflicts of needs  Focus on Value Chain Processes  Focus on Unique business requirements  Focus on Long-term strategic goals  Prioritize the requirements  Use Well-known Process References (APQC) Pre Implementation – Business Needs

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 12  Do BPM regardless of ERP scope  Focus on Process pain points  Try to Simplify the processes  BPM Deliverables to ERP: • Processes • Workflows • KPI • Procedures • Role & Responsibilities • Forms / Reports Pre Implementation – Business Process Management

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 13  (Available & Qualified) Resources  Clear Role & Responsibilities & Job description  Effective Communication  Staff Retention CEO Steering Committee ERP Project manager ERP Team Members (Dedicated) Functional members (Part time) ERP Implementer ERP Consultant • Competencies • Knowledge (Business, Technical) • Dedication • Loyalty • Motivation & Interest • Skills • Teamwork • Negotiation • Good Communication • Effective Follow-Up Pre Implementation – Project Team

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 14  Top Management Commitment & Support  Change of Stakeholders or their interest / power  OCM  Initial Scope  Data Migration  Competence of ERP’s consultants  Resources  Project Management  BPM  Training  . . . . . Pre Implementation – Risk Assessment

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 15  Bid Evaluation & Prequalification  Outsourcing Strategy  Tendering Process  SOW  RFP  TBE  CBE  Contract Award Pre Implementation – ERP Service Contracting and Award

16M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran ERP PROJECT MANAGEMENT – Implementation Processes Pre-implementation Implementation Post-implementation Project Integration Management Cutover Plan Project Plan Project Scope Management ERP Configuration / Development Blueprinting Project Time Management Scheduling time intervals and important milestones / Schedule Control Project Cost Management Cost Estimating / Budgeting / Cost Control Project Quality Management Quality Gates Determination Project Human Resources Management Develop Training Materials and Plan End-user Training Key-user Training Organizational Chart Re-design Roles and Responsibilities Matrix Project Communication Management Communication Data Gathering and Cleansing Data Migration Project Risk Management Project Procurement Management ERP Consultancy Service Contract Administration Project Stakeholder Management <<< Organizational Change Management >>> Stakeholder Analysis and Executive Alignment Legend : Business / Managerial Activities Technical Activities Pre-Implementation Implementation Post-Implementation

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 17 Considerations:  Rolling Wave Planning  Combination of Short-term Achievements  Be realistic despite environmental forces  Identify & Focus on the Critical Path Implementation – Project Management Plan

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 18 What is Business Blue Print? BPM VS BBP Challeng es Integration of processes which are doing by others? Endless BBP discussion Trade off Level of Efforts VS. Level of Control Level of Efforts VS. Wanting every things StandardizationVS. Flexibility Avoid Scope Creep VS. Stockholder Satisfaction Best Practice VS. Best Fit Implementation – Business Blue Print

19M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran Implementation – Blue Print

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 20 Common Reasons for Timeline Overages • Scope Change • Ineffective Issue Management • Ignoring real critical path (e.g OCM, Data Migration) • Unrealistic Timeline • Inadequate Qualified Resources • Poor BPM 2010 2011 2012 2013 14.3 16 17.8 16.3 Average duration of ERP Implementations within 2010 ~ 2013: 16.1 Months Planned Duration (Months) %61 %72 %61 %54 Implementation – Schedule

21M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran ERP Implementation Strategy  Big bang  Pilot  Phased – Functional Wise – Organizational Wise  Depends on: • Size (Functional , Organizational) • Readiness Considerations • Priorities (Managerial , Technical) • Organizational Structure • Resource Allocation • Geographical Locations Implementation – Schedule

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 22 Cost Breakdown:  ICT Infrastructure (Network/Server/Client/Storage)  Implementation • License (less than 10%) • BPR • Customization/Development • Test • Training • Data Migration  OCM  Support Main Reasons for Cost Overrun  Scope Change  Unrealistic Project Budget  Project Timeline Overage 2010 2011 2012 2013 5.5 10.5 7.1 2.8 Average Cost of ERP Implementations within 2010 ~ 2013: $6.5 Planned Budget… % Cost Overruns %54%53%56 %74 Implementation – Cost

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 23 Keep stakeholders informed & engaged Change Vision Business Change Impacts New Processes Procedures MOM Tasks Issues Documents (BBP, Books, Articles, etc.) Progress Report (Monthly) Implementation – Communication Management

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 24 Identification Gathering Cleansing - Validate (consistency) - Consolidate Convert to Templates Migrate Test & Accept Implementation – Data Gathering Migration

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 25 Types of CHANGES:  Visible – How to Work: • Software • BPR • Organizational Chart redesign • New Role & Responsibilities  Invisible – Paradigm shift: • Integration • Transparency • Control • Power shifting Implementation – Organizational Change Management

26M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran Pre-implementation Implementation Post-implementation Project Integration Management Post Implementation Support Technical Support Cutover Project Scope Management Project Time Management Project Cost Management Project Quality Management Performance Mgmt. / Benefit Realization Audit Project Human Resources Management Project Communication Management Project Risk Management Project Procurement Management Project Stakeholder Management Legend : Business / Managerial Activities Technical Activities ERP PROJECT MANAGEMENT – Post Implementation Processes Pre-Implementation Implementation Post- Implementation

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 27  Legacy system retirement or Parallel using?  Team member Motivation & Retention  Hand over the system  Closing of the implementation contract Post Implementation – Run & Support

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 28  User Performance  Business Process Performance (KPI)  System Performance  Training needs  Reporting needs  Benefit Realization  Effective Enterprise Governance  Increase Enterprise Transparency  Increase Availability of Data  Improved Data Reliability  Improved Productivity  Less Duplication of Efforts . . . . .  Continues Improvement Post Implementation – Performance Management & Audit

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 29 Success Factors: (Executive point of view)  Effective Follow up  Dedication  Continuation ERP Issues Conclusion

M.Z. Moshfegh, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran 30 MASOUD ZAKERMOSHFEGH mmoshfegh@yahoo.com ir.linkedin.com/pub/masoud-zakermoshfegh/36/96/628/en Thank you for your attention M. Z. MOSHFEGH, The Lesson Learned from Implementation of ERP in Project-Based Holdings, 10th International Project Management Conference, Tehran, Iran, 15-16 Feb 2015

The Lesson Learned from Implementation of ERP in Project-Based Holdings

In this document