Dont Forget Your Business Processes!

Oracle Cant Do it All for You!

Douglas A. Volz & Stephen F. Keefe

BearingPoint, Inc.
 Agenda

Introduction
Common Pitfalls or Traps During or After an
Oracle Implementation or Upgrade
Principles of Effective Business Process
Change
Differences Between Mission, Vision, Strategy
What is Business Process Modeling?
 Agenda (Contd)

Ways to Look at Your Processes

Activity Analysis
Brown Paper Mapping
Responsibility Charting
Factors to Consider When Making Major
Changes
References and Acknowledgements
Conclusions
 Introduction

Why do so many Oracle Implementations not

yield the predicted benefits?
Why are inefficient (pre-Oracle) methods still
in use after implementation?
Learn about how you can effectively change
your business processes
What are some of the common ways to
analyze your business processes
 Common Pitfalls & Traps

What follows is a list of some common traps

that occur during an Oracle implementation

It is the systems fault; I want the Oracle System

to be like the old one
Absolutely no customization vs. too much
No ad-hoc reporting solution, no management
reporting solution
Stakeholders not actively participating
We have a budget (but no benefits case)
 It is the Systems Fault

Real case example, March May 2003

Blaming the 11.5.5 Oracle System and not
the underlying broken business processes
Yet, when reviewing the Procure to Pay,
Order to Cash and Plan to Fulfill process
areas, out of the 300 issues found:

Over 75% were caused by broken processes

And many system issues were report related, not
core functionality
 Customization Levels

Too many customizations

Leads to expensive upgrades or re-
implementations
Difficult to maintain Oracle W/W Support will not
assist you if customization is involved

Absolutely no customization
Not viable either unless your operation is small
Especially true for Supply Chain and CRM modules
 No Ad-Hoc Reporting or Management
Reporting Solution

Always need ad-hoc reporting

Discoverer, Business Objects, Noetix Views, others
Use of a report server (can double as a back-
up server)
Also need to consider your management
reporting solution
Oracle Business Intelligence modules / Oracle
Warehouse Builder
Business Objects
3rd party data warehouse solutions
Stakeholders Not Actively Participating

The most important project for the company,

yet:
Stakeholders dont attend meetings or respond

How do you get them on board?

Engage your sponsors before the project or starts
The initial engine to motivation is involvement
Set project expectations together
Make them a party to the crime
We have a Budget (But no Benefits Case)

Project budget has no relationship to the task

Focus is on costs not on benefits

Without a benefits case:

Justifying the project as lower cost, not high value
Much harder to sell internally
Cannot get the needed resources

Need to find the benefits

 Benefits Matrix

Long
QWs
Range Benefits

Value

HRFs Avoid!
Time wasters

Time to implement
QWs = Early wins
HRFs = Hassle reduction factors
LRBs = Medium to Long range benefits
Principles of Effective Business Change

Alignment of people, process and technology

People
Management sponsorship
Skill levels and training, roles and responsibilities
Commitment & wiliness to adopt new processes

Process
Leading practices for your industry
Aligned with your strategic directions
Streamlined and effective
Measured and held accountable for
Principles of Effective Business Change
(Contd)

Alignment of people, process and technology

Technology
Right hammer for the right nail
Dont be first unless you have to!
Choose the technology after you understand your
business requirements, not the only way around
Principles of Effective Business Change
(Contd)

How do you achieve this alignment?

Dont look at the tools first!

Find out how good you are benchmark

Do a high-level analysis of your business processes
and opportunities
Then prioritize your business needs
And last, look at the needed tools to achieve your
goals
Principles of Effective Business Change
(Contd)

Find out how good you are

Gauge yourself against your competition

Compare current practices against leading

industry processes

Performance benchmarks
Principles of Effective Business Change
(Contd)

Are we talking about financial measurements?

Operational and financial measurements

Not only ROI, working capital, EPS, etc. but also:

Purchasing spend as a % of cost of sales

No. of buyers per hundred employees
Manufacturing cycle time
Length of monthly accounting close cycle
And many others
 Example:
Supply Chain Benchmark Analysis
Supply Chain SCORcard Performance Versus Competitive Population
Overview Metrics SCOR Level 1 Metrics Actual Parity Advantage Superior Value from Improvements
Delivery Performance to
Supply Commit Date 50% 85% 90% 95%
Chain
Reliability
Fill Rates 63% 94% 96% 98%
EXTERNAL

Perfect Order Fulfillment 0% 80% 85% 90% $30M Revenue

Responsiveness Order Fulfillment Lead times 35 days 7 days 5 days 3 days $30M Revenue
Supply Chain Response Key enabler to cost and
Flexibility Time 97 days 82 days 55 days 13 days asset improvements
Production Flexibility 45 days 30 days 25 days 20 days
Total SCM Management
Cost
19% 13% 8% 3% $30M Indirect Cost
INTERNAL

Cost Warranty Cost NA NA NA NA NA

Value Added Employee

Productivity
NA $156K $306K $460K NA

Inventory Days of Supply 119 days 55 days 38 days 22 days NA

Cash-to-Cash Cycle Time
Assets 196 days 80 days 46 days 28 days $7 M Capital Charge
Net Asset Turns (Working
Capital)
2.2 turns 8 turns 12 turns 19 turns NA

SCOR: Supply Chain Operations Reference Model, Supply-Chain Council

Missions, Visions, Strategies and Processes

Whats the difference?

Mission To be excellent sailors

what we want to do
Vision To sail around the world
the size of our ambition
Strategy We will use a 45
how we will get there catamaran sailing east-to-west
Plans & Processes
who does what when Detail, detail, detail
 What About Strategic Directions?

Set your strategic directions first

Strategic direction, overall mission and vision comes

from your executive management; the overall goals
and objectives of your company or agency

People, processes and technology support your

strategic directions

Without it you could be solving the wrong problem!

 What Are Business Processes?

You can define them as:

A series of business activities that taken together,
transform resources into goods and services for
your customers

Source: Business Process Design Methodology, BearingPoint, Inc. April 2003

 Sample Business Process
Manual
Requisition
Process Online
Procure
Requisition
Inventory Goods
Process
Requestor

& Services
Process

Approved
Approved Inventory
On Line or
Manual Planning
Express
Requisition Requisitions
Requisitions

1.0
Review
Requests
No
Buyer

1.3 System
generates 1.4 Direct enter
New Supplier or No Purchase Order
AutoCreate PO? Yes PO or
Requirement? or Agreement
Agreement
Release
Yes

1.1 Create new 1.5 Print, Email,

1.2 Approve
supplier or Select Send or Fax
Terms and/or
existing supplier. Purchase Order
New Supplier
Sourcing

Negotiate Pricing.

Supplier Add New Supplier

Request for
Responds Supplier Ships
Quotation
to Request Process Product

Receiving
Add New
A/P

and
Supplier
Payment
Process
Process
Source: R2i for Oracle Release 11i, BearingPoint, Inc.
 What is Business Process Modeling?

It is the simple yet time-consuming task of

asking yourself:

can I do what I do any better?

Common goals for process modeling include:

Cost reduction and consolidation
Eliminating non-value added activities
Streamlining and improved efficiencies
Bringing up a new business unit
 Approaches to Process Modeling

Define first the business process areas

you want to address
Find out who are the process owners &
stakeholders get them involved
Examine your processes & organization
Activity analysis
Brown Paper mapping
RACI analysis
 Activity Analysis
Activity analysis is a structured method of sub-
dividing a large, complex organisation into a
series of activities
Purchasing
Example: Department

Raise purchase
Select suppliers orders

Expedite
Negotiate annual Resolve invoice
orders
contracts queries
 Activity Analysis

Helps you understand:

What each department actually does

Identifies gaps in the process analysis
Isolates potential opportunities
Identifies non-essential activities
The cost of doing an activity across an entire
enterprise
 Brown Paper Mapping

Gets the doers involved

Shows areas of strength

Shows areas of opportunity

Shows the big picture - Forest and trees

Thought provoker for system enhancements

Can be used for a variety of workshops

 Brown Paper Example Note
approximate
Copies of
Red flags timings
documentation
Process Title

Decision

Post-it
Notes for opportunities,
Key metrics Signatures
strengths, comments
 Responsibility Charting (RACI)

Helps determine who does what for a process

Who is
- The doer - the person who actually
Responsible
conducts an activity
Who is
- Ultimate ownership: the person who
Accountable carries the risk if it all goes wrong
Who is - A person who must be consulted
Consulted before decision/action is taken
Who is - A person who must be informed after
Informed decision/action is taken
 An Example of a RACI

Training Project Project

Activity
Lead Sponsor Managers

Training Needs of Project Team

- review needs RA
- plan training RA I
- assign coach RA I
Resourcing
- determine adequacy A
- Get departmental approval RA I
- plan mobilization RA I
Obtain Buy-In from stakeholders I RA I
Program Management C RA
Identify Linkages/Dependencies A R
Report Workstream Results A R
Evaluate Project Progress RA I
Factors to Consider When Making
Major Changes

Is making major changes a challenge?

Reasons why projects fail

What is resistance to change

What strategies can you use

 Major Change has Always Been
Recognized as Significant Challenge

It should be borne in mind that there is nothing more

difficult to arrange, more doubtful of success, and more
dangerous to carry through than initiating changes in a
states constitution. The innovator makes enemies of all
those who prospered under the old order and
only lukewarm support is forthcoming from those who
would prosper under the new

Niccolo Machiavelli (1469 - 1527)

 Some Key Reasons Why Projects Fail
Inexperience in Lack of
scope and communication 20%
complexity 17% Failure to define
objectives
17%

Redesign of
business processes
and IT issues 14% Project Management Problems
32%
A survey of 252 European and US companies revealed the
importance of the softer issues. Asked what were the
main reasons why major projects they have been
involved in have failed, they answered . . .
Typical soft Design Issues in System
Implementation Projects

Clear vision and goals

Securing and retaining active sponsorship
Effective communications
Technical and legal barriers - habits vs
requirements
Cultural barriers
 Two Levels of Successful Change Mgmt
Change Management

Organizational change People change

What we need to do to What we need to do to get our

effectively design and integrate: people to:
New work processes Understand and accept the
New technology change
New application software Commit themselves to
New organisation preparing for it
structure Be proactive in identifying &
New performance executing all actions
standards necessary for success
Such strategies recognize the process that
people go through when they experience
change..

deny commit

resist explore
Managing implementation projects means
addressing rational, political and emotional
issues:

Rational
Rational

Political Emotional
 What will resistance look like
You are
Happy as I changing the
Dont Too much
Dont have am rules
understand stress
the skills
what I will do
I didnt sign
Dont up for this Emotional Why do this?
Rational have the
Dont know if time and
its worth it resource Stupid
Dont think Can I cope?
consultants
this will work

Losing
Will I lose control of my
power destiny Whats in it
for me

Whos
sponsoring Political Organization
this says project
is failing
How can I Risks are too
regain control high
Resistance to change is natural. It
needs to be acknowledged and
positively managed
Confusion Deflection

Immediate criticism Silence

Denial Aggression

Malicious compliance Avoidance

Sabotage Leave

Early agreement
 Some Examples of How to Manage
Resistance
Adopt a positive attitude to those who express strong
views
Ensure sponsorship provides a strong enough force to
counter resistance
Capture the key concerns, recognize problems early
Build responses to resistance into your communications
and training
Ensure you are seen to have listened to concerns and
acted where appropriate
Change management raises business performance
by...

Right People

Right Right
Things Way

...ensuring that organizations have the right

people, doing the right things in the right way
 References

Dont Park Your Brain Outside, A Practical Guide to

Improving Shareholder Value with SMART
Management, by Dr. Francis Hartman, Project
Management Institute

SMART Management presentation by Ken Hanley,

BearingPoint, Inc., May 2003

Business Process Design Methodology,

BearingPoint, Inc., April 2003

R2i (Rapid Return on Investment) implementation

toolkit, BearingPoint, Inc.
 Conclusions

We have covered some of the common traps and

pitfalls
Discussed how to figure out your business
requirements and align it to your strategies
How to focus on business processes and business
benefits not just project cost
Looked at how making changes can be difficult
And some techniques to managing resistance

Major changes are possible you can transform

your company
 Questions & Answers

Thank You for Your Attendance and Participation