A Clear And Present Danger

How often does it happen that an organization moves from an old legacy ERP type system to a new, up-to-date ERP system and it fails to meet expectations and to improve system and business process efficiency?

Too often!

One of the primary reasons is that the project is way underfunded for the scope and somehow management has decided that there is no need for the costs to be what other successful companies have spent and they set forth to “do it on the cheap.”  Major strategic projects, such as a new ERP implementation or major ERP upgrade, which are underfunded, under staffed, and given an unrealistic time frame to complete, almost never work out.

Cutting corners and saving money on such strategic projects, which are a foundation for the company to support how they manage the business,  may not be the best idea.  The ROI is to be realized after a powerful system is implemented successfully and everyone’s expectations are met.  Doing it right means:

• More cost upfront on the project, but also a maximized ROI for the long term, as in 10 to 15 years, every year.
• Significantly higher system performance and business process efficiency realized, every year.
• Smooth transition from the old to the new system.
• Easier Business User buy-in and happier end users from the get-go.
• Much less maintenance and support costs, every year.
• Minimizing the need for customizations and making future upgrades easier and cheaper.

Given that most organizations do have to deal with finite budget limits on such projects, the best strategy is to plan what scope you can do, within the limits, while “doing it right.”

A Best Practice would be not to take or introduce unnecessary risks, which seldom work out.  Most often one cannot do all of the scope that one would like to do in Phase 1 due to the budget and time available.  What you can do to is develop a long-term, phased-in roadmap, based on business priorities, where the key stakeholders will be able to see when their needs will be taken care of.  OK, they may not get the new system functionality this year, but they will be happier to see that it is at least on the list to be done next year, or the year after.

With new technology, it is often said that “You don’t know what you don’t know.”  If you choose to do it on the cheap, you are most likely going to find out what you don’t know the hard way — and sooner, rather than later. What you may save on the front end, you will likely pay the piper for many years to come.

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More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

It’s the Big Daddy question: Why did our implementation fail? It causes a room to fall silent and eyes to focus intensely on meeting handouts and coffee cups.

In our experience, there are some very key differences between PeopleSoft projects that have been successful and those that have not.  Historically, we have been asked to come in and fix a number of failed implementations. It’s almost always ugly, and it happens more than you might think.  The upside? As a result, we have been able to assemble a list of the top reasons implementations fail.  Here’s what we’ve learned, in no particular order:

1. The solution is not tied to the business objectives. We have said a hundred times over that a project can be on time and on budget but if it does not meet the objectives of the project/business, then it still will not be successful.  Companies implement PeopleSoft for specific reasons and after spending months and many dollars, it will be a complete failure if those objectives are not achieved. Seems obvious, but it’s incredible how often this gets brushed aside during a project in favor of more tactical objectives.
2. Scope is not managed. Scope creep is the number one killer of a project.  Scope can kill a project with one large change or many, many small changes (what we call ‘death by duck bites’).
3. Organization is not prepared for change. Certainly implementing the software flawlessly is key for a successful engagement, but beyond the software it is important that the organization is ready to use the software and prepared for the business changes that will come.  Without being prepared for change, there is a high chance that user adoption of the new software will be negatively impacted and the software blamed.  In effect, it is not the software, but the failure of being ready to use it, support it and adopt new business processes which lead to the project’s failure.
4. Project team skills are not appropriate and unavailable. Many times during the sales cycle when we discuss what is key to success, we are promised only the best and brightest dedicated to the project.  Unfortunately, business priorities often intervene and the project ends up being staffed with RIP (Retired in Place) folks and resources who have never even seen a mouse.  The new software will help establish best practices and having a team engaged that understand the details of the business and are motivated to succeed is very important.
5. Executive sponsorship is not strong nor visible. The role of the executive sponsor is often overlooked but that role’s importance should not be.  Executive sponsors will be key for managing scope and change requests, ensuring the project has the correct resources and resolving issues.  I have seen many a project have all of the right elements except a strong executive sponsor and still struggle because of it.
6. The system is not sustainable by the customer. There are cost cutting implementation methods out there such as lab, offshore etc., which can implement for a lower cost, but there is a price to pay for that lower cost.  The highest price paid is the fact that insufficient knowledge transfer has occurred and the client is unable to sustain and support the solution once it is live and the implementation partner has departed.  The client must be able to support and grow the solution and have the knowledge to do so.
7. End users are not trained. Often, as the go-live pressures mount to hit the expected date and not increase any costs, corners are inevitably cut.  Generally those corners are cut in testing or training — both of which are major mistakes.  End users must be trained in order to effectively use the solution.  A proper and efficient training program must be developed and executed timed close to go-live to ensure end users are ready for the software.  Ignoring this training will only result in many help desk issues, a stressed go-live and ultimately poor user adoption. And what does that spell? Failed implementation.

Don’t think for a second that there are only seven reasons why implementations go south. Sadly, there are many more. In my follow up post, I will outline what MIPRO’s mitigation strategies are to ensure these do not happen and we have a successful PeopleSoft implementation.

In the meantime, if you have a question about this or your own horror story, please don’t be afraid to tell me about it. We do a lot of clean-up work, and we’ve primed some insanely successful projects. I’d love to hear from you.

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More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

From MarketWatch:

Oracle (ORCL 32.80, +0.25, +0.76%) said its third-quarter net income rose to $2.1 billion, or 41 cents a share, compared to $1.19 billion, or 23 cents a share, in the same period a year earlier. Revenue for the quarter ended Feb. 28 rose 37% to $8.76 billion. Excluding one-time items, Oracle said earnings for the quarter were 54 cents a share.

Analysts polled by FactSet Research had expected Oracle to report earnings excluding items of 50 cents a share, and $8.7 billion in revenue.

The most notable thing about this news is the fact that much of the quarter’s success was predicated on software sales to new corporate customers.  This isn’t maintenance stream stuffing; this is IT departments finally loosing the checkbooks and satisfying some (probably) longstanding requirements.

Also notable is Oracle’s side statement on whether or not the earthquake and tsunami in Japan will have any bearing on short-term future operations:

The Redwood Shores, Calif.-based company also raised its quarterly dividend, and said it doesn’t anticipate a significant negative impact on its business from the recent earthquake and tsunami in Japan — while posting a better-than-expected profit outlook for the current period.

Great news all around for Oracle.

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More links:

MIPRO Consulting main website.

MIPRO on Twitter and Facebook.

About this blog.

There’s plenty of information out there about why to choose SaaS and which products lead their respective markets.  What’s not out there en masse is some cogent advice on how to deal with the underbelly of any enterprise software purchase: the contract.

Derek Singleton, an ERP Market Analyst for ERP Software Advice, rounds up his nine key points you’ll need to think about in negotiating your SaaS agreement.

So you’ve decided to go with Software-as-a-Service (SaaS). It’s easy to implement, easy to use and has a friendly subscription pricing model. You’re psyched.

Then comes the contract.

While SaaS has simplified enterprise software in many ways, you will still need to review, negotiate and execute a fairly complex contract when subscribing to an “enterprise-class” system. In this post, we will walk you through the nine most important things to consider when negotiating your SaaS agreement.

Nice to see these oft-discussed points collected and discussed evenly.  It’s a high-level consideration, but certainly these nine items should be somewhere on your contract checklist.

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MIPRO Consulting is a nationally-recognized consulting firm specializing in PeopleSoft Enterprise (particularly Enterprise Asset Management) and Business Intelligence. You’re reading MIPRO Unfiltered, its blog. If you’d like to contact MIPRO, email is a great place to start, or you can easily jump over to its main website. If you’d like to see what MIPRO offers via Twitter or Facebook, we’d love to have you.

More business posts.

Speaking of PeopleTools 8.51, our friends over at Grey Sparling are hosting a webinar to explore the new goodness in PeopleTools 8.51.  Details from their invite:

Although the 8.51 release isn’t nearly as large as its predecessor, there are a lot of powerful new features that you will want to know about.  Two of the most exciting are:

• A new testing framework (you’ll hear a lot more about this at Oracle OpenWorld).
• A new way of navigating within PeopleSoft (called Smart Navigation).

The Grey Sparling developers have just finished downloading and creating demonstration environments for this release, and we have scheduled two webinars this coming week to give you an early look at what’s there and how to use it.

• Wednesday, September 15 at 10:00am Pacific (which is 1pm EST).  Click here to register (space is limited).
• Friday, September 17 at 1:00pm Pacific (which is 4:00pm EST).  Click here to register (space is limited).

If you’re at all interested in getting under the hood of PeopleTools 8.51, don’t miss these.

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MIPRO Consulting is a nationally-recognized consulting firm specializing in PeopleSoft Enterprise (particularly Enterprise Asset Management) and Business Intelligence. You’re reading MIPRO Unfiltered, its blog. If you’d like to contact MIPRO, email is a great place to start, or you can easily jump over to its main website. If you’d like to see what MIPRO offers via Twitter or Facebook, we’d love to have you.

More PeopleSoft posts.

Interesting snippet from the recent Oracle earnings call:

Question (Kash Rangan – Merrill Lynch) So if I read it correctly, it is going to be ERP supply chain [cerium] for everything, HR, everything on demand, delivered as a multi [inaudible] service from your data sectors to add to the subscription model, right.

Answer (Larry Ellison) Absolutely but it’s not necessarily. The interesting thing is its not necessarily from our data center. We have three models. One is, we have on premise where you run it. We have on demand in our data center. I should say on premise in your data center where you run it. We have on demand in our data center where we run it. But then there is an on demand in your data center where we run it. So the computer is actually on your floor, behind your firewall, attached to your very fast local area network but we provide all the services.

And we think that’s where the real value is and we think that’s the interesting model. It’s a model that Salesforce.com does not offer. It’s a single tenancy on demand model, with a computer on your data center, highly secure, highly performance, but we provide all of the upgrade services and we administer the applications.

That’s proven to be a significant differentiator between us and Salesforce and what is allowing us to win virtually every large-scale deal.

Ellison is onto something, because the two top objections to on-demand are (1) confidential data being moved offsite into another entity’s care, and (2) end user performance.  The third model Ellison talks about – where the Oracle on-demand application infrastructure is in your datacenter, in your care, on your network – overcomes both of these.  It’s a compelling hybrid, and I suspect you’ll see other firms scramble to copy it.

(Via Dave C.)

(click to enlarge)

Requirements gathering.  So many organizations don’t realize this is often where success in a Business Intelligence (BI) deployment lives or dies.

When it comes to BI, we have all heard that BI is more than just simple reporting.  That’s become the BI vendor’s mantra.

However, the challenge we see all the time is how to realize the tremendous benefits of BI beyond reporting or even making existing reporting more valuable.  Through our experience and working with our clients, we have developed a proven, repeatable process to help make the vast promises of BI a reality.

It all begins with the premise that BI is not a tool, but rather part of the business process that should be used to improve business processes. Unfortunately, traditional report requirements gathering procedures have focused on – wait for it! – reports.  In essence, that process is flawed from the start.

If an organization simply wants reports that may or may not assist the business process or answer business questions, then the old, outmoded approach is fine.

What happens if you go down this road?

Well, tunnel-vision happens: if you ask users what type of reports they need, they will provide an answer based upon the limits of their experience and job domain.  Answers will be derived from what they use now, problems they have experienced in getting data or information, and “individualized” not process-based needs.  Their perception is based upon the knowledge or lack of knowledge of the true capabilities of BI.

That’s a myopic – and oft-committed – error when trying to establish a real BI practice.

Embedding Bi into the business process is really an exercise of peeling back the metaphorical onion. In looking at the diagram below, if we think of a business process such as AP invoice payment, each process is surrounded by six key questions/considerations.  By securing answers to these questions, we can help ensure that the requirements gathered do not result in a siloed report and that the downstream and upstream impact of this information is understood and usable.  As these questions are asked and answers interpreted, they ultimately influence and refine what is being asked for. This inevitably leads to improved business intelligence far beyond glorified reporting.

This is only the tip of this discussion.  If you would like to see additional detail and a practical example laid out in real-world terms, register for our free whitepaper, MiPro’s Business Intelligence Manifesto: Six Requirements for an Effective BI Deployment.  It provides much more information and expands upon the theoretical with plain English examples.

Also, if you would like further information on an enterprise BI strategy or BI applications in general, please email me.  I’m a nice guy.  If social media is more  your thing, you can follow us on Twitter or become our fan on Facebook.  Or, if old school RSS is your gig, you can subscribe here.

Related posts:

• Business Intelligence Apps: Build vs. Buy
• Business Intelligence: A Picture (or Flash Demo) Is Worth a Thousand Words
• Twitter vs. Enterprise Software
• Living Together: Oracle BI and PeopleSoft
• Back to basics: Why choose an enterprise Business Intelligence tool, anyway?
• Using BI to Survive the Recession, Part I
• Using BI to Survive the Recession, Part II
• Business Intelligence in the real world: Aligning metrics (Part I)
• Business Intelligence in the real world: Aligning metrics (Part II)

Related whitepapers (PDF):

• MiPro’s Business Intelligence Manifesto: Six Requirements for an Effective BI Deployment

Last week we dove into the Real Estate Management module included within PeopleSoft’s ALM product suite.  This week I’m going to dig into another module within the ALM product suite — Maintenance Management (MM).  For anyone interested in asset maintenance and reliability, this one’s for you.

Given the rough sledding in the economy right now, managing a company’s assets is hugely topical.  Here’s a quote from a June 2009 AMR Research Report entitled Asset Management Algebra: EAM = ROI:

“Companies don’t have the luxury of large capital budgets in today’s economy. They have to do more—or at least as much—with less. This means that, in respect to their assets, they have to wring out efficiency and extend the life and usefulness of their existing plants, property, and equipment. This is at the core of many organizations’ enterprise asset management programs.”

The PeopleSoft MM system is a full function, end-to-end solution providing complete visibility and control of a company’s capital and non-capital assets. Assets are managed throughout their entire lifecycle, from acquisition through in-service and ultimately to retirement. PeopleSoft customers using the MM system enjoy the benefits of reduced capital equipment downtime, lower costs to maintain these assets, and ease of compliance with safety regulations. In addition, the fully integrated solution minimizes the TCO of the software solution.

Besides providing robust functionality, I believe the biggest benefit PeopleSoft customers receive is the integration into their existing PeopleSoft Financial, HCM, and Supply Chain systems. Interfacing a third-party MM system is expensive, complex, and time consuming. The PeopleSoft MM application ships with native integrations with the following PeopleSoft modules:

• PeopleSoft Asset Management
• PeopleSoft Project Costing
• PeopleSoft Resource Management
• PeopleSoft HCM
• PeopleSoft Purchasing
• PeopleSoft eProcurement
• PeopleSoft Inventory
• PeopleSoft Accounts Payable

To illustrate my point, consider the lifecycle of a work order and all the systems it touches, from generation of the work order to performing the work required, closing out the work order, as well as all the associated accounting.  It’s a lot and complex, so let’s walk through an example.

When a work order is generated, it may access the inventory system for spare parts availability, the purchasing system if parts or other MRO items are not on hand and need to be purchased, the accounts payable system to handle the payment of the purchased MRO items or spare parts, the HCM system to determine what person(s) has the skills to perform the work, and the general ledger and asset management systems after the work is performed.  Lots and lots of touchpoints, and this is a relatively limited example.

It is not uncommon for a PeopleSoft customer using a third-party MM system to develop and maintain over 20 bi-directional interfaces to the GL, AP, Inventory, Procurement, HCM and Asset Management systems. PeopleSoft MM eliminates these integration headaches with its native ties to other PeopleSoft systems.  If you think this is just spec sheet fodder, it’s not: these out-of-box integrations save massive amounts of time and effort.

So, what about the ROI?  Let’s again go back to what AMR Research says:

“EAM systems can provide demonstrable results in a relatively short time frame. In today’s environment, where budgets are tight and freeing up or conserving working capital is paramount, developing and implementing a robust EAM solution can help deliver incremental profit to the bottom line.”

PeopleSoft customers operating in asset-intensive verticals such as Mining, Utilities, Hospitality, Education, State/Local Government, Manufacturing and Oil/Gas would be well advised to review the benefits offered in the PeopleSoft MM system.  Likewise, if your organization has a fleet of vehicles, multiple capital assets used for production, or multiple facilities requiring ongoing maintenance, take the time to learn more about PeopleSoft Maintenance Management.

For more information on the PeopleSoft MM product, please email me or give us a call at 800-774-5187.  In addition, you can check out Oracle’s website and download some of the collateral related to the product.  If you’d like more of a in-depth primer on PeopleSoft MM’s and a deeper explanation of its benefits (especially compared to point solutions), download our free whitepaper entitled PeopleSoft Maintenance Management: An Introduction and Overview of Benefits.

Next week we’ll discuss the features and benefits of the PeopleSoft IT Asset Management (ITAM) application, the third asset management application contained in the PeopleSoft Asset Lifecycle Management (ALM) suite.  Be sure to come back (or subscribe to our RSS) if you’re interested.  Alternatively, if you’re into social media, hit us up on Twitter or become our fan on Facebook.

Related posts:

PeopleSoft Real Estate Management: A Deeper Look

An Introduction to PeopleSoft Asset Lifecycle Management

Sneak Peek: PeopleSoft Enterprise Portal 9.1

PeopleTools 8.5: A Look Inside

Related whitepapers (PDF):

PeopleSoft Maintenance Management: An Introduction and Overview of Benefits

I gave this a passing link in our Oracle BI and PeopleSoft post last week, but I’m staring at it again and think it deserves its own post.

Here’s Jeff McQuigg, writing for IT Toolbox, on the total costs of Oracle’s BI apps vs. 100% custom:

When you add everything up, we estimate about a 7X effort increment to deliver a similar piece of functionality as the BI Apps. Although this seems high, when you really sit down and think about all of the moving parts that are needed, plus all of the complexities and start-up costs, the numbers become more realistic.

In other words, if you want to build your own BI apps — complete with all requirements gathering, data models, ETL, reports, and dashboard definitions — you’re looking at a cost, in sum, that’s seven times what you’d pay for Oracle’s excellent BI apps.

BI isn’t just technology, it’s a great deal of process engineering and planning.  If you look at it as merely a technology exercise, you may indeed get a functioning BI system, but will you legitimately get something above and beyond a few new reports?  Or will you get a platform on which your senior officers can make real-world business decisions?

Cost is a major factor, but solution value is the end game.  Keep that in mind when you’re juggling BI cost numbers.

(Thanks Larry Z.)

Related whitepapers (PDF):

MiPro’s Business Intelligence Manifesto: Six Requirements for an Effective BI Deployment

Vinnie Mirchandani:

Read this Google paper Data Center as Computer to understand why the average software company which cannot talk about PUEs and CRACs is going to be hopelessly outflanked by the amazon’s and salesforce’s.

Read this note by Dennis Howlett on why “not our problem” will be less and less acceptable as an excuse for a software vendor. Operations Management will become as important a competency as architecture, interface design and testing.

Either software vendors will pick up those competencies really quick, or they will leverage the infrastructure and operations experience of one of the pioneers – as Coda is doing with salesforce.

The disruption is here.  To sloppily paraphrase Bob Dylan, software companies have to get busy being born or get busy dying.  It’s not even about living anymore: if software vendors can’t be reborn into the new market, then they simply won’t survive.  Taking the “same as it ever was” approach is tantamount to getting busy dying.

Dramatic?  Probably.  But there’s lots of drama and noise and gnashing of teeth when something – anything – is facing disruption.  If you’re smart, you see the change coming and adapt to it, even if it means cost, re-org and effort.  If you’re myopic or a serial denier, you’ll get pulled into the event horizon and, well, don’t say you weren’t warned.