We all know them?the takeaways from any major systems implementation. So why is it that we have to keep relearning them? AMR Research visited 18 leading multinational manufacturers the past three months, conducting in-depth reviews of their supply chain system deployments. Although these companies represented the best of the best, they are in the minority of companies that got to the Promised Land and saw some business benefits.

I visited 18 leading multinational manufacturers the past three months, conducting in-depth reviews of their supply chain system deployments. Although these companies represented the best of the best, they are in the minority of companies that got to the Promised Land and saw some business benefits, though the journey was long and often painful.

Still, these were not unique or unpredictable areas of pain, and after a dozen of these visits, it began to feel like Groundhog Day.This raises a key question: if we all know the best practices for major system deployments, why do we continue to make the same mistakes and fail to build these lessons into subsequent projects?

The lessons are universal and independent of the deployed vendor application, industry, or process area. Here they are, with a checklist to help you avoid the all too common pitfalls. Incorporate these “must-take-into-account” items into your next large-scale implementation.
We have categorized them into four areas:
1. Strategy and value generation
2. People and organization
3. Implementation process
4. Technology

Strategy and value generation
Business strategy and objectives dictate supply chain strategy and transformation: A successful transformation effort should be led by the business, not IT. That business lead should also lead the selection decision and the implementation priorities. After all, it’s the functional team that has to deliver the business benefits.

Create an overall supply chain strategy and vision: Again, systems change must be a factor of the functional business requirements. Articulate evolution or revolution to avoid one team taking one approach and a second team taking another. As one IT executive for a global consumer products company said, “Be realistic, practical, and grounded.”

Strong top-down executive sponsorship and continuous engagement are mandatory: While this speaks for itself, the projects that lacked such sponsorship saw the scope for fragmentation and politicking increase dramatically. “We had strong sponsorship aligned with corporate strategy and stable management,” an IT executive for an engineering business said. “You can’t do this without top management support,” added another.

For each supply chain process, use a single system across the enterprise: You cannot have two right best systems. This degree of local ownership will always mean some part of the organization isn’t conforming and delivering best practice results. “It is difficult to expand the solutions’ use because we are a federation, and so we are missing business benefits,” said one group IT executive at an A&D firm.
“Business cases use a standardization index against which we measure functionality drift and its value,” added a supply chain executive at a high-tech firm.

Establish robust end-to-end measurements, from value to systems performance: Consider the following:
1. Best practice scorecards track business benefit delivery by manager and cost center.
2. Balanced scorecards measure the journey as well as the results, and cover technical aspects too.
3. Comprehensive, one-version-of-the-truth dashboards cut down on the hunt for the guilty and got much faster in defining corrective action.

People and organization
Executive and project management continuity are vital: This continuity is best applied from concept development through implementation and into mature operation. Develop clear on-off plans for team members. If reentry options are not clear, the best people will either not commit to the project in the first place or will leave when an opportunity comes, rather than at a time to suit the program. Finally, project succession planning is as important as normal business succession planning.

Change management needs a strong and sustained focus: Early user involvement is vital. Focus on broad training, including supply chain concepts as well as system capabilities. Consider these comments from some of the leaders we interviewed:

“We knew in advance change management would be a critical component, but still ran into trouble. Midlevel managers needed to be convinced because of other priorities in day-to-day operations.” IT executive, engineering business

“Our business people were just as blind as our software people.” IT executive, global CP company

Organizational change is often required to build new supply chain skills and processes: A clear model as to what elements will be centralized and what elements localized is essential because it often rebalances in such initiatives. Be sure to import new skills at an early stage. “Resource pools needed to be restructured and new responsibilities were assigned, but it still proved challenging,” commented an IT executive for an engineering company.

A single, global IT department simplifies control, implementation, and management: A great deal of complexity was added and generally regretted if multiple divisional IT departments existed. This manifested itself in uncertainty over systems, timing, version control, interfaces, and responsibilities. A CP company IT executive commented that “centralization was key.”

Have strong internal competence at system level: This allowed for rapid cycles for system tuning. Many of the best also saw it as necessary in order to keep the vendor honest.

Implementation process (Again, implementation must be business led and IT supported.)
Establish joint project ownership and governance: Incentives and metrics must be aligned between the operations of the business, IT, and external partners. A supply chain executive at a high-tech firm recommended that IT and the business be measured on the same key performance indicators. And an IT executive also from a high-tech firm said, “If IT misses a milestone, then future funding is reduced.”

Balance business requirements and system abilities: You must know your technology’s limitations versus having new ideas that generate additional value.

Use a phased implementation approach: Although controversial, there was a clear consensus. The size of phases and the gap between phases did vary considerably, however. The leaders recommended using a pilot for quick wins, scope management, and business agility. They also mentioned a clear and structured cascade methodology for rollout, particularly within a distributed organization.
“This is a five-year program, not a six-month project. But focus on successes twice a year to drive belief,” said an IT executive at an engineering business.

Testing always gets squeezed: Adequate time and resources for testing is essential in order to maximize user buy-in, tune business rules, and rapidly deploy. Build contingency into plans and don’t be bullied into giving it away in order to keep to an often arbitrary implementation date.

Technology
Data accuracy and cleansing are critical to go live: Give clear recognition and accountability at the start of the program. Best practice was to appoint someone chief of data for the business. Also, measure and test data accuracy regularly, as it drifts very quickly. Engage suppliers in enacting their responsibilities to feed accurately into your business.
Use stable systems: Once again controversial but still clear, many of these organizations had gone through periods of what could be called “co-makership,” and had the scars to prove it. If systems are not proven, use your early adopter leverage to form a strategic partnership with the vendor to obtain clear commitment, system tailoring, and cost control. Don’t leave it all to the vendor. But be warned–early adoption can be a rough road: “If you want stable systems, don’t be the first to implement.” Supply chain executive, global automotive supplier
“We bought a vision and little of it worked. It took six years and multimillions of Euros to get us there.” IT executive, high-tech firm
“We pioneered products, so we did have bloody noses.” IT executive, global CP company

Define the required support model up front: Clear agreement is needed on who provides what and what the first and second line of support is. “Iron out a good contract covering a customer support agreement, the type of post implementation support required, and specific vendor resources,” recommended one supply chain executive of a high-tech firm. Many also recommended companies ensure that interfaces are owned by the vendor, or that an internal team exists with the skills to manage it.

Maintain one version of the application: This simplifies alignment, maintenance, and upgrade management. Operationally, it lowers the total cost of ownership.

Ensure sufficient attention is paid to performance and scalability: Robust performance measures and test scenarios are required. The appropriate skills, such as database administrators, must also be on board. As an automotive industry IT executive said, “Initial performance was poor. It could only be addressed by reducing the amount of product forecast.”

Although a lot of these are old lessons, if you review this list while planning your next deployment, maybe some of these things won’t appear on your post-implementation review as “lessons learned for next time.” On the other hand, you might simply take the view of one of our senior interviewees: “I still have my job, so it cannot have been that bad.”

Source: AMR Research/Martin White

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