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Spin Off 07/23/2010

Posted by TBoehm30 in Project Management.
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How does a company chop it’s IT in order to spin off and sell a part of itself?

I just read an excellent article by Mike Gorsage from Tatum about Integrating IT for Mergers and Acquisitions.  In the second half of the article he talks about “Planning for Separation.”

 This got me thinking about when I was consulting with Agilent as they were getting ready to split the company and sell part of it to Philips.  Agilent had just recently split from HP and some of the IT was still, unofficially, shared.  While HP and Agilent were two different companies, there was a shared culture that allowed people to communicate easily.  People at Agilent had come from HP and were comfortable with how things worked there.  Now some of them were being ‘sold’ to Philips and it had to change.

 Agilent had to figure out what IT the new company would take with it.  Some hardware and software would have to be duplicated, some would have to be given, and some would not be part of the sale.  They had to figure out the same thing with the IT team; however it is much more difficult to duplicate a person.

 I was working on their CRM system for the call center dealing with medical machinery.  HP/Agilent (now Philips) produced monitor type equipment for hospitals and doctors.  When the equipment had problems, they called the response center in Atlanta.  The call center would specifically be part of the sale to Philips.

 The CRM system, Clarify (now owned by Amdocs), was highly integrated with the back office system.  Corporate Agilent decided that the back office system would not be part of the sale.  Since Philips and Agilent, along with HP, are competitors in some arenas, the new company could have no access to proprietary data.

 That meant we had to get all of our data off of the old system, into a new system on a very tight timeline.  We had to update our CRM system to integrate with SAP instead of the old HP system.  With the help of some very smart people, we got the CRM system up to speed within our timeline and on budget.  We figured out how to download master data from SAP: the customers, contacts, products, and contracts.  We figured out how to send back to SAP the data it needed for tracking, billing, etc. 

 During the building move we managed to move all of the hardware over the weekend, so barely anyone knew it happened.  The call center is a 24 by 7 operation, so it had to be done carefully and quickly.

 The biggest problem turned out to be migrating data from the back office system to the new SAP system.  The contracts in the legacy system were confusing, not standardized, and big.  Agilent had a large team of people who came up with a plan to pull the data, clean it up, and then put it into SAP.  It would take weeks of processing the data after it was pulled, to clean it up enough to get into SAP.

 Agilent set up the deadline of when to be out of their system.  If the new company missed that deadline and needed continued access for another month it would cost Philips a lot of money.  We missed that deadline and had to extend.  Agilent doubled their fee the next month and would have doubled it again had we needed another month.

 By that time, I suppose, someone decided enough was enough, and called it done.  We had enough data to proceed and make it work.  Since I was not involved directly with old back end system, I have no idea what data we lost.  I can only imagine it was significant.

 With the new company complete, we worked on better integration with SAP, the politics of the new culture, and improving the call center.  Philips had bought several medical companies that would join us and we had to integrate them next.

 Most of the companies’ call centers were moved into our building and so we eventually shared the CRM system with them all.  We shared the phone system, and the other infrastructure that allowed us connectivity to the internet, intranet, and each other.

 Philips wanted everyone to use SAP in the call center.  We quickly did benchmarks and comparisons to show corporate how much extra it would cost to get rid of the current CRM system.  They acquiesced, at least temporarily, to allow the legacy system.  Their idea was still to get rid of it, and that theme was seen in numerous meetings.  We managed to continue the use of Clarify, even against the wishes of some big-wigs at Philips IT.  Eventually it was expanded to other countries around the world.

 The thing that Philips did right was allow the best technology to continue being used, and even invested in its future.  While they had alternate plans, the old systems worked well and could not easily be changed so they didn’t change it.  Their alternate plans were shelved, and new plans created to better the company as a whole.

 Philips had the people who understand it’s a global world out there and Technology makes it happen.

ERP Mini-pilots: How to implement an ERP system 08/07/2009

Posted by TBoehm30 in ERP.
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One of the keys to success in a new software system implementation is to get everyone familiar with the system in advance of go-live. If someone is learning the system on the first day, then that is too late for them. The users of the system need time in advance to play with the system, to experiment with different methods, and to become familiar with using the software.

Now is the time on my current project when everyone should be doing mini-pilots. They should be working on their own with the new ERP system. The accountants are changing the accounting parameters to see the repercussions of certain actions. They are trying out processes such as invoicing, accounts payable, and accounts receivable. They then check the journal entries to validate the accuracy of the transactions. They are cutting checks and running reports.

The people who are in charge of manufacturing are trying out the MRP system. They are creating work orders, purchase orders, and receiving inventory. They are inventing routings, BOMS, and work centers. They are checking that the cost rollups work correctly. The manufacturing processes must work smoothly on day one because that is the way the company makes money. Without a clean manufacturing process implementation, the project won’t be declared a success.

A big ERP system has hundreds or thousands of parameters that can change the way that the software behaves. Accounting needs to make sure that each activity is tracked in the correct account. Since the system is flexible enough to handle dozens of different types of processes, the accounting codes are determined by a very complicated setup linking products, customers, account types, and account codes. The parameters have to all be right, and now is the time to make sure they are set correctly.

No detail is too small to test. When a sales order is created, turned into a work order, then invoiced, and paid, we will need reports all the way through the process. Each report has to be carefully studied to validate the data. Any time a major parameter is changed, the whole process should be repeated.

Purchase orders, or purchase requests, have an approval process that needs to be setup and tested. Security has to be in place – or at least planned – so that people can’t be making changes that affect the rest of the company. Knowledge has to be shared so that parameters aren’t changed and then changed back without everyone knowing.

Everyone is working hard to learn the new system. There are literally hundreds of parameters and setup features that they are looking at. Can the users receive more product than originally ordered? Can users pay out a different amount than was on the original PO? Are users allowed to run batch processes?

Every screen has to be tested and validated. Any time a screen doesn’t behave as expected, the parameters are checked and changed to fix the problem. That means going back to the beginning again and verifying that the parameter change didn’t alter the original behavior of other transactions.

We also learn more about the system every time something doesn’t work as expected. We dig into the details to figure out the answer. If we figure it out ourselves, it is a success that won’t be easily forgotten. If we need help from the vendor, then they usually give a great summary of related issues.

This time period is a very unstructured time. Everyone is working on their own, doing their own thing. We won’t know how much real work they have put in, until the next meeting where we go over the system. I haven’t given them a schedule like I have for the Conference Room Pilots. Since I am working with responsible, hard-working people, I know that they will figure it out.

The time to do Mini-Pilots needs to be long enough (more than a week) to allow people to get a good feeling for the software. It also needs to be short enough (less than 6 weeks) so that people feel the pressure to work hard. If the time is too long, then people will tend to procrastinate thinking they have plenty of time.

As the consultant driving the implementation, I have been trying to meet with people to get their impressions. I have worked with people on different functional areas to help them understand the software. I have been inserting myself into their daily routine so that they won’t forget about the project.

I think it is working, because people are starting to get nervous. They are working even harder knowing that the go-live is getting closer.

This is great because we all know that it’s a global world out there and Technology makes it happen.

ERP Project Management – Make Them Sweat 05/18/2009

Posted by TBoehm30 in ERP.
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Build some slippage time into your project plan.

Our plan calls for four business units to go-live on four different dates. The first one in September, but because of fourth quarter restraints, our next one isn’t until February. This is the plan approved by upper management giving everyone enough breathing room to perform their day jobs and still have enough time for the implementation project.

We had wanted the first two business units to perform together in their tasks. We scheduled the pilot programs together, the business process modeling, the testing, etc would all be done at both locations at the same time. This would allow comparisons in problems, coordination of solutions, and a general feeling of comraderie during the project. Everyone thought this was a good idea until the pressure started.

Our second business unit has more work to get their system running than the first business unit. The companies are different enough that this was obvious from the beginning. The longer project for the second unit was a perfect plan to allow them the time needed for that extra work. Unfortunately, they can already feel the pressure coming from the amount of work being projected to get them ready. We had planned on doing the first pilots together in a few weeks for the two business units.

They decided that there just wasn’t enough time to be ready for that pilot. In the steering committee meeting we fully discussed the pros and cons of letting a few tasks slip for the second business unit. After pleading their case, we agreed that it was in their best interests to expand their time frame for certain tasks, without changing the final go-live. We didn’t touch the timeline for our first business unit.

This experience showed everyone the amount of work that is needed for a company-wide software implementation. It opened their eyes to the tasks that need to be completed by their deadlines. They spent a little time worrying about how to finish their responsibilities on time.

A little sweat never hurt anyone. Now they will have no trouble figuring out what to do. After all, everyone here knows that it’s a global world and Technology makes it happen.

ERP Implementation Obstacles 03/24/2009

Posted by TBoehm30 in ERP.
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The Struggle
Your ERP system is chosen. Management has spoken their approval and you have the team together. It’s time to put together your plan. The first real item on the plan is initial training. This is the type for the planners, not the end users. It’s just to learn the system enough to put together the implementation approach. In this particular case it’s the strategy of accounting vs. manufacturing. What parts of one or the other can we use to phase in the project. As I said in a previous post, I don’t like the big bang approach.

We need to schedule the accounting training for the accountants. These are the same accountants who close the books every month. They are the same accountants who prepare the books for publication every quarter. These accountants, by the way, spend quite a bit of time closing the books. That is the main reason why the company needs an ERP system. They need a better way to consolidate the books.

So when can these accountants take time away from their busy day jobs to work/train on the new ERP system?

The Problem
The company runs very lean. They have just enough employees to get the job done. Everyone has their job, they know what they do and they do it very well. However, it is not automated. Their jobs could be much easier with some good technology. An ERP system with a single database would allow corporate accounting to easily consolidate their books. They will also get better insight into the costs of the business and be able to make better decisions. They’ll be able to understand the costs of producing different products. They’ll have better insights into their inventory and holding costs.

The first new task to start the implementation is training. When can we start the training? It is now the end of March. That means the end of the quarter and all of the work associated with closing the books. April is ruled out.

How about May? April books need to be closed, so maybe the second week of May. It seems like we’ve only got the accountants for half the month or less. That is not going to be enough time to complete an ERP implementation in six months.

The Solution
Once again, we need Executive support. It takes decisions at the highest levels to pull people off of their current jobs and get them to focus on the new project. This project has to be the number one priority. The only way to set that kind of priority is for a CFO or C-level Executive to set expectations.

They’ll also need help, probably from the outside, to continue normal operations. They’ll need to hire temporary workers who have enough skills to close the books. They’ll even need help from their current departments to continue operations while some of their leaders are working on other projects.

This is a short term headache to create a long term positive change for the company. Will they have the strength to pull this off? I think so because they are very aware that it’s a global world and technology makes it happen.

10,000 hours 03/06/2009

Posted by TBoehm30 in Success.
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I will normally limit this blog to technical issues directly within my experience. I will avoid any long rants about traffic, poorly organized restaurants, spoiled food at the grocery store, and people who talk to much. However, I have just found out the secret of success. Let me say that louder:

The Secret of Success
The secret to becoming an expert in something turns out to be 10,000 hours. That works out to 4 hours a day, 5 days a week, for 10 years.

I am listening to the new book Outliers by Malcolm Gladwell.

Let me digress for a second with a quick talk about listening to books. I am a member of Audible.Com, so that I can cheaply download books to my iPod or iPhone. I listen to them on the way home while fighting traffic (insert your own traffic rant here). It is a fantastic service in that they keep my library as a backup, so I can re-load books on newer computers, or ones that I’ve fixed. I listen to books for self improvement, not the Science Fiction books I normally read.

He describes many people, with different job descriptions, who became successful because of their preparation. He claims that success has less to do with talent than simple repitition. Bill Gates had tremendous opportunities for programming when he was young; he got in his 10,000 hours in time to take advantage of a new technology. The Beatles put in their 10,000 hours on stage. Look at professional piano players, violinists, hockey players, the list goes on.

For anyone out there who still has the ability to focus 10,000 hours of their life on a single activity, I say “Do It”. This has got me incredibly excited. Want to know why I am such a good programmer? I got my first computer at 13. I learned Cobol, Pascal, and RPG in high school. I majored in Computer Science in college, and then got my first real job doing programming support. I easily put in 10,000 hours.

I am encouraging my kids to think about what they want to do. My daughter might be an author, I told her to write. It doesn’t matter what she writes, it will get better over time – 10,000 hours worth of time.

If you are older, have a family, a mortgage, and adult responsibilities, you may not think you have time for that 10,000 hours. It does seem a daunting task. However, in this economy why not try? Even a little preparation has got to be better than none. Who knows where it will take you.