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SAP Implementations in the Current Economic Landscape

I originally started writing this as a checklist to ensure I had a good grasp on the process points of a successful IT implementation within a lending environment.  However, as I thought more about the Loans and Financial Institutions modules of SAP, I began to focus more on how the landscape of the Banking industry at large has changed recently.

This in turn started the question, what aspects of SAP implementations will become more crucial in the current economic environment or, conversely, less important?  Will focus and priorities change at all?  Will the ensuing global downturn simply serve to reinforce critical delivery points that seem less crucial amidst less stressful times?

What follows below is a list of points written to help visualize how factors of SAP implementations could be affected by the state of the world and, ultimately, why these factors are always important to achieve a successful SAP deployment.

1.  Initial Scoping

This is the first crucial element of any SAP project as it defines the landscape for the entire process and forms a linchpin to the successful implementation.

Difficult financial times means the unknown and multi-layered costs relating to any missed requirements have become more of a factor.  A missed requirement may create the necessity for an additional band-aid project in the future, or reduce the usability and cost-effectiveness of the finished system. 

The negative impact of needless “nice to have” inclusions on the underlying dollar figure of a project is also now more significant than ever.  Unnecessary included elements may require additional staff training at monetary and time cost to the firm, only to skill up employees on a process that is not considerably beneficial.

The important consideration here is to move away from cost containment through reduced scope and corner cutting.  Rather, cost containment should be achieved by identifying the right solution and putting the implementation on the right track from the very start.  A poorly completed scoping phase can lead to increased costs throughout the entire project and, possibly the part that is most detrimental to the client, well beyond the go live date. 

2.  Clear Strategy and Plan

It is clear this stage must work in smooth conjunction with the scoping phase.  An increase in accountability and ongoing reporting procedures will be a key product from the current economic landscape.

Effective SAP implementation planning, with key deliverables and concise records of the project members responsible, is the obvious equivalent here.  The need for ongoing reporting and progress measurement stems from good strategy and planning, and enables swift resolution in the instance of a responsibility not being followed through.

Especially in the Banking and Financial services sector, where an expectation is growing for accurate and honest reporting as opposed to simply trusting upper management, all aspects of the business will be required to show exactly what will be completed, why and when.  SAP implementations will be no exception, so the strategy and planning phase has a great influence on whether things will run smoothly and, furthermore, provide a concise and dynamic document to which stakeholders can refer to sort out problems if they occur.

3.  Time Management

Good time management is another crucial element that flows through all stages and can adversely affect any project if not maintained.  Time management is greatly assisted by effective planning and strategizing, and should be monitored to ensure meeting deadlines or communicating with clients does not fall by the wayside.  In an increasingly stressful environment, good time management is the glue that holds all other factors together. 

4.  Working to Deadlines

Project implementations that seem to constantly work towards a horizon end date are all too familiar.  Although it might sound motivational to work towards the horizon, the truth is you can never actually get there.

Working to deadlines and delivery on project commitments is always important and the significance of this point cannot be overemphasized in the current environment.  Budget management and time organization have never been more important than now, and these can be very difficult to manage effectively if deadlines are not met.

For internal SAP implementations, there can be a “funny money” mentality which has the tendency to negatively affect the project members’ approach to meeting deadlines.  In external implementations, the importance of project completion dates and milestones can easily become hazy as the client, not the implementer, will ultimately lose out if systems are not delivered on time.  In today’s economy, money is no longer funny and the haze has definitely cleared, so working to and achieving deadlines is essential.

5.  Communication

It is hard to avoid the persistent doomsday sound bytes and newspaper excerpts centering on the increase in redundancies, financial market concerns and widespread monetary stresses.  It is easy to understand that even the most job secure person takes at least some of that information on, which is why it is also simple to appreciate how this concern can flow into any workplace.

Large decisions and project work are also possibly influenced by these sub-conscious attitudes, and SAP projects are no exception.  More specifically, twelve months ago, the boom of the strong bull market moved focus away from immediate costs, and pushed attention onto bottom line savings and increases in the efficiency of processes.  As cash flow management becomes more important, not all firms are afforded the luxury of this long term approach.

The point here is to be aware of the potential affect the current environment may have on clients, co-workers and project team members.  Honest, regular and open communication between the implementation team and the client is absolutely essential to quell any issues arising from today’s workplace mentality.  Effective communication allows focus to move off immediate cost and stay on the project at hand, and ensures the implementation is completed properly.

What Else?

Two potential corporate outcomes of the current world economy seem almost uniformly certain to occur in people’s minds; an increase in regulation on business operations and better reporting and accountability delivered by firms and employees.  The fraudulent actions and lofty risks taken by some resulting in the list of household company names in trouble and rising unemployment figures surely point towards this inevitability.  The need for better regulations and reports has been felt heavily within the Banking and Financial services sector, and it is likely attitudes within this space will drive these requirements in other sectors.

For SAP implementations, an increased focus on Risk Management and Collaterals Management is likely, as well as an increase in client’s need for the automation of manual processes.  This reduces possible human error within the business, whether it is of a deliberate or accidental nature.

The temptation for financial institutions to maintain the status quo and adopt minimal change to ride out the storm will be great.  However, moving beyond this bunker mentality to see the need to focus on ongoing stability and easily accessed analysis of that stability is clear.

Although risk-averse attitudes are a good idea, it will be the firms that pro-actively adopt new attitudes and convert them into process driven IT infrastructures which stand the best chance of successfully moving out of this downturn.

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