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International QA Design Review Turns out to be a Great Lesson in Business Transformation

As a Principal Business Consultant representing the manufacturing space in SAP’s Business Transformation Services (BTS) group, I have an opportunity to work a wide range of projects in various industries and locations.  In the last quarter alone I have been engaged in the Pharmaceutical, Mining, A&D and High Tech industries in three different countries helping these companies transform their business.  The BTS engagements have involved a customer value assessment (CVA), a solution road mapping exercise and a quality analysis of an SAP blueprint design.  Each of these assignments posed unique challenges and proved to be very interesting, but I wanted to share with you my most recent experience because it illustrates how a seemingly routine assignment can be an amazing opportunity to learn about new cultures and apply BTS methodologies in a new way.

The request to fly to Taiwan came on the Wednesday afternoon before the long Labor Day weekend.  A high tech company in Taiwan was near completion of their blueprint phase which was led by a SAP service partner.  There were a number of interfaces, reports and enhancements in the design and the customer requested that SAP perform a QA Review of the design to ensure the design was best making use of core SAP functionality.  For the most part, this is a routine assignment that many of us in SAP consulting and specifically BTS have participating in.  My role would be to work with my Taiwanese consulting counterparts to analyze the manufacturing part of the design.  So after a brief call with the project manager and solution architect, I decided to take the assignment and put my Labor Day weekend plans on hold.

I left LAX that Saturday at 5:45 PM and landed 15 hours later in Taipei on Sunday at 10:00 PM with the difference in time zones.  On Monday morning, I met with the rest of the team at the SAP Taiwan office in downtown Taipei.  The team was a collection of seasoned SAP consultants from Germany, Australia, US and Taiwan.  One of the other consultants from Germany, Pierre Bohn, was also from BTS.  Even though we had each been given a functional area of the design to evaluate, we agreed that an overall assessment of how well the company was addressing the business transformation should also be done. 

At 2:00 PM that Monday we arrived at the high tech client’s main facility and received a brief overview of their project and then split into our functional review teams.  Each of us were paired up with a local SAP Taiwan consultant and met with the client’s IT and business stakeholders who had participated in the blueprinting process.  For the next two days, we met on different parts of the design and documented our findings.  Our findings included interfaces to custom developed legacy systems that could be replaced by SAP core, incomplete designs and lots of areas where design improvements could be made which is typical in these health checks. 

The days were long and we were all battling jetlag, but we did manage to experience the local culture, food and see some of the sites.  One evening our SAP hosts took us out for a traditional Chinese 9 course dinner where we sampled a wide assortment of culinary delights including crispy duck, seafood, suckling pig and beef in flavorful sauces.  Another evening, we ventured into downtown to see the famous Taipei 101 skyscraper which was the tallest building in the world until 2010 and is in the middle of some of Asia’s best high end shopping.  More shopping was found in the local night markets.  One morning, I set out for a jog at 6:00 AM through the little industrial town located near the main client facility.  I got to see a very local view of the area as merchants opened up their street side produce markets, restaurants and butcher stands where an entire pig was being processed in front of me.  It was quite an experience jogging through the local neighborhoods and it reminded me of the days when I lived in Singapore while at SAP APJ and was immersed in the beautiful Asian culture.

Over dinner one night, Pierre and I discussed what we had discovered about their business transformation.  Although this project was labeled as business transformation project and their charter documents called out the importance of addressing this aspect of the project, it was apparent that they had been focusing on the new process and IT landscape and not on the value driven transformation.  We decided to use the Business Transformation Management Methodology (BTM2) as a framework and agreed that the client needed a formal business transformation readiness and maturity assessment which would evaluate them against the following BTM2 areas:

  • Strategy Management
  • Value Management
  • Risk Management
  • Process Management
  • Program/Project Management
  • IT Transformation Management
  • Organizational Change Management
  • Competence and Training Management

Unfortunately, this formal assessment was not part of our design health check so we were not able to interview the leadership team of the company, but we did perform a high level assessment from conversations with the business and IT stakeholders.  Based on our high level BTM2 assessment, we were able to document the following recommendations to the customer to better ensure a successful business transformation project.

  • Conduct a formal assessment utilizing the SAP BTM2 framework, surveys and tools which will provide them with a business transformation report card, areas they are addressing well and areas which need improvement.
  • Improve alignment between executives on the importance and goals of the project.
  • Improve alignment between the different sites (goals, priorities, value, requirements, etc).
  • Establish measureable KPI´s to track the strategic performance against business goals.
  • Increase communication of the value and goals of the project to the IT and business stakeholders so that they have guidance when making process changes.  Changes need to be aligned with value.
  • Better document End-2-End processes which were not done to the level of detail needed.
  • Identify critical Value and Solution Enablers to meet strategic enterprise goals.
  • Blueprint through best practices based on Value Enabler and aligned Solution Mapping.
  • Develop a comprehensive Business Transformation Roadmap.

So after a long week in Taiwan, we were able to deliver on the main scope of the project and document our design findings and make our recommendations on how to improve it.  But it was obvious to us that by just addressing the functional design issues we identified and not the business transformation items, that the client’s likelihood of a successful project was not great.  When companies focus on the design only and not the value driving the change, they often end up just implementing a new system for the sake of implementing a new system.  This will result in very little improvement in the areas that are most important to the company.  Instead, companies need to focus first on the corporate vision and their KPIs they want to improve.  Then, the IT and business stakeholders that are designing the new processes need to understand the value drivers so that they can design a new solution that will enable that value. 

Hopefully this SAP high tech customer will not only incorporate our design recommendations, but also reevaluate the importance of focusing on the business transformation aspect of the project.  Studies have shown that less than 40% of all business transformations are successful and meet their intended goals.  Of those projects that fail, only 25% of those fail because of the technology or IT design.  The majority fail to focus on the actual business transformation itself.  This is why it is so important that the SAP BTS consulting team is involved early on in projects and a formal business transformation strategy and roadmap created to ensure success.

Finally, we can also acknowledge that bringing IT and Business together is a value mindset and value proposition identified up at the beginning of a project implementation.  There is a SAP HCM factor and Organizational Readiness factor present that drives together this transformation as keeping it consistent, functional and whole.  All aspects of transformation need to be driven in parallel as to demonstrate that transformation was effective.  BTS services can further support customers in realizing and capitalizing on this transformation.

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  1. Craig S
    Ron, 

    This is one of my pet peeves in my specialty field of QM.  It was one of the reasons I decided to start blogging: 

    QM, New blog – Is knowing the software good enough?

    So many businesses (and consulting partners) now just want the software installed on-time and under budget regardless of the impact.  This is a time to design and drive basic changes in business systems that can greatly increase quality and reduce costs.  But most places just want the bare minimum.  Over the last 15 years I think this has been getting worse since when I first started working on SAP projects.

    The commitment to helping clients fundamentally retool (I prefer the term reground) their processes has been eroding to the point of just getting the software in.

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  2. Alexandra Weber
    Ron,

    This is a great blog!

    Thank you for doing such a nice job in explaining how all those important pre-requisites to the customer’s requirements make a big difference in value delivery if consultants were enabled to perform.

    Before clients even attempt to fix some of their most critical IT processes, there are many more elements to be considered than just the immediate fix that may actually result in further deviation from the true value for the customer.

    Most customers don’t understand the dependency relationships in the system and some of the system symptoms do not always require the fix related to the symptom only but to the overall end-to-end EA first. 

    We know the saying: “check twice, cut once”.  In common daily business we mostly follow those rules but with fixes that many customers apply to the system we tend to forget that important and necessary step.

    Why would most customers attempt to patch their IT systems only the way that they would propose it to be patched?

    In many cases customers don’t even fully understand how those systems are exactly functioning; how configuration can be changed in different applications to trigger off the dependant application; and many would go to extent of calling in consultants with expectations that consultants can fix their issue in a week without providing them the opportunity to carefully review the system elements that are out of the immediate “fixing” scope (but are equally co-dependent), which limits the experts to provide a complete end-to-end evaluation where we would be able to understand if something is missing or not. Such requirements may result in either a conflict and stress proposal or all together no value added for the customer.

    Even though customer may be very happy with the immediate fix, but at the same time, customer is not actually aware of the impact and full potential that could be missing in their system.

    False process mappings, repeated false inputs and wrong designs can only contribute to additional project chaos, system imbalance, additional customizing needs, or increased need for Excel file sharing and Microsoft programming – when in fact one simple configuration fix can avoid all that hassle which client may not be aware of as they would insists on IT quick fix or customized process change.

    With Ron’s examples showing how customers can obtain the higher value and higher pay off but only if they would welcome the Business Transformation team’s involvement.

    We agree that only if we let the consultants perform to what they are experts in doing; by delivering the business transformation, customers can cash-in on true benefits and happier and healthier organization easier to control.

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