To be honest, I had never heard of the Pareto principle until I very recently googled the 80-20 rule. Having read the Wikipedia article on the Pareto principle, including the various examples of how to apply the rule, I still missed one important application of the rule..
In my experience, many software implementation projects overrun the budget, overshoot the timelines or simply don’t meet the expectations. Again in my experience, very often projects are managed in a very linear manner: 10% of scope eats 10% of budget eats 10% of time. Unfortunately, the true value of the solution is not derived in a very linear way. The true value of the solution is only derived out of the 20% of the scope, more particular, only the differentiating part.
Let me explain.
Company X requires a new CRM solution. Having selected the software and the implementation partner and having drafted the (high-level) requirements, the implementation project begins. Budget is set to 100 and the project needs to be completed in 12 months. The project preparation phase and the Business Blueprint phase consume 30% of the time as well as 30% of the budget, resulting in a detailed description of the desired result of the implemented solution. The realization phase (system configuration according to the Business Blueprint) brings the consumed budget to 75% and time to approximately 80%. So far, so good. Now comes the tricky bit. With less than 2 months remaining, the testing phase begins.. And very often, the business representatives spot design flaws, notice that they have had different assumptions as to the look-and-feel of the system or the level of process support. However, since the budget and time are not limitless, change request management very often prohibits re-work, leaving the business representatives dissatisfied with solution. Or, if the changes are accepted, resulting in customer satisfaction at the cost of overshooting both budget and timelines.
And I just don’t understand this. Why would any company invest linearly in an implementation project? Why invest 80% of your budget on 80% standard processes, leaving only 20% of your budget available to realize the truly differentiating aspects of your processes? Why re-invent the wheel if the wheel is merely a spare part, not the crucial component of your vehicle so to speak?
Fortunately, many companies now underline the importance of embedding best practices, templates or any other accelerators in their projects, allowing them to focus on the truly important objectives of their projects. SAP has acknowledged this quite some time ago and has invested heavily in building a vast portfolio of Rapid-Deployment Solutions. Pre-defined scope, fixed time and at fixed cost, partial of complete SAP solutions are implemented, benefiting from the 40 years experience in business processes SAP has. Will a Rapid-Deployment Solution fit all your needs? Well, not all the time. Will a Rapid-Deployment Solution allow you to only dedicate 20% of your time and budget to completing 80% of your project? Yes, it will. And thus allowing you to dedicate 80% of your time and budget to optimize your processes and implement the best possible solution.
So, forget linearity. Implement for example CRM in merely 8 weeks at a fraction of the cost, allow your business to gain experience with the system and then refine, enhance if and where needed. Reduce cost, shorten the time to value and benefit from the experience SAP has built in, by running your project the rapid way. Now, that’s a Pareto principle example I’d like to add to the Wikipedia page!
Many customers have already embraced the Rapid-Deployment Solutions portfolio, so be sure to listen to and speak with other SAP customers benefiting from the value of SAP Rapid Deployment Solutions at the upcoming SAPPHIRENOW in Madrid (November 13-15, TechEd, November 13-16)