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Using PO Matrix for large SAP Transformation

Why Do We Need to Transform?

Transformation, Improvement, Innovation

  • Transformation
    • Transformation occurs when people inside an organization realize they have reached a higher level through continuous improvement and technological innovation
  • Improvement and Innovation
  • Improvement is small change while Innovation refers to breakthrough

Management Must Always Transform

  • Management success is determined by creativity and teamwork at all organizational levels
  • Reasons for company-wide improvement
    • To achieve the company’s business plans / profits
    • To foster, utilize and build the company’s improvement and development powers
  • Types of Management Technologies
    • Procedures – the basic steps for performing jobs
    • Techniques – the ways in which jobs are performed well

Seven Conditions for Fast Track

  1. Top and middle management commitment to company-wide transformation
  2. Superior in-house development capabilities
    • Intrinsic technologies mainly by R&D department
    • Management technologies through daily work
    • Superior managing capabilities
  3. Effective in-house education and on-the-job coaching
  4. Total active participation of staff departments in company-wide improvement
  5. Enabling structures to promote improvement in daily work
  6. Enabling structures that encourage creative improvement by integrating knowledge and experience

What Tool can we Use?

Policy Objective (PO) Matrix

  • Policy / Objective (P/O) Matrix
    • Tool for visualizing and translating top management’s commitment to improvement and transformation into concrete activities.
    • Technique to manage company-wide activities to achieve policies and objectives.
  • Purpose of P/O Matrix

  Ÿ       To deliberately promote and manage improvement activities in a way that achieves the goal of company-wide transformation.

Aim of the PO Matrix

  • Provide a company with an enabling structure for achieving priority business plans
  • Prevent a company from falling into undesirable state of affairs
  • Facilitate the planning and establishment of policies and objectives
  • Capture, document and co-ordinate a company’s highest priority tasks
  • Develop business plans by integrating the knowledge and experience of all employees
  • Allocate resources for improvement
  • Provide an enabling structure for interdepartmental co-operation
  • Make plans visible to anyone in the organization at any time
  • Help a company respond quickly to changes in the surrounding environment
  • Provide an enabling structure for anticipating and removing obstacles
  • Prevent a company, when it becomes busy from making excuses for not improving
  • Help a company use its full company-wide capabilities to carry out plans
  • Periodically examine and study a company’s performance in implementing priority improvement plans

How to Build a PO Matrix

  • Visualize the relationship of the following
    • A business unit’s priority policies for companywide improvement during the current period and for the next two to three years
    • Improvement objectives for the current period including the measures and means to achieve them
    • Targets for each improvement project
    • The overall results expected from all improvement projects
  • Align the contents listed above throughout the organization, from
    • Top management
    • Business units
    • Departments
    • Sections
    • Smaller organizational units as necessary

Important Considerations

  • When to prepare a P/O Matrix
  • In line with business planning cycles
  • Managers are responsible for saying NO as soon as they get the feeling that something may not work
  • Integrating with Culture

  Ÿ  It is important to develop policies with a mind for the national and organizational culture and adapt one’s management practices accordingly

  • Responsibility for saying NO

How to Use the PO Matrix?

Visible Management
Effective tool for communicating Top Management policies to entire company
Visually shows which areas are targeted for improvement
True Volunteerism
People are motivated only when they thoroughly understand why policies and objectives (self-determined or top-down) are needed at a given time.
Strengthening Leadership for Improvement
Outlook – To develop a scenario for success, including the feasibility of and measures for achieving it
Organization – To unite employees and other departments, as needed toward common goals
Persuasion – To lay out a direction, determine priorities and explain why they are necessary.
Quick Response to Changes in Surrounding Environment
P/O Matrix should be changed to suit the current environment
Committing to Profit
Objectives & Targets not only help secure profits, but also strengthen improvement and development capability


How to use in an SAP Roll-Out?

  • Create Department level PO matrix
    •   Ÿ  Define the guiding principles like “Stay Vanilla”, etc.
    • Bring all Stakeholders together
    • Collaborate and drive consensus (“kumbaya”)
  • Define Functional Objectives
    • Bring together Business Process Leads to lay down Functional Objectives
    • Align Implementation Plan
    • Agree on Results to be measured
  • Cascade down to Program Charter
    • Align Program Charter with the PO Matrix to define the KPI’s / Results

  • Create Project Plan
    • Align Project Plan in Solution Manager to the PO Matrix
    • Establish measures
  • Monitor and Refine
    • Measure success of the program and refine targets
    • Deliver Value
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