May 4, 2019
Why and How to Ensure Business is Involved in Your Utility’s ERP Software Project
If you’re reading articles about the factors that contribute to success or failures of ERP solution implementations in utilities, you will definitely notice some common themes. One of those is the need for management or business involvement.
It may seem obvious that the managers and business users of the system would be the ones to best know the specific requirements for the solution. What is less obvious is how to get the required time and attention of those business people. This article focuses on ways to achieve that, and details why it’s worth the trouble.
In the real world, very few utility organizations are operating with enough excess individuals to make it easy to dedicate key business members to an ERP solution implementation project team without leaving a hole in the daily operations of the business.
Because it’s so critical to a successful implementation to have key business members involved, let’s explore the options to get the necessary time:
- Longer hours and overtime
- Hire and backfill
- Backfill with contractors
- Reduce the need for business members
Option 1: Longer Hours and Overtime
It is probable that a combination of these strategies will be necessary to free up all the necessary business members. For a short-duration project, it’s possible that employing the strategy of longer hours and overtime may suffice. But for anything over a few weeks there is the risk of employee dissatisfaction which can lead to burnout, loss of key individuals and resentment of the implementation and resulting solution.
Option 2: Hire and Backfill
If the need for extra headcount exists, the hire-and-backfill strategy can be a viable solution. Since it is key individuals that are needed for the implementation, it may be difficult to backfill them directly. A more likely strategy is to hire a more junior individual and then promote up the line until the key individual is free to be dedicated to the project. But it is imperative that a spot is available for that individual to go to at the completion of the project. Without that plan in place, the individual may resent being put on the project, leading to suboptimal performance.
Option 3: Backfill with Contractors
If a long-term headcount increase is not viable then using a contractor for the backfill is another option worth considering. Similar to the hire-and-backfill strategy, it may require some promotions or other personnel shuffling because it may be difficult to find a contractor that can fill the key business member’s position directly. However, if the desire is for the key business member to return to their original role at the end of the project, this method is a good choice.
Option 4: Reduce the Need for Business Members
Reducing the need for business members is usually done in conjunction with one or more of the above strategies. Typically, it involves selecting an implementation partner that has the experience within the business/industry to ease the need for the business specific knowledge of key business members. To take this approach will require more thorough vetting of not only the partner company but vetting the individual members of the partner which will be on the project. It will require commitment from the potential partner to designate specific team members during the selection cycle rather than representative team members. The selected implementation partner must be held to those vetted individuals.
A midsize utility had been sold off. It now had a finite time in which it needed to transition all of the business solutions from the parent system to new systems. The utility chose SAP as the new ERP solution. With all the work of the transition, the business people were already overburdened. A System Integrator (SI) was selected to largely deliver a turnkey solution with minimal business involvement. The SI had deep SAP understanding but little utility industry understanding and delivered a mostly out-of-the-box solution on time.
Unfortunately the solution was not usable in some cases. The business had been minimally involved. That was compounded by the fact that when they were involved the SI “spoke” SAP and the business “spoke” utility. Without a common language, everyone thought they were aligned on a solution decision, but there was not true understanding.
One specific area which came to light during user acceptance testing was the use of SAP Compatible Unit (CU) functionality along with CU work orders for construction work. The SI, not understanding utility business did not realize that a construction project will have hundreds if not thousands of CUs for a given project. The business, not understanding the standard SAP CU functionality, did not realize that each CU would result in an operation on the CU order, thus possibly thousands of operations. This resulted in a CU order with hundreds or thousands of operations and the resulting hundreds or thousands of reservations for the necessary materials, all of which was unusable for actual operations. Due to the fixed deadline to go-live on the new system, there was no time to change the design before go-live. The painful result: paper and workarounds had to be put in place rather than using the solution on day one and beyond.
With a hard lesson learned, the utility hired Utegration to fix the construction work process. The business still didn’t have time to dedicate to the project, even less than originally due to the manual work arounds now being used to keep the business running. But they did dedicate the time to individually vet the Utegration team which would be working on the project. They chose a longer-hours and-overtime strategy based on the limited duration of the project (about 3 months), and the assumption that the project would be able to limit the necessary business time to a few key design workshops and then solution review and approval along the way.
The fact that Utegration understood such concepts as grouping CU by design point for design review, but grouping materials based on a delivery schedule to support construction, yet grouping the final costs to support FERC reporting and asset accounting removed the need of the business to be involved in all steps of the detailed design. Additionally the fact that the Utegration team members “spoke” utility, when the business was needed for design workshops, or later for solution reviews, they could understand what was being proposed or developed without needing to be SAP experts. At the end of the project the solution was producing work orders with no more than 10 operations which could be scheduled appropriately. The material reservations were consolidated to allow efficient picking and delivery. And the costs were able to be reported and settled by the proper FERC requirements.
Every ERP implementation project requires a major commitment from IT as well as the business. For utilities that are unable to allocate members of the business to be dedicated to the project, choosing Option 4: Reduce the Need for Business Members, may be the best option. Choosing an SI that understands the utility business, as well as the technology itself, offsets the demands on business resources and allows them to be used in the most efficient manner. Having external utility experts on the implementation team can help reduce the risk to the project, making day-to-day operations during the implementation and after go-live smoother for everyone involved.