Strategic SAP Solutions for Measurable Business Value

Planning For a Smooth Go-Live: Part 3

October 24th, 2008 by

 SAP smooth go-live process issues

3.      ERP or SAP Process issues 

Let me start with a caveat to this section.  No matter how good, thorough, experienced, or conscientious a consultant or a core team member is, there will always end up being a few process gaps, and an occasional completely missing process discovered at go-live.  Now that the caveat is out of the way, there are many reasons for the process problems: inexperienced consultants, company employees who miss some of the process exceptions, inadequate training, insufficient integration testing, lack of user acceptance testing, and other reasons. 

The bulk of the items causing process problems generally fit into three core areas, 1) design or blueprinting, 2) change management, and 3) testing. 

SAP / ERP Design and Blueprinting 

Your business probably developed numerous processes and exceptions over many, many years.  Some of those processes were also developed as the need arose, and in an ad hoc manner and may have many inherent inefficiencies.  SAP projects are generally tasked with replacing all of those years of collective knowledge and processes, as well as any “broken” processes in six months to a year, and on very large projects in maybe a couple years.  That is no small task and to be successful it truly takes an experienced consultant.  As I’ve previously written about, this is one of those areas that all of the fakes end up costing your SAP project and your company big money.  And I mean big money over and above what you pay them.
A good blueprint should translate your scope into all of the key business processes that your company does, and then the key process components needed to support those processes.  I generally prefer a blueprint that has inputs (or some type of process trigger), the process itself, and then the outputs.  It should also contain the key master data requirements, any necessary FRICE (Forms, Reports, Interfaces, Conversions, and Enhancements) development objects, and the key business areas affected.  If there is sufficient time in the Blueprint phase, the Blueprint itself should also begin to capture some of the key change management issues.

Poor blueprints (missing processes, too generic, too high level, etc.) cause serious project delays and flared tensions by constantly dragging your project back into “Design” mode when you should be in full project execution.  It takes up the time and effort of other integrated teams, and generally causes a “drag” on the overall project.  Obviously this burns up budgets too.  Worse still, a poorly designed Blueprint is often blamed on the company, the department, or the key resource on the project who is responsible for that area.  Unfortunately those “smokescreens” are often used by consultants who are not that skilled at extracting the necessary information needed for a good blueprint.  It’s always easy to “blame” the client through the backdoor by putting the responsibility on a core team member, or some other portion of the company / client team.
If there is a genuine issue with a team member, an experienced consultant should raise this issue during the process when it is encountered.  Frankly, if it suddenly comes up AFTER the blueprint is due, it should be seen as nothing but an excuse by the consultant.

ERP Project Testing 

Another area to begin addressing processes is during testing.  Any integrated application like SAP should include at least 4 primary types of testing.  No matter what name is used, they are generally individual transaction tests (sometimes called “unit tests”), transaction strings or processes within the same module like Sales and Distribution (“module tests”) and then full-blown cross module tests that test entire process chains from start to finish (true “integration tests”), and then finally tests that involve the wider user community often called “user acceptance tests” or “day in the life” scripts, etc.
During testing, while it is important to follow the scripts to be sure that all of the proper “boxes” are checked off, it is equally important to test more.  “Integration tests” and “user acceptance tests” serve as the last opportunity to find and address process gaps.  Sadly some consultants (and some consulting firms) see this as an opportunity to absolve themselves of responsibility for potential problems or shortcomings.  As a result, they will often strictly enforce that the script must be followed to the letter and no deviation is allowed and no exception processing is allowed.  There is a legitimate need to control the process to ensure that the work is done and that the known processes work sufficiently as designed, however there should also be some mechanism to address gaps or exceptions.  One simple method to accommodate this is to create a space on the signoff sheet that directly solicits comments about any process gaps and any exception processing that might be needed.  Final signoff of the testing should not be signed off until this commentary is converted into additional testing scripts or some manual process defined to address the processes.

For final integration testing you may wish to pick random documents from your current business operations to run those through the system with the converted data.  This will give you the best test to ensure things are working correctly.  For example, you may wish to choose 10 or more each of the sales orders, purchase orders, production orders, reports, etc.  The key is to use something that is meaningful and can be verified back against your current system.  

ERP Project Change Management 

Unless you completely re-design and re-write SAP to do all of your processes exactly the way they were done before, there will be change management issues to deal with.  And unless you also re-write the user interface, there will still be training and user acceptance to accommodate.  If you’re going to re-write everything, why bother with a packaged system application at all?  On the other hand, if you are putting in a package application such as SAP, Oracle Apps, or others, there are change management issues to deal with.
Change management generally encompasses a few key areas:  Training, communication, organizational change, process / job changes, and post production support.  Some change management is necessary on every project and if your company handles change reasonably well it may not be a struggle.  However, if your company has many employees who have done the same job for a long time, without much change taking place within the organization it will take a tremendous amount of “hand holding” to get them through even small adjustments. 
You will need to assess your own organization and its ability to absorb change for whether change management resources should be budgeted.  From a project perspective however, one of the key things to be wary of are consultants who want to add new functionality without understanding the impact on the organization. 
Business Change Management analysis case in point:  I was at a client where SAP’s Handling Unit Management functionality was the best fit I had ever seen.  They had high dollar custom made steel transportation racks that needed to be inventoried and returned, the packing was consistent and uniform, their production volume was not intense as a sheer number, and they already had wireless bar codes with some warehouse automation.  From a functionality standpoint it was almost a “no brainer” and a great ROI on the automated tracking, inventory, and return of the units.  However, a more careful look at the organization showed a very different picture.  The staff responsible for maintaining the data and processing the transactions had not been reliable with data maintenance or with processing in the past.  Also, because of the organization there was virtually no chance that would change in the future.  

A less experienced consultant with limited project or change management experience would have seen this as a great opportunity to throw some “gee whiz wow” new functionality at a company.  They keep billing for the new work (a scope change), they would be needed almost indefinitely for production support, and they’ve got a great candidate to blame for why you have to keep paying them.  Sadly I’ve seen this scenario played out over and over again.  On a recent project I saw this with the implementation of SAP’s Customer Service and Solution Database functionality.  The company had an “ugly” but mature and working solution, they were downsizing the customer service area, the SD scope for the project was already pretty significant, sales were beginning to slow, portions of the business were being spun off, and employee morale was already low.  The consultant convinced them to “replace” their solution database and customer service functions from a CRM application that they did not even retire.  So there weren’t even any software license savings.  The consultant got to stay on, support an unnecessary process (the legacy app was not going away and worked fine), and was needed for post production support.  

 The process related issues will quickly separate experience from inexperience.  There are lots of good consultants out there, and then there are lots of less than satisfactory fakes in the market as well.  Unfortunately it is it the “good” consultants who are often penalized for smooth and successful go-lives by early roll offs.  Meanwhile fakes and less skilled consultants are rewarded by extensions to support poorly designed processes and inadequately prepared user communities at go-live.  The old adage rings true here that “you get what you pay for” as long as you have a way to separate the genuine articles from the fakes.  In the end, there are many hidden ways you end up paying as much or more for inexperienced consultants, not the least of which are the many hidden ways their SAP implementation approach impacts your business.  A truly seasoned consultant may cost a little more up front, but at go-live with the quality of delivery and the overall satisfaction of the solution it can pay dividends for many years.  

 In essence, the need for careful process understanding can not be underestimated.  The amount of change your company can absorb, the impact of processes being brought into a package application like SAP, and the cost to your implementation budget should all be considerations. 

Four Part Series on SAP Project Planning for a Smooth Go-Live:

Planning For a Smooth SAP Go-Live: Part 1
(introduction, security and authorizations)

Planning For a Smooth SAP Go-Live: Part 2
(master data, data transformation methods)

Planning For a Smooth SAP Go-Live: Part 3
(process issues, blueprinting, testing, and change management)

Planning For a Smooth SAP Go-Live: Part 4
(custom development, costs and consequences of inexperienced developers)

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SAP, ERP III, SOA — Learning Organizations through Social Media Collaboration

April 27th, 2007 by

Knowledge Management

Knowledge Management

SAP Knowledge Management Introduction

Everyone’s heard the buzzwords, ERP, SAP, SOA, you name it. In the technology area they’re everywhere. These are just acronyms for ways companies try to leverage technology for competitive business advantage. Reduce costs, streamline operations, increase revenue, and transform your organization [1].

Since ERP applications like SAP have entered the business world there remains one area that enterprises struggle with –, the realm of capturing and then converting employee “know how” into ERP solutions–, Knowledge Management [2],[3]. I call part of that ability to leverage both employee “know how” and to collaborate with the broader customer community ERP III. For a detailed explanation of the different versions see ERP vs. ERP II vs. ERP III Future Enterprise Applications .

There is a simple and inexpensive way to implement ERP III, enabling your ERP application to transform your enterprise into a learning organization. ERP III is a way to capture that employee “know how” to develop business solutions to create real competitive advantage. In this post we look at this idea in the context of SOA (Service Oriented Architecture), however it can be more widely applied and adopted to virtually anywhere in the enterprise.

Background for SOA, Knowledge Management, and ERP III

The ERP revolution began with integrating the “back office” functions of the enterprise: purchasing, ordering, financials, HR, distribution, inventory, etc. The idea is that the whole enterprise relies upon a common set of data from a single database which provides one version of the truth–, a single version to rely upon or correct. Next came ERP II, extending the ERP application from the back office to the extended supply chain, to the web, to the banks, and beyond.

Enter SOA or Service Oriented architecture, the idea of “universal” and completely reusable application services that can be “plugged in” to other applications. This SOA architecture would then allow for the rapid assembly of dynamic process and application chains as business and opportunity needs arise. SOA (or sometimes SaaS) holds tremendous promise to enhance and extend the idea of ERP II even further, but an idea that will take time and tremendous effort to do effectively.

ERP III and the Learning Organization

The next generation of business transformation is ERP III, or the customer integrated ERP enabled learning organization.[4] However, SOA’s success and timeliness are directly tied to how well an enterprise is able to create a “learning organization” within its development and IT ranks.

This learning organization approach is one of the key backbones to a successful SOA initiative as well. The cornerstone of effective SOA re-use policies and procedures, service standards, and validated service development is directly correlated to how well the enterprise’s developers are able to collaborate and coordinate their efforts (especially in an ad hoc manner).

A learning organization starts with knowledge management and is best supported by a culture which generates and also consumes information.

Service Oriented Architecture, or “SOA” requires a level of participation, collaboration, and information exchange like never before to be successful. True “SOA” requires a blending of technology, collaboration, and cooperation with highly structured standards to achieve a significant level of trust in the development work. While many suggest that this level of collaboration, integration, and reliability within the enterprise may take enterprises as long as 10 years to accomplish, the methods defined in this paper can dramatically reduce that time and effort. [5]

What is Knowledge Management? [6]

A learning organization starts with knowledge management and is best supported by a culture which generates and also consumes information. There seems to be no widely accepted “definition” for knowledge management, and as I review the information on Wikipedia about Knowledge Management I find a rambling discussion of high level theoretical constructs with little substance. As a result I am offering my definition here, and some clarification, which helps to distinguish knowledge from information.

“Knowledge Management is not information management. It is the process of transforming unstructured data into contextual information and then applying that information. Knowledge as “contextual information” is the ability to draw on information and combine it with experience by applying it to a particular situation or circumstance when it is needed. Knowledge Management is the process of capturing, codifying, and disseminating information so that it provides some value in a particular context.” Bill Wood, R3Now Consulting, originally drafted in the late 90′s, updated in 2006.

My personal opinion is that the reason there is little consensus on a Knowledge Management definition is because most “knowledge management” discussions surround information management. What people call “knowledge” is the codification or classification of information. Often “knowledge management” is referred to as the systems that help to capture and codify knowledge but this is still just information in a structured context. They do not take knowledge to the next step of infusing it into the enterprise (or creating a learning organization) by creating methods to take that information and apply it in a value added context for day to day activities. It is only with the application of information coupled with experience and context that something becomes “knowledge”–, it is NOT a system.

Sytems can facilitate knowledge management. Systems contain information, not knowledge. Knowledge is the application of information in a relevant context. Systems do not add context, situations add context.

For the enterprise to continue to “wring value” out of the ERP implementation or other technology investments, the enterprise must change. For effective enterprise level change to take place technology must support the capture, organization, and implementation of the unstructured knowledge and information contained in people’s heads, or jotted down on crib sheets. This is not an easy task.

Knowledge is not data and information. Data consists of facts, observations, occurrences, numbers, and things that are objectively perceived.

Information is a collection of various aggregated or synthesized data points. From there, Knowledge is the mix of information, experience, and context adding value [to a particular situation]…

Knowledge Management is the systematic process by which an organization maximizes the uncodified and codified knowledge within an organization.

Original author(s) unkown, further adapted and modified by Bill Wood.

Why is Knowledge Management So Misunderstood?

Before beginning it is crucial to understand the often misused, misunderstood, and even abused concept of “Knowledge Management.” Contrary to so many of the technology offerings out there, knowledge management rarely (if ever) is a system, however systems can facilitate knowledge management. Systems contain information, not knowledge. Knowledge is the application of information in a relevant context. Systems do not add context, situations add context.

Systems, by their nature and design are information tools. Too many times the term “Knowledge Management” is used to describe information gathering and classification systems–, information systems. Some even call their systems “knowledge bases,” and maybe they are bases for knowledge, however, they are not knowledge management systems. Until information is learned, and then applied, it is not knowledge, it is merely information.

Knowledge Management, Collaboration Tools, and ERP III – Current and Future State

The initial process of implementing SAP requires taking structured and unstructured data, along with the processes from legacy systems and “institutionaly knowledge” and then you place this information into a highly structured application. At its most effective, the initial SAP implementation captures some cost savings, process improvements, and revenue generating opportunities. However, no initial implementation is able to capture the vast unstructured information and knowledge that resides in people’s heads.

It is only with the application of information, in a particular context, coupled with experience where something becomes “knowledge”–, it is NOT some system.

The SAP enterprise current state, with the application you’ve implemented, and possibly some of the ERP II enhancements, still has the possibility to deliver far greater benefit without significant cost. To capture and leverage that benefit requires an enterprise wide cultural transformation. People must begin to both act and think differently. And this change has to occur not just in the larger enterprise but within the IT organization itself.

To extend the SAP application’s usefulness and achieve greater benefit it is critical to a) capture useful “unstructured” information, b) then organize, classify, or categorize it, and then c) translate it into more useful application solutions. This process also facilitates the implementation of SOA within the SAP environment.

The first step toward the future state is to create a collaborative learning organization. A learning organization is an organization that is constantly acquiring and applying new information and thereby gaining knowledge. Once that information is captured, it can then be structured into solutions, some process based, and others technology based. Some of the solutions can be translated into additional, value added SAP enhancements, additional SAP functionality, or market-based business opportunities around innovation and customer focus.

A Collaborative Knowledge Management Model for a Learning Organization

Based on my time at Grant Thornton (and later Hitachi Consulting) as the SAP Knowledge Manager, I made use of the best resources I could find in the arena of “Knowledge Management.” Based on that research, and leveraging the pioneering efforts of other true knowledge managers, I created the model you see here. It is consistent with much of the literature that exists today, however, in the late 90′s when it was developed, and then in 2000 when it was instituted, it was a pioneering effort.

1) Raw Data: The unstructured data, ideas, “crib notes,” and thoughts that we all have. However in this instance, it is the raw data surrounding the job or responsibility that the individual performs within the enterprise. Sometimes these are the “workarounds” to get something done when you run into obstacles or roadblocks, other times they are just shortcuts or techniques to perform a job or function.

Knowledge Management Process

2) Organized Information: This is the process of capturing and classifying that raw data. This is where the “knowledge bases” and other types of information systems come in. Many enterprises make it this far. Sometimes these are the “workarounds” to get something done when you run into roadblocks or obstacles. Other times they might be the shortcuts or techniques to more efficiently perform a job or function.

3) Acquired Information Experience: This is the interaction with the organized information. This can be through search functions, employed taxonomies, reports, or other methods of accessing the organized information. This is after the capture of the information in steps 1) and 2) above, and involves its wider availability than in the individual who originally developed or “held” the knowledge or information. Few organizations or enterprises make it much further than this. However, this is the beginning of the true learning organization.

4) Applied Experience (Knowledge!): This is the practical application of the organized information after it has been acquired. Whether this acquisition is through word of mouth, training, or some type of information management system (that is wrong named a knowledge management system) or through a “knowledge base”. This is where the cost savings, revenue opportunities, continuous process improvement opportunities, and real competitive advantage begins to come to fruition.

5) Refined Experience (accurate intuition and forecasting): This is more of the inherent “knowing” what to do in a broad variety of contexts that may not be directly related to the task or issue at hand. It is when an individual can draw on that level of inner experiences mixed with intuition and make the right decision or provide the right answers when there is not enough information to make such a determination under normal circumstances. This can also be a type of “making the complex appear to be simple.”

There is a simple and effective method to capture the unstructured information, organize and classify it, and then disseminate it in such a way as to create a true learning organization. This method, outlined below, will help to move your organization through the 5 steps noted here.

Practical and Inexpensive Ways to Move Toward ERP III and SOA Today!

Since I am not a big fan of reinventing the wheel I look for existing ways to solve current problems. To that end, the key to moving ahead on ERP III is to create a collaborative culture, from the collaborative culture, you create a learning organization by using some of the existing collaborative tools. The answer lies in using some of the popular web technologies making a splash today.

Enter the “cool” and the “fun” factor in the enterprise–, “social networking” is one of the hottest, and most vibrant collaborative uses of technology anywhere–, these sites connect people for personal exchanges. While not appropriate for the types of personal exchanges on the world wide web, that same technology can be used to create a collaborative environment around cost savings, process improvements, system enhancements, revenue opportunities, customer acquisition, customer retention, customer experience, enhanced products, better services, and general business improvement for competitive advantage. The list of possibilities is only limited by what you can imagine can be leveraged from participant knowledge. The same technology options which can enable SOA are avaliable to capture the uncodified end user “raw information.”

Forums are One Effective Method of Acquiring, Categorizing, and Synthesizing Unstructured Data and Information

Forums or other social media outlets can also be used to capture SOA related standards, common development services, and to do code or object reviews. They can be used to capture SOA best practices while facilitating broader development community participation in standards, services, and object re-use policies. The collaborative nature, and the ability to offer code improvement suggestions, bug fixes, standards exchanges, or development and solutions discussions, in a threaded forum will prove invaluable to an organizations SOA initiatives.

To make this a reality, the key is to leverage tools, and define a process that captures the unstructured information . Once it is captured, methodically move that to process changes or to structured application solutions within SAP or an SOA initiative.

Defined below is a set of free tools, along with proposed solutions on how to apply those tools in a practical manner. Please keep in mind, this is ONE solution option. There are many more and there are also some very specific and interesting ways to incorporate this type of solution DIRECTLY into the SAP application. Here is one method to get started:

1) ANY networked PC (you don’t really need “heavy duty” hardware here unless you just must have blistering performance)

2) Download the free Uniform Server application that works on Windows. It contains Apache Web Server, MySQL, and PHP (including PHP My Admin). You only need to unzip this file to a local directory, and then double-click (or execute) the Start Server file.

3) Download and Install the latest PHP Bulletin Board open source application: (Set up the MySQL database and copy the web files to the proper local directory of the newly created web server from step 2). To see the forums in action, go to the PHPBB site at:

4) Structure the Groups to match the business department (create a new forum “group”), and then create 4 sub-areas under each department link. A) Cost Savings, B) Revenue Generation, C) Process Improvement, D) System Changes.

5) Structure additional groups to match SOA service development. An SOA topic with sub-forums for A) standards, B) services, C) objects, etc.

6) Have the users create the hyperlinks in their SAP user menu. A hyperlink for that departments topic in the bulletin board is easy to add to the SAP user menu (right click on the favorites menu, then add a web address, it’s really that simple.)

7) Adjust department and user goals to include evaluating forum contributions, based on points earned for participation, and aligned with the forum structure that applies to them (for example, cost savings, revenue generation, SOA standards, etc.)

8) For the system changes option, create an inexpensive interface to read the MySQL table for this area and generate a separate approval / response process. This way the changes, and responses to those change requests, as well as the details of the change request, are captured in an easily searchable database.

9) To produce the most useful solutions, follow a “PDCA” process (Plan, Do, Check, Act). After a discussion thread has reached a certain point where the exchanges have stopped, reduced to a trickle, or a specific date deadline, have someone review the entire threaded discussion, capture the most salient posts (by using the hyperlinks to the posts), and then summarize those hyperlinks into a single post. Call a meeting with the key stakeholders, review the salient points and produce a position paper or some other summary document and then publish that for final review.

The PHPBB forum software contains several developer implemented modifications that are available, and fully supported at no charge [7]. For example they have a “cash” modification that is nothing more than adding a point system based [8] on how active a forum participant is. In combination with the ability to develop groups, and to have moderators approve posts, this is an effective way to manage the information “clutter.”

Goals can be based on the number of points. Posts can be reviewed and approved by the department supervisor, or even a skip-level manager as the moderator. This ensures that the submissions are both high quality, and that they are being reviewed.

Over time, in areas such as manufacturing maintenance, or any other similar situations, enough quality information could be captured to create solution databases. This would facilitate the introduction of PM (Plant Maintenance) [9] for both preventive and predictive maintenance programs.

The searchable nature of the forums allows for quick and easy information retrieval in the short term. Over a longer period of time, the information can be structured and implemented as various types of system solutions to address recurring themes or various business opportunities.

Collaboration, virtual discussions, and even “debates” will ultimately occur in such a way that they help to refine various business issues or problems. In the future, as the issues arise again, going back through the old dialogs may yield a new perspective or new direction for the future. In the end, the cultural change to a learning organization will begin, and along with it new information and ultimately new knowledge will emerge to use for competitive advantage.

ERP III, Knowledge Management, Collaboration, and Learning Organizations – The Conclusion

Competitive advantage and the emergence of the extended enterprise through SOA, and the extended supply chain demand greater collaboration. This collaboration is a key component of creating the learning organization.

SOA and additional benefit realization from an SAP implementation depend heavily on the ability of an organization to capture competitive advantage from the knowledge of the employee base. Even skilled IT contractors must rely heavily upon the acquired knowledge and wisdom of those who actually perform the enterprise’s processes on a day to day basis.

No matter how skilled an IT professional may be, there will always be some things that escape detection or discovery because of the nature of intangible “knowledge” that exists within any individual or organization. The key to leveraging the IT investment in SAP and in implementing an effective SOA program is in finding ways to create collaborative communities to expose that knowledge. This collaboration can become the basis of a “learning organization” that is a key to transforming both the enterprise and the IT infrastructure that supports it. Using today’s “social networking” tools, as a means to advance that collaborative culture is one of the most cost effective ways to accomplish the task of organizational transformation.


[1] SAP as a Change Enabler

[2] Knowledge Management—Emerging Perspectives:

[3] Knowledge Management Journal – Business process modeling through the knowledge management perspective:

[4] Learning Organization from Wikipedia –

[5] Hitachi Consulting, where I previously worked in the SAP practice as a functional consultant and the SAP Knowledge Manager has published a white paper on SOA that explains both its promise and its drawbacks; SOA – CIO Savior or Nemesis,

[6] One important distinction to note here is that this paper will focus on the implementation of the “learning organization” in practical ways throughout the enterprise. This “learning organization” approach has far reaching affects beyond SOA, it has the ability to transform business through the use of enabling technologies.

[7] For example, see this forum which lists many of the validated and approved modifications, along with full support information and enhancement options.

[8] Forum with information for installing, updating, and enhancing or modifying the “cash” (i.e. points) modification to the PHPBB forum.

How to access the modifications while the modification database is unavailable (it is currently undergoing a complete update and re-write).

[9] For example, see SAP’s Plant Maintenance solution:

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