Project Management Body of Knowledge (PMBOK) applied to an

							 Project Management Body of
Knowledge (PMBOK) applied to
        an ERP Project
   Andres E. Diaz, P. Eng., MBA, PMP
      Hunter Business Group Inc.
          www.hunter-inc.com
               ERP technology

• ERP systems are used worldwide regardless of company
  size.

• AMR press release suggested that, by 2004, the ERP
  market has reached $ 78 Billion in sales (AMR Research
  Centre press release June 2000) and all of it requires
  implementation.
       ERP technology
• “Furthermore, those who have already
  implemented report that 70 % of their
  implementation have failed, have come over
  budget or have been seriously postponed”
  (“ERP Implementation Secrets White Paper”,
  Michael A. Roman, Manufacturing Practices
  Inc., 2005.).

• So why don’t ERP systems deliver what they
  promise?
ERP systems: Is there something wrong with “the
system” technology?


• Most ERP technology embodies a
  proven set of Logistics, Manufacturing,
  Customer Relations and Financial
  practices.

• When you embark in an ERP system
  purchase you are implicitly and
  explicitly accepting those practices as
  the business process framework for
  your firm.
ERP systems: Is there something wrong with “the
system” technology?



 • Although the “best” package may have
   been selected, why is that we still have
   implementation problems?

 • Everything seems to point to the approach
   taken to manage the implementation
   project.
               Managing a project

• Identifying requirements

• Establishing clear and achievable objectives

• Balancing the competing demands for quality, scope,
  resources, risk, time and cost to produce a quality
  deliverable.

• Adapting the specifications, plans, and approach to the
  different concerns and expectations of the various
  stakeholders.
   Defining effective project management.
• “Effective Project Management requires that
  the project management team understand and
  use knowledge and skills from, at least, five
  areas of expertise” (PMBOK Guide, PMI)
   – Interpersonal skills
   – General management knowledge and skills
   – Understanding the project environment
   – Application area knowledge, standards
     and regulations
   – The Project Management Body of
     Knowledge.
     Project Management Body of Knowledge


• Project Life Cycle Definition

• Five Project Management
  Process Groups

• Nine Knowledge Areas
     Project Management Body of Knowledge

• Project Life Cycle Definition

 –Project Phases

 –Project Stakeholders

 –Organizational Influences
     Project Management Body of Knowledge


• Stakeholders‟ influence

 –The influence of stakeholder is high at the
  project initiation. At initiation, the cost of
  changes is also low.

 –Those stakeholders who have responsibility
  and authority in selecting the “best” package
  are not the ones with responsibility and
  authority in using it.
     Project Management Body of Knowledge

• Stakeholders‟ influence

 –“Using” stakeholders come to exert their
  influence in the intermediate phases of the
  project life cycle (such as in Conference
  Room Pilot mode), when satisfying them is
  significantly more costly.

 –Most methodologies correctly identify the
  former group (“selecting stakeholders”) but
  tend to ignore the latter one (“using
  stakeholders”).
     Project Management Body of Knowledge

• Five Project Management Process Groups

 –Initiating
 –Planning
 –Executing
 –Monitoring and Controlling
 –Closing
     Project Management Body of Knowledge



• Traditional methodologies tend to
  emphasize “executing” and
  „„monitoring and controlling”
  process groups in detriment of
  “planning” and, more importantly,
  “initiating” process groups.
     Project Management Body of Knowledge

• For instance, the PMBOK suggests that an outcome of
  “initiating” is a Project Charter and a Preliminary Project
  Scope Statement (which is an input to “planning”) instead of a
  project plan (which is an input to “executing”).
 – Most ERP implementation methodologies are “initiated” with a project
   plan.


 –“In multi-phase projects, initiating processes are carried out
  in subsequent phases to validate the assumptions made
  during Develop Project Charter and Develop Project Scope
  Statement processes” (PMBOK Guide p. 43)
     Project Management Body of Knowledge
• So what should be the scope of your ERP implementation?

 –Although ERP technology is expected to deliver positive
  results once implemented, results are delivered by processes
  executed by individuals who may or may not use the
  technology to carry their processes out

 –Many ERP vendor driven implementation methodologies
  tend to see the project scope and deliverables as
  “implementing the package” instead of dealing with business
  processes.
    Forget about tools, techniques and the
       PMBOK. What about people?
• Implementation methodologies depend on
  people to function

   – “Project team members are not dedicated to
     the project 100%”

   – “Senior management members can not agree
     on the goals and metrics for success”

   – “No time and money is spend on building the
     team – people are just thrown together and
     expected to work together from the first day”
  Forget about tools, techniques and the PMBOK.
  What about people?
• Are people issues in reality methodology
  issues?

   – Clearly, weak implementation methodologies
     are more people dependent, i.e. super project
     leader/consultant/user etc. syndrome



• However, the incorrect or no application
  of “generally recognized good practices”
  hinders success over a wide range of
  different projects.

• 23
    Project Management Body of Knowledge

• Scope Management
  –Scope Planning
  –Scope Definition
  –Create Work Breakdown Structure (WBS)
  –Scope Verification
  –Scope Control
A sampling of commonly found implementation
methodologies

• “Information Technology (IT) will do it”

 –Generic education for IT personnel with technical bias instead of
  functionality applicability
 –Current processes mechanics (as IT understands them today) are
  programmed into the new ERP package
 –IT educates users
 –Limited involvement of the real process owners
A sampling of commonly found implementation
methodologies
• “Information Technology (IT) will do it”

 –Scope focuses on completion of programs and not on process
  improvement and strategic match.
 –Overall project deliverable is technical in nature
 –Go live with programmers making sure that the system (and
  their programs) “works”.
 –Programming and education budget may not be overrun but
  expect low system utilization and inefficient business process
  execution
 A sampling of commonly found implementation
 methodologies


•“Most Common”
–Generic Package Education for project team and others key
 users.
–Some form of Process Simulation (Conference Room Pilot)
 to identify gaps between package and “as-is” version of
 business processes.
–Identified gaps (as the selected group understands them) are
 programmed into the new ERP package.
 A sampling of commonly found implementation
 methodologies
•“Most Common”
–More education to those users identified as “super users” who,
 in theory, are the people owning and keeping the system
 current (T. H. Willis, p. 37)
–Scope focuses on reproducing the existing current state of
 business processes and not on process improvement and
 strategic match
–Go live with programmers making sure that the system (and
 their programs) “works”.
–Expect budget overruns and very little process improvement
 (but things look like before)
  A sampling of commonly found implementation
  methodologies

• “Don‟t worry about it (or do it yourself)”

 –Generic education
 –Technical set up and system configuration done by
  vendor or third party.
 –Budget was kept low and may have been met but
  your investment is significantly underutilized ((and
  things still look like before)
  A sampling of commonly found implementation
  methodologies
• “Consultants‟ dream”
 –Discovery (lots of it)
 –Massive documenting of current practices without any
   benchmarking (non value added process mapping)
 –Generic System Education for project team and others (lots of
   it)
 –Pre-configured Conference Room Pilot to sort out issues (still
   too many modifications)
 –Some refresher education
 –Huge budget to begin with
 –Go live (lots of consultants)
  A sampling of commonly found implementation
  methodologies

• These methodologies do two things (wrongly) in relationship
  to scope definition and project initiation.

 –First they look at using the ERP technology through the glass
  of existing company functions and business processes, instead
  of facilitating process improvement and re-alignment vis-à-vis
  such factors as the firm’s marketing and manufacturing
  strategies or the market place demanding the achievement of
  goals and objectives not currently being attained.
  A better implementation methodology

• The challenge of a better implementation
  methodology is to implement a set of improved and
  re-aligned business processes supported by the ERP
  technology tool within budget and timeline. In order
  to meet this challenge the project methodology must
  include the following generic steps:
A better implementation methodology

–Business definition
–Logical system design
–Package Selection
–Essential Processes Model
–Process validation and training
–Final deployment and Go-live
       A better implementation methodology

• Non PMBOK complaint methodologies use the CRP
  sessions to identify mismatches and discrepancies
  between the ERP system and the “as-is” vision of
  business processes as understood by those stakeholders
  performing them; a different scope begins to “creep up”
  (hence the term “scope creeping”)


• The result is an expensive retrofitting exercise that ends
  up consuming most of the implementation resources and
  the ERP project‟s success is seriously compromised.
           Successfully Managing a project

• Identifying requirements.

• Establishing clear and achievable objectives

• Balancing the competing demands for quality, scope,
  resources, risk, time and cost to produce a quality
  deliverable.
           Successfully Managing a project

• Adapting the specifications, plans, and approach to
  the different concerns and expectations of the
  various stakeholders.

• Select appropriate processes from Project
  Management Process Groups.

• Applying the right combination of knowledge areas
  to project activities in order to meet requirements.
        Contact Information
• Andres E. Diaz, P.Eng, MBA, PMP
• Hunter Business Group Inc.
        – Web Site: www.hunter-inc.com
• Office:1-905-477-9241
• Cellular: 1-416-721-9835

• Email: andres.diaz@hunter-inc.com