7 Step Guide

to ERP Transformation
Drive change in your organization,
and make a quantum leap in efficiency
and productivity
 Mergers, acquisitions and dispa-
rate software systems can cause
your business intelligence to
suffer. Consolidating everything
into one system, while a huge
company-wide undertaking, can
Dr. Gero Decker, prove to be very lucrative by
Co-Founder dramatically reducing costs and
& CEO increasing profitability.

Executive
Summary
Enterprise Resource Planning (ERP) transforma- ever one common driving factor: the desire to change. They are not just an update, the transformation success - the company-wide
tion is a lucrative, yet undoubtedly risky endeav- dramatically improve efficiency and profitability. addition of a new module or the implementation modifications that occur through ERP trans-
our, with a diverse set of driving factors. It could Despite the initial expense of ERP transforma- of extra features to a system that already formation reach across people, processes, cus-
be that your current ERP system doesn’t align tion, bringing in a company-wide standardized exists. Transformation creates a company-wide tomers, technology, data management, and risk
with what you want to achieve. It could be that software solution that allows you to streamline disruption and ultimately quantum leaps in management. All the software knowledge in the
the various departments of your organization are your processes, reduce human error, and easily improvement. It is also crucial to have in mind world won’t make a successful implementation
running on multiple and disparate software extrapolate data analysis will result in long- that technology, as critical as it is, is by no without these more important non-technical
systems, which may all provide value in their own term cost benefits that provide a compelling account the sole ingredient in transformation. factors, which is why we have put together this
right, but which through their disparity, damage motive for undertaking such a huge change. We should never underestimate the impor- 7 step guide to help you plan your ERP transfor-
your business intelligence. There does exist how- ERP transformations amount to large-scale tance of change management in achieving ERP mation.
Introducing
the 7 Steps Train &
Coach
Review &
Refine

7
Define & Implement &

6
Agree Test

5
Goals & Mining & Shape &
Scope Variance Target

3 4
2
The following 7 step model details the importance
of effective planning, testing and change
management within an ERP transformation
project, and suggests ways in which organi-

1
zations can maximize returns from undertaking
such a task.

Harnessing the potential and capacity of your

whole team is imperative to ensure you get
the most out of your ERP transformation. The
following steps will guide you in these efforts.
We recommend that for each step you consider
the suggested outcomes, review the suggested
actions, and then ask what mechanisms you al-
ready have which could be repurposed or
reinvigorated to achieve those outcomes.
1
Goals &
Scope
Defining the goals and scope of your ERP trans- on organizational matters. For example, if you
Set boundaries and formation project is the first thing that should have aspects of your organization operating
scope. Will ERP drive happen in the planning cycle, arguably even through a shared service or if you want to off-
transformation or before an ERP system integrator or consultant shore certain initiatives, these crucial decisions
support it? Get gets involved. In this initial step, the aim is to map need to be made before you move to the next
out exactly what it is that you want to get out step. At the end of this initial planning cycle
stakeholder alignment,
of your ERP transformation. Scope out the rough you should have defined what it is you wish to
prioritize initiatives.
project details, define your budget and time transform, what current processes and solu-
frame, and plan what it is you are hoping to tions will be affected, and appointed an ERP
achieve. Once these foundational aspects system integrator to lead the project. It is also
have been defined internally, the next part of important to set a concrete scope, an overall
the planning cycle is getting an ERP consultant plan going forward for the following years
on board to help define and scope the higher which indicates your intentions and expectations
level aspects of the transformation and to from this transformation effort. However most
prioritize initiatives. This is the stage where you important of all is the non-technical people as-
define what core processes will be affected pect, stakeholder alignment and strategic pro-
and in what ways you envisage them to be opti- ject management, ensuring you have buy-in from
mized by the system change. It is also at this your team and that the main stakeholders
point that you should define what modules you across regions and departments are aware of,
need to consider, making strategic decisions and support, your transformation goals.
 2
Mine existing systems, identify
variance, uncover “ hidden
scenarios” then query decisions
and rules applied. Share results.

Mining &
Variance
With a Process Mining tool you can now base team. Although this is certainly useful informa- visualize compliance violations, and monitor your project plans. This is particularly impor-
the transformative changes you intend to carry tion, it holds a potential for human error and process performance while acting on critical tant in the case of organizational mergers as
out on solid, factual data through in-depth factual weakness. In contrast, mining system cases and performance bottlenecks. By identi- part of a larger ERP initiative. Process mining
process analysis. Often, organizations who are processes provides you with lucrative data fying the variances in the desired state which allows you to mine the systems of both compa-
not using a process mining tool may choose already existing in your current systems, on you defined in Step 1 and the existing state which nies and build standardized processes based
to collect the data they require to justify their which you can confidently base your project you uncover through process mining in this on real data, in a way that works for both orga-
plans through surveys, site visits and collecting plan. In this step you can identify the root caus- step, you can uncover hidden scenarios, query nizations.
verbal and possibly anecdotal wisdom from their es of poorly performing processes, detect and decisions and rules applied, and further define
3
Get early feedback &
problem buy-in, create
target models, and compare
Shape &
“as-implemented” with
“as-intended” models.
Target
This is the step in which you want to get initial of this step is to combine an understanding of
feedback on the plans you laid out in the first what the current sequence of activity in those
two steps. This should involve inviting important processes is or should be, with the software know-
stakeholders from different company locations ledge of the consultants. In order to ensure
and various process areas and bringing them that processes function properly in the new
together in one location to run a blueprint work- system, this is where decisions about process
shop. This is a roughly 3-4 month effort in which changes or feature customizations need to be
functional experts, procurement managers made. These decisions are then passed to the
and core process owners get together with your consultant who can configure the system accor-
ERP consultant and head of supply chain and dingly, for example by enhancing the given
define exactly how the processes they have a system through customized reporting or inter-
stake in are going to work in future. The purpose faces to other systems.
 4
Define &
Agree Define new processes,
generate test scenarios
Once the initial planning has been scoped out visibility and collaboration across departmen-
and cases, gain com-
at both the lower and the higher levels and tal boundaries this step will be much easier.
system customizations have been agreed on, Once you have everyone singing from the same mitment for proposed
it is time to generate test scenarios and hymn sheet you can generate your test sce- solutions.
cases and gain commitment for the proposed narios in preparation for Step 5. These scenarios
solutions. This is a big milestone at the end should sufficiently test the robustness of the
of blueprint phase. The project team should structures and plans you defined in previous
report back to stakeholders and the people stages and in doing so, will safeguard the ulti-
affected, and get their definitive buy-in and mate stability of this quantum change in your
support. With a software tool that allows for organization.
 5
Implement new systems
using revised processes,
track progress, select
and run appropriate test
Implement
sequences. & Test
In this step, your transformation team take the planned actually operate in practice. End-to-end
information they have collected and start imple- process testing will allow you to uncover any
menting the system and working on its configu- discrepancies or issues you are unhappy with
ration. This requires that you build the interfaces that can then be fixed and adjusted at an early
you need to other systems and create your stage to mitigate larger issues down the line. The
process and decision models and workflows. You next crucial test is a user acceptance test. Bring
must also set up user accounts and ensure that in people from your organization who might be
everyone is ready to use the system. This is also based at various sites – who will eventually
when the testing phase begins. Ensure you run be using the system – and have them test it,
an appropriate sequence of tests, testing indivi- adjusting accordingly if there are any issues.
dual units to find out if they are operating as This is not just a testing activity but also a way
you intended and also running integration tests to engage with people out in the field who will
to see how well the system integrations you had eventually have to use the system.
 6
Train
& Coach Train and coach end users in the
new systems, the underlying
This is arguably one of the most important are changing, of their role within the change,
processes they support, and the
steps! Training your end users well in the new and of the support available to them. It also
system is what will ensure buy-in and solidify important to take localization into account, as context for change.
your project. The training sessions should be despite having defined a general target state
rolled out in large deployments, harnessing there will be variation at different sites. For exam-
the wisdom of those you’ve been working with ple, if you are deploying to 200 warehouses
most closely throughout the previous steps, around the world, there will be specific require-
and using these people as trainers or as people ments at different locations. There might be
who inform your training staff. This is where the need for a unique interface to a system at
change management plays a hugely important one site but not at another. It is important to
role. People need to know not only what the test, adjust, and refine across the board and in
new system does and what the new processes line with end-user requirements as part
are, they also need to be aware of why things of change management deployment efforts.
7
Review
Review actual vs expected
results and refine systems
& Refine
where needed or revise
training if appropriate. This is the step at which you go live and review with the system itself. Of course you want to
the project. Your team is off and running with recover as quickly as possible and that is where
the new system and the new processes and the the ongoing review system comes in. This is an
lion’s share of the effort has been seen through. important part of the change management ele-
What you may not have foreseen, but something ment of the transformation in which you build
that is important to be aware of, is that such up strong communication channels, so if some-
a big transformation is often followed by an thing isn’t working well or in the way you had
initial dip in performance. People are not as intended it to, it is communicated and you can
productive at the beginning of the switch due take corrective action. This also affects your
to the fact they need a little bit of time to get organizational KPIs and process performance. By
used to the change - they have questions, they running Process Intelligence on the new sys-
may struggle with things that possibly weren’t tem, you continuously monitor whether or not
elaborated well enough in the training phase, processes really work the way you’d designed
and there may also still be bugs and issues them to, so you can make adjustments.
 If you want to learn more
about how Signavio can
assist you with ERP transfor-
mation, sign up for one of
our free webinars or come
Conclusion meet us at a Lunch and
Learn event in a city near you.
Or, if you're ready, take our
Merging ERP systems, promoting best practice products for a test drive with
across ERP systems, and consolidating other a free personalized demo.
IT systems into your ERP, are all ways to create a
more efficient ERP system. Combining this
exercise with a broader business transformation
initiative is a sure way to also increase your
www.signavio.com
organization’s effectiveness.

This 7 step guide is not intended to be either

definitive or prescriptive. Instead, the informa-
tion included should act as a thinking frame-
work to guide you along your chosen path. Com-
bining the information in this 7 step model
with our other 7 Step Guides on Business Trans-
formation, Operational Excellence, or Risk
and Compliance, you can take heart that the
steps you take along the path to ERP trans-
formation are sure and confident.