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How Manufacturers Can Successfully Manage IT Projects on Their Digital Transformation Journey

By Sycor

Challenging supply chain conditions are currently the norm, making a modern IT infrastructure and landscape more important than ever. Manufacturing companies utilizing powerful tools such as AI and other predictability technology – based on a robust ERP, CRM and Business Intelligence platform – have a competitive information advantage.

Your specific digital transformation journey depends on various factors such as the maturity of your organization, the current state of the IT landscape you operate in, as well as available project budgets. Digital transformation goes beyond tools and technologies and includes people and processes, as well as managing them. No matter where you are in your digital transformation journey or which IT challenges you are facing, every digital transformation project must be prepared and executed correctly in order to achieve an adequate return on investment. Below is a non-conclusive list of success factors for any project or program during the transformation process.

• Treat the project as a business program, not as an IT or implementation partner project

IT is not self-perpetuation. The project should contain a clear business purpose and therefore business ownership and accountability. The technology project sponsor, as a member of the steering committee, must be a top-level business manager ensuring sustainable interest in the project. In general, the sponsor should be the CEO or the CFO of the zone / cluster or the entity impacted.

• Set a realistic contingency budget

It is recommended to utilize a 20% contingency budget for risks so that these don’t compromise the project. This includes 10% contingency reserve for known unknowns (risks that are included in the risk register) and 10% management reserve for unknown unknowns.

• Backfill key-users / business owners

Successful companies enable their business owners to fully focus on the ERP project. Key-users are accountable for the solution design and have many responsibilities including requirements provision, alignment with internal subject matter experts, design reviews, testing of functionality, support in data cleansing, testing of data migration, testing of security setups, testing of reports, presentation of results in the conference room pilots, signing off on user acceptance tests, training end users, executing specific tasks during cutover, and supporting the live solution. Any distraction from their day-to-day job, can derail the project timeline.

Many part-time stakeholders cannot replace a few dedicated business owners. The tasks mentioned above are executed more effectively if done by a few, dedicated knowledge holders.

• Add one IT Business Analyst to each functional stream

A technical resource within each horizontal stream (Sales, Procurement, Warehouse, Production, Planning, etc.) can help key-users bridge technical language, learn the new solution faster as well as provide valuable input of the exact IT functions in today’s IT landscape. This can accelerate project progress. It also ensures project progress at all times (e.g., even when key-users are out of office).

• Governance and transparency

The external provider(s) must be invited to the steering committee to present their visions of the risks and the state of work. They should participate within the steering committee.

• Start data migration on day one of the project

Data Cleaning must be anticipated. Poor quality of migrated data has a strong impact on go-live, stabilization and business activities. A bug can be resolved easily but poor data quality is much more complex to fix. The number one reason for ERP project failure is data not being ready to migrate at the set go-live date. A dedicated data migration stream consisting of team members from both the customer and the implementation partner should begin their activities right after project kick-off.

• Utilize an OCM team

Organizational Change Management (OCM) focuses on the people side of change. It is the organized, systematic application of knowledge, tools and resources of change that provide organizations with a key process to achieve their business strategy. OCM manages change as a process, and recognizes that projects deal with people, not programmable machines. OCM provides open and honest communication, geared to lead people through change with direct, knowledgeable and frequent communication. End-users are frequently hesitant to embrace change. In preparation for any major change, it is important for organizations involved to understand the specific impacts the implementation will have on their own internal operations and to prepare proactively for those impacts.

• UAT: 80% of data and security role setups with 100% realistic business scenarios

Run the User Acceptance Test (UAT) for any platform with a minimum of 80% of the data migrated (no sampling), under real-life test cases. This avoids isolated technical checks and orients the tests towards its real objectives (test processes and business activities).