OCM Overview Best Run Business Run Sap

SAP ORGANIZATIONAL CHANGE MANAGEMENT TOOLKIT
Strategic Organizational Alignment and Project-Level Change Management

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CONTENTS
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 The Case for Organizational Change Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Predictable SAP Business Integration Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 The Goal of Organizational Change Management? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 What Successful Organizational Change Looks Like . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Building Your Team to Match Your Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 The Prime Directive: Act with the End in Mind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Moving Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 2. Fundamentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Helping Your Organization Understand the Business Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Why People Resist Change (And How to Overcome Resistance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Levers for Change: Moving Your Organization to Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 The ASAP Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 – Phase 1: Project Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 – Phase 2: Business Blueprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 – Phase 3: Realization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 – Phase 4: Final Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 – Phase 5: Go-Live and Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 – Phase 6: Continuous Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 Levers for Change and the ASAP Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 – Leadership and Sponsorship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 – Skills and Competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 – Organization Design and Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 – Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 – Governance and Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 – Performance Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 – Incentives and Rewards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 – Hiring and Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 – Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 3. Organizational Change Management and the ASAP Methodology . . . . . . . . . . . . . . . . . . . . . .26 Phase 1: Project Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 – OCM Practice: Develop and Communicate a Clear Business Case for Change . . . . . . . . . . . . . . . .27 – OCM Practice: Conduct a Business Risk Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 – OCM Practice: Develop and Execute a Leadership Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

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– OCM Practice: Establish a Steering Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 – OCM Practice: Build and Execute a Project Governance Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . .29 – OCM Practice: Develop a Change Communications Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 Phase 2: Business Blueprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 – OCM Practice: Devise and Execute a Tactical Communications Plan . . . . . . . . . . . . . . . . . . . . . . . . . .31 – OCM Practice: Build a Stakeholder Realization Campaign Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 – OCM Practice: Create a Work-Impact Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Phase 3: Realization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 – OCM Practice: Organizational Design and Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 – OCM Practice: Complete Role Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Phase 4: Final Prep . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 – OCM Practice: OCM Practice: Business Readiness Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 – OCM Practice: Do We Have the Right People? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 – OCM Practice: Incentives and Rewards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 Phase 5: Go-Live and Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 OCM Practice: Celebrate Go-Live! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Phase 6: Continuous Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 – OCM Practice: How Are They Doing? The Performance Management Lever . . . . . . . . . . . . . . . . . . . .39 – OCM Practice: Reinforcing Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 – OCM Practice: Refining Organization Design and Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 – OCM Practice: Hiring and Selection During Continuous Improvement . . . . . . . . . . . . . . . . . . . . . . .41 – OCM Practice: Communications During Continuous Improvement . . . . . . . . . . . . . . . . . . . . . . . . . .41 Appendix: Links to OCM Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 – Phase 1: Project Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 – Phase 2: Business Blueprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 – Phase 3: Realization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 – Phase 4: Final Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 – Phases 5 and 6: Go-Live, Support, and Continuous Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

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1. Introduction
Change. Let it run uncontrolled, and it’s destructive and costly. Harness it well and it’s the fuel of success. How change affects your company is determined by the way you manage it. The SAP® Education organization has designed this SAP Organizational Change Management (OCM)Toolkit to help your business carry out your change management project. It provides concepts, suggested processes, and real-life tools for conducting organizational change within your business or agency. It’s designed to enable your OCM team to plan and execute a successful effort and introduce your SAP solution with a minimum of disruption. This chapter introduces the idea of organizational change management, makes a case for its importance for your project, and explains our approach to managing change.

Studies of systems implementations consistently show that human performance, not technology, is the leading cause of failure to achieve expected results from a system implementation. In fact, a recent worldwide SAP survey of 186 implementations found that two of the leading barriers to successful implementation were “inadequate skills and training” and “organizational resistance.” Experience has shown us that the success of any SAP implementation depends on how the project team addresses three critical elements of project readiness: people, processes, and technology. These three elements don’t operate in a vacuum. In fact, they’re intimately related, and success in any one of them depends on what you do with the other two. As you go through the various tasks and processes in this volume, you’ll find that most of them are interrelated. Few, if any, elements in an OCM project exist independently, or even in an orderly timeline.

The Case for Organizational Change Management

The effectiveness and success of any organization’s strategic program depends in large part on how that organization manages human, technological, and organizational change. Implementing world-class information technology alone will not achieve the desired business results if the people affected aren’t aware of how changes to business processes, roles, and responsibilities will affect them – nor will it succeed if they are not ready, willing, and able to use new skills and tools. This is not an “SAP only” phenomenon. Indeed, change management is a long-standing human need. In 185 B.C., the Roman poet Terrance wrote, “There is nothing so easy but that it becomes difficult when you do it with reluctance.”

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ELEMENTS OF PROJECT READINESS

Get the system ready

It’s also important to remember that change management is not a “one and done” operation. While you may reach the end of your change management program for a specific implementation or upgrade, you’re likely to carry out ongoing OCM procedures as long as you use your SAP solution. Business is never static, so the need to manage change doesn’t go away. This toolkit is organized to assist you over the long term. If you have not done any organizational change management, you may wish to start at the beginning. However, if you have already begun some change activities, or if you are familiar with OCM, jump ahead to any section you think might be helpful.

Get the processes ready

Get the people ready

Figure 1: Project Preparation Predictable Business Integration Challenges The Goal of Organizational Change Management

During a typical implementation, an SAP project team appropriately focuses on the SAP technology and process aspects of improving the business. However, the human dimension of the implementation needs every bit as much attention as the software configuration. We cannot underestimate the need for addressing the human dimension in a business change, both to ensure a successful launch and to accelerate the business benefits expected from the implementation. To ensure minimal disruption and deliver a rapid return of value, SAP customers should execute a change management plan involving demonstrated commitment by leadership, sound governance, effective change communications, and efficient training.
Business Integration Considerations

Your OCM effort has a very simple goal: to make sure personnel challenges don’t get in the way of meeting your SAP implementation business goals. Your OCM effort exists to create and execute the strategy for a minimally disruptive business transition. Its charge is to explain changes to job roles and tasks, to build acceptance of the new solution, to redefine departmental boundaries where necessary, and even to facilitate required changes to organizational structures and teams. The bottom line: your OCM project works to speed adoption of your SAP solution and accelerate its return of value.
Aspects of Organizational Change

• The best-designed improvement strategies, from technology enhancements to mergers and acquisitions to sharedservices arrangements, do not realize benefits expected unless people across the business are engaged, informed, and prepared to succeed. • The best business processes are ineffective if people in the organization do not understand and follow them. • The best technology in the world is inadequate if people in the organization do not use it.
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There are two fundamental aspects of organizational change: • Strategic organizational alignment • Project-level change management Strategic organizational alignment focuses on enabling a systemic shift in organizational behavior and culture. It concentrates on such intangibles as leadership, alignment, commitment, direction, expectations, and messaging. Its purpose is to make sure everyone in the organization is on the same page and is going in the same direction. Without strategic organizational alignment,

the likelihood of achieving your desired changes and business results will be seriously diminished. As an internal person tasked with creating systemic changes, you face a big challenge in dealing with internal culture, politics, and traditions. Change in these areas can be difficult, as employees or groups fight to hold on to the familiar ways of doing things. This toolkit will help you by recommending techniques to motivate even the most resistant members of your organization. Project-level change management identifies the specific tasks by department, role, and person necessary for your organization to

execute your new processes successfully. Because neither can be successful without the other, you must include both strategic organizational alignment and project-level change management in your OCM efforts. Project-level change management represents the tactical portion of your OCM effort, and a typical mistake is to focus solely on these tactical activities. However, simply completing the checklist of project-level change management tasks does not mean your organization is aligned with its vision. The table on the following page summarizes the characteristics of these two aspects of organizational change.

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Strategic and Project-Level Change Management at a Glance

Objective Duration

Long-term transformation Enterprise focus – business transformation (years) When a systemic shift in business behavior and culture change is required to achieve organizational awareness, understanding, commitment, and action

Project launch success Tactical focus – ERP implementation (months) When designed to enhance people's ability to move from a current way of thinking and conducting work to a new way of applying tools, systems, and process to increase flexibility, quality, productivity, and innovation and reduce cost Focused on activities to support successful implementation of project objectives that fulfill the business requirements and business case: • Project has built a guiding coalition of leaders who support deployment and are individually and collectively accountable to drive specific project goals. • Key executives are well prepared to lead change, supported by individual plans, activities, and a robust tool set. • People are in the right jobs with the right skills and supported by preparations and tools that set them up for success. • A systematic transition strategy minimizes business disruption and shortens time to achieve full project benefits. • Every employee is prepared to succeed on day one of launch. • People understand new work requirements, which their leadership supports to realize full benefits expected. • Communication actions • Training activities • Organization structure analysis • Governance (steering committee process) • Local site-readiness preparations

Application

Components

Focused on ongoing activities to support business strategy and long-term objectives: • Executives lead drive to achieve a business success story and provide role models for how to succeed in the new setting. • Managers are well informed and actively work to establish new business practices within their teams. • Business design is integrated at the enterprise level, enabling delivery of a consistent operating platform for "good" growth. • Employee ability to succeed in the new environment is supported by a collection of integrated people, processes, management practices, performance systems, and reward strategies. • Staff demonstrates new work behaviors, which are supported by leadership, to realize a new set of operating values. • Work norms necessary to realize maximum benefit are demonstrated by people at all levels of the business. • Executive communications • Governance/leadership strategy • Sponsorship alignment plan • Incentives and rewards • Staffing and resource strategy

Outputs/ focus

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Typical OCM Challenges

Business change driven by an implementation of SAP software can be comprehensive; if you’re going to manage the risk it involves, you need to understand the challenges it can bring. The good news is that you can anticipate many of the typical transition issues that may arise, such as: • Your employees may see their leaders as out of touch with the implementation program and not focused on program imperatives. • Your organization’s business units may have limited participation during program design and cutover preparations and may resist them. • Your program may not be able to identify or resolve implementation issues quickly or completely. • The business may feel unclear regarding new work roles and responsibilities the program creates. • Your workforce may be unprepared and ill equipped to succeed in the new work setting. Anticipating and addressing these challenges within the SAP implementation effort is essential to fostering a smooth, successful business transition. Recognizing which of these symptoms has the potential to affect your project’s success and addressing their underlying causes is critical, both to “go-live” success in the short term and the stability of your new SAP solution in the long run.
Common Enterprise Software Implementation Requirements

• Manage resistance from any business managers who are vested in continuing existing work practices and process. • Solicit the right mix of stakeholder participation and feedback during the project. • Secure the right number and type of extended team resources to involve in the operations readiness teams and in business preparation for go-live. • Position the implementation project to complement other critical business programs. • Establish a committed steering committee that takes an active role in supporting the new SAP solution, helps remove obstacles, and provides resources where critical to maintain the implementation schedule. • Help staff transition from their current roles to new SAP project roles and work practices in a way that accelerates the transition and minimizes business disruption. In Chapter 3 of the SAP OCM Toolkit you’ll find tools and strategies for addressing typical OCM challenges and meeting the requirements of your implementation.

What Successful Organizational Change Looks Like

Most enterprise software implementations require you to do the following: • Deploy new business processes to diverse business units consistently and efficiently. • Prepare each significant business segment for transition and manage activities in a way that both accelerates acceptance and minimizes local work-arounds and resistance. • Make the best use of business resources, particularly end-user tools and new manager roles and activities, in preparing the workforce for changes to operations systems and processes.

A successful organizational change combines a collection of complementary activities working together to ensure a smooth shift in critical items, such as (but not limited to): • Organizational work practices • Corporate policies • Decision-making procedures • Operating values and behavior As a result of your change management activities, the workforce understands and accepts the reasons for change and acts together to achieve a common set of performance improvement goals. A successful organizational change campaign enables business teams to use their new SAP solution or upgrade to work smarter and faster and create more valuable, more accurate, and more costefficient results.
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Three Common Organizational Outcomes

The most successful SAP implementations achieve three common organizational outcomes: • The business is mobilized to make the change. The OCM effort has engaged everyone in the organization with a stake in attaining a high-performance and competitive advantage for the business. • The business is prepared to perform in the new setting. The OCM effort has provided employees the information and tools they need to embrace change and integrate it into everyday work practice. In addition, OCM is integrated with employee training and support. • All transitions are managed so the affected people know where the program is and what’s next. The OCM effort gives everyone in the organization a logical path for moving from the old ways to the new ones. The core project team, the business process owners, the critical third parties – everyone involved knows how to transition from current operational procedures and adopt the new SAP technology. We will drill down into each of these three organizational outcomes a bit more in Chapter 3.

Large OCM teams may consist of a dozen or more staffers. A small organization in which the business changes will impact only 50 to 200 end users might ask a single individual to own the total OCM effort. Indeed, the OCM effort in smaller operations may not have its own dedicated staff; rather, it might take up a percentage of another team’s time. For example, the project management office itself might handle it; or it might be spread across the project’s process teams, each team owning the management of change for its respective functional organizations and end users. In all situations, however, and for companies of all sizes, the scope of an OCM effort is the same: • Mobilize the business. • Prepare people to perform. • Manage everyone’s transition. Your OCM team should feel free to adapt the concepts and tools presented in this toolkit to its unique situation and business case. While the OCM approach we present here is consistently actionoriented, it’s designed to be flexible. You can adapt the concepts to the tactics, delivery channels, and audiences most relevant to your specific situation and transition priorities.

The Prime Directive: Act with the End in Mind

Building Your Team to Match Your Needs

As you build your OCM initiative team, keep the objectives of your project clearly in sight and create a team to meet them. The size of your team and the roles of individuals will vary depending on a number of variables. For example: • Size of the overall project team • Number of sites involved in the project • Number of business functions impacted by the change • Number of end users impacted by the change

There’s one critical rule of thumb above all others: act with the end in mind. As discussed earlier, you have successfully managed your OCM effort if you’ve mobilized the business, prepared people to perform, and managed everyone’s transition. Following are high-level activities that will enable you to reach this successful end state.
Mobilizing the Business

• Build a guiding coalition of leaders who can furnish resources, drive key messages, remove roadblocks, and help solve problems that challenge implementation success.

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• Promote the SAP program to all your stakeholders – executives, managers, and end users alike – so everyone understands the value of the process changes and SAP technology and has confidence that the SAP program can improve operations results. In addition, stakeholders should recognize how they can contribute to business integration success.
Preparing People to Perform

Recognizing Change Management as an Art, Not an Exact Science

• Work with your business teams and operations managers to fully prepare the staff to be impacted by any new practices. Create the tools and transition planning needed to help your staff succeed in the new setting and achieve the productivity gains made possible by new SAP solutions. • Work with your project design teams, process owners, and other subject-matter experts to analyze how process changes will impact their work. In addition, explain to your business staff how new roles and skill requirements will affect them. • Provide detailed recommendations for how to manage the transition for each significant business organization or geographic site.
Managing Everyone’s Transition

The OCM process described in this toolkit draws upon best practices from hundreds of successful projects. One of the lessons we’ve learned from these projects is that managing OCM initiatives is a balancing act that requires flexibility and improvisation. As we mentioned earlier, the steps in an OCM effort don’t always follow a linear pattern. Often there is overlap between the tasks you perform – and team members may be asked to start a new activity before finishing the previous ones. For example, at the start of the project your communications team may engage employees with a set of communications initiatives. Before they’ve finished, individuals handling communication may be pulled away to work on stakeholder alignment activities. Later, they will revisit communications to ensure that employees are still engaged. As a result, it may seem as though there is no end to certain OCM activities. But in reality, the team is achieving its goals by engaging and reengaging the workforce at key points in the implementation project. The art of organizational change management is balancing these activities to be successful, improvising when necessary.
Moving Forward

• Develop a clear, consistent business vision and gain “buy-in” from all levels of the business early on and throughout the deployment. To achieve these goals, you’ll need to work closely with business sponsors and executives as well as members of the SAP program steering committees. • Set up systems to involve stakeholders in key decisions and to resolve problems or issues related to organizational change. Use these systems to identify issues that challenge operational success, and work with the program teams and business leaders to address them. • Use a systematic, proactive organizational change assessment approach to recognize problems early and apply appropriate resources to resolve obstacles quickly. Continue to apply and expand these practices as part of your site cutover planning.

In the next chapter, we’ll examine some change management fundamentals. Then in Chapter 3, we’ll discuss best practices for OCM and introduce a series of tools and accelerators you can use to develop your own change management project.

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2. Fundamentals
The major objective of your OCM effort is to get your end users to accept and become competent with your new SAP solution as quickly as possible. The result will be a more rapid realization of value from your SAP solution. In this chapter, we’ll describe the fundamental tasks your OCM effort must accomplish to gain user acceptance and begin realizing the benefits of your SAP initiative.

Why People Resist Change (And How to Overcome Resistance)

Change management theory tells us there are four reasons why people resist change: • They didn’t know about the change. • They weren’t able to do whatever the change required. • They felt they weren’t included or involved in the change. • They didn’t see the change as a priority. As Figure 2 shows, appropriately timed OCM activities can accelerate and encourage the acceptance of change. At a high level, here’s how your OCM effort can overcome resistance: • For people who “don’t know,” your OCM effort should provide information and communication. • For people who feel unable, your OCM effort should integrate with your training processes to ensure relevant training is provided. • For people who don’t feel included, your OCM effort should provide a sense of shared ownership. • For people who don’t see the change as a priority, your OCM effort should make sure your leaders are exercising active and visible advocacy. Our change management approach provides the techniques tools needed to overcome resistance and enable individuals and the organization to adopt change.

Helping Your Organization Understand the Business Case

To ensure the overall success of your SAP project, everyone in your organization must understand the business case driving it. It’s the job of your OCM effort to make sure that happens. A successfully executed organizational change management plan creates a context that makes business drivers meaningful for employees. The “change adoption curve” (Figure 2) reinforces this point. The first two milestones on the road to organizational adoption are awareness and understanding. Once you achieve these, it is possible to gain acceptance, individual adoption, and eventually full organizational adoption.

Levers for Change: Moving Your Organization to Change

Earlier in this toolkit we quoted the Roman poet Terrance. Let’s return to the classics for a moment and remember the opinion of Archimedes: “Give me a fulcrum on which to rest,” he is reported to have said, “and I will move the earth.”
Figure 2: The Change Adoption Curve1

A successful OCM strategy gives you the levers to do a little earth moving. Within and across the four phases of our OCM approach,

Adapted from Remy S. Leeuwin, Organizational Change with input from Guy Couillard, OTA 12

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we make extensive use of critical levers for change – mechanisms that can work within your organization to define, describe, or influence the way it behaves. If you properly apply a given lever within a given phase, you have a powerful tool for influencing positive change. The SAP approach to OCM addresses these eight levers for change: • Leadership and sponsorship develops a culture of change leadership that aims to build commitment through accountability, role clarity, and executive development. • Governance and compliance assigns roles and responsibilities, including decision-making responsibility, and creates a culture of compliance based on measurement and consequences. • Skills and competencies incorporate competency assessment and skill development for all employees. This lever incorporates learning, training, and succession planning into all OCM initiatives. • Performance management establishes and measures individual and group performance, ensuring alignment with enterprise strategies, goals, and objectives. • Organizational design and structure aligns business and process metrics with process roles and management structures. • Incentives and rewards provide clarity of desired performance and compensation, bonuses, and promotions consistent with good performance and client successes. • Communications enable change through frequent and factual information flow, and clearly explained impacts, roles and responsibilities, benefits, and rewards. • Hiring and selection provides personnel strategies (such as retrain or hire; grow organically or acquire) that ensures individuals possess the right skills and competencies at the right time, resulting in program success. In fact, these levers are at work within your organization right now. If you wish to effect change, you’ll need to find a way to use them. And you’ll need to decide which of them require additional

development and when you’re going to apply them. Chapter 3 explains how you can do this by integrating the levers into the ASAP methodology.

The ASAP Methodology

As an SAP customer, you’re likely familiar with the ASAP methodology, a proven, repeatable, and successful approach to implementing or upgrading an SAP solution. Based on best practices culled from hundreds of projects, ASAP has demonstrated its worth for customer projects of all sizes.

Figure 3: ASAP Implementation Road Map

Let’s take a moment to examine the methodology itself. As you’re probably aware, it consists of six phases, usually depicted in the road map shown in Figure 3.

Phase 1: Project Preparation

During Phase 1, you’ll be carrying out your planning and preparation for your SAP project. Your OCM activities will primarily consist of gathering the information you need to create a workable change management strategy. You’ll identify your stakeholders, plan your communications, and establish your OCM project governance structure.
Phase 2: Business Blueprint

Your objective during the business blueprint phase is to achieve a common vision and understanding of how the company intends to support its business with SAP. The result will be your business

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blueprint: a detailed description of how you plan to achieve your goals. Your OCM activities will focus around making concrete plans based on the information you gathered doing the project preparation phase. During this phase you’ll be working collaboratively with the people who define your business processes to identify the roles involved in your SAP implementation and the impact your project will have on them. Your work here will serve as input for your organizational design and structure requirements and will also help identify necessary skills and competencies.
Phase 3: Realization

processes and skills you’ve introduced, capturing the lessons you’ve learned, and supporting ongoing user development and skill mastery.
Phase 6: Continuous Improvement

During this phase, you’ll carry out such activities as validating the adoption of the new processes and skills you’ve introduced, capturing the lessons you’ve learned, and supporting ongoing user development and skill mastery. Now that we’ve summarized the change levers and the ASAP phases, let’s take a look at how they integrate with each other. As you go through the pages that follow, please remember that the activities we discuss aren’t necessarily linear. You’ll likely find a great deal of overlap among the activities we recommend. If it drives you a little crazy, remember that in this line of work, crazy is normal.

The realization phase is where you’ll specifically identify the linkages between your user population and the business process requirements defined in your business blueprint. During realization you’ll begin carrying out the OCM activities that will take you through final preparation and go-live. Among other things, you’ll make sure you have leadership and sponsorship activities covered on the local level and ensure you’ve mapped actual people to all the roles you identified in Phase 2.
Phase 4: Final Preparation

Levers for Change and the ASAP Methodology

Final preparation is the last step before you go live. In this phase your organization will complete testing, end-user training, system management, and all cutover activities to finalize your readiness to go into production with your SAP solution. During final preparation you’ll have a number of critical OCM activities, including last-minute communications to your users and stakeholders.
Phase 5: Go-Live and Support

Your business project is a dynamic organism. Like the parts of a living body, your levers for change operate constantly, and each one keeps going independently of the others. Just as we think and digest and breathe as we walk, so the various levers operate simultaneously throughout your project. There will be times when one lever is in the foreground, and you’ll need to provide deliverables or carry out activities. There will be other times when that same change lever will apparently seem inactive – but it’ll still be there, quietly digesting lunch. In the pages that follow, we’ll look at each of these levers as they pass through the ASAP phases of project preparation, business blueprint, realization, final preparation, go-live and support, and continuous improvement. In Chapter 3 we’ll also introduce a series of OCM practices to help you manage change within each phase.

The go-live phase moves you from a project-oriented, preproduction environment to a live production operation. But just because your project is nominally “completed” during Phase 5, change management activities don’t stop. Phase 5 requires particular OCM focus on enabling leaders and managers to support user productivity and performance. During this phase, you’ll carry out such activities as validating the adoption of the new

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Leadership and Sponsorship

When your corporate leaders – from your executives to your line managers – visibly model the behaviors necessary to encourage and advocate your new solution, your employees are more likely to follow suit. In a 2006 survey, members of the Americas’ SAP Users’ Group (ASUG) cited “executive sponsorship” and “project leadership” as the top factors influencing an organization’s ability to receive value from an SAP investment. Just to remind you of how effective executive endorsement can be, remember that Ian Fleming’s James Bond novels were only mildly successful until someone asked President Kennedy what he liked to read. Every organization has leaders and sponsors you can leverage to support and encourage your initiative. Their roles may be official or unofficial, formal or informal, but their influence can be powerful either way. It is essential that leaders continue to lead and manage through and beyond go-live and develop a strong sense of ownership of the project outcomes. During the project preparation phase it’s important to identify your key leaders and stakeholders. You also need to confirm that you’ve aligned those stakeholders across your organization so they’re supporting your project and creating shared ownership of project results. It will also be critical for your leaders to visibly endorse the business case for change, which we’ll discuss below as part of the communications lever.

During the blueprint phase, you’ll put the stakeholder management plan you created during the project preparation phase into action. Your activities here will help ensure that you engage and enable leaders and stakeholders at various levels to fulfill their role in driving change. Your change leaders will generally be the people who lead your business now; what change management does is ensure that your employees are doing the right things at the right time over the course of your implementation. Essentially, organizational change management is “applying discipline to common sense.” Your job during realization and final preparation is to ensure that your leaders, managers, and sponsors clearly communicate the roles, responsibilities, and changes expected for the people who work with them. You’ll also further develop your “change network,” which is your extended change team. These are individuals across the organization who are not tasked with doing change management full-time, but who are going to be your connections within the organization for feedback, communication, requirements, and so forth. During the realization and final preparation phases, your leaders and sponsors should proactively display readily visible involvement. As part of their role in leading change and managing risk, your leaders will coach the workforce. They will need to speak proactively with stakeholders, listen to their questions, and manage risk by understanding and acting on employee concerns and issues. There are many ways you can accomplish this: roundtables or “fireside chats,” lunch-and-learn sessions, or any activity that regularly and directly connects with employees and allows you to hear their concerns and to build their trust. Leaders and managers also need to raise issues, work through the appropriate governance process, and be visible in a supportive manner for any item related to the project. Each leader will have an individual change leadership action plan (outlined in Chapter

One of the greatest benefits in smaller organizations is that typically leaders and managers can have more direct contact with the organization as a result of their smaller size. Take full advantage of the reach and access available to your organization; direct contact is the most powerful method of messaging and leading change. More complex solutions become necessary when geographic scope or numbers of employees increases.

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3), which should be confirmed and revisited if necessary to maintain the engagement, participation, and visibility of all key leaders. During the go-live phase you’ll leverage the cross-business project ownership you created during the project preparation and blueprint phases. It’s during go-live where the accountability for results comes into play. It rests with the leaders and business stakeholders who took ownership and those business leaders, stakeholders, and managers who did the coaching. Your leaders will continue reinforcing the changes and coaching the organization for continued adoption until what was new and different becomes very familiar and comfortable. As we mentioned earlier, your continuous improvement activities will extend beyond your implementation project. By the time you reach continuous improvement, your organization will be managing user performance on an ongoing basis. Your leaders should be making sure people are doing what they should, and making changes and suggestions to tweak and improve your processes. By this time, “big change” should become a regular way of life. We aren’t teaching leaders and managers to lead and manage – but are expecting them to do that.
Skills and Competencies

need for your implementation or do you need new ones? And how do you supplement them? Earlier we discussed the need to identify leaders and business stakeholders in the project preparation phase. This activity serves as the initial “audience analysis” that you can use to outline skill and competency requirements for your user population. Your goal from a change management perspective is to understand the impact your SAP solution will have on your organization, then to examine your workforce, determine its current skills, and identify any gaps between your current state and your upcoming requirements. This will help you create the “transition plan,” a complete listing of the tasks and activities your workforce will experience as part of the transition to your SAP solution. When combined with your learning plan, you’ll have a strategy for preparing them for the tasks they’ll encounter when they go live and beyond.

The skills and competencies lever is critical for a very simple reason: as good as your SAP software is, it won’t deliver its promised value unless your people have the knowledge and skills to use it. Consider, for example, an article from CIO Magazine regarding the real reason for failure of ERP projects. The author states, “Increasingly, experts reckon that they've found the smoking gun: poor training. Not the technical training of the core team of people who are installing the software, but the education of the broad user community of managers and employees who are supposed to actually run the business with it.”2 The members of your organization already have a variety of skills and competencies. But are these the skills and competencies you
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In many organizations, employees’ jobs include multiple roles. The challenge with such “jack of all trades” situations is that this broad expertise is typically developed over time through informal cross-training and knowledge transfer. In these cases, consider the critical elements of each role and focus on the near-term requirements while developing a support process for additional skills that will gradually rebuild this diversified skill set in your people.

Normally, we don’t consider training or knowledge transfer to be a formal part of the change management initiative, so we won’t go into creating a training plan here. However, the information you’ve gathered during the project preparation phase will serve as important input for the people building your skill-development plan during blueprint and realization.

Malcolm Wheatly, “ERP Training Stinks,” CIO Magazine, June 2000

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However, a training plan is still something with which you should be intimately familiar. You’ll want to review the plan and make sure it addresses the skill sets your employees need, and establish accountability for addressing those skills. Make certain to identify the necessary skills or procedural changes that should be included in training, but which are not directly software-related.

While your OCM team is at work with that, the people responsible for training should be developing and delivering their content. Also in parallel, your organization should begin executing business readiness activities – these are those activities outlined in the Individual Leadership Action Plans to ensure each site is “ready.” Such activities will continue right up to go-live and continue beyond. Training will typically occur both pre-go-live and post-go-live, as close to use as possible. Indeed, during the continuous improvement phase, it’s important to focus on reinforcing the skills that your workforce needs on a regular basis. Learning is more of a “use it or lose it” phenomenon than we’d like to admit. Be sure to analyze exactly how and what your users are doing during the management phase. (Tools such as Knoa User Performance Management for SAP are useful during this period.) Find out where your users are having problems and provide them with performance support to address those problems.

Your employees need to be fully prepared as well as trained on how their jobs will be executed. For example, let’s assume that a given plant manager at a construction materials company has been carrying out a “goods receipt” process for raw materials every Friday when the plant is quiet. With the new business processes the company has identified, however, he will need to enter the “goods received” information into the SAP application immediately upon receiving them. This would need to be communicated prior to the training, or as part it, thus providing “a day in the life” for this work role versus purely transactional training. Your training department needs to build more than transactional competence; it has to build understanding of the complete business processes behind the transactions, including all “who, what, when, where, and how” issues. It is OCM’s job to make sure the training people know what those issues are.

During the blueprint and realization phases, you’ll complete your work-impact analysis: you’ll specifically indicate what each role in your organization must be capable of doing and whether or not the people in that role have the skills appropriate to execute against that work. This helps determine what kind of knowledge transfer and skill development you’ll need to accomplish.

Performance management won’t just keep your users working more efficiently; it will also save your company a small fortune. For example, an IDC study at a large consumer company in 2006 estimated that each help-desk call took employees away from their tasks by an average of eight minutes. Multiply those eight minutes by the number of workers calling the help desk and the costs of maintaining the help-desk staff, and you have an idea of how much money can be saved by even a fractional reduction of these calls. Regardless of the size or scale of your organization, the time spent supporting employees is significant. By creating predictable patterns of support it is possible to minimize the investment and effort associated with ongoing performance support.

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Organizational Design and Structure

Like all organizations, yours has some kind of design and structure; but is it aligned with the new processes and technology you are implementing? Or do you need to make changes? You’ll use your organizational design and structure lever to align business and process requirements and metrics with process roles and management structures. Right at the start of your project – beginning in project preparation phase and continuing into blueprint – you’ll want to have an accurate view of your organization’s business goals and opportunities. You’ll need a snapshot of the current state of your business, up-to-date organizational charts, and accurate role and job descriptions. When you examine this documentation in light of your business case and any other drivers for your project, you’ll get a much clearer view of what may or may not have to change. Early in the ASAP process, your SAP project team will have met to design new business processes. Their results will be very important for your change initiative. As part of the blueprint phase, make sure you understand any impacts the new processes will have on user roles. During realization, you’ll need to assess the anticipated changes in skill requirements, roles, and accountabilities resulting from the new processes and determine whether your personnel will be responsible for doing the same things in a different way or doing different things entirely. It’s important to consider the scale of change for each role or group of people and what support they need in making the changes. For example, in our earlier discussion of skills and competencies we examined the training needs of the plant manager who handled the “goods receipt” process. It’s a true story: when the manager was unclear about when he needed to process the goods-receipt transaction, pallets of raw materials were arriving on schedule – but manufacturing shut down because the SAP software indicated “no raw materials available.” Good planning could have avoided the situation.
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In the final preparation phase, you’ll develop organizational models and roles and responsibility definitions to support the identified business processes and goals. You’ll also help initiate the business transition to your new solution, usually in partnership with the leaders of your organization and your HR team. The nature of the business process changes will dictate how organizational structure and individual roles change. For example, if you are converting a business process dispersed throughout the organization to one that is centralized, roles and organizational structure will likely change significantly. You will have to revise your organizational structure, establish new roles for individuals, and create a new flow of information and work processes. This type of change is considerably more significant than if you were simply asking an individual to execute the same business process with a new tool. In the continuous improvement phase, you’ll be constantly working with leaders and managers to be sure your employees are performing the tasks they’ve been assigned and that the appropriate handoffs are taking place between team members. In addition, you must verify that the organizational structures and support systems are in place to keep the process moving efficiently. In a way, each process within your organization is like a crazy relay race; or rather, several relay crazy races running at the same time. Batons can sometimes pass from one role to another (and then back again) at a dizzying pace. Managers must act like gatekeepers who communicate not only the individual roles and responsibilities of each “runner,” but also where the handoffs occur across multiple processes happening simultaneously. Clear definition of roles and responsibilities and metrics is essential to have the information available to users and managers to be clear on expectations.

Communications

Almost everything depends on communications. How effectively you deliver your various messages can make or break your change project. A clear, well-crafted, and factual information flow can build trust and acceptance. Infrequent, ambiguous, or misleading information can cause resistance and suspicion. Your communication to your organization should include clearly explained business impacts and process changes, roles and responsibilities, and information about the benefits of the new solution. If you have strong leaders who provide an equally strong communication channel, your OCM efforts should assist them by providing messaging they can deliver throughout your SAP project. Lacking a strong communication mechanism, however, you will need to create one. You’ll also need to develop the infrastructure to support the messaging and expectations set in the individual leadership action plans regarding communication. As experienced managers will tell you, people issues are the root of most project failures. And the typical root cause of these issues is that the business leaders – executives, process owners, operations staff – don’t agree on what business problem they’re trying to solve, or what the best technology solution is, or even that the problem needs fixing at all. Within the project preparation phase, you need to establish a clear business case for change.

encourage user acceptance – and ultimately adoption, both individually and organizationally. Resistance to change is typically higher if these business drivers are not communicated. Once you’ve defined the business drivers, you’ll be able to communicate your vision. Your messaging should include anticipated project outcomes and a clear statement of the benefits the organization expects to derive from its new SAP solution.

During project preparation, you should start communicating this information through a formal project kickoff. This will allow the vision of leaders to be shared and subsequently developed into goals that will translate into concrete plans for project execution. At this stage of the change management effort, we recommend that you develop a change communications strategy to address these requirements. You can think of the communications lever as a marketing campaign for your project. It includes both internal and external audiences, but especially targets your key stakeholders. The dual objectives are to develop a plan to engage stakeholders and to create a strategy for ongoing communications with your internal and external audiences. Note: A stakeholder mobilization campaign is an effective technique for engaging key stakeholders and will be reviewed in Chapter 3. Gaining the stakeholders’ acceptance and commitment is critical to a successful launch. This effort will involve explaining to each individual what to expect from this project, what is expected of him or her, and what constitutes your vision of success. In the blueprint phase, you build upon your initial framework to set up a tactical plan for communicating across your
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Having a clear business case will ensure the expected outcomes of your project, avoiding missed objectives, overspending, or an overly complex and cumbersome process. The people in your organization don’t expect that you are changing things for the sake of change. They want and need to understand the business drivers behind the initiative. Why does this implementation need to occur? Is it to improve the way you do business? To reduce costs? Promote growth? This context can provide the rationale that will

organization. Referring to your change communications strategy, you must now decide how to approach each of your intended audiences. Which messages apply to which audiences? What’s the timing of the messaging? What is the best delivery mechanism? You have many delivery options, from face-to-face interaction to written communications to multimedia. You must also take into consideration the needs of your audiences – for example, language or cultural differences – when selecting means of delivery. In some cultures, receiving major communications from the corporate or head office is deemed more significant; in others, employees find it more meaningful to receive communications directly from their managers. Understand your culture and provide communications from the most trusted source, which is often the direct line manager. Create your tactical communications plan early in your communications planning. Such a plan focuses on these audience and logistical questions, helping you execute your strategy for communications.

may need to communicate at a training event at one of your facilities or at a particular location for a site-specific go-live. During realization and final preparation, be sure that the timely and consistent execution of communication continues at both the broad, organizational level and the more specific local level for each site or group. It’s also particularly important to allow for feedback; two-way communication will enable you to refine messaging to address core issues for each relevant audience. Communication becomes primarily site-specific as you focus on the final preparation and go-live and support stages of your implementation and post-go-live improvement activities. During continuous improvement, particularly if your project involves multiple implementations or upgrades, be prepared for questions from the people handling the rest of it. Once you’ve reached the exalted state of “go-live,” you’ll likely be peppered with requests for advice, reaction, and opinions. Remember that your answers become part of the communications process for their part of the project, and that by default, you’ve become one of their change leaders; so make sure your answers are consistent with your communications plans. You’ll also want to communicate proactively with the people on the other part of the project: make sure you let them know the process improvements you’ve discovered and the lessons you’ve learned.
Governance and Compliance

There are many vehicles available for communication. In a smaller organization be sure to take advantage of direct contact with employees. This will minimize cost in terms of communication processes and infrastructure while utilizing the most potent change vehicle available – direct communication between leadership and the organization.

As you enter the realization phase, focus on two important levels of communication. First, create the standard messaging that you deliver to the entire organization. This messaging focuses on broad-based information – for example, the business rationale for project activities, actual milestones, or project success stories. The second level focuses on communications targeted to the local or site level. You’ll typically create these messages for specific audiences rather than your entire organization. For example, you

Your organization will need clear assignments, roles, and responsibilities regarding decision making and decision escalation. The governance and compliance lever will help you create this structure and a culture of process compliance based on a specific, welldefined set of standards. Consider this: is your organization more bureaucratic organization or is it fairly flexible? Is governance formal or informal? Is your organization process-compliant or varying in approach? Whatever its style, the way your organization is managed and functions will influence the way you make decisions

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and put new business processes in place, both during your project and in the long term. When you set project roles and responsibilities, you’re using a key function of your governance and compliance lever. It’s something that should be completed very early in the project preparation phase. It’s during project preparation that you’ll align groups and their leaders to specific components of the project and establish their accountability for the success of those components. You’ll also want to establish who has decision-making authority for which steps along the way so there is no question later if indeed the road gets bumpy. You’ll also want to put together an issue escalation process just in case one of those bumps turns into a mountain. For example, when you are defining business processes during the blueprint phase, you may discover that there are duplicate or conflicting ways of performing the same task. Typically the project team is responsible for developing a common approach; however, someone in your organization must be responsible for making the final decision. Here, in the project preparation phase, you need to decide who is responsible for making, implementing, and enforcing these choices. As you begin to align people and groups with project roles and responsibilities, make sure to keep leaders aware of the implications of their decisions and actions. You should also make sure your business owners stay abreast of process changes and understand the escalation process while you’re still in the project preparation phase. If they don’t, your blueprint process could be impeded with unclear decision making or lengthy and confusing escalations. In the blueprint and realization phases, the steering committee meets regularly to provide direction and reinforce progress.

Let’s take a look at an example of how your steering committee or leadership team might act to clarify roles and responsibility changes resulting from your project. Not long ago SAP Education worked with an organization that had manufacturing plants all over the world. Each plant employed forklift operators, but in Europe the operators were classified by the local union into three different positions: forklift operators who moved raw materials, those who transported work in progress, and those who moved finished goods. In North America, on the other hand, there was only a single role. At first glance, this did not appear to be a big issue. But the project team was unable to agree on how to define the positions, which could have resulted in lot of additional work, as each role required unique security definitions, training and support planning, hiring plans, and so forth. But after consulting with business process owners and business leaders, the steering committee found that a single job definition would be sufficient, even given the European requirements. The European branches were happy as long as the three employee groups were trained separately. The steering committee’s ability to balance local needs with efficient operations made the difference and prevented a good deal of unnecessary redundancy. While this example is global in nature, often organizations develop with different processes being used at different locations – as close to each other as across the street. Reconciling differences and selecting a shared path forward is what will allow and afford your organization a simpler path forward. These decisions will require alignment of leadership and decision makers as they will be accountable for reinforcing and coaching the organization through change.

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As the nature of the upcoming changes in your organization become more apparent during the realization phase, you’ll continue to clarify expectations for the-post go-live environment for both leaders and users. At this point, leaders must effectively (but politely) reinforce the view that change is going to occur and it isn’t optional. This reinforces direction and encourages user acceptance and adoption. The organization will continue to assist each person with adoption as the project moves forward to go-live and beyond. You’ll continue to reinforce user expectations and build process change acceptance during the final preparation and go-live phases. It’s particularly important for your leaders to visibly reinforce process change during this period. With any new change there will be a settling-in period when users feel uncomfortable doing new work or working in a new way. Once the new work becomes second nature, however, it will be more comfortable and performance will improve. It’s critically important for managers to support their teams and team members during the transition.
Performance Management

phase to determine what KPIs (or other performance measures) your organization will use to measure performance. Are they connected to the same business goals that are driving this project? If so, you can align the KPIs with specific user roles and responsibilities. By aligning the success of the project with individual or group performance measures, you’ll encourage individuals and groups to behave in a way that will lead to your project’s success.

However you measure performance and project accountability, make sure you include the entire organization. Such inclusion makes everyone accountable for the success of your project – not just the project team. It also has another effect: when the organization shares accountability, it also feels a sense of shared ownership. As the old saying goes, “people don’t hurt what they own.” People with a sense of ownership are far more likely to be committed to the success of your project than those who feel the new solution is being forced on them. Very simply, people pay attention to activities that engage others. So be aware that the focus and attention by your organization guides the focus and attention of each employee.

The performance management lever ensures alignment of individual performance with the organization’s strategies, goals, and objectives. Some organizations have mechanisms to measure and manage performance on the job; others have very few. How will your organization measure performance after this change project? Whether formal or informal, performance management processes within a company tell employees what is important, what is acceptable and desirable in work performance, and where to put their effort and attention. Most organizations use some type key performance indicators, or KPIs, to measure the performance of their business processes and subprocesses. It’s important to have a clear view of them; work in tandem with your business process teams during the blueprint

As you begin development in the realization phase, make sure to engage the extended change network you’ve developed for your project. Your network, which includes subject-matter experts (SMEs), user groups, and other stakeholders, can assist you with testing, acceptance procedures, and performance support. By involving this extended network, you reinforce shared ownership across the organization and emphasize that project success doesn’t just reside with the project team or the change team. An important part of your work with your performance management lever will be to build user-performance requirements and expectations into your “role impacts” – your definition of how

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the impending changes will affect user roles. (You’ve already done part of that work if you’ve defined “work impacts.”) This will help you establish the criteria by which you’ll determine that an individual user or group has successfully transitioned to the new solution. After the go-live phase and during continuous improvement, you’ll do performance checks on users or user groups to find out how they’re doing against the KPIs you established earlier. Note that some KPIs may have changed over time. It’s a wise practice to check your KPIs every time you change a business process and to communicate any KPI changes to anyone who will be affected. You may also want to consider using actual user-performance data to support your post-go-live coaching and reinforcement. Products such as Knoa User Performance Management for SAP can give you accurate metrics regarding how your users are doing with their new responsibilities or tasks, right down to the individual user level if necessary. The more data you have, the better you can manage user performance and the more easily you can identify the areas in which they need to improve.
Incentives and Rewards

Use the project preparation phase to examine your project scope and its expected results and benefits. Then assess how you’ll motivate individuals and groups to achieve the desired project outcomes. You may or may not require a change in financial rewards, but you’ll almost certainly require nonfinancial rewards and recognition. You can use the incentives and rewards lever in tandem with performance management to motivate employees, encouraging them to do what needs to be done quickly and effectively. In the realization phase, review how you’ve defined your desired behavior shifts and make sure you’ve clearly established responsibilities, accountability, and the metrics to measure performance.

Create positive momentum in your organization by promoting and publicizing actions and behaviors that model the changes you are looking for: bulletin boards, photos, contests, newsletters, and so on are all useful to engage and motivate performance.

Use the incentives and rewards lever to motivate individuals within your organization to act in ways that will further your business objectives. Incentives and rewards provide reward and recognition and bonuses, promotions, and compensation consistent with good performance. How do you really motivate and reward your people? It’s not just with money; there are other measures that drive behavior. If people are clear what’s going to be measured and what’s important to your company, they can focus on those things and behave accordingly.

As you move into final preparation and go-live, ensure that your leaders and managers fully understand your incentive programs and the goals they’re meant to achieve. You’ll also want to be certain to align any existing incentive programs with your new business processes. The last thing you need is an incentive to do things the old way! Review your incentive program during continuous improvement. Is the system now in place helping your organization reach its desired results? You’ll need to check your business metrics to make sure. If so, congratulations! If not, it’s time to reexamine and redefine the program.

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Hiring and Selection

Your hiring and selection activities (for example, retrain or hire; grow organically or acquire) should focus on a single goal: building project success by building the right team at the right time. Depending on your project’s scope and scale of impact, you may need to employ a variety of strategies to successfully transition and prepare your workforce. Are you bringing in the right people to complement the skill sets of individuals already in your organization? Together, will they be able to execute the new business processes and successfully operate the new systems you’re putting in place? Given your work with other levers through project preparation and blueprint, you should have a clear, current snapshot of your organization and its capabilities during the realization phase. You should also have a very clear picture of how the project could impact your organization. Use that picture to help you determine personnel shifts or transitions you’ll have to make to achieve your project and business goals. In the realization phase, you should make sure that your transition plan for new and existing employees has been developed. Your plan should anticipate how any transitions will change your organization and institute policies and procedures to set expectations and deal with changes. During design, you should also consider your “super user” strategy. For example, you may want to create super-user skill sets across the organization to reinforce and support the changes that are coming until they become sustained and adopted across the organization.

Many SAP customers successfully use “super user” programs to offer user support. Typically, such programs develop as an extension of the group, frequently called a “center of excellence” (CoE), that provides ongoing user and system support. This network of super users will often create itself naturally even if it is not formally managed or officially utilized. Any group will find its “go-to” people and make use of them on an informal basis. A formal, company-supported super-user program, on the other hand, allows the official project and support groups to leverage such “go-to” people or local experts as a mechanism for feedback and information flow. It also allows for recognition of their efforts, an important part of the incentives and rewards lever. A May 2006 survey of SAP customers found that the companies that had the most successful support organizations had a super-user program in place. These networks were organized either by business process or by functionality.

Most successful COEs have a Key/Power User program in place % of companies with Key/Power User programs in place 86% 62%

...but are aligned by business process rather than functionality by only a small margin % of companies aligned by business process

50%

57%

All companies

Levels 4 and 5

All companies

Levels 4 and 5

Figure 4: Super-User Programs in Successful Support Organizations

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In realization and final preparation, you’re looking for confirmation of any HR policies and practices that may be needed to support your business transition requirements. Will there be a reduction in workforce? Will you be transferring responsibilities to a different area of the company that could result in relocation? Will there be additional hiring or different skill-set requirements? Have any jobs been reclassified through organization design and structure? Does your current staff have the necessary skills and competencies? For any of these, you should ensure that you have all of your HR processes in place, either nationally, regionally or globally, as appropriate for your organization. When you complete your transition to go-live and move into the continuous improvement phase, you should have a clear business processes for developing, placing, or recruiting employees. With roles defined and personnel processes in place, you can support your organization when you need to add new skills and competencies. Whether you provide these skills through new hires or via transition work with existing employees, you’ll be supporting your business goals with the appropriate individuals.
Summary

3. Create incentives and rewards that focus the sales organization on implementing the new process. 4. Ensure strong leadership of your initiative, both from a sponsorship and day-to-day leadership perspective 5. Select individuals within the organization who have the skills to support the initiative, or hire individuals with these skills. (Or, you may choose to do both.) 6. Track the performance of your organization in implementing the new process, both from a user progress and development standpoint and a results standpoint. 7. Through appropriate governance and compliance, make sure that the right work is being done and measured. If your initiative is successful, your measures will show a shift in behavior as your sales organization integrates the new process into its daily work.

As you can see, there is a strong integration across all of the eight levers for change, enabling you to move smoothly from project preparation through blueprint, realization, final preparation, golive and support, and continuous improvement. As a result, much of the work you’re doing in each stream actually ends up being leveraged across many areas. Let’s look at an example. If your task were to introduce a new process to a sales organization, your activities might involve the following steps, though not necessarily in linear order: 1. Announce to everyone, through your leadership team, that the goal of the sales organization is to implement and integrate the new process and the technology that supports it. 2. Communicate requirements and expectations so that each individual will understand what you are trying to achieve.

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3. Organizational Change Management and the ASAP Methodology
In this section of the SAP OCM Toolkit, we’ll follow the “ASAP road map” as a way of organizing an OCM plan. As we look at each of its phases, we’ll discuss appropriate OCM practices and present tools you can use to help focus and direct your project. Even if you’re not following ASAP for your SAP implementation or upgrade, you’ll find it a good structure for organizing your OCM plan.
Business Drivers

In addition to the ASAP Roadmap, the SAP ASAP Focus approach for packaged solutions fits the time lines and budgets of mid-market companies choosing to implement their world-class mySAP ERP solution in 15 weeks or less. Leveraging best practices in both scenarios, all elements of the OCM Toolkit have been aligned with the standard SAP ASAP and Focus methodologies. Also for the purposes of this document, we’ll structure our presentation around a new SAP implementation. But the phases and the change activities within them will remain the same whether you’re just getting started with a new SAP implementation or beginning an upgrade.
Phase 1: Project Preparation

Corporate Strategies Lead Change ✦ Leadership and Sponsorship ✦ Competencies and Skills ✦ Organizational Design ✦ Governance and Compliance ✦ Performance Management Systems ✦ Incentives and Rewards ✦ Hiring and Selection ✦ Communication Campaign

✦ Change Leadership ✦ Business Readiness ✦ Training & Go Live Support
Improvement Focus

✦ Stakeholder Mgt. ✦ Organization Design ✦ Change Communications
People Process Technology

OCM Migrates Risk and Advances Success

Figure 5: The ASAP Methodology and OCM

Figure 5 summarizes what we discussed in Chapter 2. As you go through the ASAP phases, your OCM activities should “leverage the levers” to lead change, reduce risk, and help ensure a smooth transition to your new SAP solution. In this chapter we’ll present a series of common OCM practices that will help you accomplish your objectives. But don’t assume that there’s a discrete, self-contained set of OCM actions for each phase: there won’t be. The change management activities we present here may begin in one phase and extend well into the others. In fact, they will probably continue beyond the confines of your project. You’ll see some of the tools listed more than once, as they apply to more than one phase of the message. The ASAP methodology gives us a familiar foundation for describing what you’ll be doing, but don’t attempt to handcuff your activities to the phases themselves.
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Key activities are to organize program leaders, key stakeholders, and team resources around a clear success vision, program structure, and implementation plan, as follows: • Assess organizational change history and transition risks learned in prior implementations. • Define the program business case and customize for each major stakeholder audience. • Define a charter that empowers change leaders with authority needed to promote a common platform to source business staff and participation from other management. • Identify business factions critical to program success. • Develop a systematic organizational change strategy. • Define clear SAP team roles and project-team training plan. • Define a program governance process. • Prepare leader messaging and startup communications • Create an agreed way of collaborating with the sponsors who fund, authorize, and promote program actions. • Plan individual team activities and actions by implementation role. During Phase 1 of your change project, you’re going to be creating the foundation for everything that follows. It’s during this phase that you will determine your leadership teams, project strategy, and communications and governance processes. Pay close attention: while each phase of our model is critical, the work you do

during project preparation will have the most far-reaching consequences and the greatest effect on your project’s outcome.
OCM Practice:

OCM Practice:

Conduct a Business Risk Assessment

Develop and Communicate a Clear Business Case for Change

SAP OCM Toolkit A Business Case for Change Actions 1. Collect business case documentation produced to date. 2. Interview senior business leaders regarding strategic business context, business drivers, and the overall strategy for gaining a competitive advantage. 3. Identify significant business drivers behind the initiative and benefits expected from this change. 4. Document the business case by creating a clear rationale covering both technology and business perspectives and justifying the case for change. 5. Refine or expand the business case where needed to address relevance for each significant stakeholder group. 6. Create a standard story line articulating the business case for change. 7. Share the standard story line across senior leaders; adjust or refine the story line so that each leader is comfortable explaining it.

SAP OCM Toolkit The links below provide a series of models and tools for creating a business risk assessment. Conducting a Business Risk Assessment Conducting a Business Risk Assessment Interview Scoring Your Business Risk Assessment Interview Sample Business Risk Assessment Invitation Letter Your project implementers have likely already created a risk assessment for your overall SAP project. Your OCM business risk assessment, while similar, has a slightly different focus. Your business risk assessment process creates an understanding of the business challenges, obstacles, and complications (both real and imagined) your project faces based on the views of a representative cross-section of its stakeholders. As a first step, you’ll poll members of your senior management team to identify their issues and concerns. Then you’ll work with key personnel representing other business segments, such as process owners, site management, and deployment teams. You can use the information gathered in the business risk assessment as input to the leadership action plans (described under leadership and sponsorship) in an effort to build consensus about items that could delay integration across business teams and actions to mitigate these risks. Actions 1. Develop business risk assessment interview questions. 2. Identify interview participants who represent a cross-section of major stakeholders. 3. Interview senior management during the blueprint phase. (Remember that these efforts are not locked into individual phases; this is an example, and more follow below.)

Results: Clear Business Case for Change This practice produces the following: • A business case for transition that is explained in relevant and compelling terms for each significant business group • A strong, clearly defined platform for transition • A clear vision for success that is articulated and shared across the senior management ranks

For Further Reading A Sample Project Kickoff Announcement

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4. Analyze feedback and document findings and determine additional information to be gathered during the realization and final preparation phase. 5. Update your initial list of interview participants to include other business segments and roles (for example, process owners, site management, deployment teams) during the realization and final preparation project phase. 6. Conduct additional interviews. Analyze feedback, document findings, and provide risk mitigation recommendations. 7. Conduct follow-up interviews or focus groups as needed to manage complex implementation obstacles. 8. Conduct ongoing interviews at each implementation site (generally three to four months prior to that site’s go-live date). Analyze feedback, document site findings, and provide mitigation recommendations to the local deployment team.

time to create a viable strategy and identify real leaders. While corporate politics will always be a factor, try to involve those people who truly have the power and influence to really lead. A successful leadership strategy will do the following: • Identify the leadership team • Set expectations and identifies possible constraints • Establish agreement on leadership roles and processes to create a guiding coalition of leaders – a group of identified people who will be the top-level owners of the business change process. Actions 1. Review business case documentation. 2. Identify the leadership team members, critical sponsors, and informal leaders for your initiative who will lead and influence change. 3. Clarify leaders’ expectations. 4. Define decision-making roles and the level and type of participation. 5. Conduct individual work sessions to confirm agreement on leadership roles, decision-making process steps, and method to resolve implementation issues during the course of the project.

Results: Business Risk Assessment • You identify risks to business integration success at the outset of the project. • Early in the project, you can identify and manage challenges to project success. • You can put in place risk mitigation actions and manage them closely throughout the implementation.

For Further Reading Sample Risk Assessment Questionnaire Risk Workshop Objectives OCM Risk and Activities Guide
OCM Practice:

Develop and Execute a Leadership Strategy

Developing a Leadership Strategy Leadership Action Plans Without strong leadership your OCM project has little chance of success. It’s that simple. Make sure you take the
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Results: Leadership Strategy • Establishes a representative, motivated group of business and project leaders to help guide the project • Creates shared expectations and agreement on how executives, leaders, and sponsors will participate and fosters support for the initiative • Promotes timely decision making and problem solving to resolve significant implementation challenges • Creates shared ownership for the initiative • Initiates or reinforces relationships that provide an extended team and a feedback loop to the change team – initiating your “change network”

OCM Practice:

Establish a Steering Committee

For Further Reading Sponsorship and Leadership White Paper
OCM Practice:

SAP OCM Toolkit Sample Steering Committee Charter Once you have identified your key leaders and decided on your strategy, you’re should create a project steering committee and clearly and explicitly define its roles and responsibilities. Such formal definitions ensure that the roles and accountabilities of your leaders are valid, well defined, and understood across the organization. This steering committee will also be essential later in the project to help address and resolve organizational challenges and other implementation hurdles that are typical of any significant project. To be successful, your steering committee should include business leaders who have authority, credibility, and the respect of the people with your organization. They should be able to promote a shared sense of the direction of this project and reinforce the importance of other business leaders’ participation. Actions 1. Meet with business leaders to confirm the steering committee scope, purpose, roles, and assigned tasks. 2. Define the steering committee charter, which should include clear statements of your committee’s mission, roles, and vision of business success. 3. Confirm and validate the charter with the steering committee members. 4. Complete working sessions and workshops to confirm steering committee assignments and responsibilities. Results: Steering Committee • Establishes a guiding team of senior leadership for the project • Creates shared expectations and agreement on how senior leadership will participate and support the initiative • Promotes timely decision making and problem solving

Build and Execute a Project Governance Procedure

SAP OCM Toolkit Creating a Governance Strategy A project governance strategy gives you agreed-upon ways to operate within your project. With procedures clearly defined, business sponsors (for example, the steering committee, senior management business stakeholders, and others) and process owners who fund, authorize, and promote the project will be able to interact using accepted rules of order. The result will be a far fewer bumps in the project road than what might have occurred otherwise. As part of this procedure, you will define program team roles and operating processes and prepare information packets for major business stakeholders and groups to explain the roles and processes. Actions 1. Identify business leaders who are expected to play critical roles in achieving project launch success and accelerating the integration of new process and practices. 2. Develop a project governance charter that defines roles, scope, and authorities (steering committee, senior business management, process subject-matter experts, the SAP team, and site management). 3. Define critical decision-making process steps and roles. 4. Define critical decision-making scope to be assigned to each governance subteam (steering committee, senior business management, process subject-matter experts, the SAP team, and site management). 5. Create materials and tools to orient members of the governance team to their new roles.

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6. Reach agreement with all relevant stakeholders on their roles, assignments, and authorities. 7. Prepare information packets to introduce the project governance mandate across the business and core team. 8. Conduct a project governance kickoff (in person or virtually by phone or Web conference).

OCM Practice:

Develop a Change Communications Strategy

SAP OCM Toolkit Creating a Communications Strategy As we mentioned in the introduction to this chapter, just about everything in an OCM project depends on clear, effective communication. A key portion of your project preparation phase is to use the communications lever to develop a strategy for communicating with the people whose acceptance and commitment are critical to a successful launch. To gain their acceptance, you must explain to each individual what to expect from this project, what is expected of him or her, and what constitutes your vision of “success.” Actions 1. Develop a project branding strategy. Identify repeatable themes to use in messaging and awareness events to inform and engage business teams regarding project goals, the business case, implementation plans, and ways individuals and groups can promote project success. 2. Create templates for project outputs: text documents, presentations, Web pages, newsletters, and so forth. 3. Work with project leaders and senior management within the organization to craft key messages you can use to position your project clearly and positively. 4. Identify the stakeholder audiences for your initial change communications. 5. Develop a matrix that analyzes the combinations of business stakeholder groups, communication objectives, key messages, and potential delivery vehicles. 6. Develop a general strategy for delivering key messages across stakeholder groups. Deliver these messages in phases across the design and management phases (blueprint, realization, and final preparation). 7. Continue to communicate beyond go-live to reinforce successes and share new information.

Results: Project Governance By executing the project governance strategy, you accomplish the following: • Positions senior managers and process owners for active project involvement, early on • Defines clear responsibilities for project governance • Defines the scope for governance across the core team, business stakeholders, project sponsors, and business managers • Creates a vehicle that helps core team members, business stakeholders, and process owners make timely and consistent decisions and resolve issues quickly • Ensures that there are agreed ways of operating within the project and for collaborating with important decision makers across the organization (for example, the steering committee, senior managers, business process owners, and major stakeholders) • Clearly communicates agreed ways of operating within the project • Develops broader awareness and support for project startup and blueprint activities, which help mobilize and align the initiative with business management imperatives • Gives the steering committee a clear, defined role in managing organizational challenges and transition implications from the outset • Ensures that there is a steering committee in place with representatives from business, IT, and program management groups

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Results: Communications Strategy • Leads to consistent, visible communications encouraging project support across the business effectively and efficiently • Creates a general vision of communication targets and sets the stage for timely, consistent change communications to build understanding and encourage support • Creates key messages tailored to different stakeholders for the duration of the project and beyond • Positions leaders and key stakeholders to deliver critical messages to audiences systematically • Leverages existing channels and identifies business gaps

6. Analyze new business roles, skill requirements and staffing gaps. Use results to prepare a detailed curriculum plan, with learning objectives by audience and user role, and create lesson plans that equip users to be successful in the new work setting. In the business blueprint section, your SAP project leaders will be putting together the overall business blueprint, a detailed documentation of the results gathered during their requirements workshops. Your OCM tasks during blueprint will focus on identifying required user skills, organizational structure, and job roles, all with a view towards communications.
OCM Practice:

Devise and Execute a Tactical Communications Plan

For Further Reading Communications White Paper
Phase 2: Business Blueprint

SAP OCM Toolkit Sample Communications Plan Sample Detailed Communication Plan Sample Key Messages Tactical Communication Milestones and Road Map Part of your blueprint phase is to set up a tactical plan for communicating across your organization. Using the techniques you developed in your change communications strategy, you must now decide how to approach each of your intended audiences. Which messages should you apply to which audiences? What’s the timing of the messaging? How and when should you deliver these messages? You have many delivery options, from face-to-face interaction to written communications to multimedia. You must also take into consideration the needs of your audiences – for example, language or cultural differences – when selecting means of delivering information. The success with which you craft and present your messaging will in large part determine how people react to the change. Remember the old saying, “You only have one chance to make a first impression.” Poorly planned and delivered messaging can actually increase resistance to your project, so it’s critical to get it right the first time.
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Forge agreements among change leaders that specify priorities, decision-making roles, and individual actions that leaders can use to ensure success within their teams. Make sure they understand the business impacts of the SAP solution. Actions 1. Develop a matrix of key stakeholders across the organization. Plan for how significant business teams will be engaged throughout the implementation. 2. Conduct work sessions with business executives and project leaders that create a guiding coalition with a common focus about how to lead the SAP initiative. 3. Develop a tactical communications plan for implementing the strategy including key messages, vehicles, logistics and timing. 4. Understand business impacts of operating changes, new tools and process enhancements on work roles, skill requirements and team design. 5. Identify training curriculum requirements for highly impacted users and others in the critical user audience.

The purpose of the tactical communications plan is to equip leaders and key project members with the information, procedures, and tools they need to communicate high-priority messages clearly and consistently. This plan should leverage the existing communications infrastructure within your organization to promote systematic, managed business awareness throughout the project. If there is no formal infrastructure in place, you will need to develop channels to support these communication activities. As part of your business blueprint, make sure to precisely identify your key messages, who needs to hear them, and how you’re going to deliver them. And don’t skimp on the last part – if you don’t already have good communication channels in your organization, you will need to develop them. During the realization phase you’ll start communicating this information through a formal project kickoff. This will allow the corporate vision to be shared and subsequently developed into goals that drive plans for successful execution. Actions 1. Identify project leaders and senior managers who are expected to play critical roles in promoting project awareness and encouraging support. 2. Prepare information packets to inform and involve significant stakeholder groups and deliver them via project kickoff communications. 3. Create and distribute a project communications toolkit to management. 4. Validate project messages with the steering committee and other business leaders. 5. Develop tactical plans for communicating project communications and updates. 6. Tailor general project messages and media to specific internal and external audiences, requirements, and information expectations.

7. Refine the communications strategy analysis to specify targeted events, communication media, feedback channels, and timing across each major audience. 8. Develop a vehicle for stakeholder feedback. Your change network – those leaders and stakeholders that act as an extension to your team – is very valuable in this process. 9. If appropriate, work with your organization’s business communications team to distribute startup communications in accordance with business protocols and the preliminary change communications strategy. 10. Refine communication templates that can be easily modified and updated as the project progresses.

Results: Tactical Communications Plan • Institutes a plan for timely, consistent delivery of communications using the best channels and messages for each significant stakeholder audience • Provides a road map and the infrastructure needed to maintain systematic communications throughout the initiative • Helps business leaders and stakeholders understand clearly who must perform specific communication roles, both within deployment teams and across your larger organization • Creates two-way feedback channels to help identify and resolve critical issues early • Establishes a foundation for ongoing communications For Further Reading Creating a Tactical Communications Plan

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OCM Practice:

Build a Stakeholder Realization Campaign Plan

SAP OCM Toolkit Building a Stakeholder Realization Plan The stakeholder realization campaign plan enables you to be proactive about engaging significant business stakeholders throughout the implementation. Your plan helps avoid sporadic and haphazard communications and gives you greater opportunity to manage resistance. Actions 1. Determine the flow of business events, communications, and local actions required to engage the people who can affect project success. 2. Plan how significant business stakeholder groups will be engaged throughout the project. 3. Define the interaction needed by each stakeholder group (from SAP project leaders to business management to impacted employees). 4. Update and refine the plan by site at regular intervals (typically a minimum of three to four times throughout your project)

For Further Reading OCM White Paper Sample OCM Plan Team Management White Paper Facilitation Guidelines
OCM Practice:

Create a Work-Impact Analysis

SAP OCM Toolkit Work-Impact Process The work-impact analysis helps you understand the impact of introducing new technology and business processes on work roles, skill requirements, and team design. This analysis defines the new and changing work practices, roles, responsibilities and accountabilities your project will require. In addition, it identifies major gaps or misalignments in existing business teams or work practices. The findings will also help identify skill and competency gaps at both the job and work-group level and pass them to the people developing training. Actions 1. Interview core team leads and process subject-matter experts to identify the impact of your project on existing work practices, roles, and organizational structures. 2. Define new and changed work practices, roles, and responsibilities. 3. Define major gaps or misalignments in existing business teams or practices, including: • Identifying new work required • Identifying skill and competency required at the job level • Analyzing skill gaps of your existing talent base compared to new work requirements 4. Integrate work-impact findings into training and business transition recommendations. 5. Document findings and determine additional information to be gathered.

Results: Stakeholder Realization Campaign Plan • Reinforces your individual leadership action plans • Establishes a guiding cross-section of IT, project, and business leaders to deliver change communications • Generates business participation, acceptance, and bestcase commitment through targeted involvement activities, messaging, and business awareness events • Minimizes business resistance throughout the project

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6. Interview business stakeholders at launch sites and business functions to confirm work-impact findings and identify any local impacts specific to each respective deployment site. 7. Share evaluation results with the project office and incorporate into leadership action plans.

Are You Handling Training, Too?

Results: Work-Impact Analysis • Helps business and project leaders clearly understand the specific training required to fulfill new organization roles and work practices • Aligns business teams and infrastructure more quickly with the new way of operating • Staff effectiveness is accelerated in the new setting by transition aids targeted to specific needs and gaps • New skill requirements are addressed in a systematic transition plan

It’s not uncommon for the same people to handle change management and training. If that’s the case for you, make sure to consider these activities: • Define training curriculum requirements for highly impacted users and others in the critical user audience. • Use business process profiles and other process documents to design training content, and create work aids to shorten staff time in performing effectively in the new setting. • Create a tactical training plan defining delivery vehicles, core curriculum, timing, execution logistics, and training evaluation plan. • Develop a site-specific training plan to jump-start success at each major location or business unit. • Deliver training in a cost- and time-efficient manner, while maximizing access across multiple audiences and opportunity to practice new skill sets before go-live.
OCM Practice:

For Further Reading Organizational Optimization White Paper Risk and Impact Assessment and OCM White Paper

How Will We Need to Organize? Organizational Design and Structure

SAP OCM Toolkit Work-Impact Process The work-impact analysis you did for skills and competencies also helps you to understand the impact of introducing new technology and business processes on work roles and team design. Your analysis will help you define the new and changing work practices, roles, and team structures your project will require. With the findings of the work-impact analysis, you will have a clear understanding of the impact of your project on your organizational structures and operating practices, which you can address in your business transition planning.

Phase 3: Realization
Actions

Equip business staff to be successful in new roles, from day one. 1. Reinforce understanding of the program business case across employees, managers, and other stakeholders (alliance partners, customers, vendors). 2. Create a business transition strategy to support highly impacted teams across multiple business audiences. 3. Build site communications and transition aids to address common transition requirements.

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Your analysis here is actually an extension of the work-impact analysis we discussed during the business blueprint phase. It may be useful to address all requirements simultaneously. Actions 1. Interview core team leads and process subject-matter experts to identify the impact of your project on existing work practices, roles, and organizational structures. 2. Define new and changed roles and organizational structures. 3. Define major gaps or misalignments in existing business teams or practices and identify how those gaps will affect your current staffing. 4. Recommend changes to existing organizational structures and work practices to support the new way of operating. 5. Integrate work-impact findings into training and business transition recommendations. 6. Document findings and determine additional information to be gathered. 7. Interview business stakeholders at launch sites and business functions to confirm work-impact findings and to identify any local impacts specific to each deployment site. 8. Share evaluation results with the project office and incorporate into the leadership action plans.

• Accelerates staff effectiveness in the new setting with transition aids targeted to specific needs and gaps • Addresses new organizational roles in a systematic transition plan

For Further Reading Organizational Optimization White Paper Risk and Impact Assessment and OCM White Paper
OCM Practice:

Complete Role Descriptions

Before you move into the final preparation phase, you will need a complete cataloguing of the various roles that will be necessary to operate, manage, and support your SAP solution. This information will serve as input to the final preparation phase as you determine your hiring and selection needs. Your OCM team, HR department, or a combination of both may complete your role or job descriptions. Combined with the findings of the work-impact analysis, these descriptions will give you a clear picture of the role changes you’ve established and enable you to clearly document expectations and accountabilities. There is no specific tool for this practice, but you may wish to follow the steps below: Actions 1. Gather all existing job information: job descriptions and related documents. 2. Complete the work-impact analysis and identify changes to roles. 3. Gather process metrics from the process teams and define appropriate metrics by role. 4. Document the changes to roles and metrics into role descriptions.
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Results: Organizational Design and Structure • Gives you an understanding of the project’s impact on existing organizational structures and operating practices, and provides the opportunity to integrate these factors into your overall business transition preparations • Gives business and project leaders a clear understanding of the specific training and staffing required to fulfill new organizational roles and work practices • Aligns business teams and infrastructure more quickly with the new way of operating

5. Communicate these changes to management and develop a plan for communicating these changes to users. 6. Communicate these changes to the training team so that the work practices can be reinforced during training.

Phase 4: Final Preparation

Results • Sets and documents clear expectations for each role • Outlines metrics for each role • Addresses new organization roles are addressed in a systematic transition plan.

Sample Role-Mapping Steps 1. Define roles based on business process. 2. Map current positions to roles. – Map training courses and roles. – Validate courses and local training schedule. 3. Identify gaps between current positions and roles. 4. Capture questions and discussion points from gap analysis. – Resolve with project and execution teams, or – Escalate to steering committee, and if necessary the senior management committee – Update role template and document exceptions – Communicate changes to training 5. Assess and document impacts of activity and role changes. 6. Communicate changes to employees prior to training, including. – New activities to be performed post-go-live – Current activities no longer performed post-go-live – Current activities that will continue to be performed

Actions Create a clear strategy to transition staff to the new setting in smoothly and seamlessly. 1. Prepare senior leadership to drive business change across their direct reports and management ranks. 2. Prepare local leadership to drive change within their teams. 3. Define a clear transition strategy to address universal and local implementation challenges (addressing procedure changes, training needs, organizational redesign, and new performance expectations). 4. Build specific transition plans for each major user group to accelerate full performance in the new setting. (Local teams should have a clear understanding of what changes to expect and how to get help for successful migration to the new setting.) 5. Adapt HR and other business programs to reinforce desired new behaviors and work methods, improving business integration and staff ability to achieve high performance sooner rather than later.
OCM Practice:

OCM Practice: Business Readiness Planning

SAP OCM Toolkit Sample Business Readiness Plan Business Readiness Survey As you prepare to go live at last, make sure your organization is ready to make the leap. Even though you’ve been preparing for this moment for quite some time, there are still some actions you can take to minimize disruption – particularly among those employees who are more likely to be disrupted by the change. Actions 1. Identify the headquarters and local leaders who are expected to play critical roles in achieving program success.

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2. Define a systematic transition strategy for guiding employees and managers during the transition. 3. Document the HR implications for transitioning staff to new roles and work practices in the new setting. 4. Document the implications for each employee group that will make a transition. 5. Create a detailed transition strategy for staff in highly impacted work roles. 6. Integrate new work roles into existing work teams and job assignments and outline specific steps to transition staff into them. 7. Assess the extent of the impact on and needs of displaced employees. 8. Guide managers to prepare individual staff transition plans for their teams. 9. Lead sessions with local managers to prepare them to conduct one-on-one action planning with their people. 10. Produce specific tools and aids to prepare local managers to drive the transition of their teams. 11. Coordinate and monitor staff transition to new roles.

• Encourages constructive conversations between supervisors and their employees, leading to agreed-upon actions to promote a smooth implementation • Helps staff focus on adapting to the new setting effectively and efficiently • Minimizes dysfunctional behavior

OCM Practice:

Do We Have the Right People?

SAP OCM Toolkit Recruiting and Staffing Sample Recruiting and Staffing Plan As we get ready to go live, it’s time to take a good look at your people. First of all, do you have the right people? From the skill inventories and analyses of job roles you’ve compiled earlier, you should have a good idea by now of the skills your current employees have and the roles you need to fill. Now it’s time to match them. During final preparation, it’s wise to create personnel strategies that will help build your organization or team with the right skills and competencies at the right time. For example, does it make more sense to retrain or hire? You should also make sure that your transition plan for new and existing employees is in place. Your plan should anticipate how any transitions will change your organization and establish policies and procedures to set expectations and deal with changes.

Results: Business Readiness Planning • Promotes a smooth transition through clear, consistent communication from leaders across their teams • Minimizes the risk of business disruption and accelerates realization of benefits from new work and process enhancements • Factors people preparation into project plans, timelines, and resource requirements • Institutes a clear strategy for managing staff transition • Focuses transition resources and effort where the impact is greatest • Enables significant challenges to be handled early • Minimizes risks to business continuity because employee transition is well planned • Ensures timely, fact-based employee communication that addresses relevant local issues • Focuses local resources and effort where payoff is greatest

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OCM Practice:

Incentives and Rewards

SAP OCM Toolkit Total Rewards In truth, it often takes more than just good communication to get people excited about change. Sometimes they need a little extra motivation, and it’s a wise planner who recognizes that need and leverages it. Incentives take many forms, and they’re not always financial. Recognition can be almost anything: public kudos, small gift certificates, company logo clothing, whatever works. The important thing is to avoid taking employee performance for granted, despite the work you’ve done to achieve it. It’s easy to say that people know what their jobs demand and ought to perform as expected. Human nature, however, proves that adequate training and a good job description aren’t always enough. To illustrate, let’s remember the hugely salaried professional athletes who still demand an “incentive clause” in their contracts.
Phase 5: Go-Live and Support

5. Analyze impacts of new operating practice and roles on existing performance management and rewards systems. Recommend adjustments to accelerate integration of enhanced tools and processes to meet new performance expectations. 6. Update individual development plans for highly impacted staff.
Engaged Leaders and Stakeholders

When you move into the go-live phase of your project, your corporate leaders should be visibly and proactively displaying the behaviors outlined during planning. Their objectives should be quite clear at this point, and they should be out there meeting with stakeholders and listening to their questions. Such activities as live “fireside chats” or “lunch and learn” sessions can go a long way toward building trust with the employees. Even more important than listening to concerns, however, is acting on them. By now you should have a governance policy (see the “Governance and Compliance” section above) with clear procedures for acting on issues. Make sure you carry them out and report back to the employees who raised them. Nothing will quash positive attitudes faster than perceived insincerity on the part of management. Make sure your leadership has high-profile visibility as you move into go-live. Having them publicly express congratulations and enthusiasm – and awarding those nonmonetary incentives – will help build a sense of ownership for your new solution. No one wants to be left out of the team; it’s up to your leadership to reinforce the perception that there indeed is a team. The hubbub of go-live will disappear soon enough, and after awhile use of the new tools and procedures will become routine. While leaders may not exercise as much of a cheerleader function during the support phase, they will still be actively involved. It will be up to the leadership team to examine both financial and procedural results and visibly advocate any further changes necessary.

Actions Stabilize operations and introduce mechanisms for continuous improvement. 1. Celebrate launch success. 2. Survey business leadership regarding launch success. Collect suggestions for what worked and what didn’t. Provide recommendations to reinforce use of new procedures and tools across the business. 3. Update business-case KPIs and measure progress to achieve value realization of benefits expected. 4. Track user performance to date; validate adoption of new work methods, operating practices, and acquisition of new skills.

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OCM Practice:

Phase 6: Continuous Improvement

Celebrate Go-Live!

By the time you’re ready for final preparation and go-live, your workforce now understands the reasons for the change, knows its part in it, and is ready to embrace it. Nevertheless, there’s still a good deal left to do. Many companies will celebrate go-live, and no wonder: it’s frequently the culmination of a major project involving many people. But holding a celebration is also good change management, because it informs any employee who still “doesn’t get it” that everyone else is invested in the SAP solution and considers its readiness a major milestone. Whether you provide “SAP Go-Live” t-shirts to the troops, order pizza for the whole staff, or send congratulatory messages, making a fuss helps. As you go live, your incentive and reward lever can provide a major strategic advantage. Here’s the time when you can add a little competition, fun – and enthusiasm – to your rollout. It may sound silly –- your colleagues may not seem like the type to get motivated by contests and prizes – but if you’ve ever seen people react at trade shows, you know that such things can be powerful motivators. Create a contest to see which department shows the fewest user errors in the month after rollout; track the errors with your performance monitoring tool and give the winning department a handsome reward. Check with your HR department about cash rewards. Better still, find out if an individual’s proficiency with the new software can be built into his or her performance objectives. For example, the objective might be to reduce error rates by 5%. If you have a user-performance management system in place, you can check. As time goes on and user performance improves, such things may be less necessary. But it’s never a bad idea to build positive associations with your SAP solution.

Actions Define performance management metrics, monitor user performance, identify areas for user and process improvement.
OCM Practice:

How Are They Doing? The Performance Management Lever

SAP OCM Toolkit Team Management Fundamentals Sample Performance Management Checklist Sample Success Metrics Once you’ve “thrown the switch” and gone live, your users should already have the skills and understanding they need to carry out their daily operations. However, there are a few things to consider once you’re up and running. The first is to remember that user competence is not a fixed state. No matter how successfully your initial training has gone, a combination of employee turnover, “pass-the-baton” training, and employee bad habits can leave an organization with seriously depleted skills in only a few years, especially if those skills aren’t reinforced. For example, at the ASUG Annual Conference in 2004, a large national media company revealed that neither its documentation nor user competence had been addressed since its initial SAP implementation in 1998, despite regular upgrades. As you might guess, the company’s return on investment had suffered. Only with a concentrated effort to ensure the ongoing competence and confidence of their users did results begin to improve. Indeed, as a 2006 report from IDC indicates, “Training on complex systems is a never-ending cycle. There are always new processes, new employees, and new locations that must be brought up to speed or brought online, and no group can be left out.”3

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As we mentioned in Chapter 2, employee skills can deteriorate quickly. In fact, if your training period occurred too early before go-live (a more common situation that we’d like to see), your end users may have lost a good deal of what they learned before they touch a live system. If that’s the case, your go-live will be met with large-scale frustration. To prevent such disasters from occurring, try to make sure your users have “fingertip knowledge” available in the form of easily accessible print or online documentation. Online, context-sensitive help will be particularly useful here. Be sure to analyze exactly how and what your users are doing during the management phase. Tools such as Knoa User Performance Management for SAP are useful during this period. Find out where your users are having problems and provide them with performance support to address those problems. Not only will this keep your users working more efficiently, it will also save your company a small fortune. For example, a 2006 IDC study at a large consumer company estimated that each help-desk call took employees away from their tasks by an average of eight minutes. Multiply those eight minutes by the number of workers calling the help desk and the costs of maintaining the help-desk staff, and you have an idea of how much money can be saved by even a fractional reduction of these calls. While we’re on the subject of help-desk calls – make sure your management checks the help-desk log on a regular basis. That’s often a good source of information about where user “push-back” might be occurring and additional OCM activities are necessary.
OCM Practice:

processes, then blithely ignores them. From go-live onward, you should consider monitoring your new processes to make sure the company is executing them faithfully and correctly. Certainly in this day of strict government compliance laws such as the Sarbanes-Oxley Act, doing so becomes critical. Your communications and leadership levers become particularly important tools here. Make sure your leadership regularly reinforces your employees’ understanding, not only of the processes themselves, but of the consequences of not following them. As you monitor your processes, look for potential improvements in them. A process that works poorly or imperfectly will create bottlenecks and frustration and retard acceptance of your new solution.
OCM Practice:

Refining Organizational Design and Structure

Once your solution has gone live, most of your organizationalal design and structure work will have been completed. However, it’s not completely out of the way. As you continue with day-to-day operations, you’ll be regularly checking whether your change management team is executing the tasks they’ve been assigned and that the appropriate handoffs are taking place among the team members. Just as you monitored and refined employee processes as part of the governance and compliance lever, you’ll also regularly refine change-team processes to make sure your team can execute effectively. In addition, you’ll want to verify that the organizational structures and support systems you put in place are keeping the process moving efficiently.

Reinforcing Processes

We’re probably all too familiar with this situation: the organization goes to great lengths to create and document new

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OCM Practice:

Hiring and Selection During Continuous Improvement

Employee turnover is a constant reality in any business. Even if you have fully staffed any new roles after go-live, you’ll need to replace some of them at some point. You may also determine that some people just aren’t getting the job done and need to be transferred or replaced. Or you may note that patterns of usage suggest that new positions be created. A good part of change management is to always be on the alert for talent. Let your line managers know of the needs you have, even for unofficial roles – they’ll help you identify the right people. Use your user-performance monitoring software to help you determine top performers who may be able to move into some of those roles. Examine the results of your communications effort and identify natural change leaders among your employees.
OCM Practice:

stretch across multiple sites, and each site may have OCM issues of its own. Once the big picture is under control, take some time to look at each site individually and see if and where you need to communicate additional information. Remember that like user skills, user acceptance can be fleeting. If there are glitches with any part of your system, you’ll need good OCM communications to reassure your users. It’s good policy to ensure regular communications to the field after the project goes live – providing a source of announcements, helpful hints, notification of policy or process changes, and so forth can keep your user communities engaged and involved. The continuous improvement phase also gives you the opportunity to reinforce the goodwill towards your SAP implementation that you created earlier in the ASAP process. For example, this is an excellent time to remind people why the company implemented SAP solutions in the first place, and how the implementation is beginning to pay dividends. You might also want to take this opportunity to communicate lessons learned and celebrate a successful end to the overall project. We mentioned feedback earlier in this toolkit. Once you reach the continuous improvement phase, remember that even though your project may be officially complete, organizational change management is an ongoing process. Take advantage of the continuous improvement phase to capture feedback from your users – where did your OCM plan succeed? Where could it have done better? Where did it successfully create anticipated attitudes and behaviors and where did it fail? If you can create a safe (that is, anonymous) vehicle to collect stakeholders’ opinions and evaluations of your project, by all means do so. You’ll undoubtedly be traveling down the OCM path again. The more accurate your feedback is now, the better the process will be in the future.

Communications During Continuous Improvement

SAP OCM Toolkit Lessons-Learned Guidelines Many SAP projects involve multiple implementations – perhaps at different plants or in different departments. If your project is first to reach go-live, be prepared to be peppered with requests for advice, reaction, and opinions. Remember that your answers become part of the communications process for the other parts of the project, and that by default, you’ve become one of their change leaders – so make sure your answers are consistent with your communications plans. You’ll also want to communicate proactively with the people on other parts of the project: make sure you let them know the process improvements you’ve discovered and lessons you’ve learned. Once you’ve reached go-live, you might want to pay particular attention to local communications. Your SAP implementation may

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Appendix: Links to OCM Tools
Phase 1: Project Preparation
SAP OCM Toolkit

A Business Case for Change Conducting a Business Risk Assessment Conducting a Business Risk Assessment Interview Scoring Your Business Risk Assessment Interview Sample Business Risk Assessment Invitation Letter Developing a Leadership Strategy Sample Steering Committee Charter Creating a Governance Strategy Creating a Communications Strategy OCM Change Charter White Paper OCM Risk Assessment White Paper Stakeholder Analysis White Paper Risk Impact Assessment and OCM Plan White Paper For Further Reading A Sample Project Kickoff Announcement Sample Risk Assessment Questionnaire Risk Workshop Objectives OCM Risk and Activities Guide Sponsorship and Leadership White Paper Communications White Paper
Phase 2: Business Blueprint
SAP OCM Toolkit

For Further Reading Creating a Tactical Communications Plan OCM White Paper Sample OCM Plan Team Management White Paper Facilitation Guidelines
Phase 3: Realization
SAP OCM Toolkit

Work-Impact Process Business Readiness Plan Recruiting and Staffing Plan Impact Mapping and Transition Plan For Further Reading Organizational Optimization White Paper
Phase 4: Final Preparation
SAP OCM Toolkit

Business OCM Readiness Survey Recruiting and Staffing Total Rewards
Phases 5 and 6: Go-Live, Support, and Continuous Improvement
SAP OCM Toolkit

Sample Communications Plan Sample Detailed Communication Plan Sample “Key Messages” Tactical Communication Milestones and Road Map Building a Stakeholder Realization Plan Stakeholder Mobilization Plan Leadership Action Plan

Team Management Fundamentals Sample Performance Management Checklist Sample Success Metrics Learning From Your Project

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