Finance & ERP Systems - A Strategy for cost-effective Project Success

Finance and ERP Systems: Cost Effective Project Success

Time and time again, we talk with clients who tell us about their prior, disappointing experiences when implementing or upgrading their finance systems. We hear how the promised solution never really lived up to expectations or delivered the savings / efficiency improvement / reporting capabilities they had been promised at the beginning of the project.
There are many reasons why projects may have been less than 100% successful, but in our experience the issues summarised below represent the most common reasons why projects do not deliver:
• Wrong resources deployed to the project
• Project goals not clearly defined (unclear outcome requirements)
• Project goals insufficiently specific (resulting in ‘scope creep’, budgetary overruns etc)
• Requirements not communicated clearly to suppliers and 3rd parties

Project success is almost always assured if you have a clear project structure, work with a proven project methodology and utilise the best available blend of knowledge & skills:

Project Structure
From the project sponsor through to the most junior business user, it is critical to the success of your project that it is structured correctly. Every individual in the team needs to clearly understand their role and be able to correctly identify the roles of others. The project structure provides the framework of reporting lines and responsibilities, and facilitates efficient and appropriate communication channels for escalation of issues up to management and the cascade of decisions back to the team. Identifying the right individuals for the senior roles and ensuring their commitment to the project is key – buy-in must be seen to come from the top of your organisation.

Methodology
Aside from the human resource, the use of a proven methodology is the most important factor in determining the successful completion of a project. Which methodology is employed is far less important – all the recognised approaches share common themes which shape the achievement of project aims: it provides a simple checklist that every member of the project team should have regular visibility of and can clearly understand.
It sets out activities, responsibilities, deadlines and dependencies. It provides the tools and documents ensure goals are clearly understood, issues documented and addressed and risks understood, quantified and – where possible – mitigated.

The Quality & Experience of the Project Team
Our experience leads us to believe that the quality and blend of project resources is the third essential factor to delivering success projects. The business knowledge of the internal project resources, the skill & intellectual capability of a software vendor / consultancy and the specialist, independent, skills injected from the contract market should be combined to make for a stable project where no particular party exerts undue influence over the direction of the project.

THE BALANCE OF THE PROJECT TEAM

Business Engagement
Our experience suggests that at least half the team should comprise of business resources – any less than this and it can be incredibly challenging to instil a ‘sense of ownership’. Smaller contribution from business resources should only be considered in extreme circumstances, where the requisite skills and experiences do not exist within the organisation. Business user input is essential to ensuring accurate definition of business needs – you cannot assume that your software vendor will deliver what is best for you.

Without your clear direction as to your specific business requirements, you may end up with your business processes being reconfigured on your behalf, to meet the most profitable installation of the systems for the software vendor. Continuing and accountable engagement by the business is critical to implementing a satisfactory solution.

Software Vendor’ Consultancy Resources
The software vendor’s resources should always be engaged: This encourages proper use of the selected system, ensuring that process changes are proposed (where appropriate), to leverage the full the full capability of the target systems and ensure maximum operational efficiency is achieved.

Engagement with the software vendor throughout the life of the project also facilitates interaction with the vendor’s back office & post-implementation support personnel, ensuring that appropriate relationships are in place and effective when the project has ended and target systems are in live operational use.

Specialist Independent Resources
Specialist contractors are independent and - if selected correctly - represent the best of both the business and consultancy worlds combined. They should offer more experience than the software vendor’s technical consultants or the internal business resources can offer, with highly specialised skills. They are able to leverage the experience and intellectual capital gained from having previously worked on many projects similar to your own, and will bring lessons learned from past experiences which should help you to avoid repeating the same mistakes. Software vendor resources may be more hesitant to share details of past lessons learned, which may have been avoidable if managed differently by their own personnel.

Clients are now more sensitive to the downfalls of handing complete responsibility over to the software vendor and recognise that there are considerable cost savings, checks and balances to be achieved through the engagement of independent contractors. This is especially true of the Programme / Project Management (PM) role: In addition to overall delivery responsibility, the mandate of an interim PM should also extend to protecting the clients’ interests at all times.

A carefully selected PM should bring a vast wealth of knowledge and experience in project methodology & governance. This, combined with appropriate sector & process specific expertise, should enable them to provide objective guidance in the creation of 3rd party commercial frameworks and to maintain a practical and impartial check on vendor deliverables, ensuring that your business objectives remain the top priority.

Experience
In many cases consulting firms and software vendors struggle to provide consultants with as much experience as an accurately appointed contractor. Professional contractors stand or fall by their own abilities, skills and track records. As a result, they will typically go ‘the extra mile’: In a niche skills market, you are only as good as your last contract!

They are often vastly more experienced than the vendor, and can infuse specialist skills into the project that the business may lack, or cannot access. Being independent they can bring insightful and objective advice, for example, in areas such as best practice configuration and process design.

Value for Money
Contract rates are subject to an open and transparent market place where supply & demand dynamics influence market rates almost constantly, thanks to the growth and volume of internet job boards, and the more recent development of ‘professional’ social networking sites.
Charge rates for specialist contractors usually compare extremely favourably to software house or consultancy charges, principally because you are just buying skills, not bundled services & products.

It is also important to understand the substantial pay differential between a contractor and a consultant from a software vendor. On average, a contractor’s actual gross stake in their overall day rate can be up to 80% to 90% of charge (100% if sourced directly rather than via an agency). In contrast, the consultant will typically receive less than 50% of their charge-out rate.

Experienced and skilled contractors will have learned their business through many years of work in both industry and in a consulting environment, and may have longer periods of inactivity between client projects; as such they can justify the rates they personally command. Software houses and consulting firms, however, frequently need to use consultants that are not fully qualified or perhaps even inexperienced, simply because they have new recruits or trainees. This may increase the risk to you as new recruits are trained on your project.

Furthermore there is often little benefit to the project in the form of cost reduction, as vendors and consultancies tend to have higher operating costs, which dictate their fee structures. In most cases these consultants provided by the software vendor will be charged out at rates that far exceed those of more experienced contractors. Of course in the business systems world, new technology dictates that there will be an element of learning on every project, but the risk can be mitigated by the use of contractors in those roles that require real-life process, functional and commercial experience.

The case has been made for contractors, so…Why Paternoster Consulting?

- We focus on providing ERP & Finance Systems expertise - from simple expense management solutions to full-blown ERP deployments.
- The scale & scope of our engagements has ranged from the provision of a single Finance Process Maturity consultant through to the mobilisation of much larger programme teams to deliver Finance Transformation for FTSE100 organisations, including international assignments leading multi-disciplinary teams across disparate sites.
- We maintain strong relationships with a range of software vendors, and are frequently able to identify and request the involvement of their most experienced personnel on your behalf.
- We are Members of the Institute of Consulting, and adhere fully to the standards of conduct, competence and practice set out in the Institute’s Professional Code of Conduct .
- We are Certified Prince 2 Practitioners, and hold ‘SC’ level security clearances for work on sensitive / Government projects.
- We have impeccable references in respect of our work and are frequently engaged on multiple occasions by our clients.

SERVING YOUR NEEDS
For Programme Management, Project Management, Business Process Improvement or detailed Business Analysis, in a range of industries (with specialist expertise in Financial Services), if you require independent, reliable expertise on any activity or change that touches your Finance Department, call us today. We can assist you with:

PROJECT / PROGRAMME MANAGEMENT
• Business case delivery & benefits realisation plans
• Scoping programme plans, programme structures, deliverables, milestones
• Achieving stakeholder engagement & driving communications
• Offering systems evaluation, selection & procurement advisory
• Shaping ‘best value’ engagements with software vendor consulting partners & management of 3rd parties
• Establishing sound programme governance structures & project methodologies
• Mobilising both the programme team & management, from Initiation to Delivery

PMO
• Implementation of project standards for reporting, planning, change control, configuration management, risk & issue management
• Development and management of Programme/Project Plans & CPA – Critical Path Analysis
• Prioritisation of risks, issues, and appropriate escalation
• Steering committee reports / presentations
• Budget and progress tracking
• Administration of resource mobilisation, time-recording, and wind-down management.

BUSINESS ANALYSIS
• Bringing an inquisitive mind, superb communications, and a logical methodical approach
• Analysing and interpreting your existing processes, systems and ways of doing things, with a ‘fresh pair of eyes’.
• Interviewing users and leading workshops to understand clearly how financial processes and workflows are established across your business.
• Documentation of your ‘as-is’ environment and developing this to input key detail in to the design of your new, improved and standardised processes and systems.
• Blending extensive practical / functional / operational experience of a process domain such as R2R, P2P or O2C, with a detailed understanding of the configuration of specific applications.
• Acting as Change Ambassadors, engaging your employees at all levels, playing a critical role in ensuring your staff embrace change.

Don’t repeat the mistakes of others; let us lead your project to success!

CALL US TODAY:
London 0207 643 2708
Cardiff 02920 732246

www.paternosterconsulting.com

4
  
Mark Stock
02.05.2012