3 ways to check the organizational readiness for an ERP implementation

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When is your organization ready for an SAP implementation or project? Will the organization ever be ready before the go-live?

SAP projects are business transformation initiatives. Hence, checking organizational readiness is key. If not done properly, the project, and even your business, can seriously be jeopardized.

One thing you definitely should not do when evaluating organizational readiness is rely solely on senior management feedback. Be aware that their vision and agenda can be biased. Drive and ambition to improve the current way of working is necessary but not sufficient to ensure that the organization is ready to change and improve.

Here are 3 checks you can do to evaluate organizational readiness.

1. Fragmentation of roles and responsibilities

Lack of functional specialization and blurred roles and responsibilities highly increase the risk for project failure. Needing to change processes that involve a lot of people with low ownership due to fragmentation of responsibilities is labor intensive and risky from a change management point of view.

Make a diagram of (1) all the processes that are in scope and (2) the persons involved. If you observe that individuals are combining many roles/processes and the same role/process is being executed by many persons, there is a high organizational readiness risk.

How many persons are creating purchase orders? Is order entry also maintaining commercial agreements, updating customer master data, handling credit notes and doing other stuff?

Pro tip! You can use this template (9teams_process_overview) to get up to speed! The template links to the following (Process_Flows) process diagram.

Before going live with the project, actions should be defined and implemented to reduce the fragmentation of roles and responsibilities. Review the impact of the changes being implemented during the preparation of the project.

2. Lack of centralization of master data processes

SAP relies on accurate master data. Evaluate how the current organization is handling master data creation and maintenance processes.

  • How many persons are involved in the process?
  • To what extent is the process formalized and documented?
  • What is the gap between the documented and actual process?

The way how organizations handle master data related processes have a big impact on organizational readiness and related risk. Take that into account as you plan your initiatives.

3. Stock accuracy

Stock accuracy is a very good indicator for the level of organizational discipline, a key requirement when implementing SAP.

Conduct a couple of detailed inventory checks to review stock accuracy. Ask the organization to prepare and implement an action plan to increase stock accuracy, if required. Plan to conduct regular reviews that evaluate progress against the action plan.

Sure, a lot of other checks can be done to evaluate organizational readiness. However, with these checks, you don’t only have a solid base to do the review, you also have a valuable starting point to improve organizational readiness. This allows you to significantly reduce risks at the moment of go-live.

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