Making sure key business processes and technologies are aligned to an organization’s strategic directions is almost a pre-requisite for survival these days. When upgrading those core services, a cloud solution is often in the mix. But a move to the cloud can be a risky and disruptive experience.
In this case, we’ll see how a CFO and her Controller managed a transition to a cloud solution to transform the business and supporting operations. The project was a resounding success on all fronts. How did they achieve that result? With the help of some tried and true best practices.
Thanks to D.M. for the insights on this story.
This medium size international consulting organization had outgrown its key back office processes and technologies. The ERP/financial application was out of support and upgrading to current levels was problematic. The CRM software was not well integrated with other systems and was little used. In addition, there were many manual processes, reporting and analysis capabilities were severely limited and business needs had outgrown the existing functionality.
The CFO was frustrated by the limitations imposed by the existing processes and technologies. She knew the CEO and other senior managers echoed her concerns. The organization had acquired a number of companies to expand its reach and add additional services. It would continue to do so. It needed streamlined business processes supported by an adaptive and expandable technology infrastructure to match its growing demands.
So the CFO, with the CEO’s support, launched a project to design, build and deliver the processes and technologies the organization would need to support its strategic plans going forward, including:
- Revenue growth
- Profitability growth
- Geographic expansion
- Improved productivity
- Improved cash management
- Improved forecasting ability
- Improved innovation
To deliver business processes and supporting technologies that supported the organization’s strategies and provided the following capabilities:
- Seamless integration of CRM and financial information
- Process automation
- Flexible reporting
- Dashboards for the CEO, CFO, senior managers and customers
- Simple acquisition integration
- Enhanced security
- Remote access
- Multi-currency and multi-language support
The CFO targeted a 30 month transformation project, to be delivered in six month stages based on business process priorities and assessed risks. Total costs were not to exceed $2.4 million. That would provide a 25% return on their investment with some very significant intangibles enabling the company’s growth strategies.
The CFO’s first move was to appoint her Controller as the Project Director (PD) for the duration of the undertaking. He knew the challenges and the opportunities and had prior experience managing transformational initiatives with other organizations. The CFO also formed a steering committee with herself as chair and project sponsor and including IT and the business owners. Their primary role was to advise the CFO and the PD. They were also to act as a decision-making body for any issues that could not be resolved independently.
With input from the company’s executives, the PD pulled together a project charter that presented the project’s goals, identified the key decision-makers and their accountabilities, specified the processes, functionality and technologies and the related needs that had to be addressed in support of the organization’s strategies. He also established project priorities, risks and mitigation plans and included a high level phasing plan that responded to the scope, priorities and risks within the budget and time constraints dictated by the CFO. The charter was fully blessed by the steering committee.
The PD recognized that the technology selected would be a catalyst and enabler for the reengineering of the targeted end to end processes and so planned for a first release that included the technology assessment, acquisition and implementation with one priority business process.
The PD conducted interviews with each of the key stakeholders to determine their organization’s needs going forward. From those interviews a fifty-four factor decision framework was developed. The framework focused on the total cost of ownership and addressed four categories: operations, security, strategy, and financial. An RFP went out to two current vendors, one additional vendor of in-house managed software and two cloud based SaaS vendors. Each vendor’s submission was assessed numerically based on the decision framework. The winning vendor offered a cloud solution that was being used by a sizeable number of organizations, all with nothing but good reviews for the SaaS solution and its vendor.
With a vendor and a solution selected, process reengineering proceeded according to plan. Implementation is the key to any system’s successful life cycle. In this case, the implementations were actively monitored and upgraded in order to maximize its effectiveness. Business owners were held accountable for maintaining their areas of the system. The Helpdesk process was put in place from day one, with escalation through to the vendor. Finance and IT met monthly to review issues and requests from users. Adding and revising functionality was ongoing. Finance and IT representatives also met monthly with the vendor consultants to ensure they were all aligned.
Perhaps the most important project directive was to use the core application functionality unless it violated company standards or the law of the land or impeded strategic initiatives. That streamlined and accelerated the decision-making process around requested changes. It also kept their implementation very close to the standard offering, making it much easier to accommodate future solution upgrades, whether to fix bugs, improve security or functionality or add new features.
The project was closed after three and a half years, 40 percent longer than the 30 month target. The additional time was authorized to take advantage of additional functionality offered by the cloud solution that was not originally included in scope. The decision to extend the project was fully endorsed by all key stakeholders and yielded substantial incremental savings. The project cost was well below the $2.4 million target, coming in at $1.75 million. Ten releases were used to deliver the full functionality, averaging 3 to 5 months each. The shorter releases were enabled by the extensive functionality and flexibility of the chosen solution. The shorter, more frequent releases also helped build the organization’s ability to engage affected staff and instill a continuous improvement mindset. Release quality from inception was outstanding. Return on investment was a sterling 43%. Needless to say, the key stakeholders were thrilled with the results. The end result – a successful cloud solution!
How Great Leaders Delivered Superior Results
The foundation for success was built by the CFO, starting with strategy and executive endorsement and establishing clear goals and boundaries. While there was significant technology involved, she made it clear from the start that this was a business project. The PD leveraged that foundation, entrenched the decision-making accountabilities of the key stakeholders and focused on technology as the enabler. The best practices that contributed to the project’s success included:
- This was a business project. The key stakeholders were actively involved in the process designs affecting their areas and in the technology assessment and selection. They also played a more holistic role through steering committee membership.
- Evaluation criteria were established in collaboration with the CFO, IT lead and business owners to ensure a comprehensive solution assessment process. It also helped entrench key stakeholder buy-in.
- The CFO was adamant about acquiring the right people with the necessary knowledge, skills and experience, starting with the PD.
- They were smart about leveraging the technology and the in-place team to deliver incremental value. Sure, the project lasted 40% longer than planned but they used that time and talent to deliver greater returns from opportunities that weren’t obvious when the project started.
- Processes were adapted to the technology platform whenever possible to reduce costs and increase flexibility and responsiveness.
- A phased implementation was used to reduce risks and accelerate value delivery. Data conversion (scrubbing, formatting, loading, sequencing), integrating and interfacing with other systems and development of custom functionality were staged as needed to support release content.
- Clear guidelines were established for the approval of change requests and the addition of functionality to the cloud solution.
- The use of automation was maximized, including inputting data once at the earliest point.
- Change management was a significant focus to overcome resistance. Multi-way and multi-form communications and executive acknowledgement and support played an integral role.
- All users affected by the change were involved in the change. They were called upon to help design and test the new processes and technology interfaces, and so they became part of the solution, not part of a problem.
- Scheduled training was offered as close to Go-Live as possible and was a pre-requisite to get access to the system.
The CFO and PD chose a smart and responsive approach to supporting the organization’s strategic aspirations. It delivered value in the short term and provided an enabling legacy for the long term. What more could one want? So, please, put these points on your checklist of things to do in future endeavours so you too can be a Great Leader. And remember, use Project Pre-Check’s three building blocks covering stakeholder, the engagement and collaboration process and decision area best practices right up front so you don’t overlook these key success factors.
Finally, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, don’t be shy! Send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, we’ll post it so others can learn from your experiences. Thanks
Drew Davison is the owner and principal consultant at Davison Consulting and a blogger on Project Times. He is the developer of Project Pre-Check, an innovative framework for launching projects and guiding successful project deliver. He is also the author of Project Pre-Check – The Stakeholder Practice for Successful Business and Technology Change and Poject Pre-Check FastPath – The Project Manager’s Guide to Stakeholder Management. Drew works with organizations to implement the empowered stakeholder groups critical to project success. He can be reached at firstname.lastname@example.org