Implementing an enterprise resource planning (ERP) system can be a daunting task, especially when it involves multiple locations and business units. Yet, one consulting company recently accomplished the impressive feat of rolling out an SAP ERP system to 60 locations in just 60 months. This is a remarkable achievement, considering the complexity of such an undertaking and the potential for disruptions to business operations. In this conversation, we will delve into the details of this impressive implementation and explore the key factors that contributed to its success. To watch the full conversation, be sure to watch the interview on YouTube.
Jean: For the past couple of weeks while working for D4M I keep hearing about the term 60 in 60. Tell me – what exactly is “60 in 60”?
Eric: “60 in 60” refers to a specific a story about implementing SAP ERP systems in a 60 manufacturing plants in 60 months.
Eric: This specific company supply parts to automotive companies in the USA, Canada, Mexico, and Brazil among other countries.
Eric: The scope of the solution within this implementation is mainly the processes of purchasing to payment, manufacturing planning and execution, logistics and finance controlling, and includes all the integration to multiple other systems like shop floor systems, payroll, HR, finance consolidation system, banks, vendor invoicing, etc.
Eric: 60 in 60 is an example of how a company can implement an SAP ERP system in 60 plants in 60 months.
Jean: And from my understanding of SAP Rollouts this is quite a feat to accomplish because from what I understand, SAP Rollouts can take six months. Is that correct?
Eric: Yes. Within our experience in D4M International, it goes from 4 months to 18 months. If I can say that’s the average of the implementation therefore, yes, I agree with you. To get this done it requires multiple plan coordinations at the same time.
Jean: Out of curiosity, because I’ve talked to Raj and he seems to tell me that multiple rollouts at once tends to be quite rare in our industry. So what exactly is necessary? What is the difference in your approach? How can you complete 60 rollouts in 60 months, especially what is involved in even just one rollout?
Eric: The special thing that we have been doing with our customers is that we prepare very well. We have a methodology for transforming the organization into a standardized process, which is key to success in this type of rollout.
Eric: Before doing this implementation in these 60 months, our customers needed to be totally aware of and buy into the concept of standardization with their business processes. Which then drives the standardization of the information technology. And we have the way to assess our customers to identify what level of maturity or readiness they could be to start this journey of transformation of company.
Eric: The next step is then to determine what are the processes that will be standardized. How will we identify the transformation of the process methods. What is the governance of the solution and the template solution? How will we need to approach the data transformation within this specific program.
Eric: And this is just some of the key elements that are different from D4M international methodology and experience.
Jean: In a way you’ve found the secret sauce where it’s the exact elements that you need to prepare for to, like you say, create a standardized approach to rolling out the multiple plants at once.
Eric: Yeah. I will not say exactly secret sauce, we have the specific details that allow us to make it happen. And we are recognized by our customers as the team that deliver, who knows the business.
Eric: And by the way, we know what the technology is that is supporting that business.
Jean: Let’s just say for argument’s sake that you’re starting to do a similar 60 and 60 process for a company. What exactly are some of the early steps when approaching this it in this way?
Eric: I’m trying to picture a scenario where an organization is interested to go through this journey of business transformation.
Jean: I’m assuming it would be on the larger side, right? Wouldn’t necessarily be like a tier three or anything like that.
Eric: Correct. For this case, it might be a manufacturing tier one supplier or tier two supplier, or even an OEM that is interested in going through this transformation journey. We would start with a readiness assessment where we will be able to determine what are the areas that should be prepared before starting this journey and what is the specific actions that they need to take to be ready to start this journey.
Eric: An example of typical things that we found in some organizations is the lack of an alignment and interest of a standardization of processes. We have also found that some of the organizations don’t have a clear process and people change management methodology, or a structure inside of the organization to make this transformation happen.
Jean: Asking a general question here – what are some things to look out for when it comes to rolling things out in this capacity? You talk a lot about having a standardized approach to it having a stable leadership. Are there other observations that you can that in your line of work have come up that people should be aware of if they’re attempting to do this multiple plant?
Eric: Yes, there are many of them. Let’s start with the key elements for this transformation to work is with the right sponsorship at corporate and plant management. That needs to be fully. And that means that there is a commitment and relevancy of this transformation program in each of the personal objectives of those managers involved in this transformation.
Eric: And obviously at the corporate and at the plant management. This sponsorship is required to even able to operate in the fast way. And then being able to set the right priorities in the day-to-day operations of the project.
Eric: Another very important element is that this program of transformation should be recognized as a business project transformation and not a technology transformation.
Eric: What I’m saying is that this needs to be driven by business. The technology portion is relevant and will be enhanced what already exists. But it is not a technology-based project. It is a business operation-based project.
Eric: That means that the leaders of the business will be performing that transformation in the way that they do the day-to-day operations. And if this one is not recognized upfront then it needs to be addressed. Another important element is to have a robust template. And when I say template, it sounds very simple, but it’s a template that should contain a identified list of business processes and guidelines within the organization.
Eric: Those templates of business processes, guidelines, and requirements as well as a template of the IT solution that will be implemented.
Eric: Then the third element is a governance methodology. A governance methodology of how to and when to make a change to these mentioned templates. Not because everybody wants to do a change but it needs to be that methodology of governance of that template needs to be robust enough but fast enough to be able to make fast decisions and in that way the project is not jeopardized and the 60 and 60 is not jeopardized by waiting times within these governance process.
Eric: Lastly, the organization needs to look for their best resources within the organization to bring this transformation in place. And it makes a huge difference when the organization set the priorities to their best resources into this transformation versus not having those best resources in this transformation.
Jean: So it seems as though the 60 in 60 is almost more about planning than the execution. Just making sure that all the steps required for the entire process are in place so that you guys can do your job based on, years of experience.
Eric: You touched a very important point: the preparation. I will say that it is 60 to 70% of the recipe of success. This preparation could be very fast by doing it with D4M because we have the recipes and even though it says 60 to 70% of the recipe that do that does not represent the 60 or 70% of the cost or the time of implementation. That’s much less – probably it’s between 10 to 20% of the whole program. Now the rest is the execution of the program, and if we have the right elements that we just discussed, with a few other elements, it will be possible to execute it as a regular project. And we know how to do that.