The SAP Observation Deck

CIOs prefer reporting to the CFO

Continuing on the theme of CFO involvement in managing technology consulting partner relationships, here's some more thoughts on the relationship between CIO and CFO - including some commentary on why NOT to have the CIO reporting into the CFO : http://www.cio.co.uk/article/3235046/cios-prefer-reporting-to-the-cfo/

Managing successful technology consulting partner relationships. Where the buck should stop - and why.

In a rather insightful blog “Take Back Control of your Consulting Relationships” (click here to view), the author, Jenny Sutton, talks about where responsibility for relationships with external consultants should lie - and how the value of their work can be measured.

 

Here at Invenio we work side-by-side with many business consulting and advisory firms to ensure that technology becomes an enabler in helping our joint-customers realise their goals.  Whether that be in reducing costs, improving performance, introducing new product or service lines or expanding across new markets - technology is almost always a foundation block in underpinning the success of these efforts.  These particular types of consulting relationships are usually owned by the business or executive functions within a firm - and are therefore clearly measured in terms of what impact they have on the bottom line (not always, but that’s a whole other story!).

 

However, one relationship that is often at arm’s length from the business is that of the technology consulting partner. These consulting relationships are traditionally ‘owned’ by IT department. So, since we’ve already established that technology is a tool that helps to improve business performance, should it therefore follow that the business – rather than IT - owns these relationships too?  

 

In her blog, Jenny goes on to suggest that the responsibility for a consulting relationship – ANY consulting relationship – should lie with the CFO, as the “guardian of business value for the enterprise”. And, as technology falls squarely under the banner of providing “business value”, then shouldn’t the CFO be more involved with driving technology consulting decisions?   Whilst the value of having the CIO as a key facilitator within any technology consulting relationship should never be underestimated, as the first priority is to ensure that technology supports the objectives of the business – wouldn’t it be wise to have the CFO more closely involved to provide a business perspective on what these consulting relationships should deliver?

 

In many businesses today, the CIO reports directly into the CFO’s office - thereby ensuring open (if not always convivial!) communication between the business and IT functions.  However, even then there still exists a disconnect between the CFO and technology consulting partners - and so I do wonder if many of the horror stories we hear about cancelled and failed projects, budget overruns, incomplete and ineffective systems could be avoided by closer ties with the CFO. When you look under the surface of these stories you’ll often find references to “ambiguous objectives”, “unclear project definitions”, “poor communication”, “changing expectations”, “moving of goalposts” and a “lack of direction or leadership”. Now that’s not to say that blame should be laid entirely at the door of the IT Department as, after all, they are simply trying to do what is in the best interests of the business... but I do think that any business-savvy CFO worth his or her salt could make enormous inroads into clearing up many of these issues from the get-go – thereby helping to reduce these kinds of stories by a not insubstantial amount.  

 

So, as I step down from my soapbox, I would like to end with saying that the most successful software implementations we’ve delivered are those that are actively driven by the business users themselves - with a supporting hand and good, clear guidance from the IT function – so perhaps it is time for both the CIO and CFO to get closer in managing what the technology consulting firms do - so that way everybody wins.

 

 

Laura Coles

Marketing Director and Chief Blogger   

 

M&A for IT Directors: "The gun is loaded but boards are reluctant to pull the trigger".

City AM today reported that small and mid-size companies have been increasingly active on the M&A scene in the first half of this year - dabbling in a greater number of more lucrative deals as the economic tide begins to turn.

 

Financial Market specialists, Thomson Reuters’ latest review reflects this - stating that the value of global mid-market mergers and acquisitions (mid-market defined as companies valued up to $500m), surged by 42.3 per cent to £206.9bn over the past six months.  

 

In the UK, despite fears over the impact of the coalition government’s fiscal tightening, mid-market deal values rose by almost 90 per cent for the half-year. And the UK was not alone in showing an increase in activity with almost every region across the globe experiencing growth in mid-market M&A activity. 

 

However not all commentators are bullish on the current M&A Outlook. 

 

KPMG’s latest Global M&A Predictor showed that although forecast net debt to EBITDA ratios have come down by 20 percent - indicating increased deal-making capacity - forward PE ratios have tumbled by the exact same amount, suggesting that deal-making appetite is under severe pressure.  Commenting on the latest Predictor results, David Simpson, Head of Global M&A at KPMG said: “M&A has always been a confidence game and the latest Predictor suggests that it is currently in short supply”.

 

Coverage from the Financial Times recently stated: “Europe's sovereign debt crisis and turbulent financing markets rattled the confidence of corporate dealmakers across the globe in the first half of the year, damping already lacklustre mergers and acquisition activity”. 

 

It is the FT article includes a particularly interesting metaphor from M&A stalwarts Citigroup, who’s European Head of M&A, Wilhelm Schulz said "The gun is loaded, but in light of recent market volatility, boards are reluctant to pull the trigger".

 

What’s all this got to do with Business Systems?

 

As Gartner rightly points out M&A activity leads to a need for good integration skills. They recommend that chief information officers should brush up on these skills so that companies are primed to reap the benefits of any future M&A activity. 

 

Dave Aron, VP at Gartner says “IT should be placed firmly at the heart of M&A plans with an involvement that begins at the due diligence planning stage and culminates at the "reap the benefits" phase”.

 

Mary Mesaglio, a research director at Gartner continues: "A good rule of thumb is that roughly 25 per cent of a typical M&A integration effort will come from IT. But the time and effort that each phase requires from IT varies significantly”.

 

From Invenio’s experience, integrating systems (or decoupling them in the case of divestment) can be a complex process. In the same vein, implementing a brand new solution to help integrate the various constituent parts of a group of businesses to become one entity takes considerable time... business processes must converge and a common set of operational standards and methodologies must be agreed.  If you’d like to find out more about the IT challenges brought about by M&A I’d be happy to help so please do drop me a line if this is an area of interest (or, indeed, frustration)!    

 

Laura, Marketing Director and Chief Blogger

 

 

Sources:

 

http://www.cityam.com/news-and-analysis/mid-cap-ma-activity-surges-economy-rebounds

 

http://www.ft.com/cms/s/0/1a9d90ec-83de-11df-ba07-00144feabdc0.html

http://finchannel.com/Main_News/Business/67202_KPMG%3A_Dramatic_loss_of_confidence_postpones_reopening_of_M%26A_market__/

http://www.gartner.com/it/page.jsp?id=1396213

SAP's SME Solutions - a guide to the product portfolio

A quick post to let you know that there is an excellent article about the various SAP options available to the Small and Mid-Size Enterprise market from our friends at softwareadvice.com.  SAP have frequently stated their desire to acheive 1 billion customers by 2014 - and their work in bringing innovative, afforable solutions to the global SME market represents an excellent opportunity for them to acheive this goal. 

http://www.softwareadvice.com/articles/manufacturing/saps-sme-solutions-a-guide-to-the-product-portfolio-1042010/

Laura, Marketing Director and Chief Blogger

How carbon reduction strategies can help improve business performance

This Wednesday I took the opportunity to visit The Carbon Show at the ExCel Centre in London.  With the CRC (Carbon Reduction Commitment) legislation about to impact on thousands of British businesses, carbon management is one of the few business areas that continues to grow unimpeded by any recession, downturn or credit crunch.  Better still (for Invenio at least!), from what I saw at the show, a lot of the business technology to support carbon management is based on proprietary technology ... and, in some cases, needs a lot of work to make it a viable solution for many companies.  All this adds up to the perfect opportunity for Invenio to really get involved in this market using an industry standard business application such as SAP.

 

One key observation I made as a result of researching the various players in the market, is that most of the advisory firms who dominate this market, seem to think that the boundaries of carbon management begin - and end - with legal compliance and cost-saving initiatives. The traditional KPI for carbon management centres on energy cost-savings (mostly through efficiency drives levelled at factories, offices and warehouses).  A few companies also employ measures across their distribution network in terms of saving money by “greening” a variety of fuel and transportation costs.  But in taking a much closer look at the messages coming from The Carbon Show,  it looks like the business drivers – and benefits – of carbon management are about to be transformed.

 

Accenture, in a joint effort with the Carbon Disclosure Project, gave a wonderfully educational presentation about embedding Carbon Management into the heart of a company’s business processes and strategies so it can be used as a strategic competitive advantage to help grow the organisation, improve business performance and increase return to shareholders and stakeholders alike.  And it’s these types of business drivers that need a system like SAP.

 

In Accenture’s world, the application of carbon management reduction strategies is not just about saving energy and ensuring legislative compliance, it’s about changing the game.  By changing the game we mean incorporating new measures and new KPI’s that extend across the business so as to drive forward new customer acquisition initiatives, raise the industry profile, enter new marketplaces and position as an innovative and forward-thinking brand leader.

 

So excited are we about this new area, that we’ve already taken a look at what we can do to help our customers change the game.  The result is a new carbon management task force who are charged with helping transform and augment our customers’ existing business applications with a view to:

 

Gaining a competitive sales edge: the team are looking at ways that customers can leverage good carbon management disciplines to use as a sales advantage against competitors with little or no environmental track record.

 

Developing, enhance and extend an environmentally-friendly product portfolio: we are working on ideas that enable our customers to develop and manage new products, intellectual property and services that are tightly linked to sustainable and environmentally-friendly factors.

 

Increasing transparency and accountability: we are looking at capabilities that allow our customers to report, analyse and publicise real-time environmental performance indicators and offer forward-looking statements that track progress towards carbon neutrality.

 

Improving corporate reputation: we are identifying tools and methods that help our customers identify and communicate the positive impacts resulting from carbon reduction commitments.

 

Exploring new cost-saving areas: we are in the process of exploring novel areas in which to save energy and help reduce our customers’ carbon footprint.

 

Much of what we are working on goes beyond the realms of SAP’s new acquisition - Clear Standards (now called SAP Carbon Impact) and may require some re-engineering in the various SAP modules and applications. But, if we really want to change the game and move from a simple cost reduction exercise to a fully fledged strategic competitive advantage then now is the time to take the Carbon Management agenda to a whole new level. 

 

Laura, Marketing Director and Chief Blogger

Failure to launch. Preventing poor user adoption

Because there are so many technical, project management and application design considerations that accompany a new system implementation, it’s easy to forget the human element of a new project.  Within the business, the people who are impacted by the new system are bound to be feeling some anxiety – some are happy with the ‘old way of doing things’ and see no need for change, some are worried about whether their job will be redundant when the new system launches and some won’t like the fact that they have no control over designing the processes they’ll need to adhere to some time in the future.

 

This focus on the human factor is backed up by a raft of statistics. One article recently cited that some 85 per cent of project success is dependent on factors related to people. Further, Gartner believe that 17 per cent of ERP implementation budgets should be dedicated solely to training – with those companies that spend less, putting their entire project at increased risk of failure.

 

So to help you have a more successful system launch, here are a few ways to help neutralise potential user hostility and garner support from the user community.

 

Create awareness - give the project its own identity:

A new system is a big deal for the business, so create some buzz around it. Use a project codename and run a competition to get users involved in suggesting and selecting a new system name. The project and/or system name can be used to tie together all your communications and help to increase recognition and familiarity. Using a slogan can also help people to understand what the new system is there to help the company achieve.  

 

Communicate at every opportunity:

 

If you have an intranet, develop a microsite for the new project. This can be used as both a marketing and support tool. Create a user forum and seed with a few FAQs to bring in visitors and encourage them to ask questions.

 

To help people understand why change is needed, create flyers, posters and emails that talk about how it will help employees, departments, business units, external customers /suppliers and the company as a whole.

 

Ask your board level sponsor to write regular internal communications detailing progress on the system development.

 

Create short articles for company and departmental newsletters to educate users about how the system will contribute to the future success of the business.  Feature project updates and have Q&A write-ups that talk about how managers expect their departments to benefit.  

 

Remember that not all staff may have access to email. For these members of staff you can use update posters on staff notice boards and flyers on any coffee tables and lunch areas. 

 

Listen and Learn:

 

Although you may have already had some conversations with business users during the scoping stage, it’s worth taking additional opportunities to talk again with key users of the current system to find out what they like/don’t like about it. User adoption can be made much easier by listening and responding to their feedback in a positive way.

 

Offer to present at departmental meetings and gatherings and be sure to invite feedback. Keep the board updated on progress through presentations and feedback sessions.

 

Provide lunchtime sessions for users to take a look at the new system and take a test drive. Use these forums to understand key concerns - and ask attendees to complete confidential feedback forms based on what they’ve seen.  

 

If possible, provide key users with some pre-launch test functionality. Offer reward and recognition for timely participation and feedback.

User Acceptance Testing should be a fundamental part of your project - not a box ticking exercise - and it will be helpful to start this initiative sooner rather than later.  

 

Help users understand how an implementation project works – and why their suggestions for system enhancements may take some time to be incorporated (or may not be included at all).

Countdown to Launch:

 

Get the training program underway as soon as possible and incorporate a few ‘train the trainer’ sessions for key system users.

 

Keep users informed.  If dates slip or timelines change then communicate this as soon as possible.

 

Create an FAQ card for the launch phase. This can include: how to login, who to call if help is needed, shortcut keys, dates for training  and how to report suspected system errors etc.

 

Set expectations – there are always a few issues that need fixing post-launch.  Tell users what the process is for reporting errors, what information you need from them to help you fix them, and what the timescales are for responding.   

 

Post-Launch:

 

Offer a program of confidential ‘user surgeries’ in the days and weeks after go-live to ensure that people who aren’t comfortable in classroom or online training environment can fully understand their particular areas of the system.

 

Send regular updates featuring hints and tips, ‘surgery’ dates, keyboard shortcuts, planned new releases and feedback on some of the user suggestions that have been received.

 

Keeping talking to your users – organise forums to get feedback and understand their concerns – and make sure that you act on it!

 

Organise a post-launch party to celebrate go-live and recognise the major project contributors.

 

Investigate industry award programs and nominate the people involved in its inception, development and roll-out.

 

If you need any help in your SAP user adoption programs please do get in touch – I’ll be happy to help!

 

Yours,

 

 

Laura

 

 

Is social media the final nail in the IT Exhibition coffin?

This week we have a crack team of Invenio personnel exhibiting at an IT conference in Sri Lanka.  A decade or so ago, corporate IT departments were in the midst of a love affair with the tradeshow.  Each year, millions of delegates would converge at various conference centres in various locations around the world to see the very latest technologies on the market (or, in some cases, watch a powerpoint of soon-to-be-available technologies!). The big vendors would spend hundreds of thousands of pounds, dollars, deutschmarks and yen to attract us to the biggest, flashiest and outré stands that were stuffed with as much tat as you could stuff into your branded exhibition satchel.  The market for stress balls and branded mints never had it so good.

But then came the internet.

With a few notable exceptions including the traditional “XYZ User Conference”, everybody wants to do business sitting behind a computer screen. These days it seems, businesses search for prospective suppliers through the proliferation of social networks that have sprung up. Blogs, discussion forums, twitters, facebook and linkedin are no longer the must-have accessory for the technology marketing fashionista - they are a mainstream requirement for IT suppliers everywhere if you are to stand a chance of getting on a shortlist.

Of course, social networking isn’t a new concept – it has in fact been around for decades in the guise of usenet and listserv et al...  but its elevated position in how we use it to find new suppliers – has all but replaced the range of human interaction provided by an exhibition.  

In his recent blog entitled “The Social CIO”, Alastair Behenna wryly stated “I’m going to have to leverage my “social” skills if I’m to succeed in “consumerising” corporate IT.”  This, in response to a Gartner press release that declared a new dawn in which we’ll have occupations that include “virtual-assistant designers ... who create Web beings that replicate the actions of a human being in providing agent services on the Web”.  OK, I’ll look forward to that.

But (bringing this blog back to its original subject) I think that social media is a poor substitute for real world business networking.  The delegates in Sri Lanka get to shake hands with our CEO and have a proper conversation about how we can work together. They get to ask questions and get unrehearsed, PR-free answers. They get to see our team in action - and we get to look our prospective new customers in the eyes. And these are the things that this blog can never do. 

Social networking is a great tool (in spite of my previous protestations!).  But I think we’ll all be a bit better off if we keep a degree of human interaction in our business dealings with each other. And that means getting out of the office and into the exhibition hall to press the flesh and grab a few stress balls to give to the kids when you get home.

Yours

Laura, Marketing Director and Chief Blogger

Commonly used SAP Acronyms

Every week I write an internal newsletter containing customer service advice for distribution amongst our global workforce. In my last effort I explained why we should try to avoid using jargon when communicating with our customers.  In the SAP world (and the tech industry in general), this is a very very tough ask as the market was created by people who just love their acronyms and abbreviations. So, as a nod to everyone that struggles to decipher SAP acronyms, here’s a list of the more common ones and their definitions.

BOBJ	SAP BusinessObjects
BPM	Business Performance Management
BPO	Business Process Outsourcing
EAM	Enterprise Asset Management
EPM	Enterprise Performance Management
ERP	Enterprise Resource Planning
GRC	Governance Risk and Compliance
PI	Process Integration
SAP	Systeme, Anwendungen, Produkte in der Datenverarbeitung or Systems, Applications & Products in Data Processing
SAP ABAP	Advanced Business Application Programming
SAP AIO	SAP Business All-in-One
SAP BI	Business Intelligence
SAP BI	SAP Business Intelligence
SAP BIW	SAP Business Information Warehouse
SAP BW	SAP Business Warehouse
SAP ByD	SAP Business ByDesign
SAP CO	SAP Controlling
SAP CRM	SAP Customer Relationship Management
SAP ECC	SAP Enterprise Central Component
SAP FI	SAP Financials
SAP FICO	SAP Finance and Controlling
SAP HCM	SAP Human Capital Management
SAP IM	SAP Inventory Management (part of SAP Logistics)
SAP IP	SAP Intellectual Property (royalty management module)
SAP MM	SAP Materials Management (part of SAP Logistics)
SAP PLM	SAP Product Lifecycle Management
SAP PM	SAP Plant Maintenance
SAP PP	SAP Production Planning
SAP QM	SAP Quality Management
SAP R/3	SAP Real-time data processing, 3-tier
SAP SCM	SAP Supply Chain Management
SAP SD	SAP Sales & Distribution (part of SAP Logistics)
SAP SRM	SAP Supplier Relationship Management
SAP WM	SAP Warehouse Management (part of SAP Logistics)
SB1	SAP Business One
SBO	SAP Business One
UI	User Interface

If there's any I've missed (and I'm sure there must be one or two), let me know and I'll add them to the list.

Laura - Marketing Director and Chief Blogger

Onshore, offshore, nearshore, not sure?

As a company with a hybrid onshore-offshore SAP services model, we sometimes stumble across companies that refuse point-blank to entertain the idea of having any offshore element included in their SAP service arrangements.  These are usually companies that have either been caught by (or been scared by) the ‘dark side’ of the offshoring game.

 

Many of the bad offshore experiences I hear about have one common denominator – and that’s that the companies concerned simply outsourced work to the lowest bidder (losing sight of everything but the finances).  In these scenarios, the winning contractor typically has to eke out a marginal profit by slashing costs in the management of the venture, abandoning any skills development initiatives and hiring low cost, inexperienced or unskilled personnel.  This leads to staff attrition, multiple quality issues and account neglect/mismanagement – with a worst case scenario of a complete project breakdown. No wonder then that these companies are completely disillusioned with the practice of offshoring and refuse to consider it for future projects.

 

That said, companies who are faced with the consequences of the current economic downturn and experiencing rising (and global) competition will find themselves in need of a strategy to control costs – thus making the practice of offshoring a very attractive strategy.  Leading strategic advisory firm Hackett recently said "Globalization of work is no longer a leading-edge strategy, it should be considered a best practice for any company."  This view is not something which everyone will agree with – but it certainly makes sense for companies to review their operations within the context of the benefits provided by offshoring.

 

To Invenio, we see offshoring as a positive activity which makes good business sense. For us, it means we can provide the same quality of services to our clients at lower prices than if the work were completed onshore. And we can draw upon the best skills and talents from a far larger pool of qualified consultants. Fortunately, these views are certainly echoed by our customers, most of whom cite the benefits of offshoring as being:

• project costs - which are far lower
•  speed – projects are skilled up more quickly; and
• consistency – recruitment problems cease to exist thanks to an abundance of talent that is at least equal to those

consultants who live and work in the client's country.  

Of course, the benefits of onshoring should not be overlooked. Invenio employ a community of onshore staff whose job it is to manage projects, undertake on-site activities and act as a conduit between our customers and the offshore operations wherever necessary.  There are the arguments that we should ‘buy local and support our communities’ – a position that is particularly emotive as the jobless figures rise and, of course cultural, language and time zone issues cease to exist

 

Whatever your preference - whether it be on, off or near shore (or a little bit of all three) - the key is getting the right blend of skills to support your business and help it to achieve its goals. With careful research, and by giving full consideration to the pros and cons of each possible scenario, you’ll be sure to secure the right working practices for your business.

 

Laura, Marketing Director and Chief Blogger 

Grow old with me! The best is yet to be. (Robert Browning)

Not long ago, Invenio celebrated being 18 months old.  In that short space of time, there’s been plenty that’s been achieved – and even more to look forward to. 

Youth in business (and particularly in this industry) is not always considered attractive.  Because of this, it’s not been a point that I’ve drawn much attention to when writing promotional materials. 

But, why not?

The industry is full of long-in-the-tooth, mediocre, has-been (and never-was) suppliers... and so it’s a great opportunity for young contenders like Invenio to come in and shake things up a bit. True, there are companies out there that wouldn’t do business with us simply because of our age.  They like their suppliers to be larger and more established (although that’s a view that’s changing fast – something that you can more learn about in Martin Butler’s recent Computing article “Smaller Firms are coming into Fashion” http://bit.ly/Qbk4E). 

Being younger and smaller in a marketplace full of established behemoths reminds me of the old Avis Rent a Car slogan ‘we try harder’.  This tagline was created in response to being #2 in the car rental marketplace – behind Hertz.  And it’s very true – we have to work twice as hard to prove ourselves to be worthy of our customers’ business. We have to work twice as hard at earning our customers trust. And we have to work twice as hard to get new business.

But I don’t mind a bit.  Invenio was founded by people who already worked for the bigger players – and didn’t like what they saw.  And so, here we are – doing battle with the big boys and, more often than not, gaining customers through simply trying harder.

If you’re thinking of doing business with a young company, but not sure if you want to take the leap, here are some benefits you stand to gain:

• A more personal, proactive service.
• Lower charges, through a leaner infrastructure and lower operational overheads.
• The ability to influence the business and its growth and development.
• A direct line to the MD - and his or her team... (all empowered to make immediate decisions and take immediate action on your behalf).
• Access to highly skilled, driven personnel... (all pushing the envelope to create a truly exceptional, innovative and first class customer service experience).

Of course, there will come a time when we’re considered to be the old guard.  But I’m sure the team here have learned enough from our previous experiences not to make the same mistakes as our forebears.

Have a great weekend.

Laura