Measuring the success and increasing the return on investment (ROI) for SAP projects requires planning, careful and consistent execution, monitoring, and assessment.
Clearly defining Key Performance Indicators (KPIs) for the project is crucial to demonstrating its success. Carefully documenting the project will also help to show how it has achieved financial objectives, and created a return on investment for the organization. This will help to make a case for further investment in SAP projects in that organization, or with other clients.
This week IgniteSAP will share some thoughts on the best methods for measuring success and increasing ROI on SAP projects as this is a fundamental aspect of best practice in SAP services.
SAP projects are multifaceted and have an impact across all areas of an organization, so it’s necessary to create a strategy to ensure success. This strategy must be guided by business centered goals and KPIs like increasing overall revenue, the number of clients, or efficiency in business operations.
SAP consultants should work with clients to get a clear idea of their expectations prior to the scoping phase of SAP projects in order to establish exactly what services they require from the resulting SAP system. The outcome of these conversations will be a shared vision between the customer and the system integrator of business requirements, and what work needs to be carried out in order to achieve this.
Once the customer and the service provider have a shared understanding of the aims of a project and its extent, they can begin to outline the means by which these can be achieved. The SAP project should begin creating clear and measurable objectives which will contribute to meeting specific business goals.
After defining the goals and scope of the project, consultants can collaborate with the customer to create a project roadmap that takes into account the expected schedule of work, the resources required, and the budget. The size of the SAP team and type of SAP consultants for the project will be agreed upon at this stage so hiring managers can begin the process of sourcing SAP talent.
These considerations will be used to define KPIs which will guide the implementation process.
Key performance indicators must be agreed upon in concert with the client in order to demonstrate how the project has fulfilled the organization’s objectives and validate the investment. These, along with later financial reporting, will help to demonstrate how the SAP project has provided the organization with a return on investment.
KPIs must be relevant and aligned with specific business goals. They will not only demonstrate the project’s success to the customer, but also help serve as a baseline from which the project’s progress can be tracked, so that any deviation from these can be recognized and addressed quickly to bring the project back on track.
These KPIs should cover factors like adherence to the project timeline, project spend, rate of improvement of the SAP system performance, an increase in customer reach, business process efficiency improvements, and customer satisfaction.
Carrying out risk assessments will establish ares where special care needs to be taken in order to avoid disruption to business process and this may also lead to the creation of other key performance indicators and warning triggers.
Other key performance indicators commonly established and assessed during SAP implementations include: a cost performance index, which compares the work complete with value earned, the number of scope change requests, the quantity of defects and issues occurring in the new SAP system, user acceptance, risk response effectiveness, which measures the success of risk mitigation, resource utilization, which measures the efficiency of the implementation team’s allocation to specific tasks, system downtime and interruptions, and the system response time for users.
SAP has created a set of guidelines for employees working on SAP projects that can be used in conjunction with KPIs to set goals for team members to ensure their daily tasks are aligned with the project’s goals.
During the project planning phase SAP’s SMART goals can be used to clarify further the requirements of each department and individuals working on the project.
They should be Specific, Measurable, Attainable, Relevant and Timely:
Specific goals define: What is to be accomplished, by whom, by what point in time, and what requirements and limitations are to be expected.
Measurable goals: The goals set for team members should be measurable (like KPIs) in order to make them useful for tracking progress, and recognising milestones passed on the way to successful completion of the project. This process can be supported by the use of performance management solutions to reduce the workload of tracking and documenting their progress.
Attainable goals: Goals set for departments and employees should be carefully calibrated so that they are ambitious but attainable. Employees must be made aware that the project manager understands their work and is allocating an achievable workload so that they remain engaged and confident of their ability to contribute to the project’s success. Workforce goals should also include provision for the development of individual consultant’s career goals during the course of the project, not solely centered on the business’s goals. This will also lead to greater employee engagement: contributing to the overall success of the project.
Relevant Goals: Apart from ensuring that the employee goals are relevant to the success of the project, the project manager should make sure that individual consultants are kept in the loop regarding the progress of the overall project, and how their contribution is necessary and valued, so that they are encouraged to adopt daily working behaviours consistent with the project’s goals.
Timely goals: Each goal that is set should be integrated into the whole project timeline. The project manager should clearly communicate the progression of the project as a whole, so employees are able to assess their own progression and flag up delays when necessary. This will allow the project manager to make timely adjustments to goals and workloads to compensate for unexpected events.
Measuring the success and increasing ROI on SAP projects is part of project management, including organizational change management (OCM). These two types of management overlap but should be treated as separate activities. There are technical and human elements to every SAP project and the progression of the project should be measured and analyzed from both perspectives.
The project manager should receive regular progress reports from departments on the technical workload, based on predefined KPIs, and work closely with an SAP change management consultant from the planning stage to minimize disruption to business processes, as well as the impact on the workforce of the client.
Stakeholders among the SAP services provider’s workforce, as well as that of the customer should be actively engaged during the course of the project with workshops, surveys, and impact assessments. Training of the customer’s workforce is an integral part of the project and should be included as part of the allocation of resources at the planning stage. The progression of customer training should also be tracked.
Transparency of communication of the project’s KPIs will help engage these stakeholders, leading to greater acceptance of accountability for the project’s success, and identification with project goals, as well as validating investment in the project for the customer.
Project managers can produce weekly progress reports to be distributed to the team based on analysis of key performance indicators. Review and analysis of KPIs on a regular basis will also facilitate the timely adjustment of schedules and allocation of personnel to avoid delays.
Careful change management (including customer training) is a vital part of the project achieving a good return on investment for the customer, because the resulting SAP system and new business practices required by the new system need to be accepted and understood by the customer’s workforce in order to be used effectively.
Team members should be allocated roles to continuously monitor progress based on the predefined KPIs. Analyzing this data allows the project manager to identify areas of improvement and make adjustments. This not only keeps the schedule on track but also avoids scope creep, where the scope of the project has a tendency to expand.
Where data from key performance indicators show that goals are not being achieved, the manager should intervene promptly in order to minimize disruption to the progress of the project and overspend.
KPI analysis should also be carried out with reference to the initial project plan to establish whether the intended changes are demonstrating that they further the organization’s business goals, as this will be the clearest way to maximize the value of their investment.
For example, a key performance indicator may have been established based on the organization’s ambition to increase its number of customers, but although the number of customer interactions may have increased during the implementation period, customer satisfaction may not have increased in a corresponding manner. The outcome of KPI analysis in this instance may lead to a review of the initial project plan, resulting in new implementation tasks to help increase customer satisfaction: which in turn leads to higher value to the business for each customer, as opposed to more customers.
After the Go-Live stage of the implementation support for the customer should include further training of their workforce, as well as further analysis of KPIs to address any unexpected challenges which are revealed in day to day business operations
Analyzing the return on investment for the customer at regular intervals after the implementation will help to make clear any further adjustments which need to be made to the SAP system, and guide and inform the practice of the SAP service provider for other customers and in other implementation projects. These post-implementation reviews should be added to the archive of project documentation for later reference and to guide subsequent best practice.
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