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Making the transition from spreadsheet-based Financial Planning and Analysis to a leading Enterprise Performance Management Solution (e.g., Hyperion, Cognos, etc..) requires commitment, executive sponsorship, and significant adjustment by those involved. Before moving forward with haste, certain items should be considered to ensure a successful and sustainable implementation:
- Assess the Current Environment: Before a company can even consider beginning to scope out the analytical and reporting needs of a given organization, it is important to take a careful look at the current environment. Many organizations make the mistake of implementing analytical tools that only produce what is currently being used. The only difference may be a more complex user front end. Doing this will not create any value for the organization and will only lead to frustration and a low adoption rate.
- Get to Know Users and Understand User Needs: It is important to meet with the key people in the organization that will be using or relying on the new tool to make business decisions. Approach these conversations in a way that opens the door so that they are intricate in the design and development. Keep in mind, fulfilling the needs of the Finance is important, however, providing a tool that has the power to directly impact the business and profitability is the goal. It is important to have a strong executive sponsor of the project which will assist with driving the project and promoting it through-out the executive team of the company. However, receiving input from the data experts / users of the data will lay the foundation for a useful tool which will have an impact on the day to day operation and management of the company.
- Identify Key Performance Indicators (KPI’s): During the discussion with management and the users in the organization, it is not only important to understand the business drivers, but also being able to measure business performance by applying KPI’s. KPI’s need to be measurable, but one simple aspect to keep in mind, is they should be useful. Don’t overwhelm your user base with complex KPI’s that do not add value. During your information gathering sessions you should be able to get a feel of what is needed, and you may find in most cases there is a common theme. Some examples of KPI’s include:
- Profit and Loss
- Inventory Turn
- DSO (Days Sales Outstanding)
- Customer Loyalty/Attrition
- Market Share Indicators
- Other relevant measurements
- Good Project Management Skills Are Key: Once the information gathering sessions are complete and a signed-off proof-of-concept is in place, it is time to create a Statement of Work (SOW). The SOW is a detailed road map of the project. While drafting the SOW, it is important to keep in mind that you are providing a solution to an existing problem. Therefore it is important not to over complicate as this will only create resistance and lack of acceptance. When drafting the Statement of Work, the following should be defined:
- Project Scope
- Risks identified
- Timelines defined
- Any additional terms of the project
It is a good practice when managing a project of this scope to schedule weekly update meetings and to track the progress of the project to ensure that key deliverables are being met. This will keep the project in line with goals and timelines detailed in the SOW. Lack of diligence can most certainly result in an overage in project budget and delays in implementation. Some others points to keep in mind include:
- Implement in phases and conduct User Acceptance Testing along the way.
- Ensure proper training is made available not only users, but the administrators of the new tool.
- Do not over complicate. In some cases, less is more. Provide a sustainable, usable system that can provide standardized reporting, yet have the flexibility to provide ad-hoc analysis as needed by users.
There are many styles to managing a project in the IT or Finance world. Information Technology people have their own style, understanding, and expertise. Finance and operational people have the ability to bring a different angle that is also very important to a successful implementation. Using the items detailed above as a guideline and engaging the necessary key people upfront, will make a big difference in the success of the project.
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