Critical Success Factors for SAP SRM

Oct 07, 2010 1 Comment by

As promised, today’s post is a summary of the material I co-presented with a client today at the America’s SAP User’s Group (ASUG) Fall Focus in Orlando.  We talked about some of the most important things to consider when implementing SAP’s Supplier Relationship Management (SRM), but these critical success factors could be applied to almost any large-scale implementation project:

1. Build a clear business case. Do the ground work to prove why the benefits of SRM are going to be worth the investment.   For example: identify specific processes with problems that will be fixed or measurable cycle times that will be tangibly reduced with the use of electronic purchasing.  List the specific purchasing methods and contracting events that are most susceptible to “maverick spending” and estimate the savings you can count on by reducing the use of these techniques.

It’s typically better to use conservative estimates in your ROI calculations to avoid over-promising on the savings.  Most ERP vendors can provide templates to document your ROI and suggestions for business process areas that have the highest potential for payback. It’s just as important to document the expected costs of SRM.  Consider the up-front spending for software licenses, servers and consulting support as well as long-term costs to maintain the solution such as user help desk, catalog maintenance and regular updates to stay on the current supported versions of the software.

2. Collect Key Performance Indicators. Gather metrics on the processes you expect to improve. Do this before implementation to create a baseline for comparison. Continue to collect metrics afterward to prove out the business case and use the data to identify additional process improvements.

Example metrics could include cycle time from the initiation of a purchase request to the placement of a confirmed order or cycle time from placement to the delivery of goods. It takes effort to collect this data – especially before implementing the reporting tools that come with SRM – so limit metrics to those that matter most to your bottom line.

3. Define clear, measurable project objectives. Set expectations up front with the implementation team for project execution and deliverable results.  Leverage a defined implementation methodology and strong project management techniques to define the work of the implementation project and get sign-off from business process owners at regular intervals. Re-visit the project objectives regularly throughout the project just to make sure progress is consistent.

4. Establish Specific Project Roles.  Examples of useful SRM implementation team roles and what they provide to the project include:

  • Executive Steering Team – Project authorization, resources & oversight
  • Sponsor – Executive authority & resolution for escalated issues
  • Business Process Owners – Represent functional needs, make process decisions and approve deliverables
  • Subject Matter Experts – do the ground work of requirements definition and testing
  • Business Process Specialist – Liaison/Analyst/Coordinator/Prophet
  • Project Manager – activity planning and project execution
  • QA/Testing – independent verification
  • Technical Staff – set up software, data & connectivity to enable business functionality
  • Customer Care – end user training & transition to long-term support
  • Organizational Change Management – alignment, communication & stakeholder readiness

5. Guide the Change.  Offer ample learning opportunities for users and communicate with them regularly as the project unfolds.  Provide regular updates on project progress via emails, websites and messages delivered in staff meetings and other routine gatherings.  I also like to have project team members invite field users in for demonstrations and visit field locations at points during the project to make sure they are considering the true end user perspective as they set things up.

Use online, on-demand learning to reduce costs and instead of creating specific "SRM meetings", take advantage of regular staff gatherings and existing communication channels.

Most organizations are getting away from classic classroom training and moving toward the use of online, on-demand learning tools where users can repeat portions of the material as needed to build confidence. Use screen shots and “before/after” demonstrations to show how the new purchasing processes differ from the old.  For those who struggle with self-directed training, consider the use of facilitated “webinars” or open lab settings to give more individualized attention.

Be sure to align the scheduled roll-out of the system and any related process changes with the business cycles of your stakeholders.  For example, avoid piling on changes during year-end closing times or the peak buying seasons. finally, make sure your vendors are in the loop once you decide to go with SRM.  It’s a big change for them as well, so give them an early head’s up and you’ll avoid post-Go Live glitches.

-Steve

Question for Chatter:

  1. What critical success factors have you seen when implementing big changes such as SAP’s Supplier Relationship Management?

Incoming search terms:

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Change Communication, Change Execution, Change Leadership, Stakeholder Readiness

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I help people and teams succeed with big changes... never a dull moment!

One Response to “Critical Success Factors for SAP SRM”

  1. Mike Bafta says:

    When I first saw SAP, I thought it was in reference to the old structural adjustment program. Terrible policy it was.

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