At first glance, the situation appears relatively innocuous: A COO, as the executive sponsor of an SAP project, is supposed to lead the executive steering committee, but never has time to go to them. On the other side is the systems integrator, who has insisted that all of the senior vice presidents involved in the departments being affected by that program are present at those meetings. Seeing that the COO is absent, the SI follows suit and instead sends its third lieutenant.

“You have all of those things you’re supposed to have; you just don’t have the real, personal involvement in those programs,” says SAP change management expert Art Worster. “I think that’s where it falls apart. Executive leadership has to be real. It has to be tangible. It has to be involved.”

Worster has seen his share of good and bad SAP projects; he spent 25 years in leadership roles in the operation side of the chemicals industry and 12 years as an SAP consultant for EDS (now part of HP).

Executive involvement goes hand in hand with the difficult change management decisions that need to be made to ensure that the money, and time, spent on SAP produces a business return. In this interview, Worster shares his tips on building a successful SAP change management strategy.

ASUGNews.com: Everyone knows business and IT need to work together on SAP projects. What are the qualities of an IT department that works well with the business?

Art Worster: Somewhere in the organization, whether it’s in the IT department or the business functions, there has to be somebody who can bridge that divide between technical IT knowledge and practical business knowledge. And I have seen organizations that can do it either way.

From an IT perspective, I’d say the IT departments over the last 20 years have missed an opportunity to become more business-oriented. I’m not putting down the need to focus on the technology aspects of it, but the technology aspects are only really valuable if they can produce or be identified as producing tangible business benefit. The IT departments have lost an opportunity to understand business processes, to understand the relationship between the business functions and to provide a set of business applications.

ASUGNews.com: What are the qualities of a business team that works well with IT?

From the business perspective, I would take business executives through a program to help them understand, a little bit better, the technology. I would like them to understand the relationship between how IT business applications actually support business processes.

I would also ask business executives to understand that there are significant changes that are going to have to occur between departments at the executive levels. They will have an impact on, perhaps, the compensation programs of senior executives. They’ll impact the span of control of certain business executives.

ASUGNews.com: When it comes to the change management involved with SAP projects, what is the single biggest mistake you see organizations make?

Let’s take a project that basically is constructed with all the pieces correctly—that’s using Solution Manager, Accelerated SAP. It has an organizational change management function where the organizational change managers have focus groups where they talk about perception, assess skills pre-SAP and post-SAP, and put together training and education programs—all of those things. Typically, that’s done.

What isn’t done is recognizing that there are going to be significant organizational changes necessary in executive leadership. The executive leaders: maybe they’re not overtly distrustful, but they’re also not accepting it. When their representatives on the project team come and say, ‘Well, boss, this is what I need to do, and it’s going to be something that that particular executive doesn’t want,’ they don’t understand they have the responsibility to sit down in the executive suite with the other involved executives, and figure out how they’re going to deal with that change at the executive level.

I’m sure you have experienced people saying, ‘The politics of my organization are terrible.’ In general, politics aren’t terrible. It is because of the power of executives that makes people fearful of going and dealing with difficult issues between highly political people within the culture of the organization—those are the pieces that generally don’t get dealt with effectively. And those could be the most damaging aspects of any project that you’re involved with. It is the single largest cause of organizations not achieving the business benefits that SAP is capable of producing.

ASUGNews.com: Give me an example of the difficulty of change management when it comes to an SAP project.

Take the relationship between the head of procurement and the head of manufacturing in an organization where the executive compensation programs are heavily based on achieving certain objectives. Typically, the chief procurement officer’s compensation program will be based upon, among other things, achieving a fairly large purchase price variance. One of the ways you do that is you buy larger quantities less often; buying larger quantities less often means that your average inventory for raw materials is larger. At the same time, the vice president of manufacturing’s incentive program includes reducing raw material inventory. And the way you do that is that you buy less material more often.

In an SAP project, you have to come up with a material control function—you have to come up with a single way of buying raw materials, and it really should be based on the lowest total cost of ownership of materials which is a combination of purchase price variance and cost of inventory. When you’re doing that now, you’re talking about whose going to have material control functions. So you’re talking about the politics of two people who are probably competing for the next promotion, and who’s going to wind up with this very important function.

The organizational change management group, or function, working with those executives has to have the ability to sit down with the top boss and say, ‘Here’s what we need to do: We need to go back and look at the objectives of the compensation programs. We can’t have this be a net win for one and a net loss for the other. We need to decide from a cultural and organizational standpoint how are we going to do this.’

It’s difficult if you don’t have someone within the program management of the organization who has the trust and ability to sit down with these folks and to resolve these issues. Perhaps you get the software installed, but you don’t achieve the business benefits.

Art Worster had a successful 25 year career in Operations in the Chemical Industry, in a variety of roles from Plant and Division Operations Management, Plant Design and Construction, and Environment, Health and Safety to Business Turnaround, Shared Services and Business Process Re-engineering (culminating in SAP leadership).  Following that career, Worster spent 12 years in SAP Consulting leadership for EDS, where he led the turn-around of four failed or failing implementation programs and a large fixed price implementation,  before taking responsibility for building EDS’ Global ERP Practices. Worster is now adjunct faculty at Central Michigan University working with the College of Business Administration as a business adviser to the on-line MBA program’s SAP concentration and SAP Graduate Certificate program.

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