Undergoing an SAP S/4HANA business transformation brings inherent challenges and risks that make having a strong program management office (PMO) essential to the performance and success of the program. While the functional and technical designs are critical to an S/4HANA transformation, the program management office lays the foundation for the program governance, delivery quality and measurement of success for the program.
PMO best practices
There are several best practices to consider when standing up a PMO to support an S/4HANA migration. Program management focuses on three main levers: budget, timeline and scope. The PMO’s objective is to deliver a program on time, on budget and manage scope effectively. There are many factors to consider when enabling a PMO to manage a program, but we generally focus on four best practices to enable a PMO for success:
- Define a consistent methodology and governance structure
- Develop an integrated program schedule
- Implement a rigorous scope management and change request process
- Establish a risk management framework
The foundation for an effective PMO is to define a consistent methodology and scalable governance model that is easy to follow. Taking the time to define and document the project management approach (i.e., agile vs. waterfall), change request process, risk management approach, deliverable approval process, quality gates, program goals and metrics, etc. will enable the program and various stakeholders to be successful. For example, by defining key quality gates and the criteria for exiting each quality gate, it is possible to plan and track key milestones and deliverables in the project plan based on the criteria defined, which helps ensure clear visibility to schedule issues and overall project health.
During the planning phase, it is also important to develop an integrated project plan that incorporates change management, training, data, third-party tools, project management, etc. A well-thought-out program schedule that captures dependencies, assigns resources at the task level and looks at the program holistically determines success in understanding schedule risks, monitoring program performance and understanding resource gaps. It is critical to manage third-party activities in the schedule. There can be many challenges when engaging third parties such as environment availability, integrations, licensing and resourcing that could have a significant impact on the program schedule. When setting up the schedule, it is essential to identify what is needed from these parties and when, so expectations can be clearly communicated and delays identified early so a recovery plan can be implemented.
Scope: adaptable and agile
In the ever-changing technology and implementation landscape, being adaptable and agile throughout the project lifecycle is necessary. Defining a robust scope management and change request process is key to managing scope effectively. Often, when additional scope is requested, the magnitude of the impacts to budget, schedule and resources are not fully understood. It is likely during testing that a critical defect or new requirement will be raised that is considered mandatory for go live. Each new requirement should follow the change request process to make sure it can be accommodated within the program’s timeline, scope and budget. To develop effective change request criteria, consider questions such as:
- Does this disrupt the business or is there a manual workaround available?
- Do I need additional resources or funding to support this build?
- Will this item impact our timeline?
- Can another requirement be deprioritized to accommodate the new request?
Defining an effective scope management and change request process with the right level of review and right personnel involved can help reduce this risk significantly.
The big picture view
SAP S/4HANA migration programs are typically fast paced and new risks pop up regularly. It is often difficult for the project team who are in the weeds of the detailed tasks to pause and see the larger picture. Applying a risk management framework for team members to quickly and efficiently escalate risks will allow them to raise key business concerns but stay focused on detailed project tasks. The PMO is in the best position to identify mitigation strategies in collaboration with the impacted project team members.
Not only should there be a process to identify and raise risks, but it is also important to capture how to document the mitigation strategy, track it and drive it to closure. For example, if it is discovered that the business did not procure all necessary licenses or services for a third-party application, this risk would need to be escalated and logged. When defining the mitigation strategy and actions, the team should identify the date by which it needs to be resolved, track the target resolution date and identify project milestones dependent on this mitigation strategy. It is best to track these risk remediation strategies and dates in the project plan and directly link dependent tasks to identify potential schedule impacts.
Having a strong PMO is one critical piece of the puzzle for ensuring a successful S/4HANA migration. Following these best practices is foundational for defining and measuring and achieving success. Taking the time to stand up a PMO methodology and governance structure, develop an integrated project plan, enforce a rigorous scope management and change request process and establish a risk management framework will increase the likelihood of delivering on-time/on-budget, improving insight to project performance and status and managing scope. This focus will help ensure better resource management throughout the program, driving desired outcomes.
Chris Hanson, Managing Director, also contributed to this blog.
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