This document provides a case study of a large scale business transformation program undertaken by a top 10 global business organization to standardize processes, implement a single ERP system, and integrate operations across various business units. The program involved transforming business processes, implementing SAP, integrating operations, and deploying shared services. Project management methodology was effectively applied to execute the program through establishing governance, planning deployment, developing solutions using IBM Ascendant methodology, managing stakeholders, and realizing business benefits. While costs exceeded projections, the program achieved its goals and business benefits through effective program management.
The Path to Product Excellence: Avoiding Common Pitfalls and Enhancing Commun...
MCP4
1.
2. Project Management National Conference 2011 PMI India
Program Management Approach
for a Complex Business
Transformation
Sachdeepak S Arora
Delivery Project Executive, IBM India Pvt. Ltd.
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Contents
1 Abstract ............................................................................................................................4
2 Keywords...........................................................................................................................5
3 Introduction.......................................................................................................................5
4 The Case Study...................................................................................................................6
5 Key Challenges / Risks Managed.....................................................................................16
6 Critical success factor.......................................................................................................18
7 Best Practices...................................................................................................................19
8 Business Benefits Realization .........................................................................................21
9 Lessons learnt...................................................................................................................22
10 Conclusion......................................................................................................................23
11 Author’s Profile..............................................................................................................24
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1 Abstract
This case study showcases successful application of Project Management
Methodology for a large scale Business Transformation program being
implemented by one of the top ten global business organizations.
The client decided in 2006 to transform itself to a Globally Integrated Enterprise
by 2015, in order to meet the following objectives
a. Leverage global resources through common processes
b. Adopt standards for seamless intra and Inter-organization operations
c. Provide adequate controls through compliance and governance
d. Improve productivity and efficiency to expand margin and increase EPS
To meet the above business goals, client embarked on a program which involves
a. Transformation of Business Processes to be globally consistent.
b. Implementation of single ERP instance to support business processes.
c. Integration of business operations management
d. Deployment of shared services model to support functions like HR,
procurement, finance etc.
e. A major Organization Change Management initiative to ensure smooth
transition to future organization design
The key elements of PM approach include
a. Key stake holders’ identification and a business case approval
b. Logical distribution of the initiative to Project Portfolios, Programs and
Projects
c. Setting up of team/s
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d. Establishing a governance model and communication cadence
e. Program plan preparation, which includes Proof of concepts / prototypes
for new technologies and processes, large scale Business Process
transformation activities, Systems Integration and Organization Change
Management activities.
f. High level release / roll out strategy
g. Execution and control process
h. Focused risk management
i. Creation of reusable assets
The ‘business benefits measurements’ have confirmed that the program is on
track.
This paper highlights the effectiveness of PM Methodology in meeting challenges
in such large business transformation program.
2 Keywords
Business Process Transformation, Program Management, Complex system
integration Project Management
3 Introduction
This paper is a case study of successful application of program management
methodology for executing a large scale business transformation program.
The client is one of the top ten global business enterprises in electronics and
service industry with revenue of approx. 100 billion USD and is present in 170
countries with 4,00,000 employees.
The client embarked on a large scale business transformation program in 2006 in
order to achieve the following business objectives.
• Simplify and standardize business processes across business units and
geographies.
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• Achieve speed to the marketplace.
• Integrate across the business units to enable solutions and bundled offerings
to the clients
• Deliver products and services globally
• Increase integration with back office to leverage cost competitiveness and
productivity
• Provide additional flexibility to adapt to changing business needs
• Increase spend on strategic projects and reduce on tactical projects
• Cut down on cost of operations
• Increase ability to leverage scale to improve efficiencies thru initiatives like
shared services, back office operations etc.
• Reduce revenue “leakage”
• Improve forecast accuracy
• Ensure improved quality and availability of information across Geos and BUs
• Improves business controls / audit posture
• Provides real time data
4 The Case Study
The client assigned the task of this transformation to a top business exec.
The Client selected SAP as technology platform
• Scope
The scope for the first wave covered business processes from Opportunity to
order, Order to cash, Finance and Human resource. The processes in scope are
listed in the table below
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Opportunity to Order Order to Cash Finance Human Resource
- Quotation/Proposal - Sales Contract - General Ledger - HR
Management Management Processing Administration
- Pricing and - Contract and - Currency / Statutory - Compensation
Contracts Project Registration - Inter-company Management
- Price and Margin - Service Contracts Processing - Org Mgt
Management Management - Project Systems - Time and
- Partner Channel - Sales Order - Profitability Analysis Attendance
Management Management - Profit Centre - Payroll
- Product - Service Order - Cost Centres / Internal - Employee Self
Configuration Management Service
Orders
- Lead Management - Billing - Manager’s
- Opportunity - Contract and - Financial Closing
Self service
Management Project Close - Manage Banking
- Invoicing Functions
- Cost Recognition - Tax Accounting &
- Revenue Settings
Recognition - Account Payable
- Logistics Execution - Manage Accounts
- Complaints And Receivable
Returns - Collections Management
- Installed Base - Dispute Management
Management - Credit Management
- Product - Account for Fixed Assets
Configuration - Support Capital Tracking
Services
- Support Property Control
- Project Based Cost
- Business Controls &
- Revenue
Reporting
Forecasting
- Perform Supplier
enablement
- Execute Procurement
opportunities
- Purchase Order Logistics
- Financial Master Data
• Global Template Approach:
Development of one common global template was of strategic importance in
order to achieve business requirement of common business processes across
the organization.
In addition, the global template serves the following requirements of the program.
• Minimize retrofitting, rework, regression testing
• Provide 95% of configuration before deployments begin
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• Promote buy-in and ownership through collaborative blueprint workshops
involving representatives from all geographies, business units and global
process owners
• Develop a foundation for standardization controls to better manage the
systems landscape to maintain an integrated design
• Develop a framework for a repeatable structure used for operations support
across enterprise.
Global Common
Standards
Defines all globally applicable
system structures and data
standards, such as: global
Chart of Accounts, SAP
hierarchies, master data.
Common Processes
This repository for the key
integrated business process
scenarios, including common
interfaces, reports and bolt-ons.
Leverage able Content
Broadly applicable content across
business units and geographies
offering reduced total
implementation and long-term
support costs
Regional / Business
Unit Variations
Market specific customizations
Differentiation
SOA will be used to maintain those processes
that differentiate IBM in the marketplace Figure – 1: Global template approach
• Planning
The initiative was spilt logically into various programs, project portfolios and
projects.
A full cycle implementation was carried out at a small business entity as a proof
of concept. The scope for POC was carefully chosen to represent the entirety of
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process design in a smaller version. Similarly, prototypes for new technologies
were prepared
Deployment plan to roll out the template across the enterprise in a release model
was prepared. The roll out plan is based on business priorities like emerging
markets , requirement of applications in the geographies where the existing
system are not able to take the growth load , geographies where cost of
maintaining existing systems are very high. Figure 2 lays out life cycle the
program and specifies the dependencies in the lifecycle.
Figure – 2: A large scale business transformation program lifecycle
First release
Business Case Prototype / Pilot /
App. Proof of concept
Establish
Business benefits Set Up operations
Centers of
measurement Management
Competency &
Excellence
Achievement
Subsequent of Business
Global
releases Goals
Templates We
are
her
e
• Methodology
IBM Ascendant method is being used for the implementation. The project life
cycle has seven phases and six domains.
Deliverables of each domain in each phase are well defined in the method
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Fig -3: IBM Ascendant Method
The Ascendant SAP Methods offer guidance, like a map or a recipe, and can be
altered to meet the specific needs of a project.
The methodology provides a consistent, structured, and practical approach to
1. What needs to be done
2. How it should be done
3. How it should be controlled
4. Who should do it
• Establishing the key leadership team
Establishing key leadership team was the first step. In addition to the regular Job
description process to on board the team, the following additional factors were
considered keeping in view the complexity and the volume of the program.
• Org structure is generally dynamic, since the technical and leadership skills
required at beginning of the life cycle are very different and of the highest
quality than the skills required for steady state operations and roll outs.
• The steady state operations and rollouts to be achieved through centers of
competency or excellence functioning effectively.
• The desired key resources may not be available at the outset, as they may
be involved in other programs and will require to be brought in, at different
stages in the program life cycle.
• The requirement of type of leadership may change depending upon the
program situation and phase of the program lifecycle.
• Strategy program planning team is different from the routine project
management team and focuses on the long term business benefits
realization
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• The teams engaged at early stages of program are likely to require support
from their leadership since some of the deliverables may not meet the
expectations as anticipated.
• The number of resources required is likely to increase / decrease significantly
to meet peaks and turfs of the requirements.
• Development of Technical Applications & Systems
• Design & Build
Best of class resources were chosen to work on solution and design. ‘As
is’ design was converted to a ‘To be’ design document. Solution design
team worked closely with business. After the business blue print was
signed off, a ‘Requirement Traceability and Verification Matrix’ was
prepared as per SEA guidelines. Solution design team configured the
system and developed functional as well as technical specifications.
More than 1500 objects and 400 interfaces were developed in the first
phase itself.
A large number of reports, data conversion programs, enhancements,
workflows and forms were developed.
• Data Migration
Millions of data elements were migrated from various legacy systems in to
SAP. A process assigning data element ownership to the right business
owner was established. The global data standards were followed.
The data migration cycle included a seven step approach. They were data
extraction, mapping, cleansing, a scrambling (to ensure data privacy
compliance), development of conversion programs, conversion and data
verification & validation.
The data element owners assumed the responsibility of confirmation that
the data loaded is correct and meets the business logic as part of exit
criteria
• Testing
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The following cycles of testing were carried out. A total of 1800 test scripts
were executed during system integration testing phase
• Functional / Unit Testing was owned by the developers /
configuration team
• Integration Testing was owned by the development team. However,
during the later cycles, after majority of the defects were taken care of,
members from business and sustenance team joined the development
team. This helped reducing time for users’ acceptance testing and also
transition to sustain. The test scripts were prepared based on the
functionality captured in the ‘requirement traceability and verification
matrix’
• User Acceptance Testing involved multiple users and also testing of
global template elements .Users were trained in SAP prior to taking up
users’ acceptance tests.
• Regression Testing, wherever applicable , was carried out
• Performance / Stress Testing for validating network and system load
capacity were carried out . The test results met the defined exit criteria.
• Scope Change Management Process
A scope change management process was set up. Each change request had
to go through a change board approval. Despite strict control, about 500 CRs
were required for the first release. The change board met more frequently
closer to ‘ Go Live ‘ .
All domain leads were required to carry out impact assessment on every
change request. Closer to go live only those domains which were considered
relevant were asked to submit impact analysis and others were informed to
respond in case they believed there is an impact. This expedited the process
for CR approvals.
• Stake Holders’ Management
There are many stake holders in this complex program including the business
users, top management, steering committee, business process leaders, the
teams who were redeployed as part of future org design and the project team
members.
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The following factors increased the complexity in stake holders’
management.
• Diversity of stake holders: local, regional, global business leaders,
unions etc.
• Enterprise-wise impact of every important decision
• Higher costs of delivery
• Higher opportunity costs
• Tracking & Controlling
A project communication plan based on project tracking, controlling and
communication needs was developed.
Processes like on boarding and off boarding were developed. Artifacts like
project charter, team charter and communication plan were created. Team
rooms, program Wikis and other virtual tools for sharing and storing project
the artifacts were made available.
Entry and exit criteria for each major deliverable and key milestone were
defined.
Communication cadence thru status calls, face to face workshops, milestone
check point meetings, executive and steering committee reviews, quality and
audit reviews were put in place
Conference calls involving resources from Europe, US, Australia and India
required time rotation so that disadvantage of working at odd hours could be
shared by all teams
IBM Seven Keys to success process was used for reporting at senior
management level.
IBM Seven Keys to Success
1. Stake holders are committed
2. Business benefits are being realized
3. Work and Schedule are predictable
4. Scope is realistic and manageable
5. Team is high performing
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The program is on schedule; however the costs overshot by approx 13 %.
The main reasons for costs to increase were
• The additional effort and travel for face to face workshops on
getting the business requirements articulated to the level of
granularity.
• Procurement of high / niche skilled expensive resources for
solution and design.
• Organization change management activities
Organization readiness to accept such a large change required significant
amount of OCM activity. The change agents were identified as sponsors in
top management, advocates in senior execs & business heads, change
process owners and coaches in the middle management
The program has engaged specialist services for carrying out OCM activities.
The change was mainly occurring from
• Large scale business process transformation (from local to
global)
• New organization design and changes in roles
• Skill gaps for managing future organization
The main deliverables were
• Future Org design
A five step approach for developing future org design was adopted
• Document and assess ‘As Is’ org.
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• Envision ‘To Be’ org.
• Design ‘To Be’ org. and Job roles
• Define Skills and Competencies to close Gaps in ‘As Is’ – ‘To Be ‘ ,
map roles
• Create plans to resolve gaps
Business Strategy
Future
Organization & Process State
Current People
State Organizational Change Management
Information
Technology
Fig -4: Factors impacting Future Org design
• Communication
A communication plan was developed based on communication need
analysis for the organization. The plan detailed what needs to be
communicated by whom and when. It also listed the medium of
communication. Various types of communication material were developed.
Communication was routed through key stake holders /change agents for
appropriate impact.
• Training
Training need analysis was carried out. Based on requirement for various
user groups, multiple types of training materials were developed and
delivered. The super users were also sent for SAP training, prior to
involvement in users’ acceptance testing. Learning Labs and Classroom
trainings were organized. Computer based simulations were prepared for
complex transactions. Web lectures and web pages providing information
about new processes and tools were prepared and made available to the
users to be accessed at their own time .
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An organization readiness check point included completion of trainings to
various user groups prior to go live
5 Key Challenges / Risks Managed
The following were a few of the key risks experienced and managed in this
engagement
• Business process owners experienced difficulty in articulating requirements,
since the processes were getting globally aligned for the first time in the
organization. The processes owners were familiar with the local business
requirements.
Use of agile methodology was of some help to address this issue.
Requirement Traceability Verification Matrix was of help in articulating
requirements.
• Where the process definition was incomplete or flawed, it created issues of
acceptance by the users at the exit point. Program management tried
defining Exit and Entry criteria with as much clarity as possible.
• SAP solutions being implemented did not address all the requirements from
the business. Additional budget and time were required for unplanned
development work. The following are the reasons for the additional
development work
o There were business scenarios / requirements where the SAP
solutions did not meet the business need and required customization.
o There were SAP solutions which were not tried earlier and required
some amount of customization. SAP time lines of delivering these
changes did not support the project time lines and project had to bear
the expenses for developing the solution
o The right expertise to implement a few desired solutions was not
accessible as required to meet the project time lines.
• Low data quality created issues for migration and reconciliation in production
since it was the first time the globally distributed (multiple applications) data
was migrated in a single database and global data standards were
implemented.
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• A few weak configurable controls / access controls and/or Separation of
Duties allowed errors and audit exposure. New roles at different levels were
getting created for the first time as per the future org design scenario.
• Very high volumes of users caused system to be unstable. This was
especially true immediately after the roll outs / releases since more number
of users (out of curiosity than normally as planned ) logged in and users
spent more than required time (since they were learning to use the new
application ) on the application .
• System exited (went live) with some known or unknown problems due to
oversight in testing and/or decisions made around Exit criteria. The users
signing exit criteria found it difficult to understand process & technology
transformation from local to global. The stay of hyper-care team was
extended from planned 30 days to 45 days. Additional costs were picked up
by the project
• Multiple regulatory compliances brought in additional challenges for program
management team since this transformation involved multiple countries,
business units and applications. These compliance included
o Data Privacy laws
o Visa and work permits
o Union agreements
o Global trade practices and restrictions
o Audits like SOX, Client specific , Service provider specific
o Intellectual property protection
• Management of diverse global delivery teams in virtual environments threw
up additional challenges. A global and virtual team was best suited to this
program since the complexity and diversity of the required skill sets dictated
to bring on board variety of resources. Best in class resources were required
for design and solution and could be picked up from any where and the most
cost effective for routine operations.
The team scaled up to approx 1000 resources during peak period.
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The program spent additional money for
o Additional communication time and infrastructure for virtual working.
o Travel costs for face to face meetings and workshops
o Cultural sensitivity trainings
6 Critical success factor
In order to achieve the envisaged business benefits and make program
successful, the following are considered as Critical Success Factors
• Strong, active executive committee that demonstrates visible sponsorship of
the project
• Visible organizational commitment to make significant process and
organizational changes, resulting in targeted benefits realization.
• Dedicated, empowered project team able to make rapid decisions on behalf
of business units
• Country buy-in and accountability for results, especially for such large global
implementation involving multiple countries.
• Rigorous scope management process to limit modifications to standard SAP
functionality and to keep scope within original estimates
• Common enterprise level design, with limited process and configuration
changes during the rollout/ releases of the project
• Rapid decision making and issue resolution procedures, coupled with prompt
escalation and resolution of critical business issue
• Benefits Realization as an integral part of the Project, not a follow-on or
collateral activity
• Change management and organizational alignment processes in place to
make the organization ready to accept change.
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• Clear, concise, relevant, and actionable performance measures directly
linked to each element of the business case and visible to all levels of the
organization
• One integrated team with clearly defined program objectives, goals, and
timeline.
7 Best Practices
The following are some of the best Practices implemented in the program
• Establishment of the CoE / CoC .- A CoE was set up with the following
objectives
o CoE enables development of the required skills, development and
upkeep of reusable assets thus bringing down the costs for the program
o The location of the CoE was carefully selected considering costs
and availability of required skills
o The CoE charter includes that
• All key resources are strategically part of the center.
• The key deliverables of the program are owned by the center.
• Implement best practices
• Established ‘Core and Flexi team’ model
o In order to optimize costs and delivery capabilities, a core and flexi
team model has been adopted. This addresses resource requirements to
meet ‘peaks and troughs’
o The critical skills are retained in the program as core team. These
resources are usually on the leadership roles or posses niche skills. The
flexi team is brought in on ‘as required basis ’.
o The core team is highly skilled and is well versed in client specific
business requirements. This team can guide / lead the flexi team. The
flexi team is brought up to required skill levels by the core team through
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an ‘on boarding’ process which include training in client specific
processes and methods
• Created reusable assets and assigned asset ownership A large number
of reusable assets were created / being created. A process to continuously
improve upon the existing reusable assets and skills based on the lessons
learnt has been established. This process helps to meet the planned
productivity improvement in the business case. The program management
assets are
o Templates - development, configuration, testing, communication etc.
o Processes – engagement, change management, issues and risk
management, decision making,
o Physical assets - testing rooms, virtual Private networks, severs .
o Soft ware Programs – configuration documentation , RICEFW
programs (Reports , Interfaces, Conversions, Enhancements , Forms and
workflows )
o Project Plans – Engagement & delivery, development, testing,
cutover.
o Test scripts , Data migration processes
o Business Process Procedures – Global processes, desk top
procedures.
o Technical architect diagrams.
• Prepared business continuity / Disaster Recovery. The client servers are
hosted in a data center which has built up geographically dispersed back up
to ensure continuity in case of any disaster / eventuality like earth quake
/floods or damage due war / terrorist strikes.
• Assigned data elements ownership – Each data element was assigned an
owner. The owner was normally a business process owner, who dealt with
the specific data element as part of his normal duties. He was responsible of
ensuring that the clean data is provided for upload and after conversion,
validate that data is correctly reflected in the new SAP system.
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• Preparation of Check lists - Check lists defining entry & exit criteria for all
major milestones were prepared. A check list for meeting Go Live criteria is
listed below as an example.
Go Live Check List
Completion of all major test activities SIT: Signoff complete
UAT: Signoff complete
Performance Test: Test complete
Data Cleanup and Data Migration Data verification signoff complete
Activities Data validation and correction Complete
Execution of users’ transition plan OCM roadmap execution in progress as per plan
Bubble staff in place
Completion of LCM Preparedness LCM staff in place
Plan Knowledge transfer Complete
Sustain Readiness Exit criteria met
Execution of Cutover Plan Production verification Confirmed
Dry run Complete
Failover plan in place
Operational Readiness Documentation in place
Hypercare support in place
Technical Readiness Hardware in place; System build Complete
Network upgrade complete
Interface batch Scheduling/monitoring/performance complete
Other Criteria Required for Go Live Disaster recovery plan confirmed
Audit certification received
8 Business Benefits Realization
The realized business benefits were measured in line with business case
commitments. In addition to the global process alignment, there were tangible as
well as intangible benefits.
All tangible benefits were measured and reflected in quantities. Assessment
about intangible benefits like increased employee morale, company branding etc.
was also made.
This exercise confirmed that the program was meeting the business case
objectives and is in line with business leadership’s strategic vision
Key benefits achieved are mentioned below
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Benefit Source Metrics
System Sunset Number of systems / interfaces sunset / Number of Systems / interfaces
partly sunset sunset
Resource Savings Resource Costs Number of FTEs redeployed
Contract Savings Number of external support vendors Number of external venders’
reduced / activities curtailed
Control Points saving Redundant Control Points Number of control points reduced
Automated Control Points
Staff Efficiency & Transaction Time Reduction in Transaction process
Productivity Iterations time
Reduction in Iteration
Cost savings The amount spent on the system to The difference between the
support business amounts spent prior and post
transformation with details of
contributing factors.
9 Lessons learnt
• Requirement of right skills - The requirement of right skills is critical for such a
large transformation program. These skills are required across the domains
like engagement, business, application, architect and organization change
management. Right service provider, where these skills are available needs
to be brought in to steer such programs right at the outset
• The business finds very difficult to provide the requirements in the
requirement gathering phase. Despite trainings, some gaps do remain with
business teams to provide end to end process information and also
understand 'to be' processes. Hence changes in business requirements do
come up during testing and even later part of the project. Methodologies like
Agile and artifacts like ‘Requirement Traceability and Verification matrix’ are
of help.
• Program managers need to effectively monitor changes in the scope. A few
slippages could result in additional work for months. On the other hand,
missing on a few critical business requirements could make the developed
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application inadequate for business to accept or may require an expensive
work-around.
• The change management process followed at the project involved mandatory
assessment by all domains. The response from all domains delays
processing of CRs .To expedite the approval process , CRs should be taken
for approval after preliminary assessment by relevant domains and should be
send to all domains for concurrence after approval.
• Early involvement of users’ and sustain team members help reduce overall
users’ acceptance testing and transition to sustain time
• Data quality and application of global data standards to multiple local
systems can create major data consistency issues. Assignment of data
ownership to the right business process owner to validate the data is of help
to get the right quality of data in to the system.
10 Conclusion
Many multinationals are integrated businesses across geographies and business
units to realize their strategic business objectives of rapidly responding to global
marketplace and significantly reducing operations costs. The ERP packages
provide technology platform to support such initiatives.
Program managing such complex transformation initiatives throw multiple
additional challenges. The Program Managers require high levels of skills of
effectively communicating to virtual teams across diverse cultures, negotiating
successfully , solving complex issues, providing leadership , managing
relationship across multiple levels, managing ambiguity, demonstrating sound
business Judgment and technical acumen to successfully deliver these
envisaged business benefits to the clients, on time and with in budget
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11 Author’s Profile
Sachdeepak is IBM certified Senior Project Manager and Certified SAP
Consultant
He has successfully managed complex and high valued IT /SAP
business transformation Projects like Global SAP Implementation &
Support and business transformation on SAP for one of the largest
global IT Companies .
He set up operations support and development of interfaces in WBI suite,
managed Siebel implementation & support and Implementation of SAP in
Uniliver Ltd.
He managed ECC 5.0 upgrade, SAP releases and rollouts for Ericsson,
while working in Stockholm.
He led Implementation of SAP HR for Rohm & Haas, 3Com (while
working in the US) & for L & T group of companies.
He spearheaded automation of Airmen and Officers’ recruitment and
selection processes for Indian Air Force
In addition, to his delivery roles, Sachdeepak is a trainer and a certified
instructor for Project Management and Project Financial and also a
reviewer and mentor for PMs seeking Senior PM Certifications in IBM.
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He holds MBA and M. Phil. (Org Mgt ) degrees and have published and
presented papers on Project Management in system integration &
application development at various forums like SAP Tech Ed, Society of
PM Japan and PMI Chapter, Bangalore.
sacarora@in.ibm.com , sdsarora@hotmail.com
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