• Cognizant 20-20 Insights

Transforming the Business Through Large-scale Product Implementation There are multiple facets to the success of an extensive IT product implementation. We present a sequence, governance framework and key considerations for managing such a program.

Executive Summary is recommended that during this stage firms finalize a governance structure for the initia- The decision to embark on a large-scale IT tive, identify the desired operational changes, product implementation project has the potential choose the product and draw up actionable to transform the way an organization operates. plans to kick-start the implementation. Such a project impacts not only the IT systems, but also business processes, team structures and • Implementation: After the groundwork is the organization’s competitiveness in its industry. complete and a product is identified, the final It provides the leadership with a rare opportunity set of future business workflows and the cor- to take a step back and challenge the “It’s always responding level of product customization are been done this way” mind-set. agreed upon. New software is released and workflows and/or data are migrated. It is all too easy for management to view such Post-implementation: The value of the product an initiative as merely an IT implementation and • implementation is enhanced and sustained by miss out on the opportunity to transform the instituting governing frameworks for incorpo- broader business processes. A clear definition of rating user feedback and overseeing future the business vision can help prevent this. changes. In addition to developing a clear business case, A comprehensive change management plan, establishing a governance structure early on which encompasses the project from inception to is crucial for ensuring that the project fulfills closure, must be instituted to ease the transition. its envisioned potential. A governance group There is a natural tendency for the focus to shift provides strategic and tactical supervision, and away from change management activities as the ensures that the program stays on track. program gathers momentum. Governance teams The lifecycle of a product implementation can be can help to keep an eye on the bigger picture – the divided into three distinct stages. overall organizational objective – to help avoid this misstep and ensure a seamless transformation. • Initiation: The foundational stage of the project, this prepares the ground for implementation. It

cognizant 20-20 insights | august 2012

Large-scale IT Product Implementation Stages

Post- Initiation Implementation implementation •Establishing governance •Processes. •Incorporating user

structure. •Technology. feedback.

•Drawing up a business •Organization. •Ongoing governance. transformation plan. •Developing requirements. •Product selection.

Change Management

Figure 1

Phases of a Product Establishing a governance structure: Com- Implementation Project prising stakeholders from all affected business divisions as well as vendors, the governing com- A product implementation can be viewed as a mittee provides direction plus operational and series of phases (see Figure 1). An effective change tactical oversight throughout the project lifecycle management program would run parallel to the (see Figure 3). implementation, preparing the organization to react favorably to the impending transition. • Strategic governance: The strategic governance group, comprising senior leaders Initiation from business, operations and technology as There are several considerations to be taken into well as vendor partner(s), is responsible for account during the early stages of a product deciding the direction and providing strategic implementation (see Figure 2). Decisions around oversight. This group is responsible for product suitability and adherence to business providing the funding/resource commitment processes are the result of a detailed evaluation for the program and monitors the program’s and selection exercise involving stakeholders progress in terms of the strategic objectives. from business, operations and technology.

Key Questions During Initiation Phase

Is the product choice driven by the Have the major pain points and bottlenecks organization’s unique set of needs been identified and will the product and challenges? implementation address them?

Is there a culture of accountability Have the process areas within the governance group and has that will be impacted leadership invested in the broader been identified? goals of the project?

Will an upgrade to existing infrastructure Will a change to the be necessary to support the product? existing organization If yes, has this upgrade been factored structure and hierarchies in the cost-benefit analysis? be necessitated?

Figure 2

cognizant 20-20 insights 2 Levels of Governance business leaders can begin identifying the processes that will be reviewed as part of the project. The point is to understand the real purpose of business processes and not the as-is implementation. The final scope should Strategic Governance be broad enough to extract maximum benefit out of the impending implementation, while staying focused on the drivers behind the

Set Direction decision to embark on the project. Program Governance Escalation

• Design blueprint for future state: A plan outlining the to-be processes and highlight- PMO ing the potential benefits in terms of reduced Operational Governance turnaround time, risk, cost, etc. can be developed as an output of the process analysis. At this point, it would be a good idea to make note of viable alternatives to recommended Figure 3 future processes that can be evaluated at a later stage for feasibility. • Program governance: The program Taking an objective view of the existing processes governance group supervises programs in line is vital to weed out inefficiencies. Firms may find with business priorities and technology goals. it beneficial to engage an independent partner This group, comprising program managers, is who can critically assess the current state and responsible for the resolution of any issues present an unbiased point of view on process that may crop up, risk management, ensuring enhancements. vendor accountability and managing project dependencies. Developing requirements: A detailed set of business requirements may be finalized while • Operational governance: The operational bearing in mind planned changes in business governance group is an initiative-level task processes, nonfunctional considerations (scalabil- force, involving stakeholders from each ity, performance, etc.) and industry trends. project. It ensures that all projects are on track and provides early visibility to the program • Functional requirements: Functional require- management committee in the event of any ments must cover the business features delays or risks. desired from the product. These can be a com- bination of the ideas uncovered during the The key consideration while forming the early stages of the project conceptualization, governing body is to ensure due representation requirements determined during the business from the affected stakeholders while keeping the process transformation phase, industry trends members to a minimum because the speed of and the perceived direction of the project. decision making slows as the size of this group increases. • Nonfunctional requirements: Considerations related to product capacity, scalability, archi- Drawing up a business process transforma- tecture, integration capabilities with existing tion plan: Product implementation and the systems and infrastructure requirements accompanying workflow automation present an should be kept in mind while drafting nonfunc- opportunity to introduce operational efficiency tional requirements. We recommend that cost- and controls, and reevaluate business processes conscious firms adhere closely to specifica- that are not completely aligned with the strategic tions that are true to their anticipated business objectives. An intensive analysis of the existing and infrastructure growth instead of seeking state of affected processes and planning the expensive “industry-leading” features that desired future state are first steps toward gaining might go unused. the best value from such a transformation. Requirements may be prioritized based on criti- • Analyze to identify improvement opportu- cality and their “fit” with business goals. Firms will nities: At the outset, the process owners and do well to avoid leaning toward a product choice

cognizant 20-20 insights 3 and subsequently retrofitting requirements; it is submit proposals. Vendor proposals should be important to take an unbiased view of the unique evaluated for their fit with the initial consider- set of needs and constraints of the business ation set, as well as the level of customization before settling on a product. that would be needed to implement the “must- While making a have” requirements. product decision, Product selection: The product selection decision has many facets, While making a product decision, it is essential it is essential to including but not limited to the func- to keep in mind the future costs and constraints keep in mind the tionality offered, pricing, vendor that accompany product customization. Ongoing support for the customized modules as well as future costs and capabilities and support, ease of customization and infrastructure compatibility with future releases of the product constraints that requirements. An exhaustive set of must be factored in before making a decision. accompany product prioritized requirements serves as Develop implementation plan: Developing customization. a valuable input toward arriving at strategies to plan for critical pieces of the this decision (see Figure 4). implementation is crucial. The project teams • Determine considerations: The considerations must understand the “big picture” and put in a for product selection might include the set of concerted effort toward meeting dependencies. functional and nonfunctional requirements, • System integration plan: The system inte- vendors’ support models and frequency of gration plan should address aspects such as product updates, pricing models and vendors’ synchronization of multiple projects, interface capabilities and experience. development for existing and new systems and • Develop a scoring model: A scoring model testing coordination. Multiple system integra- that assigns weights to all requirements and tion options may be available to the firm, and qualitative considerations helps to objectively firms should exercise care in making the right rank vendor responses. Requirements that selection (see Figure 5). are nonnegotiable “must haves” need to be >> In-house system integration: If the firm assigned high scores. The model should be has a strong in-house capability to man- flexible enough to allow for assigning partial age the system integration, this would be scores where a feature is not available out of an ideal solution. However, taking on this the box but can be developed by customizing role in addition to driving the overall pro- the product. gram puts a significant strain on the firm’s • Publish RFPs and finalize selection: Based resources. on the finalized considerations and prelimi- >> Independent system integration partner: nary information regarding potential vendors, An independent partner with relevant inte- a set of vendors can be identified and invited to

Requirements and Considerations for Product Selection

Response Analysis Vendor Scoring & Product & Vendor scoring Recommendation Report

Create Comprehensive Vendor Shortlist Vendor RFP Vendor RFP document Develop Vendor Scoring Model Vendor Scoring Model Vendor Response to RFP

Functional Requirements

Nonfunctional Requirements

Qualitative Considerations

Figure 4

cognizant 20-20 insights 4 gration experience and domain knowledge and user acceptance testing needs to be devel- and without product prejudice is the next oped for a successful implementation. The firm best solution as the independent partner’s needs to optimally divide the testing effort focus will be on an optimal solution. The between testing out-of-the-box features and program structure could be designed to testing customizations and integration points. make the integration partner fully account- able to the firm’s program management Key stakeholders and all vendor partners should team, which in turn could coordinate with sign off on each of these plans to ensure account- all the internal and external entities. ability. Early investments in planning prevent unpleasant surprises (and costs) in later stages of >> Product vendor: If a product vendor were the program. to also independently manage the system integration, it may cause a conflict of inter- Implementation est. For example, the vendor may choose to The implementation stage comprises a set of ini- customize the product for a requirement tiatives across the firm. Planning for these initia- that can easily be built into the firm’s exist- tives before diving deep into “activity mode” is ing system. Also, managing related internal a key determinant of success. Almost all firms projects of the firm could be a challenge for have a set of defined processes for executing the product vendor. large programs. These processes need to be • Migration plan: A product implementa- customized for the product implementation to tion requires detailed and careful migration ensure efficient implementation. planning. This may require new development, enhancements to existing systems, parallel Gap analysis: Once the product choice has runs of new and existing systems as well as been made, it is necessary to review the original new “throwaway” developments. Planning business transformation plan and the prioritized ahead to develop a fully integrated program requirement set. As all requirements that were implementation vision that highlights depen- initially envisioned may not be an ideal fit given dencies between various projects is essential the customization, alternatives might need to to minimize the ”throwaway” effort and be used. A gap analysis serves to identify those smoothen the “go-live” experience. features from the initial set of requirements that are available out of the box, and those for which • Test strategy: A detailed product testing strat- customization is needed owing to product con- egy covering comprehensive integration testing straints.

System Integration Options

1 Product Vendor Acting as System Integration Partner

Product Vendor Firm+Outsourced Team Project Team Product Vendor Firm Project Outsourced Team Project Team

2 Firm Managing System Integration Product Vendor Firm+Outsourced Steering Program Team Project Team Committee Management Firm Firm Project Outsourced Team Project Team

3 Independent System Integration Partner Product Vendor Firm+Outsourced Team Project Team Integration Firm Controlled Partner Firm Project Outsourced External Partner Controlled Team Project Team Product Vendor Partner Controlled

Figure 5

cognizant 20-20 insights 5 Business process reengineering: Revisiting important to ensure that the end users are and evaluating alternative process workflows satisfied with the solution, and also that any for requirements that are not supported by the future requirements do not erode the value product or need a high level of created by the project. Valuing end-user customization serves to finalize the initial business process trans- Incorporating user feedback: Once the product feedback creates formation plan. A set of require- implementation and the accompanying opera- ownership and ments results from this exercise tional changes are complete, the firm should put buy-in. End users that defines the required product in place a continuous feedback mechanism so customization and custom develop- that all the affected users can provide feedback are much more ment outside the product. All “nice on the product and the changed workflow (see receptive to to have” requirements that need Figure 6). high levels of customization may changes and ignore Evaluate feedback: The feedback received be considered for exclusion based • should undergo meticulous evaluation; it is minor disruptions on time and cost constraints. It is important to avoid continuous cycles of minor important here to bear in mind the when they feel a changes. Suggestions considered fit for imple- long-term maintenance costs of sense of ownership. mentation can be taken up in a subsequent over-customization. release cycle. Product customization and related software • Roll out changes: Following the evaluation, development: After the business processes are the changes chosen for incorporation can be finalized, implementation can commence. Proof implemented in a series of planned releases. of concepts may be planned for testing critical The flow of communication should be kept up integration touch points in order to mitigate risks during these changes to ensure that the users during the later stages. Product customization feel involved in the fine-tuning process and should be carried out such that future upgrades respond positively to the adjustments. will support the customized pieces. To ensure Valuing end-user feedback creates ownership maintainability, the product vendor should be and buy-in. End users are much more receptive required to follow strong software configuration to changes and ignore minor disruptions when management procedures. The firm’s standard they feel a sense of ownership. Any undetected SDLC methodology should be followed for custom inefficiencies in new workflows can be ironed out development around the product. by analyzing and selectively implementing user Releases: Product implementation requires an suggestions. extended parallel run of the existing platform and Ongoing governance: Retaining a governance the new platform. The parallel run may last for team that oversees future enhancements, many weeks, and it is important to be prepared for these parallel operations. Also, regular, high- Feedback Flow quality checks must be performed to ensure that the system performance is in line with expecta- tions. The migration sequence can have a sig- nificant impact on the “sunk costs,” based on the level of throwaway development required. Hence, the sequence in which the modules will Get Evaluate be released into production should be carefully Feedback Feedback 1 2 considered. Product releases for intermediate testing or other purposes should be accompanied 5 3 by detailed release notes. Transformed workflows Promote Roll Out to support the technological changes need to be Usage 4 Changes rolled out in conjunction with the product launch, Communicate in keeping with the business transformation plan.

Post-implementation Successful implementation is not the end of the journey for the firm’s leadership. It is equally Figure 6

cognizant 20-20 insights 6 inclusion of additional workflows and integration Preparing the organization for the transforma- of new systems can help to avoid the common tion is an important investment in the success of pitfalls of over-customization or the platform the initiative. becoming obsolete sooner than the expected time. Business goals and the marketplace evolve Communication: Timely commu- continuously, and hence process changes should nication to the entire organization Ideally, the mitigates uncertainty and anxiety keep pace to stay aligned with the business governing body objectives. over the upcoming changes and impending shifts in the orga- should comprise • Process governance: New workflows being nizational hierarchy. A plan leaders who are considered for inclusion should be scrutinized should be chalked out to formally for efficiencies as well as relevance to the busi- reach out to all stakeholders, aware of the ness objectives. Existing workflows that are creating awareness and individual guiding principles being modified should stay true to the funda- ownership for the new product of the original mental principles of the original transforma- implementation. tion initiative. implementation and Influencing user behavior: User who continue to • Technology governance: In order to protect acceptance of changed workflows the value of the implementation over a longer can be accelerated by leadership be invested in the period, the technology ecosystem surround- initiatives such as championing of program. ing the product should be safeguarded from the new processes and systems, bottlenecks that could impact performance, and by behavioral changes. maintainability and the potential scale of the Encouraging users to approach leadership with overall platform. new ideas to achieve business goals can also help Ideally, the governing body should comprise achieve buy-in. leaders who are aware of the guiding principles of the original implementation and who continue to User training: Adequate user training can go a be invested in the program. long way in alleviating the inevitable unease sur- rounding the new platform. The training plan Change Management should ensure that by the time the product is In addition to successful operational and techni- installed and new systems go live all users must cal implementation, organizational change man- be familiar with the product navigation, workflows agement plays a critical role in the success of and exception resolution processes. Contract large programs. A new product implementation negotiation with the product vendor should ripples beyond the application, technology and include early and regular demonstrations of the infrastructure changes (see Figure 7). product for the intended users and commitment on formal classroom training for all users.

Managing Organizational Change Accompanying a Large IT Product

Customers Operations staff Tech staff People Changes

Organizational Changes Shared Services, Global Operations

Process Changes Business Functions New Vendors Technology Changes

New Vendor Product New Operations Workflow Hierarchy Legacy Modernization and Team Setup New IT Hierarchy Infrastructure

Figure 7

cognizant 20-20 insights 7 Change management is all too easy to set aside. critically observe business operations. While a Leaders’ efforts toward ensuring a smooth product can deliver certain immediate benefits transition often lose steam as other activities out of the box (e.g., automation, speed of place greater demands on their schedules. execution, etc.), looking beyond technology to It is important to view change management harness value can greatly magnify the benefits as an overarching theme in all stages of the of a large-scale product implementation program. project. A comprehensive organizational change management program identifies and aligns all the Shrugging off the legacy of long-standing impacted components of the organization, and processes to seek a fresh perspective on realigning improves the predictability of results by antici- people, processes and technology with business pating and mitigating people and organizational goals can be challenging. However, seizing the issues. opportunity of translating a technology project into a broader set of initiatives helps an orga- Conclusion nization make the best of its investments and A product implementation is an often overlooked increases the probability of the program’s success opportunity for firms to take a step back and in the long term.

About the Authors Aashish Chandorkar is a Director with Cognizant Business Consulting and leads the Technology Consulting Practice. Aashish can be reached at [email protected].

Dheeraj Toshniwal is a Senior Manager with Cognizant Business Consulting and leads the Wealth Management Consulting Practice for APAC. He has experience leading business and IT transformation engagements with global banking and wealth management firms. Dheeraj can be reached at Dheeraj. [email protected].

Siddhi Chanchani is a Senior Consultant in the Banking and Financial Services Practice within Cognizant Business Consulting. Siddhi can be reached at [email protected].

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