April 2020
Understanding, expectation and management of impediments discussed in this blog is paramount to a successful implementation. Formally adding Change Management to the project will facilitate management of the expectations and minimize the relating dysfunctions.
The focus of this blog is from a D365FO implementation perspective of a spin off.
Carve outs and Spin offs are when a parent company divests a minor part of the company to investors. The minor part may be one or more business units. A carve out is usually transacted by sale of stock, whereas a spin off sells the business unit so that it becomes a new company. Either of these divestiture methods may span multiple years to accomplish.
The investment company desires the spin-off company to be worth more by itself than it was as part of a larger company. The investment company will want to achieve the best return on the investment, thus their goal is to maximize company value while minimizing ERP implementation costs.
There are several implementation challenges when dealing with the business unit’s project leads and subject matter experts. There are conflicting agendas, whereby an investment company (the new owners) are telling the employees that they are going to get a new system configured for their needs. The employee interpret this as, a magic lamp, they are going to get configurations that match all their needs, wants, and desires. The local ERP implementation leads end up with similar impression. All the while, the investment company is telling the implementing team, they do not care if the employees have extra button clicks and extra steps.
On the implementation team, there are different expectations. On regular implementations, the client requirements are not overruled by an investment company. As a result, there are several best of breed enhancements developed for the ERP system. The consultants are familiar with adapting to clients on a day to day basis. The consultants are not familiar with deflecting all the SME enhancement requests to a listing that gets reviewed (frequently denied) by the investment company. Client leads, SME, and Consultants may quickly develop less than productive attitudes due to their frustrations.
Another facet is client staffing. When a spin off occurs, the SME’s may stay with the selling company, thus minimal staffing at the new company. The parent may have let all the low performing employees go as part of the divestiture. Alternately, business unit functions may have been controlled by a corporate department, thus the employees at the new company, simply lack the knowledge to perform specify required tasks for the new ERP system (e.g. centralized accounts payable, decentralized foreign offices). The client may rely on the implementation team to fill this knowledge gap. The client may go so far as to request the implementation team to act like employees, e.g. defining business process, processing system transactions.
In summary, when planning and performing an ERP implementation, acknowledgement and management of the above facets, will greatly help you have a successful implementation.
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