Saturday, 24 July 2010

Evaluating efficiency

At the beginning of the SAP implementation project, it was identified that one of the key drivers was to improve efficiency. We had a large number of systems, none of which talked to each, and as a result, a large number of staff were involved in just manipulating data. It made sense to try to get all of the data in a single system so that it would be easier to work with - and don't say this too loudly, but it was felt that we could perhaps reduce headcount by being more efficient.

We were told that it was possible to improve processes by using the various processes that were built into the SAP software. A number of key areas were identified and we looked forward to seeing these in action. However, in most of those areas, we have still yet to see any significant improvement. In some cases, we have had to take on a couple of staff as the process is now a bit more complex than before.

However, there is an area where we have seen some spectacular improvements - the funny thing is that it was completely unexpected. It has made a major difference to many departments, has saved hours of work every week, reduced waste and saved a sizable amount of money.

When I first joined the comapny, I discussed the concept of electronic document management - at that time, everything was paper based. It was decided that it was not practical, and when we started work on SAP, it was not even put on the blueprint. Having talked to one of the consultants, he did some work for us to set it up, and I bought and installed some hardware to allow staff to scan all incoming documents.

To begin with, there were a few teething issues - getting people to understand where the files were being scanned to was the biggest, and then getting these attached to the relevant item within SAP. But within a fairly short time period, almost everyone was getting to grips with the system.

To explain in more detail, let's look at the sales office. They process around 1,000 orders a week - and every day without fail, they will get a number of queries about an order that has been placed. In the past, this caused some considerable work - although they had access to the data entered, people would question if the order had been entered correctly. The staff member would have to take the customer's details, then hang up, and go look for the original documentation.

As this was not a key driver, we don't have hard evidence of the time taken to recover the paper files, but it is generally accepted that it would normally take between 15 and 30 minutes for each order. (Some would take longer, particularly if the file was misplaced). The staff member would then have to call the customer back wasting more time - and of course, it caused some frustration with the clients.

Now, if someone queries an order, the sales person can click on a link and the scanned file opens up in a matter of seconds. I don't use it that regularly, but I can find and open an order, and then the scanned file in about 40 seconds - the sales staff can do it in just over half that time. And it is not just the sales office that benefits from this - purchasing, accounts, distribution are all making good use of this facility. In fact, we estimate that we are saving the time equivalent of between 4 and 5 full time staff each and every week with the document management system. (My colleagues agree that is a conservative estimate.) We think that as we roll it out to other sites, the savings could be as much as 20 full time staff.

Now don't get me wrong, we are not going to be laying staff off any time soon - but the time saved is going to allow us to do more things that we need to. Sales can do a bit more cold calling, a bit more customer relationship management etc. Some of the saved time will be used to make sure that they have more time to concentrate on other areas where they are not so confident.

I had a comment from one of the staff the other day - she said that the document management system on its own was almost worth the effort of the SAP implementation. Well, I'm not sure that I would totally agree as the cost has been so high. But it is an area that we can point to, in order to highlight success in the project, and as my old football coach used to say "a win is a win".

Now a lot of people within IT will say that this should not be such a surprise - electronic document mangement has been around for many years, and the benefits are well known and fully documented. But you have to understand that for our company, this is a completely new way of working - and one that took a bit of effort to get people to use in the initial stages.

If staff get excited about it because they can now see some tangible benefits, then that is a good thing (a really good thing!). We can then try to use that to get them on board with other aspects of the SAP system. If one area of the system makes their jobs easier, then maybe we can encourage them to be more positive about the rest of the system - and who knows, maybe we will eventually be able to say with hand on heart that the project was worthwhile. We may even see a return on our investment!