Microsoft Dynamics Sure Step 2010 : A repeatable process for the sales teams (part 2)

11/13/2012 3:08:28 AM

Determining the infrastructure implications

The acquisition of a packaged application for the business solution includes the following three components:

  • Software costs (and any associated maintenance costs)

  • Services or implementation costs for the delivery of the solution

  • Hardware or infrastructure costs

The Sure Step Architecture Assessment Decision Accelerator offering deals primarily with the third component of the business solution acquisition costs. It bears mention that infrastructure costs are incurred regardless of whether the solution will be on-premise, that is, physically located on one of the customer's sites, if the solution is hosted by a third-party provider, or it is an online solution. The requirements will definitely vary depending on whether the solution is on-premise, hosted, or online—for example, the former will require more hardware or server components, while the latter two may have higher bandwidth and latency needs.

Given the understanding of the customer's requirements and the proposed solution blueprint to meet the customer's needs, the sales team is able to develop the conceptual architecture of the solution in this exercise. This exercise, which is typically carried out by technical solution architects or technical application consultants, includes developing the high-level hardware and infrastructure plan. Besides the business requirements from the previous activity and the solution blueprint, other inputs considered for this activity include projected transaction volume, key user scenarios, and any other benchmarking activities. The infrastructure and hardware recommendations that result from this exercise are then used by the customer to obtain the estimate for the infrastructure to support their business solution.

The Architecture Assessment DA offering also provides deeper offerings to help the customer in other areas such as performance projections and benchmarking, and high-availability and disaster recovery planning. A customer could have a concern in a specific area of their business that generates high usage or traffic patterns of the solution. Or due to the mission-critical aspect of the solution, they may require that the infrastructure plan encompass failover mechanisms to minimize or eliminate downtime. The customers may also want the plan to include disaster recovery, in order to ensure that their data is protected appropriately and can be recovered in the event of failure. For such situations, the Architecture Assessment DA offering has more technical sub-offerings, including the Proof of Concept Benchmark DA and the High Availability Disaster Recovery DA. Both of these offerings are performed by very senior and experienced technical resources, and can be used to provide the customer with the desired answers and allay any concerns about the operation of the system.

Estimating the delivery costs, approach, plans, and roles

The Sure Step Scoping Assessment Decision Accelerator offering deals with the second component of the business solution acquisition costs noted in the previous section—the services or implementation costs for the delivery of the solution. But this offering provides far more than just the costs—the decision point for the overall approach to delivering the solution, resulting in the development of a high-level schedule and the delivery team structure.

The first step in executing the Scoping Assessment Decision Accelerator engagement is to determine the overall solution rollout approach. In this exercise, the solution delivery team and the customer work together to determine whether the solution can be rolled out in smaller, manageable releases, or if the entire functionality is desired at the time of solution go-live. Rolling out the solution in multiple releases is known as a phased approach to solution delivery, wherein select solution functionality is enabled in individual releases, with each release building on the prior one. The alternative to a phased approach is delivering the full solution in a single release, which is often referred to as the big-bang approach to the solution delivery. A key point to bear in mind is: the reader should not confuse the phased approach with, say, the phases of a waterfall solution delivery method. The waterfall phases break down an overall project or release into smaller segments, while the phased approach is a technique to break down the overall engagement into multiple projects or releases.

The larger the scope of the project, and/or greater the reach of the solution within the customer organization, the more desirable is a phased approach over a big-bang approach. The following are the supporting reasons:

  • A phased approach enables the customer organization to start using the solution much sooner, facilitating a smoother adoption of the system. As the scope for each release is limited, the delivery team can promote that part of the solution quicker to production, thus enabling users to start working with the system earlier than they would have with the big-bang approach.

  • Solution testing can also be more manageable as the limited scope may mean a more focused applicability of the solution and fewer workflows that are impacted.

  • Customers can also start to benefit from the solution sooner, by selecting those requirements that are important to them but could be easier or quicker to solve with the new solution.

  • For complex solutions, customers can also earn valuable support for the project from early adoption of the system, resulting in a quick win for the delivery team, which, in sales/consulting jargon, is often referred to as "going after the low-hanging fruit".

  • From an overall risk management perspective, the phased approach is often seen as the less risky strategy for all the reasons noted here.

Of course a phased approach is not always the best one. Sometimes, the customer organization will need all the features enabled before they can begin using the system. In that case, the big-bang approach may be the only alternative. But the big-bang approach also has other advantages:

  • If the same user base will be using the addition functionality, they will not need to be retrained at every release.

  • Solution testing will encompass all likely scenarios, so the customer organization can find out, once and for all, whether or not the overall solution will meet their needs. This could also potentially reduce overall testing costs. In a phased approach, you test the scenarios for the first release, and then potentially retest those scenarios in concert with the others when testing for the second release.

  • "Throw-away" interfaces or integration code does not have to be created in instances where part of the system being used may necessitate external sources to be temporarily connected to the new system.

Regardless of whether the overall solution can be rolled out using a phased or a big-bang approach, the customer and solution delivery teams also need to select the delivery approach for the individual releases. Solution delivery has two distinct approaches—waterfall and agile.

  • Waterfall: A sequential process that depicts a linear flow of activities from one phase to another, culminating with the solution being promoted to production and then into operation.

  • Agile: An iterative solution development method that promotes a collaborative process between the resources that own and specify the requirements for the solution with the resources responsible for the development and rollout of the solution.

Just as with the overall phased or big-bang approaches, there is no right or wrong with either of the solution delivery approaches; it is just a matter of organizational preference. Some organizations prefer the structure of the waterfall approach, as it clearly breaks down the activities in each phase leading to the deployment of the solution. Others prefer to let the requirements of the solution evolve during the development activities, which is a characteristic of the agile approach. The Microsoft Dynamics Sure Step methodology supports both approaches by offering Standard, Enterprise, Rapid, and Agile workflows (plus an Upgrade workflow for existing customer deployments).

The next step for the sales and solution delivery team, in the execution of the Scoping Assessment Decision Accelerator offering, is to work with the customer and understand their solution priorities using the solution blueprint as the input. To do so, the delivery team will need to identify the inherent constraints, as well as any imposed constraints for the project. Inherent constraints are often imposed by the system—for example, a system will need a certain logical configuration order, such as starting with the chart of accounts, and then moving to the general ledger of an ERP system. Imposed constraints, on the other hand, are typically external constraints—for example, the customer may have licensed specific software that is up for renewal, which the customer does not desire to do, and would prefer that the corresponding module of the new solution is enabled before the license of the third-party software expires. Understanding these constraints allows the solution delivery team to come up with a schedule that meets the customer's objectives for the new solution.

The next step in the execution of the Scoping Assessment Decision Accelerator offering is to determine the effort required for the solution deployment activities. This includes the solution setup, configuration and development, the environment setup, and the user training needs, among other things. Many organizations develop costing spreadsheets and databases to support them in these tasks, and typically populate the spreadsheets based on their experiences on similar past projects. Other organizations use Estimator tools that include base values for enabling specific functionality. These base values may have been garnered from past history, but typically they constitute the average value from the experiences of several consultants over multiple projects. As such, these Estimator tools provide a consistent, repeatable framework for estimating the solution delivery efforts. Of course, the Estimator tools would also provide a means to override a given estimate, say to add an uplift that may be needed in riskier engagements.

The Sure Step methodology includes two such robust Estimator tools for the Microsoft Dynamics AX and Microsoft Dynamics CRM solutions. The output from this estimation exercise produces the overall effort for the solution deployment in the desired time unit, such as hours or days. This effort can then be translated into the solution delivery costs, by associating the corresponding resource rates for each of the tasks. The next screenshot shows a section of the Sure Step Microsoft Dynamics AX Estimator tool:

Armed with the information on the overall solution rollout approach, the individual release delivery approach, the inherent and imposed constraints, and the effort needed for the solution deployment activities, the sales and delivery teams can determine the solution rollout schedule in the next step.

Reducing the risk perception

While the Sure Step Requirements and Process Review, Fit Gap and Solution Blueprint, Architecture Assessment, and Scoping Assessment Decision Accelerator offerings are designed to help the customer envision their future solution and the costs associated with delivering that solution, the Proof of Concept DA is provided to allay any potential concerns for the customer in specific areas of the solution, while continuing the theme of solution envisioning as well.

The Proof of Concept Decision Accelerator offering requires the utilization of solution delivery resources to set up, configure, and customize the solution to a specific subset of the customer's requirements. As the customer has not yet acquired the software licenses, the delivery team will typically build their own demo environment to execute this solution setup, such as in a Virtual PC (VPC) program that virtualizes a standard PC and its hardware. After the solution setup has been completed, the delivery team will set up a solution demonstration in a conference room setting, where the customer's business and technical decision makers will be able to preview and criticize the solution features.

The Proof of Concept DA is an appropriate offering in instances such as when the customer, after going through the Requirements and Process Review, Fit Gap and Solution Blueprint, Architecture Assessment, and Scoping Assessment DA offerings, is fairly comfortable with the Microsoft Dynamics solution but still has concerns in specific areas. There are two key points here. The first is that the customer is fairly certain that the proposed Microsoft Dynamics solution will meet their needs, and the second is that the sales team identifies those specific areas where the customer is looking for additional proof points. These are important points to bear in mind because the Proof of Concept exercise should be a time-bound, limited scope engagement exercise that helps the customer with the final decision point before moving forward with the system acquisition. From the service provider's perspective, these points become crucially important if the Proof of Concept DA is positioned as an unpaid engagement, as resources who may otherwise be working on billable customer engagements are being called upon to work on this prospective customer's requirements.

The Proof of Concept DA can also become the starting point should the customer decide to move forward with the proposed solution. If the due diligence done by the delivery and customer teams includes configuration of the system, and/or custom code is written to meet a specific requirement, these should be carried through to the implementation of the system. This is another aspect where having a customer lifecycle methodology such as Sure Step allows the teams to build upon the work from the previous phases, even if that previous phase happens to occur during the sales cycle.

Another point about the Proof of Concept engagement is the potential that the project scope or solution vision may be altered after the output of this exercise. It is quite possible that the customer team may think of additional usages, or request a different solution to meet their requirement. In these cases, the sales team will need to go back and update the solution blueprint and corresponding delivery estimates, and perhaps even redesign the proposed system architecture.

Estimating the Return on Investment (ROI)

The Sure Step Business Case Decision Accelerator offering is designed to provide Return on Investment (ROI) analysis for the solution that can help the customer executives understand the value proposition for the solution and justify their investment. The Business Case DA determines the quantifiable business value for the given investment, as well as the Total Cost of Ownership (TCO) for their new system.

Determining the impact of the solution on the customer organization and articulating the value is a very important activity for the customer and sales teams. When there is a value associated with the solution, it becomes a lot easier to drive executive support, which is critical for the project. Also, having clearly defined value projections will help motivate the teams through inevitable struggles during the course of the implementation of the solution. In some situations, companies are hesitant to share certain financial information, but given the investment they are about to make in terms of money, resources, and time, it behooves them to go through this exercise so that they can clearly understand the potential for organizational gains with the new system.

In the Business Case DA, the customer and service provider teams work together to determine the direct and indirect benefits associated with the proposed solution. Direct benefits have measurable impact on the budgets or costs. Examples of direct benefits resulting from the new system include:

  • Increased inventory turns and the resulting lower inventory costs

  • Reduction in personnel needed to accomplish a task

  • Increased orders processed through the system during a given period

  • Reduced returns due to wrong shipments

Indirect benefits, on the other hand, are not easily quantifiable. They may need observation and projection of estimated impact. Still, these are important factors to account for. Examples of indirect benefits from the new system include:

  • Productivity increases gained from better visibility

  • Reduced administrative overhead costs

  • Reduced communication costs

  • Increased customer retention

The Business Case DA also pulls together all the costs associated with the acquisition of the solution, with which the customer gains an understanding of the TCO for their new system. TCO cost elements include solution acquisition costs, operating costs, and long-term costs.

As mentioned earlier, the solution acquisition includes three components—software costs (and any associated maintenance costs), services or implementation costs for the delivery of the solution, and hardware or infrastructure costs. The software costs come directly from the licensing agreements. The Scoping Assessment DA produces the cost estimates for the services delivery, while the Architecture Assessment DA produces the inputs to determine the hardware or infrastructure costs.

Operating costs include costs involved in training and retraining the personnel in the customer organization, their resources involved in the testing of the solution, and other costs such as insurance, electricity, and other physical infrastructure needs. Long-term costs, on the other hand, may include costs for periodic solution reviews, and costs for solution upgrades and scaling.

The benefits and costs form the basis for the determination of the Return on Investment for the solution. Sure Step provides an effective tool for ROI calculations, which has been developed by an independent analyst firm, Nucleus Research. The standardized tool provides a systematic way to capture the benefits and costs, which in turn allows the teams to project the expected ROI, payback period, and/or Net Present Value ( NPV) for the investment. Separate ROI tools are provided for the analysis of ERP and CRM solutions. The following screenshot shows the report section of the Nucleus Research ROI Tool for Microsoft Dynamics AX:

The service provider executes the above steps of the Business Case DA to develop the financial results and report. The financial results include insights into risk assessment areas such as capital recovery and variance potential. These results are then provided to the customer's business executives and calibrated as needed.

Besides the financial analysis noted previously, the Business Case DA also helps the organization determine Key Performance Indicators (KPIs) and Conditions of Satisfaction (COS) for the new solution. Establishing the KPIs and COS is an important exercise for the long-term health of the initiative, as they provide a means to track on-going progress of the engagement, and eventually the success (or failure) of the solution. Hand-in-hand with establishing the KPIs is the need to determine the baseline metrics for these KPIs, which will help the teams understand where they were at the start of the engagement and what they have achieved with the new solution.

Developing the project charter

The Sure Step Proposal Generation activity summarizes the conclusions drawn from the Decision Accelerator offerings and the preceding Diagnostic activities into a project charter for the customer. The project charter includes the high-level project scope, solution delivery approach, workflow, timelines, activities, and dependencies. It also includes the roles that will be involved in the solution delivery, both from the service provider and customer teams, and their corresponding skills requirements.

The proposal generation activity begins with summarizing the high-level scope. For this, the sales team will review the outputs of the Requirements and Process Review Decision Accelerator offering and the Fit Gap and Solution Blueprint DA offerings. Based on the requirements that were identified, defined, and documented in these exercises, the project charter will define the scope, including the business needs and functional requirements for the new solution, and the to-be business processes.

The project charter will also include non-functional requirements and any other technology requirements such as integrations and interfaces to external systems. Any performance needs such as system response, latency, system downtime, and failover requirements, will also be noted in the proposal. For this, the team will summarize the findings of the Architecture Assessment DA offering.

The project charter should also discuss the solution delivery approach that was ascertained in the Scoping Assessment DA offering. This includes deciding whether we will go ahead with multiple releases or one single release. It also involves deciding on the suitable implementation approach for each of the releases—waterfall or agile.

The project charter should be accompanied by a high-level project plan. While the overall implementation approach will be covered in the project charter, the high-level timeline, activities, and dependencies for the solution delivery will be noted in the project plan.

Another aspect covered in the project charter is an assessment of the proposed roles and responsibilities, and the project team skills and requirements. The starting point for this assessment can be the output of the Scoping Assessment DA offering. The project plan should then specify the next level of detail, including denoting in which activity and when the corresponding roles will be involved in the implementation. An overall project governance model should also be defined in the project charter, especially for longer engagements that involve multiple releases. The governance model should clearly articulate the project management and key roles for each of the releases. The model should also define the structure to bubble up communications and issues at a program level, such as the formation of a steering committee that will include key business stakeholders from a cross-section of the customer organization as well as key stakeholders from the delivery team.

The project charter can also include project communication plans and schedules, including the timing and information structure for project statuses, from individual release resource teams through to the steering committee.

The assumptions, scope delimitations, and risks identified for the engagement are key areas that should be highlighted in the project charter. It is important to list any assumptions that went into the definition of the solution, along with the requirements that are clearly out of the scope of the engagement, in order to avoid any misconceptions or misunderstandings. The project charter should also note the identified risks and attempt to identify and outline a mitigation strategy for each of them. Any dependencies owned by the customer and outside of direct project control should also be clearly highlighted.

The Proposal Generation activity is typically performed in the Proof stage of the Microsoft Solution Selling Process and traditionally follows Proof of Concept and/or Business Case activities. The sales team looks to influence the solution decision of the customer in this activity, and strives to obtain verbal approval from the customer. Upon receiving a verbal approval of their proposal, the sales team can proceed with the development of a budgetary estimate and the creation of the Statement of Work (SoW).

Closing the sales cycle

The Sure Step Final Licensing & Services Agreement activity builds on the Proposal Generation activity to formalize the agreements between the customer and the selling parties. The selling parties could be multiple entities or, in some instances, one single entity. From a software licensing and on-going software maintenance standpoint, it could include Microsoft, Microsoft Partners, and Independent Software Vendors (ISVs) for add-on solutions to the core Microsoft Dynamics solutions. Similarly, it could also include multiple parties on the services delivery side, including Microsoft-Certified Implementation Partners and Microsoft Consulting Services (MCS).

A typical first step in this exercise is to provide the customer with a budgetary estimate for the services delivery. The budgetary estimate essentially summarizes the results of the Scoping Assessment Decision Accelerator offering, and includes any rate discounts that may have been proposed between the service provider and the customer. If the customer has been actively involved throughout the Diagnostic phase activities, the budgetary estimate should not come as a surprise to them. However, the service provider can expect some level of dialog on rate discussions and timeframes, which is the reason for providing the customer with an estimate, as it facilitates open communications through negotiations towards finalizing a formal agreement.

After a satisfactory round of negotiations for both parties, the service provider initiates the Statement of Work as the formal agreement to commence implementation of the solution. The SOW builds off the project charter and project plan documents initiated in the Proposal Generation activity. It is a formal legal agreement for services that will need to be signed off by the customer and the service provider, so it will include many of the components of the project charter, including the project scope, any requirements not in-scope, assumptions, risk factors, approach, timeline, and resources. The SOW will also include legal terms and conditions both from a services delivery and a payment schedule perspective.

The Statement of Work itself can take different approaches. The most common approach is the Time and Material (T&M) format, where the customer is expected to render their payments for all services and expenses generated during the course of the solution implementation at agreed upon intervals. Project managers from both parties are responsible for ensuring that the project stays within scope and budget, with change order controls and processes typically in place to manage deviations. The larger the scope and length of the engagement, the more likely it is that the parties will agree to the T&M format, which will allow for a lower risk profile, especially for the service provider.

The following is a screenshot from Sure Step of the contents of the Statement of Work for the Standard project type. The SOW has been provided as a template for organizations using Sure Step to customize to their specific needs, including necessary legal references.

The other approach, which is being seen more frequently in tighter economic times, is a Fixed Scope engagement. In this approach, the customer and service provider agree to a very strict definition of the requirements in scope up front, and the service provider is then responsible for delivering all the requirements for the agreed fee. This approach is typically more risky for the service provider, especially in the larger engagements. The scope of the engagement typically goes through some levels of modifications during the course of the implementation. This typically results in the service providers building a risk quotient into their fee structure, to ensure that they are covered to an extent in mitigating circumstances. It bears mention that Sure Step includes guidance and templates to manage the inevitable scope modifications—this is covered in the Proposal Management sections of the Project Management discipline.

Besides the Statement of Work, the other component that is provided to the customer is the Software License and Maintenance agreements. As mentioned earlier, this could be only for Microsoft Dynamics, or it could include any associated ISV solutions.

The third component for a business solution delivery is the hardware and infrastructure requirements. These are typically addressed by the customer's procurement group, based on the recommendations made from the Architecture Assessment DA offering.

Initiating the delivery cycle

The final activity in the Sure Step Diagnostic phase is the Project Mobilization activity, which is the precursor to the start of the solution implementation. This is a critical activity for the sales and consulting teams, especially in instances where the resources involved in the sales cycle are different from those who will deliver the solution.

The Project Mobilization activity takes place after the customer has signed off the Statement of Work. It ensures that there is a clear knowledge transfer of the customer's requirements and the envisioned solution between the sales resources and the delivery resources. In this activity, the services delivery managers also lock-in the consulting resources who will execute the implementation of the solution. If the resources need any additional training before the start of the implementation, the managers are responsible for making sure that the training is scheduled and executed without affecting the start of the solution delivery.

Other usage scenarios for the decision accelerators

In the previous sections, we discussed the positioning and usage of each of the Sure Step Decision Accelerator offerings at length. Each of the offerings has been designed to serve a specific purpose, and they build on each other to help the customer envision their future solution. As noted before, the DA offerings are each independent and optional, so only those that are required for a customer engagement need to be used. That being said, there are three critical DA offerings that should be executed in some shape or form to ensure that the solution meets the vision and requirements. The three DA offerings are the Fit Gap and Solution Blueprint DA, Architecture Assessment DA, and Scoping Assessment DA.

The first DA, Requirements and Process Review, is important only if the customer does not have a full grasp of the requirements for the new solution or the future processes with the new solution. However, these days many customers start their business solution selection process with a Request for Proposal (RFP). If the RFP encompasses a thorough composition of the organization's requirements and future processes, the seller can begin with the Fit Gap exercise to determine if the requirements fit well with their solution. However, as noted earlier, even if a customer already has an RFP in place, it is possible that another competitor or vendor assisted the customer in developing the requirements. In that case you may have to execute the Requirements and Process Review DA, at least to an extent.

Determining the Degree of Fit of the solution is of critical importance, as is determining the solution blueprint, the future infrastructure, and the approach, timeline, and costs to deliver the proposed solution. This is why the Fit Gap and Solution Blueprint DA, Architecture Assessment DA, and Scoping Assessment DA are deemed as critical DA offerings. If, after executing these offerings, the customer is convinced that they have the right solution to meet their needs, the sales team may be able to go straight to the Final Licensing and Services Agreements activity and skip the other DA offerings.

For smaller deals, questions often arise from sellers about whether or not the Sure Step Decision Accelerator offerings are still applicable. Irrespective of whether the DA offerings are positioned as paid offerings, they are still applicable because they reduce the risk factor for a solution of this importance for the customer, as well as for the service provider, who ensures that they have documented and accounted for all the requirements in their proposal. It is important to remember that the duration for each of the DA offerings is dictated by the selling and customer teams. So, for smaller engagements, it still behooves the service provider to at least utilize the templates provided in Sure Step and go through the steps in an abridged manner if needed. This will ensure that they are not making any erroneous assumptions, and they are also clearly communicating to the customer their understanding of the requirements and the vision of the solution. Going through this process also reduces the risk of underestimating the deal, as during this process the sales teams may unearth points that they may not have considered. Therefore, at a very minimum, the sales teams should use the Sure Step templates to document their assumptions and solution vision, and make them known to the customer. Another option may be to combine the three offerings and execute them as a series of steps, resulting in the documentation noted above.

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