Live From the SAPinsider Studio: Frank Linge of Smurfit Kappa Paper on Investment Design Methodology

January 5, 2015

Frank Linge, Manager, IT/IS, Smurfit Kappa Paper, visits with SAPinsider Studio during the Project Management 2014 event in Atlanta to discuss the finer points of his organization's Investment Design Methodology in managing large-scale SAP projects. Topics of this discussion include:

  • Components of the methodology, including Continuous Review Mode
  • Multi-project management
  • Practice of, and benefits from, Investment Design at Smurfit Kappa Paper

View the video, and read the transcript of the discussion here:

Ken Murphy, SAPinsider: Hi, this is Ken Murphy with SAPinsider, and I’m here at the SAPinsider Project Management conference 2014, and I am pleased to be joined by Frank Linge, who is the Manager of IT/IS for Smurfit Kappa Paper. Frank, welcome. Thanks for joining us.

Frank Linge, Smurfit Kappa Paper: Hello.

Ken: Can you start by introducing yourself, the company a little bit, and your role with the organization?

Frank: Let’s start with the company. The company is based more or less in Europe, with some subsidiaries down here in Orange County, California. Approximately by now it’s 41,000 people working for the company and we have 350 places where we manufacture paper or board. And the revenue in 2013 was around $7.9 billion. So that’s the company more or less. My role in the company is I am working for a cluster who’s manufacturing the paper then becoming the box. So actually I am a deliverer of paper for the internal customer which is not quite easy all the time. And my focus is on IT, and on project management.

Ken: And project management; one of the things you’re talking about as a speaker here at this conference one of the things you’re talking about is your organization’s investment design methodology and managing SAP projects. Can you talk about the methodology originated? Was it a particular SAP project?

Frank: No, it was triggered by two experiences I had with implementing SAP to the company. Two larger projects in a million part of money you spend and finally we found out we didn’t do too well. So we had a lot of notification left over after go-live, which is not funny. And we did take about two years in cleaning up everything. So that’s when it started, and with the experience from former companies so I said I needed to do something in methodology and straightness of the process. And so it came up.

Ken: So is investment design an extension of sorts of a proof of concept?

Frank: Well, it does. It combines many other tools already in place, like capex pipelines and stuff we already have. But it tends to a certain amount, because things are missing when we start. We never really analyzed something, so we (estimated) what the costs were going to be and then we started doing things. After we finalized actually, it came up that we really couldn’t prove that the concept was good. We knew we implemented SAP, we knew that we built up a new machinery, but we never were able to then prove over the next one, three, or five years on a long period whether or not we spent the money correctly.

Ken: One of the things you talk about is the continuous review mode. I was hoping you could explain what that is and its importance in that design methodology.

Frank: It’s the most important core part of the methodology. Because we use just one set of data all the way through the process and different kinds of projects. So finally you do have a model and you do have a complete landscape of your processes analyzed and evaluated by money. So what it means just simply is, that you review the process all the time and you go into a cycle and over a longer period of time it appears that you really can calculate and analyze where you are and where you want to be. So actually in the end the review is supported by many different things like being accountable just for a smaller part. So that makes the whole review cycle very interesting from step one through the evolution of the whole company.

Ken: What if I’m running multiple SAP projects at a time? Can I use investment design methodology to manage all of them simultaneously? If so, how do you tame complexity?

Frank: I would say yes, but it is very complex. It’s not complex because of the SAP projects, but then you run into the second part of the methodology which is just multi-project management. So you’re trying to figure out how to keep all those things running at the same time, and using the methodology and analyzing things. So you need a really clear view of where you are at the moment, and you need very well educated people following the concept from A to Z. So if somebody steps out of the concept, there is going to be a hard time to bring them back in again. But yes, it is hard to follow and it is complex but that is the meaning of the game.

Ken: Can you talk about any long-term strategic benefits from this approach particularly in your organization? What real-world benefits have you seen?

Frank: Well, we started off with it. That’s where the proof of the concept came, and the trust of the company and senior management that this is a good idea. And the trust came when we finally were very successful with doing audits. That’s where it started. So the audit was basically part of the new methodology. And so we proved that we were greenlight, greenlight, greenlight. And then they said go ahead with that, and we extended the methodology to a certain point. The first examples are simply audits, and not only in IT, but as well financial audits which are more important as well. And after a while when the trust was there, that allowed us to really start off with the concept from the beginning. So the first thing now started off with is a transport sourcing management system which will be finished in April (2015) and then we can see whether I’m right or wrong.

Ken: All right. Well, we will look forward to seeing that. Frank, thanks for joining us.

Frank: Thanks a lot.

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