Reducing Operational Risk with SAP Management of Change

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SAP Solution in Detail

SAP Solutions for Sustainability

SAP Management of Change

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Quick Facts

Business Challenges

• Conform to regulations and voluntary standards when evaluating process changes

• Monitor change so that it does not lead to unknown or uncontrolled oper-ational risk

• Eliminate burdensome change and approval processes that tempt staff to make changes without review or approval

• Involve the right experts, approvers, and technical staff automatically • Document and track follow-up actions

so temporary changes do not unin- tentionally become permanent Key Features

• Simple change request – Let employees and contractors request changes easily

• Automatic assignment – Automate identification of risk experts, approvers, and subject-matter experts • Business rules and checklists –

Streamline the change process and drive consistency

• Task management – Provide workflow and status management to ensure task completion

• Integration – Integrate with asset management and environment, health, and safety processes

Business Benefits

• Meet regulatory requirements and industry best practices by thoroughly assessing impacts before approving changes

• Improve executive supervision by providing insight into change manage-ment performance

• Maintain safe operations by miti- gating risk caused by change • Grow with confidence by safely

pursuing business improvements and new opportunities

For More Information

Call your SAP representative, or visit us online at

www.sap.com/sustainability/orm. Summary

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Improve Safety with Flexible and Robust

Management of Change

MAnAgeMenT OF ChAnge: CRITICAl IMPACT TO AveRT CATASTROPhe Perhaps no industry understands the need for effective management of change better than the chemical indus-try. After the disaster in Bhopal, India, in 1985, the industry voluntarily created the Responsible Care program, and manage-ment of change was a key component. The American Institute of Chemical Engi-neers founded the Center for Chemical Process Safety and has created an effec-tive community focused on this topic. The American Petroleum Institute like-wise created voluntary standards such as its Recommended Practice 75. The NORSOK standards developed by the Norwegian petroleum industry are similar standards that apply to oil ex-ploration in the North Sea. In addition, many countries have imposed regula-tions like OSHA’s process safety man-agement of highly hazardous chemicals standard in the United States.

From these beginnings, more and more companies have come to rely on man-agement of change as a best practice. They realize that changes can have a negative impact not just on people or the environment but on the business itself. A change to improve one business objec-tive often has unintended negaobjec-tive con-sequences on another business objec-tive, be it product quality, safety, or operational costs. For these reasons, a holistic approach that evaluates all im-pacts a change may have is essential to carefully balance the pros and cons. Through effective management of the change process, companies can grow their business with confidence.

BeyOnD COMPlIAnCe TO PROACTIve OPeRATIOnAl RISK MAnAgeMenT The SAP® Management of Change appli-cation, a part of SAP solutions for sus-tainability, can help your organization es-tablish an effective change management program, meet stringent compliance standards, and manage operational risk proactively. With the support of the soft-ware, you will be able to apply changes to your operation confidently because you monitor potential risks associated with any change before the change is made. A Rigorous yet Straightforward Process The first challenge in change manage-ment is that you cannot manage changes you know nothing about. The fact is, a multitude of changes may be made with-out a manager’s knowledge because em-ployees bypass what they perceive as cumbersome change management pro-cedures. To resolve this, the SAP applica-tion makes the change request process as straightforward as possible; it is based on simple change request forms that en-courage employees to participate.

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management process and the degree to which it has been accepted by employ-ees throughout the company. Workflow notifications and status reports help managers supervise all activities related to the assessment and implementation of changes. Flexible analytics can moni-tor key performance indicamoni-tors (KPIs) to give executives insight.

Because your processes evolve over time, the software moves with you, sup-porting such different options as ad hoc task creation, manual selection of tem-plates, and fully automated rule-based processing. Only the relevant stakehold-ers and contributors are assigned to tasks, which avoids confusion and mini-mizes workloads. Individual contributors are notified via e-mail and can jump di-rectly to their work without complex nav-igation. The workload on change coordi-nators is greatly reduced, so they can focus on monitoring the meticulous exe-cution of change-related tasks.

Because too much change at one time can itself be a source of risk, it is impor-tant for management to monitor the overall process. Questions such as “How many changes were made this year?” and “Are activities being completed in a timely manner?” are essential to under-standing the maturity of the change Once a change request is submitted,

the process must expedite that particu-lar type of change intelligently, even though different types of changes are handled differently. Small changes should not be delayed by exacting analy-ses, although potential adverse effects of making such changes must be consid-ered. Complex changes should undergo extensive reviews by multiple disciplines. Temporary changes may be handled dif-ferently than permanent changes, while all changes require various pre- and post-start-up activities. The SAP applica-tion can standardize all these different procedures, relieving staff of any unnec-essary burden. The software supports an efficient, effective business process by applying case-specific checklists and rules, which can automatically create activities and assign the appropriate resources.

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SuBMITTIng A ChAnge ReQueST To manage changes, the changes re-quested must be entered into the soft-ware. However, initial data entry for SAP Management of Change is minimal. The requestor selects what type of change is involved (see Figure 2) and uses data that other SAP solutions use, for exam-ple, the data describing peoexam-ple, assets, or materials. Later in the change pro-cess, additional data can be entered as needed and parameters set, such as planned dates or an emergency flag. Most data in SAP Management of Change is captured through the input of textual comments and selectable response codes set up in questionnaire format based on your requirements. The fields used frequently – like the emergency flag – can be predefined in the software.

based on previous responses. This dy-namic approach models the real-world process, but does so in a way that brings order to the chaos.

SAP Management of Change supports the five main phases of the change man-agement process as shown in Figure 1: submission of a request, review, approv-al, release, and execution. Throughout these phases, tasks are assigned to the appropriate specialists. Activities carried out frequently can be predefined in stan-dardized templates, which can be mod-eled to reflect your business needs. The SAP software can then generate an activ-ity according to your business rules, so it happens only when required. For exam-ple, when a change is in review, follow-up activities are triggered only for the posi-tive responses. This minimizes staff in-volvement to just what’s required. Making changes to processes and

as-sets is a multistep process that may be performed over days, weeks, or months. That makes it easy to forget an impor-tant interim review, leave out an approv-al step, and lose track of close-out activities.

Which reviews and activities are appro-priate depends on the type of change to be made. To map out all possible if-then statements is impracticable. You need a manageable way to ensure that the is-sues that need to be considered are con-sidered and that the people who need to be involved are involved. But no more. The SAP Management of Change appli-cation supports this variable, conditional, iterative process. As you work through review and approval processes, and as activities are executed, additional re-views and activities can be triggered

The Five Key Phases of a Change Request

Figure 1: Support for Five Key Phases of a Change Request

SuBMIT ChAnge ReQueST

Requester

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an expert they can pick from a pre-defined list, requesting a review or additional information.

Change requests are often made by line workers who may need additional technical support to properly document their request. To give them help, the soft-ware helps them generate an e-mail to Contractors and employees who have

no SAP user account can enter a change request. In this case, they would use a generic system user ID and specify their own ID in a requester field.

Figure 2: entry Screen for Change Requests

More and more companies have come to rely

on

management of change as a best practice

.

They realize that changes can have a negative

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RevIewIng AnD evAluATIng A ChAnge

A change must be assessed to make sure it will bring sufficient benefits to the company and that the risk can be man-aged. The assessment process can vary greatly depending on the type of change, the complexity of the environment, and the urgency of the request. Many compa-nies distinguish between minor and com-plex changes, with a clear checklist of items to check for each type.

The SAP software can be modeled to support each change type. For example,

task management for minor changes is not necessary prior to implementation, while a risk assessment questionnaire could be displayed directly from the change request screen. The questions would have to determine how well the user understands the change being re-quested, whether the change intrudes into uncharted territory, and if the change brings hidden complexities with it. Figure 3 shows a sample configuration of a risk assessment questionnaire.

A complex change, on the other hand, could require expert analysis, potentially involving multiple disciplines, for

exam-ple, environment, health, and safety (EHS) management personnel and engi-neering. The SAP software can be config-ured to generate a single task to handle an entire assessment or more than one task, with each task handling a portion of the assessment. The tasks are based on templates that specify roles. The people registered in the software who fulfill those roles will then be notified automat-ically via e-mail, which includes a link tak-ing them directly to the task they have to perform.

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Digital Signatures

If a certain approval is highly critical, for example, when the environment is highly hazardous, the task can be configured to require a digital signature. In extreme cases, a signature strategy requiring multiple digital sign-offs may be defined.

Digital signatures can be required by the SAP Management of Change application at any time in the change management process. For example, you may want to require digital signatures for overall sta-tus changes or on completion of individ-ual tasks of certain types (see Figure 4). APPROvIng OR RejeCTIng A

ChAnge ReQueST

After all review tasks have been complet-ed, the change coordinator sets the change request status to “review com-plete.” When multiple approvals are needed, the individual subject-matter experts provide their approvals during the evaluation phase. Now, before the implementation phase can start, the change request must be given a final approval or rejection.

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ReleASIng A ChAnge ReQueST AnD DRIvIng The ChAnge PROCeSS The fourth phase of the change manage-ment process involves, first, releasing a change request that was approved. There-after, the actual implementation of the change happens in tandem with the fifth phase: the coordinator drives the com-pletion of all tasks by different owners.

Businesses often divide the implemen-tation activities into subphases: pre-start-up, implementation, and post-startup. You can group your activities into subphases in the software by arranging them in task hierarchies that you define in templates. The software then includes the appropri-ate templappropri-ate based on your business rules. You can define templates to cover any degree of complexity or criticality a review might warrant (see Figure 5).

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You monitor task status from the task hierarchy, with statuses represented as traffic lights. When all tasks have been completed, including post-start-up ac-tivities, the overall status is set to “com-plete,” which concludes the change process. In exceptional cases a change request can be reopened, for example, to correct entries. As with all software-supported actions, the authorization for this can be restricted to a specific profile.

When a due date and responsible per-son is fixed, the system automatically generates notifications. When deadlines or people responsible cannot be ascer-tained ahead of time, you fill in the per-son and date and trigger the notification. You can also create an ad hoc activity and trigger the associated notifications. This gives you great flexibility to antici-pate and cover every situation. By adding templates and rules gradually over time, you can extend the software configura-tion until it covers the great majority of your processes.

As an example, a common implemen-tation task could be the pre-start-up safety review (PSSR), which is modeled in the software with questionnaires, in-cluding a comment section – and a full history log of comments – per question. For each area of the PSSR requiring an explicit sign-off, the software generates a separate task and provides individual status management for each task.

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exeCuTIng ChAnge ReQueST ACTIvITIeS

Executing a change typically requires the completion of a number of implementa-tion activities that the software gener-ates based on the rules set. When an activity is triggered, the activity owner assigned to that activity receives an e-mail with a link providing direct access to the task. There is no need for the ac-tivity owner to view the entire change re-quest. However, if the need arises, he or she can readily navigate to the change request itself.

Alternatively, activity owners can work from personal work lists within SAP Management of Change (see Figure 6). Work lists can filter items by user or sta-tus, so an activity owner can display, for example, just the open work items assigned to him or her. Work lists are very useful for users who have multiple task assignments.

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Integration of the SAP Business Workflow Tool

For casual users, the most convenient way to access a task is through the link embedded in the notification e-mail, which takes them directly to the task in the workflow. This eliminates any need for them to search or navigate.

However, through integration with the SAP Business Workflow tool, you gain much greater functionality than e-mail can offer. Using its intelligent workflow in-box, a task can be sent to multiple al-ternative assignees, which appears in the in-boxes of all those users. However, as soon as one person accepts the task, the item is removed from the in-boxes of the other assignees. Using this tool, you can configure a workflow to forward work to substitute activity owners during absences of regular activity owners. You can also set up a workflow to execute escalations based on time frames.

Integration with SAP ehS Management SAP Management of Change integrates with the SAP EHS Management applica-tion to leverage expert EHS risk assess-ment functionality. A risk assessassess-ment request can be created directly in SAP Management of Change, establishing a link between the applications. Once the assessment has been completed in SAP EHS Management, the results are sent back to SAP Management of Change and attached as a PDF that documents the analysis performed.

Integration of the SAP enterprise Asset Management Solution

If you use the SAP Enterprise Asset Man-agement (SAP EAM) solution, you can benefit from closed-loop integration be-tween it and SAP Management of Change. You can configure task types in SAP Management of Change to trigger follow-up actions in SAP EAM by creat-ing, for example, a maintenance notifica-tion or order within the task. This links a follow-up action to the task, and SAP Management of Change will check against status when you complete the task in SAP Management of Change.

Many times, a maintenance notifica-tion is created before the change re-quest. This may happen when the origi-nal change request is for a repair but later it is realized that an upgrade rather than a “replacement in kind” is preferred. In this case, you can link one or more ex-isting orders to a management of change task. SAP provides a Web service, which can be used to create a new change re-quest from SAP EAM or from any other application.

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leARnIng FROM AnAlyTICS AnD RePORTIng

Executives need to understand how the organization is performing with regard to safety, quality, maintenance, and pro-ductivity. They must also gauge the de-gree of adoption and effectiveness of the management of change program itself, comparing how different business units fare with it and watching trends. Informa-tive KPIs may reflect the number of

change requests per type, emergency versus planned changes, or the percent-age of temporary changes. Manpercent-agers will be particularly interested in incidents and near misses in cases where an inad-equate management of change process was a causal factor.

For operations and EHS managers, the focus is typically more granular. They will more likely be looking at overdue tasks and time to completion for both tasks and entire change requests. They will

have keen interest in monitoring tempo-rary changes to see how long they stay open, aware that if they stay open too long, there is a risk that they will inadver-tently become permanent.

Most of these analyses can be made based on the search functionality of the personal work lists. Detailed analyses, in-cluding a wider range of attributes, are typically made using analytical tools. SAP Management of Change stores its data in structures specifically optimized

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for analytical purposes. Because your change types can be modeled using questionnaires, useful evaluation criteria for analytics may draw on the custom questions in your templates. All response codes can be made available for analyti-cal purposes as well. Expert users can run dynamic queries with drill-down func-tions – often referred to as “slicing and dicing” – using SAP Business Explorer tools or SAP BusinessObjects Explorer® software, for example.

SAP Management of Change contains a predefined dashboard (see Figure 7). Custom dashboards can be built using tools like SAP BusinessObjects™ Dash-boards software.

FInD OuT MORe

For more information about operational risk management, the SAP Management of Change application, and the SAP EHS Management application, please visit

www.sap.com/sustainability/orm.

ReleASe InFORMATIOn

The SAP® Management of Change application is a networked application that can be deployed on the SAP NetWeaver® 7.31 technology platform with integration to the SAP ERP 6.0 applica-tion, with no enhancement package required. Alternatively, SAP Management of Change can be deployed directly on SAP ERP 6.0, provided SAP ERP is running with enhancement package 6. Integration with the environment, health, and safety risk assessment functionality requires ver-sion 3.0 of the component extenver-sion for the SAP Environment, Health, and Safety Management application, which can be installed on SAP ERP 6.0 running with enhancement package 6.

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