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9 Games ERP Consultants Play

January 14th, 2013 by

ERP Consultant Games

Most in the ERP industry agree that software consultants can play a major role in helping their clients successfully implement a new ERP package. While some consulting firms have more expertise than others do, at least most firms try to operate with their client’s best interest in mind.

However, there are many firms within the ERP industry that are outright thieves. They will not hesitate to take advantage of their clients in order to pad their own wallets. In fact, some firms are so good at this it has become part of their standard operating procedures.

Clients that are educated and aware of the games consulting firms play can save themselves a few headaches and a lot of money. Below are some of their tricks to watch out for.

1)      The “Bait and Switch” Routine

During the sales process, this is when certain consultants are brought in to display the expertise within the firm. They may know best practices and the software, but it might be the last time you ever see them.

2)      Resumes: Lies and Half-Truths  

Outright falsification of consultant resumes is more common than you think. In addition, many resumes presented by the firm are not really resumes, but vague “profiles” that lack detail and read like sales literature.

3)      “Lowballing” the Quote

This is the oldest trick in the book, yet surprisingly many clients continue to fall into this trap. For example, all consultants know that for time and material quotes the actual implementation costs are usually much higher.  Also, most fixed price quotes are only fixed until further notice.  When the client wants to make only minor changes in the project scope, they are hit with expensive change orders. The change order costs are usually 100% greater than the actual time for the consultants to perform the work.

4)      The “Best” Implementation Tools & Methods

Most firms claim to have the very best implementation methods and tools available. However, do not be surprised when their consultants run off and do something entirely different during the project. Maybe the tools are not so great; otherwise, their consultants would use them!

5)      The Less You Know – The More Money They Make

For some firms, a potential client that has ill-conceived project objectives, an undefined scope, or lacks basic knowledge of ERP; is considered a gold mine. The idea is to gloss over these “minor” details until after the client signs the contract.

6)      Marquee Accounts for Reference Checks

When a potential client asks for a list of the firm’s other clients for a reference check, many firms provide only their “marquee accounts”. These accounts are compensated by the firm in some form for being a reference. Therefore, do not expect these clients to mention anything bad about the firm.

7)      Not Enough Time and Talent

Most consulting firms would love to “camp out” on your ERP project. One way to do this is convince the client that the organization lacks the right employees for the project. Also, some firms too easily support the premise that the client’s best employees have other tasks to perform that are more important than an ERP project. That is, “No need to get your hands dirty. Our consultants will do the project for you.”  

8)      “Add-on” Services 

Once consultants get their foot in the door, many try to sell their clients additional services. These include more consultants for readiness assessments, change management programs, best practices, and other services you may not truly need. Also, do not be surprised when your consultants push for software functionality that was originally out-of-scope. 

9)      The Promise of Software Knowledge Transfer

Most firms state that one of their goals is to “work themselves off the project” by transferring software knowledge to the client. However, nine times out of ten, if it is going to happen, the client must force the issue. Considering their hourly rates, what incentives do consultants have to transfer software knowledge?

This guest post is by Steven Phillips, author of the Street Smart ERP blog and the new book Control Your ERP Destiny.




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Investigative Report: Enterprise Application Guest Worker Fraud in America

June 18th, 2012 by
H1-B Visa Fraud

Guest Worker Fraud

Last week’s post on why Guest Worker IT Firms Crash Then Burn When Investigating Visa Fraud provided a little background on guest worker fraud being investigated now. Much of the spark to light this match was the whistle-blowing activity of a Jack Palmer about Infosys. However Infosys should NOT be considered an isolated incident.

As Jack Palmer’s case demonstrates there are options for consultants who are tired of the fraud. What Mr. Palmer’s conviction and dedication indicates is that you must be willing to stand up and be counted. No one said being a whistle-blower would be easy, but there are protections. Another interesting feature of Mr. Palmer’s case involves the various government agencies and channels conducting several of the ongoing investigations.

United States Senator Chuck Grassley from Iowa has taken a strong interest in meaningful visa reform and ending the fraud for some time. As a regular crusader against H1-B visa fraud he has often introduced legislation and taken a stand against fraudulent practices. As one example in a February 10, 2012 Grassley Weekly Video Address: H-1B Reform was the topic.

While some Guest Worker IT Firms Crash Then Burn When Investigating Visa Fraud there are still too many customers who are ripped off while their SAP or other enterprise projects crash and burn. Even though there are Hidden SAP Offshore Development Costs, those costs and the negative consequences go much higher when dealing with fake experience from onshore resources. There is a measure of customer trust that workers who are on site, employed by system integrators, had to go through some type of screening and background verifications for experience. Enterprise application customers almost expect that the hiring practices at some of these IT firms mirror their own internal processes. NOTHING could be further from the truth. See this excerpt from Mr. Palmer’s insight (noted last week in Guest Worker IT Firms Crash Then Burn When Investigating Visa Fraud):

When asked if all the people had some special expertise that couldn’t be found in the U.S., Palmer said, “Absolutely not. Not even close. Many of them [are] what we call freshers. People that would just come over, whoever they could get to come over. Whoever got accepted for a visa.”

Many of the people brought in, in fact, didn’t know what they were doing at all, Palmer said. “There was not a project or program that I was involved in that we did not remove somebody because they had no knowledge of what they were doing,” he said.

As noted by Mr. Palmer’s attorney Ken Mendelsohn, “Senator Grassley has taken an interest in this situation and actually wrote Secretary of State Hillary Clinton and Homeland Security Secretary Janet Napoliatano.” The letter and responses are attached here and are interesting from the perspective that there are still MASSIVE numbers of B-1 and other visas being issued (primarily to Indian IT firms).

Letter from Grassley

Response from Secretary of State Hillary Clinton

Conclusion on Helping to Clean Up VISA FRAUD in the Enterprise Application Space

Sadly for those with real experience, whether foreign born or citizen, it is not just the system integrators who are the problem–, often some of the recruiting firms help to continue perpetuating the visa fraud. I’ve heard of many cases where unscrupulous recruiters will provide candidates with resumes the recruiters rewrote to add “experience” and background “employment” that the individual does not have.

Mr. Palmer’s case together with several criminal investigations are underway (with still more to come) but you can do your part to stop the fraud in the visa program by reporting any incidents you encounter.

If the fraud were stopped I personally wouldn’t care if the caps on visas related to high tech were significantly increased or eliminated. Unfortunately I don’t think a real cleanup will happen until some people end up in jail.

As I have long said, I personally have no issue competing with the very best there is anywhere in the world but it gets old cleaning up and working around so many messes left behind in the SAP world. I’m not interested in that kind of “job security.” I want to make the highest and best use of my skills by helping businesses gain real benefit from their SAP projects.

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References and Additional Information on Reporting Suspected Visa Fraud and Abuse

United States Code (USC): 18 USC § 1546 (a) “[Any visa, permit, or other document] procured by means of any false claim or statement, or to have been otherwise procured by fraud or unlawfully obtained…” provides for criminal penalties and fines.

Contact U.S. Senator Chuck Grassley to tell your story or to encourage further investigations or prosecutions: http://www.grassley.senate.gov/contact.cfm

The Criminal investigations into Infosys and other high tech worker visa fraud issues is being partially handled by the U.S. Attorney’s Office in the Eastern District of Texas. If you have information about Infosys or other system integrators committing visa fraud reach out to them. You can contact them here: http://www.justice.gov/usao/txe/contact.html

U.S. Immigration and Customs Enforcement accepts tips and information related to visa fraud, feel free to report any suspected incidents here: http://www.ice.gov/exec/forms/hsi-tips/tips.asp




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Being an Expert Witness in an SAP System Integrator or Consultant Fraud Trial

May 29th, 2012 by
SAP Expert Witness

SAP Expert Witness

Those who have followed this site for any period of time are probably aware that one of my passions is to see the whole business application space “cleaned up.”

A recent group of comments and private messages I have received about consultants who knowingly commit fraud really got me aggravated.  I’ve actually received e-mails through my site from these “freshers” who would brag about having their fake resume ready and they were excited about actually conning their first customer.  Enough already, I decided to do a series on helping expert witnesses through the litigation process against some of these unscrupulous tactics.  

Although I am NOT, NOT, NOT, a fan of litigation I believe we have reached an unfortunate time in the business application consulting space where something must be done.  There are too many fraudulent consultants, too many staffing firms which facilitate and in some cases participate in this fraud, and too many system integrators who take advantage of clients who do not fully appreciate how SAP projects work.  Please understand this is not legal advice, for that you must consult an attorney. 

You Just Got Called to be an Expert Witness in an SAP, Oracle, or other Business Application Lawsuit

Being called upon or contacted to be an expert witness in a court case for your field of expertise can be an exciting and frightening proposition.  Over the years I’ve been contacted by lawyers and expert witness brokers to do exactly that.  I’ve never taken them up on the offer but have taken the time to understand the process.  If you want to be an “expert” witness in some multi-million dollar litigation about a failed SAP, Oracle, or other business software implementation you will want to prepare for…

What Can You Expect?

First, be prepared to have your writings, resume, personal life, and your past carefully scrutinized in tremendous detail.  Anything you’ve written online, in publications, or even in social media spaces is fair game for legal evaluation over your judgment as an expert witness.  Consider carefully whether you want past events that might be “colored” to affect your professional judgment raised in a court of law (and no, that is NOT why I haven’t accepted any expert witness assignments ;) . 

What are the Legal Requirements for Expert Witness Testimony

First of all expert testimony in the United States is generally governed by Federal Rule of Evidence 702.  That rule governs “technical or other specialized” testimony from experts and virtually every U.S. State has either the same rule or some equivalent.  However, each state can have different ideas of what that Rule actually means in their own state level courts so it is really important to understand what state a case is in, or whether it is in federal court.  In legal terms this is related to “venue” or what court the case will be tried in.  Is it is state or federal venue.

Standards for Admitting Expert Testimony

Two key U.S. Supreme Court cases govern the admissibility of expert testimony.  The two cases which either open the door, or close it, for expert testimony are often referred to as “Frye” and “Daubert.”  To be an expert witness you really should be familiar with these two cases and what they mean to you if you consider offering expert testimony. 

These legal cases use two different standards which are in use to some extent throughout the United States.  The Frye case comes from a Washington D.C. Circuit court case with the case style (or caption) of Frye v. US, 293 F. 1013, 34 A.L.R. 145 (D.C. Cir 1923).  That case established a “wide acceptance” standard meaning that something should not be admitted into evidence unless the subject matter being testified about covered something that was widely accepted.   This usually (although not always) meant that there was lots of published material that had been peer reviewed or scrutinized in other ways.   An expert under Frye addresses issues almost exclusively from the “wide acceptance” standpoint.  Keep in mind that the “wide acceptance” standard may have allowed the “flat earth” society to have prevailed in court in the Middle Ages.

As both science and technology continued to mature at a faster pace additional clarification was added in another U.S. Supreme Court legal case which is often cited as Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993).  That case established newer and more robust “scientific methods” which must be considered before accepting expert testimony.

While there is no complete checklist, and there are several additional factors to consider, one U.S. Federal Appeals Court has summarized a short list of a few key issues which should be considered for the Daubert standard.  These include:

  1. Whether the theory or technique of the expert can be tested.
  2. Whether there is a known, or potential, rate of error that can be determined with some level of assurance.
  3. Whether there has been any peer review and publication (think Frye here).
  4. Whether the theory or technique is generally accepted in the expert’s community (again, think Frye).  For us it would be in the SAP community.

The Gatekeeper Role to Prevent Unreliable Expert Testimony

The role of the judge in court cases involving expert witnesses is to act as a “gatekeeper” by letting in only those experts who at the most basic meet two key criteria: the testimony has some measure of reliability by fitting the criteria of either of the cases above, and the testimony directly relates to some set of facts or circumstances of the case that the expert will help everyone understand.  The expert’s testimony should help bring enough clarity that the judge and jury can more easily make an informed decision about some fact or issue in the case.

Which Expert Testimony Legal Standard to Use?

It is important to understand that if you end up litigating as an expert witness in a state court case in the United States rather than a federal case you may be subject to different standards and requirements as an expert witness.  Again, which venue is this, is it a state court case or a federal case?  For example, as of 2011, the following states use the following expert witness standards as defined in the legal cases above [FN1]:

[A]s many as 34 state jurisdictions have adopted the U.S. Supreme Court’s standards articulated in Daubert. Those states include Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Montana, Nebraska, New Hampshire, New Mexico, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, West Virginia, and Wyoming – and most recently in 2011 Alabama and Wisconsin.

Currently 9 states and the District of Columbia follow the Frye rule – either specifically rejecting Daubert or choosing not to apply Daubert principles. These include California, the District of Columbia, Florida, Illinois, Kansas, Maryland, Minnesota, New York, Pennsylvania, and Washington.

Meanwhile, 7 states have their own unique approach and utilize neither Daubert nor Frye: Missouri, Nevada, New Jersey, North Carolina, North Dakota, South Carolina, and Virginia.

This is more than enough of an introduction to the legal standards. There are a few areas to focus on here.  There is the consulting fraud itself – fake skills, experience, and backgrounds.  There are considerations for how much affect the consulting fraud has had on a project (i.e. damages, etc.) and then there are potentially fraudulent system integrator tactics which are designed to maximize their profit while taking advantage of the client. 

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[FN1] Daubert, Frye … or Both? Tracking Florida’s Buy-In. http://www.ims-expertservices.com/blog/2012/daubert-frye-or-both/

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