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Protecting Yourself from SAP Consulting Fraud

October 17th, 2011
SAP fake consultant
SAP fake consultant

One of the most pervasive problems with SAP or any other ERP project is the sheer amount of fraud.  It is so rampant with such huge financial effects in any other area it would be seen as organized crime.  I’ve previously written about SAP consulting screening methods and required skills, but there is one key method to filter through the huge number of frauds–, simple experience verification.

Many organizations that have SAP periodically need experienced consultants to help with specialized requests, requirements, new functionality, or to occasionally backfill employees.  Because contract staffing is not a key portion of their business they turn to staffing firms or recruiters.  Unfortunately too many of the staffing firms and recruiters have only one interest–, to collect a paycheck.  Very few of these recruiters care about how they get that payday so it is up to you as the customer to ensure you are not getting ripped off.  There is no incentive for them to carefully screen candidates–, no background checks, no former project verifications, nothing.  A recruiter’s goal is to get them through the interview and have your organization hand over the cash.  The cheaper the resource they can find (i.e. read “fake”) the fatter their margin if they can convince you to use them.

The consulting fraud in the SAP arena (and ALL of the business application space) is widespread and out of control.  For more background and information on some of my experiences with this you may wish to see some of the following posts:

Just in case you think this is just complaining, take a look at an actual timeline of consulting at a real company where an internal employee periodically posts some of the horror stories they are dealing with; http://sapmesideways.blogspot.com/.  Although the employee at that company does not come out and say they are dealing with frauds, con artists, fakes or “SAP freshers,” I’ve seen this so many times that if that company checked these “con”sultant’s backgrounds I could guarantee a very high percentage of SAP fakes or “freshers.”

For some reason these “freshers” as they call themselves have a wierd entitlement mentality that they believe they should be allowed to commit fraud to jump over anyone and everyone else.  It is as if they believe someone OWES them something and you HAVE to make an SAP opening for them or they are justified in committing this fraud.

Protecting Your Organization from the SAP Fakes and SAP Frauds

If your organization would like something different you can do at least one small thing to protect yourself.  AFTER a staffing or recruiting firm has submitted a candidate demand they include references, from the last 3 projects listed on that consultant’s resume.  The ONLY references I accept are client resources, still at those organizations, and on an e-mail address that is clearly at that organization.  If they cannot provide these then my immediate assumption is they are a fake.  If the staffing firm doesn’t get the message you will not accept fakes then do not do business with them EVER!

The ONLY references I accept are client resources, still at those organizations, and on an e-mail address that is clearly at the organization.

Think about that a minute, even if you miss out on someone who has the actual experience you are looking for, do you really want to pay those kinds of rates for someone who was so uninspiring that no one even remembers them?  What about their consulting skills?  Were they a bump on a log that hid in the background and made little or no contribution to the direction or success of the SAP project?

Step by Step to Find the Real SAP Consultants

If you decide to use a staffing or recruiting firm, make it a hard requirement that they provide ONLY candidates who can provide an e-mail reference STILL EMPLOYED at each of that consultant’s last 3 clients.  This is basic employment verification stuff but few if any of the staffing firms do this unless you insist it is a requirement.  And nothing less than a direct verification from someone who is still at that organization will work because I have seen many “stories” about how they have some other reference or the person left and are now working at “XYZ” company instead.  Would you accept that from a permanent employee candidate?

The next step, AFTER the 3 prior project references still at those companies (on the company e-mail address / domain) is copy that portion of the resume listing that consultant’s experience at that company into an e-mail message to their reference.  Send the message with a notice they used this information on their resume to indicate their experience and you would like to know if they can verify that the candidate’s experience is consistent with what is listed.  If they can not, or will not, then that is the end of the screen for that person.  I do not bother to waste any time with a phone screen until that verification step is complete.

What are some of your thoughts or suggestions for screening out the fakes, frauds, charlatans and con artists?

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Where Does SAP Offshore Development Make Sense?

October 10th, 2011

SAP Return on Investment or ROI

SAP Offshore Development Cost

If you are capable of providing detailed design specs where there is almost no deviation or thought required this is a great option.  The instant your SAP design requires a measure of experience and insight to make judgment calls, or to look for data or processing that is not explicitly spelled out in detail, you are headed for huge hidden costs. 

The level of detailed spec design work by SAP functional consultants merely shifts the development time and costs to the higher priced resources where it is “hidden” from TCO and sales quotes.  If you are capable or writing “functional” specs that are really more like technical specs with specific table and fields spelled out in detail, program pseudo-logic defined, every possible alternative anticipated, and no detail left out then SAP offshore development works well.  If you are not prepared for that level of detail and “perfect specs” then you are likely headed for a much larger invoice in change order costs and hidden functional time than you ever anticipated.

Offshore resources are often smart, industrious, and hardworking but the ugly reality no one talks about are the real rates because these resources do NOT have any significant amount of SAP experience.

This is the final post in this series.

A quick “test” for the SAP outsourcing or SAP offshore fit is the nature of the work.  “Commodity” services are a perfect fit for SAP outsourcing or SAP offshore work. 

If the effort involves any type of innovation, business transformation or needs any level of change management then SAP outsourcing or SAP offshore development may be dangerous and it WILL cost you far more than you are led to believe.

SAP Upgrades Might Support SAP Offshore Development

One area I have seen where SAP offshore development work makes sense is with upgrade projects.  Much of the development work there is re-working existing objects where the requirements from previous projects have been well tested and adjusted.  Or, if there are enhancements the gaps are well-known and understood so that the detailed SAP development requirements can be easily defined.  From this standpoint SAP offshore review and adjustment of existing code makes sense.  There is little in the way of experience needed to use the syntax checker and to do the occasional program adjustment.  And other than poor coding which causes performance problems the risk is lower.

SAP Production Support Might Work With SAP Offshore Development

In a fairly stable production environment, where there are not a lot of enhancement or new functionality requests SAP offshore support might work well.  The “fix” requirements are very specific and limited so that these types of small adjustments or corrections work well in an offshore environment.  Even for some of the smaller and less complicated enhancements or improvements SAP offshore support might work well.  However, for more extensive troubleshooting, or very complex requirements, you are likely better with some sort of local or onsite support. 

For a more details see Outsourcing Your SAP Application Support.  This provides some insight and a little framework for understanding the SAP outsourcing or SAP offshore fit.

Conclusion on SAP Offshore Development

Regardless of the hype and sales pitches SAP Off Shore development has far more Total Cost of Ownership than anyone has been led to believe.  There is a place for it but that is rarely in a new project or an extensive rework of complex processing requirements.  While you may not see the costs, the offshore project model will cost you unless you are fully aware of the requirements and hidden costs that are never defined in any of the sales pitches or materials.  Of course they will never tell you SAP offshore development might cost you far more than higher priced local resources in many situations.  If they had that level of integrity you would never engage with them for those services. 

For more information and insight on this topic see IT Outsourcing, Off Shore Support, Cost Cutting and IT Department Changes.  That post provides some additional insight on helping to understand where SAP internal resources should focus as well as where offshore support might make sense.

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Hidden SAP Offshore Development Costs

October 3rd, 2011
SAP Offshore Development

SAP Offshore Development

My experience with SAP offshore development is that no matter how detailed your spec is their lack of experience with standard SAP transactions and functionality means they will never properly test their own creations.  Their results are more than just full of bugs, often times they crash when attempting to do even basic testing.  Repeat testing by expensive functional resources happens so frequently and consumes so much hidden time from parallel project activities that entire project timelines are frequently affected. 

Functional resources have to babysit and handhold these SAP offshore resources through the whole process because of the language barriers and lack of experience.  More functional time, more project management time, more unplanned distractions from functional Realization activities and your entire project timeline can be wiped out.  If that happens you have to pay even more for a missed development date because you have to move your go-live date.  And that cost is completely hidden from you by some of the shell games they play on their supposed efforts.  All of that functional time and the risks to the project timeline point to some of the real hidden costs of SAP offshore development. Develop, test, bugs, fix, develop, test, bugs, fix, rinse and repeat at least a dozen times.

A common SAP offshore practice is to keep throwing “crap” at you saying it is “done.”  With all of the crashes and bugs that are so common with offshore development, and especially all of the program crashes, how much testing could they have done?  The bigger question is how much is this really costing you and how do you find the hidden costs?

SAP Project Timeline and Budget Due Diligence

Because of the nature and pace of SAP project work whenever the issue of blown budgets and blown timelines come up most companies rarely perform root cause analysis or due diligence.  Instead the accusations and recriminations fly in the heat of the moment.  Meanwhile the offshore developers keep saying “we finished x development on y date… the functional teams didn’t support us…” or “the specs were bad and we had to make 20 changes…”  You name it, the extent of the excuses are never ending.

Evaluating Hidden SAP Offshore Development Costs

Because of how SAP “functional” consultant time (needed to support the offshore development) is hidden from you it never shows up anywhere in the rates you were quoted.  You really have no idea about the real Total Cost of Ownership (TCO) for that offshore SAP development.  The offshore company constantly claims the “specs were not detailed enough” or every microscopic change and adjustment becomes a “change order.”  I’ve even seen this where standard SAP functionality was completely broken by the development and the developers insisted because there was nothing spelled out in the design spec about allowing standard functionality to continue working a change order would have to be separately paid for!

On new SAP implementations the functional time premium can easily cost you 50% to 75% (and in some cases even exceed 100%) of the total development hours.  Think about that for your next quote as you try to put the pen (or your spreadsheet) to the numbers.  Have you really factored in the amount of high priced functional resource time needed to support those “inexpensive” offshore developers?  Between writing “super enhanced” specification documents, repeated endless functional testing of buggy SAP development, “training” of inexperienced developers, language barriers, “babysitting” the actual development, and the lost opportunity to focus on other functional Realization activities can kill any supposed savings.  It’s all a shell game.  You pay just about the same amount (and on many occasions even more) with far more headaches and lower likelihood of making your go-live date.

Even after all of this, there is still one more hidden cost that is not realized immediately at go-live–, the cost of poor coding.  You may have significant performance problems, constant bug fixes, and a whole host of other maintenance activities that you never planned or budgeted for.  Now this is true of any development but because of the language translation issues and the modest (at best) quality of coding you are likely to have incrementally more production maintenance costs with the offshore development.

Some Considerations to Help Reduce The SAP Offshore Development Shell Game

First and foremost NEVER accept the offshore development group’s code review options.  One way you can help to combat so much of this is to budget for at least one local developer, even at premium rates, to serve as a quality checker.  They do not have to review all of the code from all of the developers but they should look for the “tells” of experience over inexperience.  And your SAP statement of work (or SOW) as well as your contract with the offshore developers should include various protections about the quality and expectations of the development work and functional consultant time and contributions.  That SAP SOW should also include some definition around what a “change” is and what a “defect” is.  Without that everything will be considered a “change request” and destroy any supposed savings.

Next week the wrap-up part 3 of this series:  Where Does SAP Offshore Development Make Sense?  There are some situations where it is a great cost saving alternative.

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