INNOVATE. INTEGRATE. TRANSFORM.

Business Solutions with SAP
SAP Peter Principle

SAP Peter Principle

Most of us working in business for any period of time have heard of the “Peter Principle.”  It was “formulated by Dr. Laurence J. Peter and Raymond Hull in their 1968 book The Peter Principle, a humorous treatise which also introduced the ‘salutary science of Hierarchiology’ …” [FN1]  While the exact quote is a little different, it has come to mean that people tend to rise to their level of incompetence in organizations built on hierarchies.

As an important caveat before getting into this topic, I have known many really hard working folks who have risen through the ranks the “old-fashioned” way –, through hard work and “paying their dues.”

My Experiences with the SAP Consulting Hierarchy

After over 20 years in IT, and over 20 SAP projects, I have seen the Peter Principle again and again.  It’s the nature of how the IT consulting world works.  It is frustrating, and it is enough to drive the competent, diligent, and most talented consultants absolutely crazy.

The “Peter Principle” happens in the consulting world because this is what organizations who implement SAP demand of their implementation vendors.  Sure, that sounds counter-intuitive and crazy, but unfortunately it is a sad reality.

You might be asking yourself right now, IS HE CRAZY?  Maybe a little, but on this point, let me assure you, it is quite true and in a moment you will see exactly how it happens and why.

Enter the Crazy World of Consulting – Why Consulting Incompetence is Rewarded

Once inexperienced, incompetent, or “less than optimal” consultants get onto your SAP, ERP, or other IT project, you are now set up for seeing the “Peter Principle” in effect.  On your implementation or upgrade project an inexperienced or incompetent consultant will ultimately make a mess, however it won’t be seen right away.  There may be signs along the way, but only deep experience will recognize this unless it is blatantly obvious.  There is always some reasonable sounding explanation, or some gibberish, or some babble that is pronounced with confidence but you don’t really understand it. Or, they have become polished and provide entirely rational and reasonable explanations, whether true or not.  After all, they are the “expert” you hired so they must know what they are talking about, right?  Nonsense!

First Sign of the SAP Peter Principle

“Blah, blah, blah”  I have no idea what you just said but just so I don’t look stupid I’m not going to challenge it.

As I’ve written on many occasions, part of the key skills and experience a good consultant or business analyst MUST possess is the ability to take the complex and make it simple.  ANYONE can take something complicated and keep it complicated, or worse still, make it more complicated, or, worst of all, make it a mess.  It takes experience and competence to take the complex and simplify it.  But all that “technical babble” and jargon sounds so convincing, so educated, so, foreign.  It’s a foreign language that you don’t completely understand and these incompetents know it.  Unscrupulous consultants know if they can make something up and sound as though they know what they are talking about you will believe them –, you hired them for their expertise.  They can game you to increase scope, or extending project timelines, or busting your budget and they do this because they are personable and manipulative.

How Can You Identify the SAP Con Artists?

Accountability, Responsibility, and Quality.  The cons avoid accountability or direct responsibility.  On a project where they are discovered they must be nearly forced to have clear accountability for delivery.  They must be pressed into doing what I call “due diligence” around a solution to make sure it will work correctly.

If you catch it early enough you can keep these incompetents from being rewarded for blowing your budget, causing project delays, and creating even MORE complicated and convoluted processes than you had BEFORE you did your SAP implementation.

How Customers Provide Perverse Rewards for Incompetence

The incompetent consultant’s area seems to have users who struggle with problems / issues / bugs that need the most fixing and the most attention.  By this time many companies have invested so much time and effort with the incompetent consultant that they don’t see any other options but to continue with this fraud.  The incompetent consultant is needed badly to support the mess they make for some time after you go live.

One way you can tell you have been manipulated or gamed during the project is by the quality, completeness, and accuracy of the solution the consultant delivers at go-live. 

From a consulting firm’s perspective, the incompetent consultant puts in lots of extra billable hours, helps them get extensions and budget increases, and needs to have lots of extra consulting support.  They are always behind, and no matter how hard “they try”, they always have another excuse for why the problems they cause really aren’t their fault–, it’s always someone else.

These consultants stay on long after go-live to ensure that their questionable solutions are supported by the same person who made the mess to begin with.  This is what customers insist on because by the time go-live happens they are “stuck” with the mess and “stuck” with the “con”sultant who made the mess.

Incompetent consultants tend to be VERY personable most of the time, and ingratiate themselves with the customer / client so that there is no question that they are working SO hard, and doing such a GREAT job.  It could never be their fault.

How SAP Consulting Vendors Reward and Promote the Peter Principle

For the consulting vendor, billing hours go up, staffing and utilization numbers are high, additional “backfill” support is needed and more people are staffed.  From their metrics and possible compensation incentives the incompetent consultant is doing a great job!  On the other hand the highly experienced, competent, and diligent consultants “work themselves out of a job.”  The competent consultants tend to have fewer go-live support issues, they usually have more engaged, involved, and knowledgeable users.  And they are just plain better prepared.  They are not “needed” as you go-live and you, as the customer, get rid of them to cut the blown budget wherever you can.

In a partner oriented firm the incompetent consultant is headed for being a manager, senior manager, managing partner, etc.  The incompetent consultant has great utilization, helps to get more staff on projects, and is always busy.

In the consulting companies incompetence is rewarded and incentivized by the consulting firms.  The most competent and diligent consultants are passed over for career enhancement precisely because of their competence – they may finish projects earlier than their incompetent peers and may be “on the bench” more frequently.

The more skilled the incompetent consultant is at being personable, at presenting a compelling case for why they are doing such a great job but you need more resources, the better positioned they are for higher level promotions.  After all, in consulting firms, senior level positions are focused on getting billable resources out and billing.  The more experienced and capable at this the better positioned you are for partner or senior management.

Stay tuned next week – details on how to spot them and then ferret them out…

=========================

Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175
Bill Wood contact

=========================


Print pagePDF pageEmail page

Related Posts:

5 Responses to “How the SAP Consulting Peter Principle Works”

  1. Simon Kirrage says:

    Very interesting reading your experiences relating to SAP consultants and Peter principle – having been in the industry around 15 years this is an oft seen scenario. However this article refers to consulting house staff gaining promotion through incompetence, the same is also true of many freelance consultants in the market today.
    While there is no personal accountability SAP consultants will continue to reap chaos on their clients, after ‘earning’ extra billable hours the consultant will often be integral in winning ‘upgrades’ (which are highly complex due to the level of customisation and ‘patches’) put in during initial implementation – leaving them at the top of the food chain – while the professional consultants sit on the bench simply because they do not offer the same potential for income.
    A good article which I enjoyed reading.

  2. I knew Peter Principle, I have been in SAP world for quite a few years now. I always felt that Peter Principle is applicable in SAP world also. Interesting to find an article which confirms the thoughts I had. This is dated Sep 12, 2011.

    Makes me wonder whether no one wrote similar content before this? What sort of HR Development/Evaluation system do we have in place in the big companies around?

  3. I wonder why Peter Principle is most seen only in SAP Implementations. Though SAP is in the Market for over 30 decades and considered one of the matured Software available in the market. This doesn’t happen with other technologies or software and the reason for what i see is a lack of Control team which can control the changes that can be controlled and monitored on the SAP System. Why don’t businesses implement an Architect team who can review, analyze and approve all the solutions before making the changes.

  4. One potential reason for the failure of SAP Project is due to the Project Managers who handle SAP Projects with out a clue or even a basic knowledge of SAP. This simply hurts both the Businesses implementing SAP as well as the team implementing SAP.

    • Bill Wood says:

      Unfortunately Rudy I completely agree. Too many “project managers” think they can handle an SAP project and have NO IDEA what they are doing.

Leave a Reply