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Series on SAP ERP Project Success Factors

December 19th, 2011 by
SAP Project Success Criteria

SAP Project Success Criteria

 

This is a compiled sets of posts related to SAP project success criteria

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

The Top 5 ERP Success Factors by Project Stage from 22 Critical Success Factors
http://www.r3now.com/the-top-5-erp-success-factors-by-project-stage-from-22-critical-success-factors

SAP Implementation Partner or Company Selection Criteria
http://www.r3now.com/sap-implementation-partner-or-company-selection-criteria

SAP Success Factors for Vendor Selection – Responsibility Matrix 1
http://www.r3now.com/sap-success-factors-for-vender-selection-responsibility-matrix-1

SAP Success Factors for Vender Selection – Responsibility Matrix 2
http://www.r3now.com/sap-success-factors-for-vender-selection-responsibility-matrix-2

SAP System Vendor Project Success Criteria 1
http://www.r3now.com/sap-system-vendor-project-success-criteria-factors1

SAP System Vendor Project Success Criteria & Factors 2
http://www.r3now.com/sap-system-vendor-project-success-criteria-factors2

SAP System Vendor Project Success Criteria & Factors 3
http://www.r3now.com/sap-system-vendor-project-success-criteria-factors3

SAP System Vendor Project Success Criteria & Factors 4
http://www.r3now.com/sap-system-vendor-project-success-criteria-factors4

SAP System Vendor Project Success Criteria & Factors 5
http://www.r3now.com/sap-system-vendor-project-success-criteria-factors5




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5 Leadership Tips for Successful SAP Project Management

November 14th, 2011 by
SAP Project Leadership

SAP Project Leadership

SAP Project Management drives me crazy!  As I’ve often said, I don’t generally fault customers or clients who hire outside help for SAP project management.  If they believed they had the answers they wouldn’t bother with contractors for guidance.

Too often I see SAP project management treated as more project administration without much leadership.  Just about anyone can be a checklist administrator.  What is lacking from many SAP projects is the project management leadership to move things along.  

After managing a few SAP projects myself and the many projects I have participated in over the years I’ve learned an effective formula for SAP project success–, it takes a project manager who can actually lead the project.  What do I mean by leadership?  I mean someone who actually pitches in, rolls up their sleeves, gets busy, and gets their hands dirty.  They must be directly engaged with the project participants, they need to spend more time with their “ear to the ground” rather than serving as passive administrators. 

The key dimensions of SAP project leadership involves enough direct involvement in project coordination to:

  1. Create a sense of urgency to build momentum.
  2. To maintain that sense of urgency and maintain momentum.
  3. To eliminate obstacles, roadblocks, and impediments which slow (or even stop) SAP project momentum.
  4. To manage conflict (which WILL happen if sufficient momentum is gained).
  5. To set, manage, and maintain expectations with both the project participants and the broader areas affected by the SAP project outcomes.

1.  Creating a Sense of Urgency

I’m still amazed at how often SAP project managers or program managers avoid using project plans with WBS structures, tasks, activities, and the assorted milestones, etc.  The only sense of urgency they create is reactive firefighting.  Everything will always be last minute, single-threaded, chaotic, disjointed, panicked, and difficult to follow.  Without a structured project plan any dates are just aspirations at best and timelines will continuously be missed.  This avoidance may be from a lack of ability, fear, or an attempt to evade accountability, whatever the reason it happens too often.  Maybe you should be asking yourself what deliverables, tasks, and execution activities your contracted leadership should be providing.

The Effective SAP Project Plan and Project Structure

The most appropriate method to create a sense of urgency is to have a fairly tight timeline but with very clearly defined milestones, tasks, deliverables, templates, and instructions on how to support project execution.  Those deliverables must help to measure project progress and they must be carefully managed.  Communicating and then supporting the message that as an SAP project manager your goal is to ensure the success of the project participants (then living it out) will bring badly needed leadership.

Without a project plan and proper templates any sense of urgency that is created is really reactive firefighting.

For each project phase or upcoming milestone an SAP project manager must have well defined presentations of what is coming, the timeline,  templates, instructions, and the resources to accomplish each set of tasks.

Nearly every contract SAP project manager somehow manages to put together steering committee presentations so why do they have such a hard time putting together critical project supports?  What are they really presenting to the steering committee if they aren’t providing meaningful project guidance?

If SAP Project Decisions Need to be Made Get Them Made Immediately!

Over the years I’ve been blessed to have several pretty decent mentors.  Back when I was an early manager in industry, long before consulting, I got a major schooling from our GM (and a senior VP).  We had a problem come up and the GM wasn’t around to consult so I did nothing.  I was the operations manager responsible for all shop floor production areas–, over a dozen leads and over 200 employees at the time.  My lack of decision-making brought large portions of the production floor to a halt. 

A “manager” who doesn’t make decisions isn’t managing or leading anything.

When the GM/VP got back he immediately set about to get things going and made a number of snap decisions and provided immediate direction.  After things got going again he called me into his office and we had a short discussion about my career.He was polite but firm and provided me a very valuable lesson. 

The GM expected me to make the decision I believed was correct even if it turned out wrong.  He said that 8 or 9 times out of 10 it would probably be right and that 1 or 2 that might be wrong or maybe not the best decision it was easier to correct than doing nothing.  He promptly let me know if I made a bad decision he would hold me accountable but it would not be as bad as making no decision at all.  He would hold me accountable for my decisions to help me learn to make better decisions but if I couldn’t make a management decision to keep things going he didn’t need me because I wasn’t managing anything.

That was a profound insight.  As an SAP project manager if you won’t make the tough decisions to get things going and keep them going then what are you managing?

Decisions must be made as quickly as humanly possible.  Delaying key decisions, or delaying any decision making, creates the appearance of indecisiveness, reduces confidence in your ability to lead, creates constant “swirl” around key issues, and slows the project.  It also creates an atmosphere where others avoid decision-making and become embroiled in analysis paralysis (or “swirl”) because that is the culture you as the project manager are creating.

Next week, more on building and maintaining momentum and the sense of urgency.




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Overcome SAP-ERP System Integrator Sales Tactics 7

June 20th, 2011 by
Business software negotiations - licenses and maintenace

Business software negotiations

As we get close to wrapping up this series we will take a short look at ERP and business software licensing.  There are a lot of things to consider here and a number of strategies you can use in negotiating your licenses.

One thing to keep in mind here is that there are two revenue streams for the software provider.  The first is the license sale and the second is the maintenance agreement.

ERP – SAP – Business Software Licensing Negotiations

One negotiating tip I learned a long time ago is to always, always, always ask for more than you really need or want.  And I don’t mean in the form of the number of licenses or the amount of maintenance.  What I mean are the concessions you want the vendor to provide.  These are your negotiation “bargaining chips.”

It is always easier to give something up than it is to take something back so if you start from a position where you have several “throw away” items you will find yourself with a decent bargaining position.

  • Software is licensed, not purchased.
  • Determine “End Game” strategy for licensing
    • This Starts “Hard” Negotiations
    • Time is on Your Side – end of fiscal year and end of quarter negotiations are best because of pressure to meet sales goals
    • Use a “give and take” approach, or a “good cop, bad cop” approach on the vendor(s)
    • Carefully evaluate their sales approach
      • Telegraph to the vendor your willingness to “walk away” from the deal if the right agreement cannot be reached
  • What are the different payment terms?
  • Consider “tiered” licensing options
    • License “stage” commitments – # of initial licenses for developers / system users during setup, and then additional # of users at actual go-live only to be paid for when the system goes live.
    • Ask vendors for interest free licensing options
  • Down payment requirements?
  • How are software modifications addressed in the license?
  • Sticker shock?

ERP – SAP – Business Software Maintenance Negotiations

Software maintenance fees can be a real challenge to negotiate.  This is one area where many software providers have a number of tactics they use to maximize your long-term payments to them.  One large vendor will just about give their software away, and even entice you with a one or two year, low maintenance fee agreement, and then “let you have it” just as the business and software have started to stabilize.  Right at the peak of your dependency on them they will suddenly balloon maintenance fees into the stratosphere.

  • How much is the annual maintenance fee?
    • What are the maintenance options?
    • What if you go off maintenance?
    • Is technical support included?
    • What kinds of technical support and how frequent (Phone, e-mail, fax, online messages, etc.)?
  • Negotiate any maintenance percentage of the software at the price you purchase it for, not at the list price.
  • Link fee increases to standardized economic indicators like the Employee Cost Index (ECI), Consumer Price Index (CPI), Factory Orders Report, Purchasing Managers Index (PMI), etc.  If you expect an inflation spike or economic downturn the PMI or Factory Orders would likely provide the best hedge here.
  • Lock in the rate for the entire duration of the contract to avoid “shock increases” as time goes on.
  • Require free license upgrades to any new version(s) of software as part of your maintenance.
  • What about Source Code?
  • Even after you make the final software selection decision, consider license negotiations with both of the top finalists to use as “buy down” leverage against the real selection
    • Try to negotiate contract language with caps or limits on how much or how quickly fees can increase.
    • Every publicly traded software vendor has strong market incentives at the end of their quarter to make any deal they can to increase revenue (often times regardless of the margins) so be patient!
      • At quarter ends the larger software vendors may resist cutting maintenance percentages but may be much more inclined to provide great deals on licensing.  As long as the maintenance is tied to the negotiated license cost then this is the same as getting a maintenance discount.
    • Seriously consider hiring a professional consultant who specializes in software negotiations.

    Final Thoughts on SAP – ERP – Business Software Negotiations

    Make sure your contract agreement does not contain “penalty” language if you decide to discontinue and then renew maintenance.  For example some contracts include provisions that if you stop maintenance and then re-start you will have to pay some amount of “make up” maintenance for the period you discontinued.

    Probably the most important component of your negotiation strategy is patience.  You ALWAYS have the option of walking away and pressing for serious concessions if the vendor wants your business.  Believe me, you CAN wait them out.  Be willing to wait as long as it takes to get the terms that are right for you but it is also important to be reasonable and fair. In the end everything is negotiable.

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