SAP & ERP Consulting from the Customer Point of View

They say a good magician never reveals their tricks. Well, I’m no magician so I’ll give you a little insight. Lagging indicators, those affected by process improvements, cost-based ROI and TCO methods, and current ERP mindsets are reactive.

Leading indicators, those which directly affect the competitive business landscape are proactive.

SAP and ERP technicians are reactive. They can make system settings, they can help you to make a small tweak here or there, but they are tactical and tend to be shortsighted.

SAP experts are proactive. Not only do they understand how to deliver process improvements, along with those process integration points, they also tend to be proactive and propose innovative solutions to nagging business problems.

SAP experts evaluate more than the SAP application alone, they are aware and actively promote solutions that address the key areas your business is concerned with. They consider the customers in your marketplace, the vendors in your supply chain, how you might innovate your product or service pipeline, and the competitive strengths and weaknesses of your company compared to those in the marketplace. On top of that, they know what processes, or process improvements, are necessary to address each of those areas to address those competitive pressures. Along with all of this the truly talented ERP experts can evaluate your company’s culture during the implementation to understand how much change the organization can absorb.

SAP and ERP technicians on the other hand simply replace your existing legacy systems with a more integrated IT system. They work to make your brand new shiny ERP system look and behave a lot like your old system. They are unskilled at knowledge transfer and have little ability to deliver critically needed change management and business transformation. In effect they are high-priced IT technicians and contrary to popular mythology they are NOT knowledge workers. [FN1]

SAP Consulting Skills Include Change Management and Strong Communication

And when some new “gee wiz” requirement comes up, or when some new problem presents itself, the technicians are the first to immediately race to a new system requirement to solve it.

I can’t tell you how many times I have been on projects where the client had a legitimate need SAP’s applications could address but the organization could not absorb the change. Experience has taught me to look ahead to the days, weeks, and months after go-live and consider whether or not the level of support for the new processes would be sufficient. And if not, either find some way to work through the necessary organizational changes or push back on the client because it was not in their best interests. ERP technicians will not do this, all they are interested in is being able to stick something else on their resume. Some “new skill” or “new experience” they might be able to sell to some other customer. [FN2]

What Can You Do to Help Promote ERP Project Success – Get Educated!

Be part of the solution, not part of the problem. Get educated about the best approach to use with your SAP implementation or upgrade project.

If you’re an SAP customer, take the time and trouble to thoroughly evaluate the vendor you bring into your company, carefully evaluate every consultant they propose, and not just on the face of a resume either. If you need to, do your own background checks on their resumes and if you find one that is a fake (which is more common than anyone cares to admit) then throw the entire vendor out the door. If they can’t even check the background of their own candidates then why should you pay them one dime to bring fakes onto your project.

If you want to get the best implementation you possibly can then create a structured, objective RFP process that has a rational scoring system to evaluate the vendor. When you go strictly on “relationships” you may be missing out on your own fiduciary duty and responsibility to deliver to your company the best possible solution to win in the marketplace. And in today’s world that responsibility could very well mean the difference between being in business or out of business. Or at least facing the prospect of massive layoffs and cutbacks. You can’t afford to “give away the farm” to a “friend” who might not be able to deliver on what you need.

If you’re an implementation vendor avoid getting burned by some of the sophisticated SAP fraud shops. The ones that create fake resumes, they do the bait and switch with someone else doing their phone screen, and they get some of their friends to “vouch” for their “experience” at large companies. [FN2] The minute you find one of these resumes from one of your recruiters STOP doing business with that recruiter or recruiting firm. If they can’t or won’t do a simple employment / project verification on a candidate then run, don’t walk away from them.

Take some time to get familiar with the various SAP tools and methodologies. For customers they are freely available and for implementation vendors who are partnered with SAP they have access to even more resources. And once you’re in with SAP, those tools and resources are free! If you’re an SAP customer paying for maintenance and support then take advantage of what those fees are for. Get educated through your OSS ID access to internal SAP resources and tools. If you find something internally you think will benefit you and you don’t have access to it as a customer then contact your SAP sales rep and ask for access to that resource.

In the end there are lots of things you can do. But you have to get out and do them.

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[FN1] See the section of the following essay that explains the difference between what many companies call “knowledge management” and what knowledge management actually is. This essay addresses collaboration, social media, and SOA in the enterprise. “SAP, ERP III, SOA — Learning Organizations through Social Media Collaboration”
http://www.r3now.com/sap-erp-iii-soa-learning-organizations-through-social-media-collaboration

[FN2] See the following posts about avoiding fake SAP resumes, fake SAP experience, and get the experience you pay for.

Screening methods to find the right SAP consultant
http://www.r3now.com/screening-methods-to-find-the-right-sap-consultant

Screening Methods to Find the Right Consultant – Part 2
http://www.r3now.com/screening-methods-to-find-the-right-consultant-part-2

Related Posts:

• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP
• Lower SAP Application Support Costs – TCO – by Reducing Custom Solutions
• SAP Implementation Partner or Company Selection Criteria
• Change Management Strategies and Knowledge Transfer Processes for a Successful SAP Project 2
• The Top 5 ERP Success Factors by Project Stage from 22 Critical Success Factors

As long as SAP implementations are driven by the application consultants’ perspective and their limited understanding of your business, the implementation will only reflect their SAP capabilities.  If you want more, then your project focus must become business driven rather than vendor and consultant driven.

Frequently I see or hear SAP consultants, even those who claim to be “Platinum” level consultants who really do not understand the extent of the capabilities of SAP as a business process and systems platform.  Even though these Platinum consultants may have many years of experience with SAP, many of them started out in SAP and have little practical business experience before their SAP careers.

The SAP implementation environment “includes several stakeholders: from the developers of the system, to the vendors, to the consultants, the project team, and the ultimate users. Each one of these holds a certain cultural assumption towards the ERP implementation and use process. Particularly, the developers’ and consultants’ cultural assumptions are embedded in the very roots of the software (the technology) itself.

Molla, A. and Loukis, I. Success and Failure of ERP Technology Transfer: A Framework for Analysing Congruence of Host and System Cultures, working paper pg. 7, 2005 citing Skok, W. & Legge, M. (2001) Evaluating enterprise resource planning systems using an interpretive approach. Proceedings of the 2001 ACM SIGCPR conference on Computer Personnel Research, San Diego, April, pp.189-197.

Business Driven Implementations MUST REPLACE System Integrator Driven Implementations

The dynamic of a consulting vendor driven implementation must give way to a business driven implementation.  Many SAP consultants have never been directly responsible for business activities before their SAP exposure.  Few of them also have had to do ongoing business production support work after going live with SAP so they have little business and user experience to ensure business benefit. 

As the SAP licensee, paying for the implementation, you must ensure that you drive the project to stay focused on business results.

This can only occur by having defined the business reasons and drivers for the implementation and then incorporating them into the Request for Proposal (RFP) process. In this way the expectation is set with a vendor that business needs and business expectations will drive the direction of implementation. 

• Throughout the course of the project periodically revisit the original business drivers for the project. 
• Insist that the system integrator provide status reports which address the details of how each business driver is being addressed.
• Incorporate business driver progress into weekly team lead / consultant status reports, OR at a minimum in monthly steering committee reports.

Requiring the system integrator to constantly address the business drivers helps to reinforce that expectation throughout the project and to the project team.  It also helps to more clearly indentify skilled consultants and resources from those on the project that you may need to replace and request a credit from the system integrator for.  After all, if they:

• sold you on business benefit, 
• proposed on business benefit,
• if business benefit (goals, objectives, etc.) are spelled out for your project,

then it is important for you to enforce that in your contract and in your project.

A correctly developed business case, RFP, project charter, scope document, system integrator contract (which should include credits for underperforming consultants) and other tools will ensure your project achieves the results you expect. All of these tools serve as opportunities to set the expectation with the consultants, and with the business, that this is a business project for business benefit. A properly done RFP will also help ensure that you are getting the best resources for your money from an implementation vendor.  That RFP will also help to ensure you are getting apples to apples proposals and quotes.  A solid contract which defines you as the sole determining party for which consultants are performing, and then credit provisions for non-performance, will help to keep things on track as well.

Barriers to a Successful SAP Project

In 1999 Deloitte Consulting published a piece entitled “ERP’s Second Wave” which identified several barriers to successful SAP implementations. I have added a designation for whether they fall into the “People, Process, or Technology” areas.

Notice that although certain functional barriers may fall within a Process or Technology area that every one of the barriers is either strongly, or completely, influenced by People. You simply cannot ignore the People involved in your project. The level of discipline required with SAP dramatically affects organizational norms directly related to the tolerance for change because of the new processes incorporated throughout the enterprise. Sumner, M. (2000) Risk factors in enterprise-wide/ERP projects. Journal of Information Technology, 15, pp.317-327.

Since implementation vendors like Deloitte are OBVIOUSLY aware of these barriers to success, why do they continue to repeat them?  Worse still, why do customers still allow system integrators to do this?

SAP Project Risks and Risk Mitigation

This list of barriers provides a great starting point for the project risks you may need to address.  Right from the beginning of your project your  RFI and RFP system vendor or system integrator evaluation should include an evaluation of these risks.  And it can’t stop there either.  You must be diligent throughout the project to ensure that your project team is ready and able to address your ongoing project needs from a business perspective.

If you are not willing to force your vendor to replace under-performing consultants then you are implicitly accepting being stolen from.  After all, when you consider the annualized rate you are paying for those consultants, why again do you pay for resources who are unable to deliver?

Be sure to review and evaluate these barriers to success throughout your entire SAP implementation and business project.

Related Posts:

• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP
• Using SAP to Improve Revenue and Profitability
• Competitive Pressures and Value Propositions, Is Lean the Answer?
• SAP System Vendor Project Success Criteria 1
• Why SAP Projects Fail to Deliver ROI and How to Change IT

Using the RFI and RFP Process for your ERP or SAP Education

This is a followup to the previous post on SAP Implementation Partner or Company Selection Criteria.  That post reviewed a 2009 academic study from the country of Romania on successful ERP vendor selection criteria and processes.

One of the key vendor selection processes is to use the RFI (Request for Information) and RFP (Request for Proposal) processes to solicit comments, methods, tools, and resource examples of how knowledge transfer will be handled.  In other words, be sure to actively engage in the RFI and RFP processes rather than simply using them as some kind of a checklist or scorecard for the correct vendor.  This is your first and best chance to gain badly needed knowledge for your implementation project. Be sure to leverage a Request for Information process and the RFP process as an educational experience (see Breakthrough Project Success: 3 of 4, Vendor Selection and Contracts). 

The RFI and RFP process should also be leveraged to insist that every vendor provide actual sample templates, resources, project plans, tools, and any other item they claim will help ensure implementation success.  If necessary, proactively volunteer to sign an NDA (Non-Disclosure Agreement) and put in writing that you will not provide copies of any of the material to any of their competitors.  Note in the RFI or RFP that non-response to this item WILL disqualify them [**].

Successful Vendor Selection Process Best Practices

The Romanian study (which I believe has fairly broad application) lined up several factors for a successful vendor selection process (Hurbean 2009, pg. 4-5).  Those include:

• Develop an implementation plan prior to SAP implementation company selection
• Have a clear understanding of the business with the reasons for the SAP implementation
• Act as a change agent and avoid custom coding unless there is a clear business driver or business need

On developing an implementation plan and acting as a change agent you can use the RFI (Request for Information) process and the RFP (Request for Proposal) processes to have the vendors educate you.  For example, you may wish to ask each proposed vendor for example implementation plans from companies of similar size and similar type operations.  You may wish to ask for sample change management and training plans, or the number of consultants that were needed for each of those activities. 

During this process be sure to start out with a “checklist” for your vendor selection critieria, but routinely update that checklist as you go through the RFI and RFP learning process.

Vendor Selection Matrix of Resources, Budget Requirements, and Best Practices

If you use the RFI / RFP process well enough you can get a fair number of vendors to compare implementation processes with.  If there are plans and estimates (dollars, man hours, etc.) that are extremely high or extremely low in comparison to all of the others I would either ask for clarification on how that few resources can handle the responsibility, or why so many resources are needed – or you may just eliminate those vendors from consideration [***].  There may be some genuine validity to the points made on the number and quality of resources needed, but if vendors make certain claims be sure to spell them out in writing and include those claims by the vendor in your final contract agreement. 

To get a reasonable idea of the real resource and planning needs I would tend to stay near any clustering of effort, timeline, resources, that several vendors provide.  It is highly unlikely that any two of them will be exact, but they may be close enough to begin to make reasonable comparisons and use their information. 

For the business, that will take some effort to ensure you have defined the number of legal entities (company codes) number of physical locations (plants, warehouses, distribution centers), the number and types of customers or vendors, the number and types of materials, etc.  This will help to ensure proper scope and ensure a more even “apples to apples” vendor comparison.

Before you Make that Final SAP Implementation Company or Partner Selection

The one thing that can not be overlooked is the actual SAP consultants that an implementation company provides.  Do NOT accept generic resumes in the final round.  Once you have arrived at your short list of vendors, insist on actual resumes from the consultants that will be on the project.  Ensure that any RFP you offer spells out that this is a requirement, and ensure that any agreement penalizes or even disqualifies any vendor for any changes or substitutions of more than x% or y number of resources at the project start (there is a high turnover to the truly talented SAP consultants so many consulting firms experience a normal annual turnover of 15 – 25%). 

Do not hesitate to review, question, and even randomly spot check consultant references that are provided.  You will spend a LOT of money on them over the course of the project, far more than many of your company’s senior level management, so the up front due diligence can not be underestimated. They must be able to bridge the technology to business gap by possessing the following skills for success.  As I have previously outlined in Screening Methods to Find the Right Consultant – Part 2, a good consultant must possess the following skills:

• Facilitation skills
• Meeting skills
• Process mapping
• Business case (or whitepaper) development
• Problem solving
• Organizational dynamics

If the consultants they propose lack these skills you probably do not want them on your project anyway if you expect good results.  When it comes time to screen or interview them you might want to think twice if there are any type of language barriers to the employees you will be assigning to work with them.  After all, as I have said before, why does any company ever hire a consultant who has barriers to consulting?

Any consultant proposed by the SAP implementation company or partner will need all of these skills to perform the following project activities:

• requirements gathering sessions,
• design sessions,
• blueprint writing,
• solution assessments,
• problem resolutions,
• fit / gap analysis,
• business process design,
• translation of SAP / ERP speak to business language,
• knowledge transfer,
• training,
• and organizational change.

The ability to communicate clearly, in an understandable manner, and to be able to translate application processes and requirements into intelligent business language is a key to these activities. How else are you going to get any kind of a decent blueprint, specification documents, or potential whitepapers explaining your options? If they are in SAPanese or other technical jargon they are virtually meaningless to a business driven project. If there are language barriers or the individual is too technical and unable to speak in plain, non-techie type language how will knowledge transfer and critical change management activities be carried out?

That list of the required consulting activities can also be used as part of your vendor selection checklist for templates, tools, resources, experience, projects plans, or other items needed for a successful project.

Vendor Selection Conclusion

In the end if the SAP implementation company or partner uses a good methodology, decent tools / templates, can help you understand key change management requirements, and ensures you have the best resources you are likely to be successful.  Any one of these areas can create a handicap right from the beginning and the maturity level of SAP is strong enough there is just no reason for it.

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Hurbean, L. (2009). Factors influencing ERP projects success in the vendor selection process.  West University from Timisoara (Romania), MPRA Paper No. 14430, Faculty of Economics and Business Administration.

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[**]  One of the routine scams that some SAP implementation companies use is to claim some special methodology or some special tools for implementing SAP.  This is almost always just some reformatted version of SAP’s ASAP (Accelerated SAP) Implementation Methodology and it is a scam.  The other routine scam by some SAP implementation partners is to claim that they use the SAP ASAP Methodology the way SAP provides it.  They may give you a couple of generic templates from that tool, but they have no actual client examples where they have actually used those templates and successfully adjusted them for the client.  You are looking for some type of redacted templates from actual client projects.

[***] Be VERY careful here.  A low number of resources, and a seemingly low budget may be a common shell-game.  Some vendors will come in far lower than others just to change order you to death and end up costing as much or more than the premium vendors in the end.  They may also be using “second string” or only slightly experienced consultants to keep their margins decent but costs low.  In the end this may work for an SAP INSTALLATION but not for an SAP IMPLEMENTATION.  If you are looking for a return on investment from the SAP implementation then this will likely not work.  On the other hand, the provider with significantly higher resource and budget requirements may be a large integrator with huge overhead that they have to support.  So you may be paying a premium in the number of required resources and budget.  In the end you control your own project fate and the more educated you are the more sophisticated of a service buyer you will become.

Related Posts:

• Achieve Breakthrough ERP, SAP, or IT Project Success: 1 of 4
• Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP
• Breakthrough Project Success: 3 of 4, Vendor Selection and Contracts
• Why SAP Vendor – Partner Selection RFI Processes are Stupid
• SAP System Vendor Project Success Criteria 1