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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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Guest Worker IT Firms Crash Then Burn When Investigating Visa Fraud

June 11th, 2012 by
SAP Consulting Fraud

Guest Worker Consulting Fraud

Recently a gentleman by the name of Jack Palmer blew the lid on the entire Guest Worker scam at InfoSys.  Anyone who has worked hard to establish their career in SAP (or other IT areas) the old fashioned way, through hard work and perseverance, owes this man a huge debt of gratitude.  He literally exposed the entire fraud and scam of the whole guest worker program by showing how one of the biggest guest worker companies routinely commits fraud.  Mr. Palmer’s case tells the story of how the guest worker program is abused and misused and even defrauds U.S. taxpayers.  His complaint even alleges how they believe Americans are stupid for allowing them to get away with it. 

In a statement to the Senate Judiciary Subcommittee on Immigration, Refugees and Border Security on Tuesday, Jay Palmer, the whistleblower at Infosys, said the company “intentionally violated our visa and tax laws for the purpose of increasing revenues.” Mr. Palmer accused Infosys of frequently violating U.S. visa laws and of staffing multiple client projects with illegal employees, including at Goldman Sachs, American Express, Wal-Mart and Johnson Control, among others [FN6].

It is worthwhile to note for the SAP crowd that several of those big name customers are SAP shops as well.

Mr. Palmer’s willingness to stand up to the guest worker fraud has caused the Department of Justice and the U.S. Attorney’s office to look into the practices of several  Indian guest worker firms who have “unusual” practices related to U.S. IT projects.

In my opinion this has been a very, very long time in coming and maybe only serious prison time will discourage some of the routine abuses of the system.  Please bear in mind that unlike some of my counterparts I could care less about the number of guest workers as long as the FRAUD is stopped.  I don’t mind competing with the very best in the world but I am tired of cleaning up messes from fakes, “freshers” and wannabees.  Enterprise projects are hard enough already and in my opinion it is because of the massive and widespread resume fraud and consulting fraud.  As a result few companies realize the benefits of properly implemented enterprise applications.

Judicial Summary of Palmer v. InfoSys Guest Worker Fraud Case

“This case stems from allegations of visa fraud and retaliation.  Palmer alleges that, while employed as an Infosys consultant, he uncovered evidence of fraud in the procurement of H-1B visas for specialty workers” [FN1].

Palmer says he began digging into how and why Infosys seemed to be bringing in large numbers of workers from its corporate headquarters in Bangalore, India, into the U.S.

Palmer says at first, most came over on H-1B visas. These visas are for people with specialized talents or a level of technical ability that can’t be found among American workers.

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.

When the U.S. State Department began to limit the number of H-1B visas, Palmer says Infosys began using another type of visa, the B-1. The B-1 is meant for employees who are traveling to consult with associates, attend training or a convention. But Palmer says the employees were brought in not for meetings, but for full time jobs.

Palmer said the jobs were in “Everything from coding software to testing software to fixing software to installing.”

Palmer said, “They could outbid everybody or underbid everybody on every contract (because they were paying less.) For example…if I’m gonna pay you $15,000 a year why would I pay an American or a legal worker $65,000 a year? It makes no – it’s just economics.”

And Palmer says the B-1 workers never paid U.S. taxes because they received their salaries from India.

“They’re basically a lot of times being paid on a cash card or a debit card where money was put in their account,” Palmer said. “And the fact is, is they’re just taking that money out and they’re never paying U.S. taxes.”

[O]ne of Palmer’s most serious allegations is that top company executives not only knew of the alleged fraud, but wanted to expand on it to increase profits. Palmer says during a 2010 meeting at Infosys’ corporate headquarters in Bangalore the practice was discussed with a group of executives, including a senior vice president.

Palmer told CBS News, “There [were] some conversations about how to increase the share price, which is – in America is the stock price. So it’s really about getting people over no matter what the cost or whatever. And you know, I think that’s the first time I heard the term, you know, ‘Americans are stupid.'”

According to Palmer, telling documents come from an internal Infosys website. One document appears to be a “do’s and don’ts” list that gives instructions on how to get B-1 visa requests by the U.S. State Department, telling managers not to mention things like work or employment on their applications or in interviews with U.S. Customs and Border Patrol agents.

When asked when he saw the information on the internal website what struck him, Palmer said, “Intent. Deliberate. Not even trying to follow the spirit of the law.”

When asked if the internal document on the website was an instruction guide on how to beat the system, Palmer replied, “Yes, in my opinion, absolutely.”  [FN2]

Legal Grounds for Palmer’s Civil Lawsuit Against InfoSys

Jack Palmer’s CIVIL legal claims and grounds for a lawsuit against InfoSys consist of the following [FN1]:

  • intentional infliction of emotional distress
  • negligent hiring, training, monitoring and supervising
  • legal misrepresentation
  • breach of contract

Americans and conscientious foreign workers can likely follow Mr. Palmer’s example and help to stop the blatant fraud in the system. 

There are likely additional grounds to sue as well.  There are also potential civil or criminal legal theories for unfair and deceptive trade practices, RICO (Racketeering and Corrupt Organization), Mail Fraud, etc.

There may be Corporate and Personal Liability for Fake Consultants, even by those companies who hire outside system integrators if an employee indicates unqualified, fake, or fraudulent consultants are being used by the system vendor.  The key is in raising the concerns about the frauds within the organization. 

Ongoing Criminal Investigations for Guest Worker IT Firms

As I mentioned, InfoSys is NOT alone in this.  InfoSys is just the tip of the iceberg as there is still a massive amount of Visa Fraud still going on today.  How many more courageous Americans will stand up and be counted to end the widespread, ridiculous FRAUD in the IT space?

While there are a few media reports, few if any of them clearly reference that there are CRIMINAL investigations going on as well as Palmer’s civil suit for damages.  While the extensive excerpts from CBS News deal with InfoSys there are several other guest worker programs that are under CRMINAL investigation as well by the U.S. Attorney’s office in the Eastern District of Texas. 

  • Vision Systems Group Inc. (IT Guest Worker Visa Fraud) [FN3]

The companies that are the subject of this investigation have asserted that the foreign workers have been brought to the U.S. to fill existing vacancies. However, the companies allegedly have not always had jobs available for these workers, thereby placing them in non-pay status after they arrive in the United States. In some cases, the foreign workers have allegedly been placed in jobs and locations not previously certified by the Department of Labor, displacing qualified American workers and violating prevailing wage laws.

The companies and foreign workers have allegedly submitted false statements and documents in support of their visa petitions. The false statements and documents were mailed or wired to state and federal agencies in support of the visa applications. The companies are suspected of visa fraud, mail fraud, wire fraud, money laundering and conspiracy.

  • Mumbai-based Larsen & Toubro (IT Guest Worker Visa Fraud) [FN4]

[The Complainant] Pai’s job in human resources at Larsen & Toubro in New Jersey adds a new dimension to this case.

In her role as human resources manager, Pai was required to help process visa-related documents. She alleges that immigration fraud “appeared to be rampant” at the company, according to the lawsuit.

This lawsuit is similar to one filed against another major Indian firm, Infosys.

While I don’t think I could be accused of being pro-union I can certainly agree with much of what the report from the AFL-CIO has uncovered related to guest worker fraud.  They have done extensive research in their 60+ page report entitled “Gaming the System 2012” [FN5].

 —————————-

[FN1] These are quotes or excerpts from the Judge’s Order in Palmer v. InfoSys order denying arbitration, Docket #10, November 9, 2011 pages 1 – 2. http://www.r3now.com/1/Palmer-Infosys-10.pdf

[FN2] CBS News – Whistleblower calls out IT giant over U.S. jobs, April 12,2012.  http://www.cbsnews.com/8301-505263_162-57412896/whistleblower-calls-out-it-giant-over-u.s-jobs/ (retrieved June 10, 2012)

[FN3] http://www.desicrunch.com/Wiki/Default.aspx?page=Abuse%20and%20Fraud,%20H-1B%20and%20L-1,%20for%20article (retrieved June 10, 2012)

[FN4] Computer World online.  ‘Massive’ visa fraud alleged in lawsuit against Indian firm, April 4, 2012.  http://www.computerworld.com/s/article/9225847/_Massive_visa_fraud_alleged_in_lawsuit_against_Indian_firm (retrieved June 10, 2012)

[FN5] Gaming the System 2012: Guest Worker Visa Programs and Professional and Technical Workers in the U.S., AFL-CIO, Department for Professional Employees.  http://dpeaflcio.org/wp-content/uploads/Gaming-the-System-2012-Revised.pdf (retrieved June 10, 2012)

[FN6] Wall Street Journal Blogs.  http://blogs.wsj.com/indiarealtime/2011/07/28/infosys-employee-testifies-on-alleged-visa-fraud/ (retrieved June 10, 2012)

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Protecting Yourself from SAP Consulting Fraud

October 17th, 2011 by
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.

Few Staffing Firms Do ANY Type of Skills or Experience Verificaiton

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:

Think I’m joking about the fraud and the negative impacts on you comapny?  Take a look at an actual timeline of consulting horror stories at a real company where an internal employee periodically posts some of the horror stories http://sapmesideways.blogspot.com/.  Although the employee at that company does not 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.”

There is no incentive for staffing firms to carefully screen candidates–, no background checks, no former project verifications, nothing.

Protecting Your Organization from the SAP Fakes and SAP Frauds

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.  I have heard 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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