SAP & ERP Consulting from the Customer Point of View

SAP System Integrator

I recently read two articles I thought I should summarize and review here.  The articles provide two opposing viewpoints of consulting and some lessons learned for service buyers.

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This article on CIO about “7 Dirty Consultant Tricks (and How to Avoid Them)” [FN1] caught my attention.  Especially the part about ways consultants try to “extract money from their clients…”:

IT consultants are among the most slippery of the bunch. Among their favorite tricks: Using “scope change” to line their pockets, claiming expertise they do not actually possess, promising you their superstars and then sending in the rookies, purposely delaying decisions and sowing confusion as they rack up billable hours, and collecting kickbacks from other service providers. The worst ones may even hold your company’s intellectual property or systems hostage until you pay up.

The article title notes it is the consultants but in reality it is the SAP system integrators who pull these types of tactics.  While the scams and shams happen all too often it is the system integrator that uses the “scope change” tactic, does a “bait and switch” with “con”sultants who have little experience, etc.  The CIO article does concede that not all consultants are this way.

The Seven Consulting Dirty Tricks to Separate You from More of Your Money

1.  Bid low and bill high – some SAP SI’s will deliberately bid low and then change order or customize you to death.  Even though you start out with a project you believe will cost “X” they will constantly work on ways to leverage more and more revenue from you.

2.  Bait and switch – they sell the “A” team but deliver the back benchers and water boys.  Sometimes they pad their RFIs and RFPs with first class resumes for consultants who never show up for your project.  Some of the placement firms bring fakes and knowingly help them create fraudulent resumes as well (see Screening and Interview Methods to Find the Right SAP Consultant and the follow-up piece Screening and Interview Methods to Find the Right Consultant – Part 2)

3.  Using stall tactics and distractions – they avoid creating momentum and enable indecisiveness.

4.  Hostage takers – build special “trap doors” into their solutions, use password protected infrastructure, or create contracts that give the consultant / company all of the legal rights to any solutions.

5.  Kickbacks – consultants may push a product, solution, or other consultants that they get paid for.

6.  Selling you far more than you will ever need – does it meet the business requirement, or is it a sledgehammer to swat at a fly when you really need a fly-swatter?

7.  Empty suits or vampires – both will bleed you dry.  Incompetent or unqualified consultants end up on the project and bleed the budget and timeline until there is nothing left.

What an absolute mess!  Unfortunately these 7 ways you get scammed, shammed, or are taken advantage of are pretty common.  The article I referenced provides some great suggestions on how to protect your company.  It’s worth the read.

The Alternatives to the Consulting Fraud Factories

In contrast to these practices, or maybe because of them, we are beginning to see customers use small firms and individual consultants more and more.  While this is a trend that many sophisticated SAP customers are beginning to use there are also things to be concerned about here as well.  Another post presents a great counterpoint to a trend for quality consultants that is beginning to take hold [FN2].

Unlike their larger counterparts, these small one to five person consultancies seem to be more principled in their approach to growing the business. Some of the common values adopted by smaller firms and missing from the larger include:

1. Do not promise what you cannot deliver

2. Do not overextend your resources and get a reputation for poor performance.

3. Do not tell the customer what he or she wants to hear. Tell them what they need to know. They will respect you for it.

4. Network constantly on professional sites such as Linked In. Hit the “Answers” feature and accumulate an “Expert” rating from your peers in your field. This allows buyers to not blindly trust that they will get the right resource but be certain in advance.

5. Blog like there is no tomorrow. A blog is quite different than a web site. Provide good, solid information free of charge and use blog searches for synergistic businesses to team with. Teaming is an absolute necessity these days.

6. Be prepared to provide information, samples and valuable service gratis as a marketing tool. Introduce yourself and then immediately engage the client with your presentation tools available to bring your expertise to whatever topic they are interested in. Let them take you where they want to go with their concerns and their needs. Apply your presentation tools and expertise dynamically on the fly in a sincere manner to those concerns and needs and you will be in demand for follow up business.

7. Quote and bill what the client can afford and grow with him (in content and resources).

8. Be dedicated to working yourself out of a job with a specific customer and having your client take over by training him. He will remember you and recommend you to 10 others.

9. Remember growth is a function of persistence and foresight. Know where your market is headed and get their first – then write and speak about your success indirectly by helping others. Demonstrate humility and a satisfaction in helping others succeed. They will find ways to give you credit. There are ways of tooting your horn without making peoples’ lights go out.

10. Word of mouth advertising from pleased clients is a sure ticket to success.

There are a number of small firms and individual consultants who do outstanding work.  They deliver great results and help you to mitigate project risks while delivering a high quality work product.

And with this introductory post I will be starting a series on the tactics, strategies, and scams used by system integrators in their sales cycles to gain your business.  In the end they are less concerned about delivering results than they are about collecting their fees.

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[FN1]  CIO online, April 11, 2011 – http://www.cio.com/article/679330/7_Dirty_Consultant_Tricks_and_How_to_Avoid_Them_

[FN2]  The Return of Boutique Consultancies…
http://duckdown.blogspot.com/2011/04/return-of-boutique-consultancies.html

Related Posts:

• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP
• How the SAP Consulting Peter Principle Works
• Tips to Overcome Sales Tactics by SAP-ERP System Integrators
• Competitive Pressures and Value Propositions, Is Lean the Answer?
• Reduce SAP, ERP, or Technology Project Stress: Part 2

Too many companies have not considered the potential legal liability to shareholders or other company stakeholders for having “fake” consultants at involved in their company IT projects.  This can be applied personally or coporately for the fake IT “professionals” that vendors and placement firms bring to company projects.  By not conducting sufficient due diligence in screening vendor resources, or for inconsistent labor practices there is a much larger potential for liability than many realize. And that would include both corporate and personal liability for Directors and Executives that fraudulent “consultants” may cause.

There is not only the potential of torts for negligence or gross negligence but there are also potential wrongful termination suits for any regular employee your company might need to terminate. The real shock is that more of this type of legal activity hasn’t already taken place, but it is just a matter of time.  It’s not important to take this author’s word for it, just read this material and then have your corporate counsel and HR departments review it as well and then ask yourself what the consequences to you and your company might be.

For example if an employee submits a false or fake resume or otherwise lies on their application to your company about their skills and you fire them there may be both personal and corporate liability.  This is true if you do not use at least similar diligence, care, and consequences for vendors and their resources.  If a CIO, IT Director, or some other managing official were so brash as to knowingly ignore the fraudulent vendor resources or consultants and then not apply the same standard for regular employees there may be a solid case for wrongful termination of anyone who is fired for false claims. You might as well just remove that clause on your employment applications and employment forms where you claim you can fire an employee for false information.

The most disturbing aspect of all of this is if you dare fire an employee for fraud, embezzlement, theft, or other such infractions but discover that a fraudulent consultant has come to work at your company you may be subject to wrongful termination liability there as well. In other words, if you or your company won’t deal with the frauds, cons, and cheats that come into your corporate environment through contracts and other means then you may be implicitly waiving any legal ability to enforce those standards on your internal employees. 

Your risks and exposure are far greater than you may think.

The first time a lawyer takes one of these cases where you have done an expensive ERP or IT implementation and it is discovered that one of more of the resources was a fake you may be in serious trouble.  Consider this:

First there is the potential for wrongful termination suits as already mentioned above.

Second there may be personal or individual liability if it can be demonstrated that there was not an adequate amount of due diligence in verifying the skills and experience of the vendor resources.  This exists because if you do any kind of prior employment verification on regular employees but do not do at least a similar amount of verification of the skills and qualifications for high paid vendor resources an argument could be made for negligence.  If it is serious enough, it might be gross negligence. 

Third, even if you win a lawsuit employee morale will be damaged.  The negative employee and public perception from the legal discovery process of finding out just how much you paid to that fake consultant will KILL your career and any future you might have at any company.

Fourth, there may also be U.S. Sarbanes-Oxley implications for any financial performance impacts caused by inexperienced consultants.  Couple this with the potential personal liability for negligence or gross negligence that may obtain and you have a serious mess.

Fifth, you may be subject to corporate liability for terminating, suing, or pressing ANY charges for any employee who has pilfered or stolen anything from you.  If you do not do the same thing for any consultant that a vendor brings to your company.

Sixth, you may still have liability for not taking action against a vendor or placement firm if you find a pattern of their use of fraudulent consultants that is not isolated.

Seventh, back to U.S. Sarbanes-Oxley legislation, it may not be enough to hide behind a vendor or consultant’s liability insurance for supposed “protection” if it can be shown you did not have sufficient controls in place to prevent your company from being defrauded by these con artists and cheats. You may discover that certain exceptions to your own corporate insurance policies will not protect you in the case of this type of “negligence”.

You and your company WILL settle every one of these cases that comes across your desk no matter how ridiculous the claims of the lawyer’s client, your former employer, might be.  See point three (3) above to understand why you will settle every wrongful termination case where anyone who is fired can possibly dig up any consultant on one of those expensive IT projects with a falsified resume. 

During discovery any lawyer can get copies of the consultant resumes and the experience presented by the vendor or consultant for the project. From there it is not a difficult issue for them to make the necessary HR calls to the companies that the consultant lists on their resume to verify all of the experience the consultant listed from every company they supposedly worked at.  And most HR departments will track down information even on contractors if you approach them.  And let me assure you, with the MASSIVE AMOUNT OF FRAUD done on a regular basis they WILL find at least one or two resumes from fake consultants.  And if you weren’t careful during the hiring of a few years ago you may be in deadly serious trouble in your own IT or Engineering departments with lots of fakes and frauds in there as well.  You may quickly discover that your technical departments have several fakes, frauds, and cons.  Are you ready for the fallout?

If this happens you may be in serious trouble.  If it goes to litigation and there is more legal discovery over what your company paid for that fraudulent consultant your career as CFO, CIO, IT Director, or other IT professional is over. 

The worst case scenario is if it is discovered that you fired an employee for theft, embezzlement, or fraud and then took any kind of civil action or made a criminal complaint against them.  You might as well hang it up. 

When it comes out how much that FRAUDULENT CONSULTANT and their fake resume cost per month that you didn’t throw off the project, or take civil action against, or file a criminal complaint against for fraud or embezzlement, your head will be on a silver platter.  Shareholders will be hunting for you and both HR and the legal department will have your number on speed dial.

This is all in addition to the messes and dissappointment that so many companies experience from the lack of expected results all of these frauds and fake resumes have created in the marketplace.  Wonder why your IT projects go over time and over budget? I’d almost be willing to wager that some 75 – 90% OR EVEN MORE of those projects were staffed with several fake consultants with fake experience and fake resumes. Wonder why you’re paying so much for that ERP project and not seeing the desired results?  Wonder no more.

Further Reading:

 How to screen for SAP consultants
Avoid 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:

• How the SAP Consulting Peter Principle Works
• Reduce SAP, ERP, or Technology Project Stress: Part 2
• Scams, Shams, ERP System Integrator Tactics
• Screening and Interview Methods to Find the Right Consultant – Part 2
• Screening and Interview Methods to Find the Right SAP Consultant

Previously I wrote on the subject of finding the right SAP consultant and how you can avoid getting ripped off, or worst case, having your business wrecked.  That previous article, Screening Methods to Find the Right SAP Consultant, has been widely read, well accepted, and I’m seeing some changes in the marketplace.  Companies are tired of being ripped off along with the lack of results or ROI from their large IT systems implementations. 

At the foundation of SAP or any IT consulting is communication –, clear, concise, easy to understand communication.  If your SAP candidate is unable to speak clearly, and in an understandable manner about the subject, you should immediately be suspicious.  If a consultant has some three (3), five (5), or more years of experience listed on their resume and even one full-cycle project then they must have demonstrated some basic skills or they are likely a fake and a fraud.

WHY would you hire a “consultant” who has a barrier to “consulting?”  And you really have to wonder about any prior ACTUAL experience they have with someone else who did hire them.

If they speak in technical “jargon” and can not “translate” that jargon to normal conversation then it is entirely possible they have never been on an SAP project. One of the key skills that every decent SAP consultant must master is the ability to help client counterparts understand and translate the SAP jargon into plain and understandable business terminology.  If they lack that skill they probably lack the critical experience to help ensure your project is a success.

Important Consulting and Business Analysis Skills

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

If these skills are weak it may be due to personality differences, interaction styles, depth of experience, or other reasons.  However, if they are lacking altogether you are probably dealing with a fake.  Even if the consultant who lacks these skills is not a fake, 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.

Let’s look at them in detail one at a time: 

SAP Consultant Facilitation Skills 

On any large IT project, especially an ERP project which directly impacts so much of the business and organization there are:

• 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?

The ability to ”extract” the key information (through facilitation skills) for all of these activities can not be underestimated.  The questioning skills, the language skills, the ability to verify understanding and re-frame the issues in terms that everyone understands are absolutely vital to performing all of these key functions.  On top of that, they are critical to knowledge transfer to your internal team.

Consultant and Business Analyst Meeting Skills

Strong communication skills and the ability to stay on task and on point are critical to a successful project.  It is imperative to have at least fair organizational skills and strong communication skills.  Without strong language specific skills it will be difficult or even impossible to understand, capture, and then summarize the key points of the meeting or to be able to keep it on point.  Together with the actual meeting process there are some meetings where the key point of the meeting must be “socialized” or shopped around even before the meeting ever takes place.  Sometimes you have to win over naysayers or get key supporters on board so that the meeting is more of a formal communication.  You may need to understand and be able to address any legitimate objections key stakeholders may have. This requires language dependent good listening skills, and strong communication skills to be able to try to persuade, influence, and address objections or concerns.  If there is a language barrier there is also some measure of an understanding barrier as well.  Meetings are likely to be unproductive wastes of time.

SAP and ERP Project Process Mapping

Start to finish, A to Z, you must be able to look at a sequence of events and understand their dependencies and any gaps.  This is a central skill for design, blueprinting, and business needs.  Disjointed or “shoe horned” patches of activities are not sufficient to develop a working process.  And you must have strong enough language skills to be able to understand the business terminology, and then translatae that into SAP terminology, and transfer that understanding to the client side participants.

Along with that you must have a decent level of insight to understand what can be enabled by technology and what are inherently manual processes.  After evaluating a process the key is to be able to simplify, streamline, and automate the complex.  Any comprehension or communication gap will negatively affect this ability. If there are technical development requirements do you think that language, understanding, and comprehension barriers will produce good specs for development?  How will they prevent going back and forth and wasting all of the high priced developer’s or other consultant’s time?  

Anyone can take the complicated and keep it that way, or worse, make it more complicated.  The mark of skill AND EXPERIENCE is the ability to take the complicated and make it understandable and workable; the sign of innovation and exceptional skill is the ability to simplify.

SAP Business Case or White Paper Development

Along with blueprinting this requires a significant amount of local language specific comprehension and writing ability.  If there is a language barrier you can forget about a detailed, thorough, and well-done blueprint document, business case for a scope change, or a white paper explaining the options. 

How will they understand all of the issues to present the appropriate pros or cons for an issue, or to explain it correctly?  How will they understand the complex inputs and outputs to translate that into formal requirements that make any sense?

Business and SAP Problem Solving

In the entire ERP space, whether it is ERP, CRM, BI, SRM, or other SAP applications the ability to understand how and where a particular business problem fits into the application space requires deep skill and experience.  That requirement goes beyond what you can get through some self-directed training, a certification program, or even a single project. 

Real problem solving skills require a level of knowledge and understanding of the business, the subject matter, the applicable technology together with a fair amount of creativity.  Language or communication barriers will make this a difficult process.

SAP Project Change Management and Organizational Dynamics

Along with all of these activities you must also evaluate the company or organizational counterparts.  These are often called “core team members” from the business.  You must be able to assess the business area the application will touch on and consider the affects of certain changes on that organization.  The deep understanding demands solid language skills to discern subtleties of the personalities in the organization.  Where there are language barriers the ability to assess and understand the cultural dynamics will be impaired.  When it comes time to evaluate the impacts of certain changes on the organization, and how much change they can absorb, this lack of understanding will create problems.  Where there are gaps here I see CONsultants constantly suggesting technical fixes, new application functionality, or scope changes where the organization is not ready to absorb the change.

Conclusion on Screening and Interview Methods for the Right SAP Consultant

SAP, ERP, and other large scale IT projects are critical to your business and its functions.  Done correctly you can see great results.  Done in the wrong way and the results can be damaging enough to your business that you might be better off taking your budget, withdrawing the money, putting it in a pile, and lighting it on fire. 

Some of these frauds can end up costing you so much that you would have been better off without the budget in the first place.  Few companies recognize the amount of damage and the hidden costs on the entire project that these con artists end up creating.

One other thing to consider in all of this is if the “consultant” lied or cheated their way into the project what else will they lie or cheat you out of?  How much is enough?  And where will it end?  Since they are clearly stealing from your company through fraudulent means, what else will they steal?

When you are interviewing, screening, or even considering your next SAP, ERP, or other Technology consultants shouldn’t you be sure you are getting what you pay those huge fees for?  Carefully consider the skills you need for success, and for Business to IT Alignment and you will be much happier with developing business oriented solutions.

Additional Resources About SAP Frauds and Fake Resumes

Some of the sites that give more insight on FAKES in the marketplace:

Screening Methods to Find the Right SAP Consultant

SAP World is FULL of Fakes and Stolen Resumes

Indian Firm giving advice and guidance on using their prep materials and developing a FAKE resume

Vendor implementation firm accused of using fakes, vendor responded from internal employees, maybe they are fakes?

Related Posts:

• How the SAP Consulting Peter Principle Works
• Reduce SAP, ERP, or Technology Project Stress: Part 2
• Protecting Yourself from SAP Consulting Fraud
• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP
• Screening and Interview Methods to Find the Right SAP Consultant