More on Vendor Selection Criteria and Methods for ERP Project Success
Using the RFI and RFP Process for your ERP or SAP Education
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
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.
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.
Studies have shown that there is a critical disconnect between projected benefits in business cases for IT investments and actual value achieved, because so many firms focus on going live with a project rather than its value delivery. An SAP / ASUG best-practice survey on the ability to capture the projected benefits of an IT project found that 73% of companies do not quantitatively measure value post-implementation. (SAP Executive Insight Series, pg. 7, 2009).
It’s been a year since the recently-departed Leo Apotheker had an infamous outburst of criticism of, specifically, Accenture and IBM in the realm of SAP consulting. This highly-publicized moment led to an avalanche of largely uninformed blog posts (one gentleman cited SAP translation problems from the 1990’s that have long since been resolved). One over-arching theme that emerged was the need to certify SAP consultants even though various forms of such certification have been in existence since 1993. My own, belated, contribution to this particular point was a post about certifying SAP implementation partners, not just the individual consultants. (point to post).