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SAP Customer Responsibility for SAP Project Success

April 23rd, 2012 by
SAP Success Criteria Formula

SAP Success Criteria Formula

 

Some time ago I put together a synthesis of SAP success criteria based on academic literature and my own personal experience.  The table below is part of the list of SAP Success Factors for Vender Selection – Responsibility Matrix. For a more detailed explanation of each of the vendor related items see the posts listed in the Series on SAP ERP Project Success Factors.

In the prior series we went through SAP success factors with shared responsibilities between the company adopting the SAP application and the integrator they use for the implementation (listed below) but today we will briefly review customer-specific success items (further down).

No. SAP or ERP Critical Success Factor Company Integrator
1 Senior Management Support (and steering committee makeup) A  
2 SAP project champion A  
3 Empowered business project team decision makers A  
4 Company SAP project team (quality and time allocated) A  
5 Experienced SAP consultants   A
6 SAP project success criteria, goals and objectives A  
7 SAP implementation strategy z A
8 SAP project management A z
9 SAP tools, templates, and resources   A
10 SAP scope development z A
11 SAP scope management A z
12 Strong SAP project and business communication (inward and outward) A z
13 SAP change management A z
14 Business process engineering – interdepartmental cooperation A  
15 Sufficient SAP training (user and project team training) A A
16 SAP system vendor and customer trust   A
17 SAP system design decisions z A
18 Amount of custom ABAP or other SAP coding z A
19 Appropriate SAP software configuration (system settings) z A
20 SAP system change control process   A
21 SAP data analysis and conversion A z
22 SAP test planning A z
23 SAP test development z A
24 Company end-user involvement and end-user testing A  

Legend

A = Primary responsibility
z = Secondary responsibility (can influence success but limited control over success)

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The previous series did not address several of the customer-specific items where organizations should focus internal efforts.  As part of the recent series on Organizational Change Management Inside the SAP IT Support Organization it is time to consider the SAP customer specific items now.  That list of items includes:

No. SAP or ERP Critical Success Factor Company Integrator
1 Senior Management Support (and steering committee makeup) A  
2 SAP project champion A  
3 Empowered business project team decision makers A  
4 Company SAP project team (quality and time allocated) A  
6 SAP project success criteria, goals and objectives A  
14 Business process engineering – interdepartmental cooperation A  
24 Company end-user involvement and end-user testing A  

1.  SAP Project Senior Management Support – 2. SAP Project Champion

You just can’t overlook strong senior leadership support and a strong project champion for SAP project success.  If the wider organization perceives it is important enough for executive leadership they will see that it is a key initiative to focus on.  The Real Reason Executive Participation Creates IT Project Success is related to the nature of their position which deals with corporate strategy. The enterprise also needs an SAP project champion to help cut through red tape, encourage organizational support, and marshal additional resources when needed.  The best project champion would be at least one NON-IT executive so this isn’t seen as “just another IT thing.”  The contribution of a well respected and strong internal leader can not be overlooked.

3.  Empowered Business Process Team Members to Make Key Business Decisions About SAP Setup

If you want your SAP project to make any progress then it is absolutely critical to ensure core team members from the business are able to make many of the important process decisions. There will be some decisions that have more widespread organizational impact and the business users will need more senior level managers to make some decisions.  For example one of the key reasons for Using Your SAP Steering Committee for Business Transformation is to help mentor, guide, and direct business project participants in designing the future state business.  This would include making “critical decisions which the project team is unable to resolve (escalations or key business decisions).”  On the other hand if they are so compliant or risk averse that they will not make any decision without gaining consensus you may be headed for problems with the project timeline and budget.  This doesn’t mean you need an autocrat either, just someone who has enough organizational insight and connections to make the right decisions, escalate the ones that should be escalated, and has an open line of communication to keep interested stakeholders in the loop.

4.  Business Process Team Members who are DEDICATED to the SAP Project Delivery and Success

Too often I see core SAP project team members, whether from the business or the internal IT organization, who are not assigned exclusively to the SAP project.  While they are given the new role they often still have their “day job” to continue overseeing and managing.  This is a significant distraction from a very serious undertaking.  When an SAP project is done effectively, and what I call “correctly,” there is significant business change that takes place.  To help manage that change and to ensure business users have their needs most properly represented requires a full commitment to the SAP project.

Unfortunately there are a lot of system integrators who are happy to have your business users commit to just “part time” on the project.  It helps the system integrator increase their billing, allows for lots of excuses for missing dates, and provides them the opportunity to push any solution they deem you should have.  Because core team members from the enterprise have divided attentions they can not ensure the same level of quality if the SAP project were their only focus.

6.  SAP project goals and success criteria

I was recently reading an article where a study of several hundred companies who had implemented enterprise applications were asked about having defined business related goals and success criteria.  The referenced study suggested only 4% of companies who implement enterprise applications complete the entire process of defining goals and success criteria and then actually follow up on seeing that they achieved the promised benefits. 

To achieve Sustained Business Value from SAP Business Software it is important to incorporate a Change Management Program within the SAP / IT Organization itself which is focused on Achieving Business Value from SAP Investment.  Another key part of the goals and success criteria is to Change How You Look at SAP to Create ROI because SAP Implementation is an Investment NOT an Event.

14.  Business process engineering – interdepartmental cooperation

 This is directly related to the first 3 items in this list:

  • Senior Management Support (and steering committee makeup)
  • SAP project champion
  • Empowered business project team decision makers

Because of the nature of the integration in SAP some of the data entry responsibilities change, for both upstream and downstream process steps which may be in different departments.  There are also significant process changes and responsibility changes as a result of the SAP implementation.  All of these require a focus on processes, communication, and cooperation.  Because this can also be an area of political “friction” between departments or leaders it is critical to have a strong executive SAP project champion. That executive sponsor can help to reduce a some of the inter-departmental “border wars.”

24.  Company end-user involvement and end-user testing

Even a great implementation effort can turn into a painful disaster at go-live if end users are not prepared to use the new system, security and authorizations are a mess (VERY typical), and testing was not thoroughly performed.  Unlike other systems which were built in silos and without the level of integration a data or process mistake that is not uncovered during testing can have significant up and downstream effects.  Unwinding and correcting the error can prove to be very challenging.

For all of these items I only touched the surface, but none of these items can be ignored and are important for a successful SAP project.  Every one of these items is completely within the control of the enterprise or organization who implements SAP.  Good luck on your SAP journey but be sure to pay special attention to all of these success criteria for your SAP project which are provided in more detail in the Series on SAP ERP Project Success Factors.




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SAP Project Fraud Allegations in Marin County v Deloitte, SAP Services

March 28th, 2011 by
System Integrator Legal Liability

Legal Liability

To my talented friends and colleagues at Deloitte, Sorry folks!  This needs to be addressed.  It is not that all of Deloitte has a problem, I know some incredibly talented Deloitte folks, unfortunately a few bad apples CAN and sometimes DO spoil the whole entire bushel (or barrel if you prefer).

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The recent Marin County California Lawsuit against Deloitte Consulting took an interesting turn.  The initial complaint was filed in mid 2010 against Deloitte only for fraud in providing inept and incompetent consultants (for background see my previous post SAP ERP Project Failure Lessons Learned and Mini Case Studies 1).

Not long ago Marin County amended their complaint (a pretty standard legal practice after the initial legal complaint is filed) and included several other failed Deloitte projects as examples of a common practice.  Along with that SAP AG and SAP Services were joined to the complaint as additional parties.  The basis of SAP’s liability, as alleged in the complaint, is that SAP through its partnership with Deloitte knew or should have known of Deloitte’s fraud and continued to give them credibility.  That modified complaint was filed on December 16, 2010.

The SAP software itself was still not alleged to be the problem

The introductory statement of the complaint lays it out:

This action arises from defendants’ illegal and continuing scheme to defraud the County and other governmental entities while reaping tens of millions of dollars in ill-gotten gains in connection with the implementation of enterprise resource planning (“ERP”) software known as SAP for Public Sector, licensed by the German software developer SAP AG.  As part of this scheme, Deloitte, with the knowledge and assistance of the SAP Defendants, targeted the County by misrepresenting its skills and experience in SAP for Public Sector software to obtain a highly lucrative public sector implementation contract for itself, and licensing, maintenance and support contracts for SAP Public Services, Inc.

As a further part of the scheme, Deloitte falsely represented to the County – which had no ERP or SAP for Public Sector experience – that Deloitte had the requisite skills and experience in SAP for Public Sector software to deliver a successful implementation for the County.  Deloitte and the SAP Defendants also falsely represented that Deloitte, by virtue of its “alliance” with the SAP Defendants, was uniquely qualified to properly implement SAP for Public Sector software.  These representations were false because, at the time they were made, Deloitte and the SAP Defendants knew, or were reckless in not knowing, that Deloitte in fact lacked the ability and/or the intention to provide the County with appropriately skilled consultants.

As a further part of the scheme, to conceal implementation problems that resulted from Deloitte’s lack of skills, Deloitte and the SAP Defendants engaged in unlawful conduct to ensure that the County proceeded to go live with the SAP system on the scheduled go-live dates, in order to secure payment of their fees.  Such misconduct included deliberate under-testing of the SAP system by Deloitte to obtain artificially positive results and thereby conceal system defects; attempt by Deloitte and the SAP Defendants to silence an employee who raised issues with Deloitte’s deficient implementation work; and efforts by Deloitte and the SAP Defendants to corruptly influence defendant Culver, a County official who was also the County’s Project Director, to cover up Deloitte’s deficient implementation work, obtain payment for work that was not properly performed (or not performed at all) and cause the County to enter into additional contracts with Deloitte and SAP Public Services, Inc.

The fraudulent scheme that Deloitte and the SAP Defendants perpetrated on the County is consistent with a pattern and practice of similar misconduct that they have perpetrated on other public entities, including those in Los Angeles, San Antonio, Colorado and Miami-Dade in connection with the implementation of SAP for Public Sector software.

On January 26, 2011 it appears the case was removed to Federal District Court for Northern California from the Marin County Superior Court.   On February 23, 2011 SAP filed motions to be dismissed as parties from the case, and to strike their name from the complaint.  On March 21, 2011 the Motions to Dismiss and Strike were terminated because the parties all agreed to allow the complaint to be amended, and allowed for additional time to respond to the newly amended complaint once it is complete.

So, the case continues.  Once again there is a key and noteworthy item in this case, the SAP software itself was still not alleged to be the problem.  The allegations within the case surround the consulting practices of Deloitte and SAP is “guilty by association” because they put their “seal of approval” on Deloitte as a qualified integrator.

Consulting Industry Implications – Especially for SAP Partner Programs

This case reminds me of something Michael Doane wrote about some time back about the need for SAP system integrators to be certified as well as their consultants (see Certainly Certifiable – SAP System Integrators Not Just Consultants).

After reading through the entire complaint I can 99.999% guarantee that one or more of the “consultants” Deloitte brought to the project had partially or even completely fake resumes and SAP backgrounds.  I wouldn’t be surprised at all if the number of fake or fraudulent “consultants” on that project was closer to 30% or even higher.  I’m not talking about fake or fraudulent because they didn’t have public sector experience, I’m talking about completely fake and fraudulent work histories and experience in general.

If the Marin County outside attorneys at Kasowitz Benson Torres & Friedman LLP subpoena the employment application information and contractor resumes and do a thorough background check on the Deloitte consultants I wouldn’t be surprised if they find massive fraud.  Worse still I’m equally sure that a careful review of the Deloitte vetting process will reveal that the experience claims and employment history for contractors was not verified.  It wouldn’t surprise me if many of these “consultants” listed fake “certifications” on their resumes as well which was not verified (for more background on the MASSIVE fraud around SAP “consultants” please 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).

What Would be the Impact on SAP and SAP System Integrators if the County Wins?

If SAP bears even a small amount of liability by the end of this case it will have huge ripple effects throughout the entire business application space.  It might actually force SAP to ensure that their partners have some measure of verifiable skill rather than just buying a seat at the table.  On top of that it will put all system integrators on notice that if the current failure to verify skill and experience continues they may be held liable.

Maybe it’s time SAP finally put in that “transcript” service for consultants who claim to have SAP training or certification.  Let decent training programs apply to be “certified training centers” or “training alliance partners” to submit the training information to SAP’s transcript service.  After all, SAP offers a Higher Education industry solution so they have the software to support it.

One Way SAP MIGHT be able to Get Out of the Marin County Case Fast!

I’m guessing here that the reason SAP was joined to the complaint was because Marin County recently ripped out the SAP system and wants to get their SAP license fees and maintenance fees back.  If they can get treble damages for fraud, all the better.  Guess what SAP, if you are REALLY smart you might want to try to negotiate that with the County in a private settlement IMMEDIATELY.  Cut the legal fees, end the PR headaches on the heels of the Oracle debacle, give them back their money for the software and the maintenance fees and then fix the partner program!  Get those settlement negotiations started IMMEDIATELY because your private settlement discussions are NOT admissible in court.  Run from this mess fast!

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Complete Marin County Deloitte-SAP Complaint Removed to Federal Court

I have attached a copy of the entire, lengthy case for anyone who is interested in reading this.  Even if every allegation is not true, I have seen enough of these kinds of tactics to know that this type of thing happens routinely.  This complaint should be REQUIRED READING FOR EVERY POTENTIAL SAP CUSTOMER IN THE RFI OR RFP STAGE!  (Complaint document here).




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SAP ERP Project Failures Lessons Learned and Mini Case Studies 2

December 20th, 2010 by
SAP ERP Project Failures

SAP ERP Project Failures

The following SAP ERP project failures cover the importance of testing, change management, training, senior management involvement, scope management, and quality of the consultants provided by ERP implementation vendors.

With the exception of the inept, incompetent, or otherwise unqualified “con”sultants provided by some system integrators it is important to note that these failure overviews illustrate many of the points made by Steve Phillips in the post on Software Consulting Firms and Clients Myths and Half Truths .

There Mr. Phillips lays out pretty significant areas where the business must chart and then control their own project destiny.

For a table of the primary areas of responsibility for end customers to ensure project success please see SAP Success Factors for Vender Selection – Responsibility Matrix 2 .  The table developed there is derived from the academic literature and my own experience.  I have added my opinion on how the responsibility for those success factors is divided between the customer and the SAP implementation partner or vendor.

Continuing on the series of SAP ERP project failure overviews, here are three more.

SAP ERP Implementation Failure Overviews – part 2

Levi Strauss & Company – SAP Failure? (2008)

  • After go-live shipping was prevented for one week and there were legacy system integration issues.  Levi was an interesting case study because many industry experts believe the SAP implementation was used as an excuse for broader economic issues affecting Levi.
    • One week of delayed deliveries was insufficient to explain the overall drop in financial performance (approximately 98% decrease in revenue could not be sufficiently tied back to the SAP implementation).
  • Levi Strauss has since worked through and resolved the implementation issues and SAP is running smoothly.

Lessons Learned: Ensure that all legacy system interfaces are carefully tested before going live. Don’t use SAP or enterprise application implementations as an excuse for poor economic or poor overall market conditions.

Waste Management Incorporated – SAP ERP Failure Overview (2008)

  • Waste Management claimed in its lawsuit that they “wanted an ERP package that could meet its business requirements without large amounts of custom development…” They also claimed “SAP used a ‘fake’ product demonstration” and “SAP’s technical team had ‘recommended that SAP deliver to Waste Management a later version of the software than the version SAP in fact delivered’.” They also claimed SAP knew the software was “unstable and lacking key functionality…” [FN1]
  • SAP claimed that its application could meet the company’s needs without modification.
  • SAP claimed in its legal counterclaims that “Waste Management didn’t ‘timely and accurately define its business requirements’ nor provide ‘sufficient, knowledgeable, decision-empowered users and managers’ to work on the project.” [FN1]

Lessons Learned: First and foremost any organization or company who implements SAP, ERP, or other enterprise software applications must ensure they are in control of their own project. This would generally fall under numerous critical success factors: business process engineering / change management, scope management, senior management support, formal project plan and schedule, consultant experience, implementation strategy, and amount of custom coding.  Delivering a project with standard system functionality, and on time / on budget requires strong leadership from both the customer and the integrator.  For additional insight and a somewhat different perspective please see the post where SAP and Waste Management Finally Settle .

Los Angeles Unified School District – SAP ERP-HR Failure Overview (2007)

  • Fake Consultants / Trainees / unqualified consulting resources on the project
    • “[I]t appears Deloitte (the implementation partner) brought unqualified resources (i.e., personnel) to the project.” [FN2, pg. 28].
    • I personally encountered one of these fakes as a project manager for another company looking for a workflow resource.  Their ABAP and SAP skills were horrible but they got a great reference from LAUSD.
  • Lack of cooperation with the Teacher’s Union and no user buy in.
    • This is a project planning and change management issue; the company and the integrator bear this responsibility.
  • Has since worked through and resolved the implementation issues and SAP is running smoothly.

Lessons Learned: SAP implementation vendors and partners may allow margin desires to override quality to the point of presenting significant project risks.  It is critical to evaluate every consultant any integrator brings onto your project.  There are just too many fakes in the marketplace that do not have proper background checks.

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[FN1]  SAP, Waste Management settle lawsuit.  Business Week. May 3, 2010.
http://www.businessweek.com/idg/2010-05-03/sap-waste-management-settle-lawsuit.html (retrieved 5/11/2010)

[FN2]  Bhagwani, A. (2009). Critical Success Factors In Implementing SAP ERP Software, University of Kansas Graduate School. http://www.r3now.com/literature/2009-Bhagwani-SAP-Project-Success.pdf




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