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SAP, ERP III, SOA — Learning Organizations through Social Media Collaboration

April 27th, 2007 by
Knowledge Management

Knowledge Management

 

SAP Knowledge Management Introduction

Everyone’s heard the buzzwords, ERP, SAP, SOA, you name it. In the technology area they’re everywhere. These are just acronyms for ways companies try to leverage technology for competitive business advantage. Reduce costs, streamline operations, increase revenue, and transform your organization [1].

Since ERP applications like SAP have entered the business world there remains one area that enterprises struggle with –, the realm of capturing and then converting employee “know how” into ERP solutions–, Knowledge Management [2],[3]. I call part of that ability to leverage both employee “know how” and to collaborate with the broader customer community ERP III. For a detailed explanation of the different versions see ERP vs. ERP II vs. ERP III Future Enterprise Applications .

There is a simple and inexpensive way to implement ERP III, enabling your ERP application to transform your enterprise into a learning organization. ERP III is a way to capture that employee “know how” to develop business solutions to create real competitive advantage. In this post we look at this idea in the context of SOA (Service Oriented Architecture), however it can be more widely applied and adopted to virtually anywhere in the enterprise.

Background for SOA, Knowledge Management, and ERP III

The ERP revolution began with integrating the “back office” functions of the enterprise: purchasing, ordering, financials, HR, distribution, inventory, etc. The idea is that the whole enterprise relies upon a common set of data from a single database which provides one version of the truth–, a single version to rely upon or correct. Next came ERP II, extending the ERP application from the back office to the extended supply chain, to the web, to the banks, and beyond.

Enter SOA or Service Oriented architecture, the idea of “universal” and completely reusable application services that can be “plugged in” to other applications. This SOA architecture would then allow for the rapid assembly of dynamic process and application chains as business and opportunity needs arise. SOA (or sometimes SaaS) holds tremendous promise to enhance and extend the idea of ERP II even further, but an idea that will take time and tremendous effort to do effectively.

ERP III and the Learning Organization

The next generation of business transformation is ERP III, or the customer integrated ERP enabled learning organization.[4] However, SOA’s success and timeliness are directly tied to how well an enterprise is able to create a “learning organization” within its development and IT ranks.

This learning organization approach is one of the key backbones to a successful SOA initiative as well. The cornerstone of effective SOA re-use policies and procedures, service standards, and validated service development is directly correlated to how well the enterprise’s developers are able to collaborate and coordinate their efforts (especially in an ad hoc manner).

A learning organization starts with knowledge management and is best supported by a culture which generates and also consumes information.

Service Oriented Architecture, or “SOA” requires a level of participation, collaboration, and information exchange like never before to be successful. True “SOA” requires a blending of technology, collaboration, and cooperation with highly structured standards to achieve a significant level of trust in the development work. While many suggest that this level of collaboration, integration, and reliability within the enterprise may take enterprises as long as 10 years to accomplish, the methods defined in this paper can dramatically reduce that time and effort. [5]

What is Knowledge Management? [6]

A learning organization starts with knowledge management and is best supported by a culture which generates and also consumes information. There seems to be no widely accepted “definition” for knowledge management, and as I review the information on Wikipedia about Knowledge Management I find a rambling discussion of high level theoretical constructs with little substance. As a result I am offering my definition here, and some clarification, which helps to distinguish knowledge from information.

“Knowledge Management is not information management. It is the process of transforming unstructured data into contextual information and then applying that information. Knowledge as “contextual information” is the ability to draw on information and combine it with experience by applying it to a particular situation or circumstance when it is needed. Knowledge Management is the process of capturing, codifying, and disseminating information so that it provides some value in a particular context.” Bill Wood, R3Now Consulting, originally drafted in the late 90’s, updated in 2006.

My personal opinion is that the reason there is little consensus on a Knowledge Management definition is because most “knowledge management” discussions surround information management. What people call “knowledge” is the codification or classification of information. Often “knowledge management” is referred to as the systems that help to capture and codify knowledge but this is still just information in a structured context. They do not take knowledge to the next step of infusing it into the enterprise (or creating a learning organization) by creating methods to take that information and apply it in a value added context for day to day activities. It is only with the application of information coupled with experience and context that something becomes “knowledge”–, it is NOT a system.

Sytems can facilitate knowledge management. Systems contain information, not knowledge. Knowledge is the application of information in a relevant context. Systems do not add context, situations add context.

For the enterprise to continue to “wring value” out of the ERP implementation or other technology investments, the enterprise must change. For effective enterprise level change to take place technology must support the capture, organization, and implementation of the unstructured knowledge and information contained in people’s heads, or jotted down on crib sheets. This is not an easy task.

Knowledge is not data and information. Data consists of facts, observations, occurrences, numbers, and things that are objectively perceived.

Information is a collection of various aggregated or synthesized data points. From there, Knowledge is the mix of information, experience, and context adding value [to a particular situation]…

Knowledge Management is the systematic process by which an organization maximizes the uncodified and codified knowledge within an organization.

Original author(s) unkown, further adapted and modified by Bill Wood.

Why is Knowledge Management So Misunderstood?

Before beginning it is crucial to understand the often misused, misunderstood, and even abused concept of “Knowledge Management.” Contrary to so many of the technology offerings out there, knowledge management rarely (if ever) is a system, however systems can facilitate knowledge management. Systems contain information, not knowledge. Knowledge is the application of information in a relevant context. Systems do not add context, situations add context.

Systems, by their nature and design are information tools. Too many times the term “Knowledge Management” is used to describe information gathering and classification systems–, information systems. Some even call their systems “knowledge bases,” and maybe they are bases for knowledge, however, they are not knowledge management systems. Until information is learned, and then applied, it is not knowledge, it is merely information.

Knowledge Management, Collaboration Tools, and ERP III – Current and Future State

The initial process of implementing SAP requires taking structured and unstructured data, along with the processes from legacy systems and “institutional knowledge” and then you place this information into a highly structured application. At its most effective, the initial SAP implementation captures some cost savings, process improvements, and revenue generating opportunities. However, no initial implementation is able to capture the vast unstructured information and knowledge that resides in people’s heads.

It is only with the application of information, in a particular context, coupled with experience where something becomes “knowledge”–, it is NOT some system.

The SAP enterprise current state, with the application you’ve implemented, and possibly some of the ERP II enhancements, still has the possibility to deliver far greater benefit without significant cost. To capture and leverage that benefit requires an enterprise wide cultural transformation. People must begin to both act and think differently. And this change has to occur not just in the larger enterprise but within the IT organization itself.

To extend the SAP application’s usefulness and achieve greater benefit it is critical to a) capture useful “unstructured” information, b) then organize, classify, or categorize it, and then c) translate it into more useful application solutions. This process also facilitates the implementation of SOA within the SAP environment.

The first step toward the future state is to create a collaborative learning organization. A learning organization is an organization that is constantly acquiring and applying new information and thereby gaining knowledge. Once that information is captured, it can then be structured into solutions, some process based, and others technology based. Some of the solutions can be translated into additional, value added SAP enhancements, additional SAP functionality, or market-based business opportunities around innovation and customer focus.

A Collaborative Knowledge Management Model for a Learning Organization

Based on my time at Grant Thornton (and later Hitachi Consulting) as the SAP Knowledge Manager, I made use of the best resources I could find in the arena of “Knowledge Management.” Based on that research, and leveraging the pioneering efforts of other true knowledge managers, I created the model you see here. It is consistent with much of the literature that exists today, however, in the late 90’s when it was developed, and then in 2000 when it was instituted, it was a pioneering effort.

1) Raw Data: The unstructured data, ideas, “crib notes,” and thoughts that we all have. However in this instance, it is the raw data surrounding the job or responsibility that the individual performs within the enterprise. Sometimes these are the “workarounds” to get something done when you run into obstacles or roadblocks, other times they are just shortcuts or techniques to perform a job or function.

Knowledge Management Process

2) Organized Information: This is the process of capturing and classifying that raw data. This is where the “knowledge bases” and other types of information systems come in. Many enterprises make it this far. Sometimes these are the “workarounds” to get something done when you run into roadblocks or obstacles. Other times they might be the shortcuts or techniques to more efficiently perform a job or function.

3) Acquired Information Experience: This is the interaction with the organized information. This can be through search functions, employed taxonomies, reports, or other methods of accessing the organized information. This is after the capture of the information in steps 1) and 2) above, and involves its wider availability than in the individual who originally developed or “held” the knowledge or information. Few organizations or enterprises make it much further than this. However, this is the beginning of the true learning organization.

4) Applied Experience (Knowledge!): This is the practical application of the organized information after it has been acquired. Whether this acquisition is through word of mouth, training, or some type of information management system (that is wrong named a knowledge management system) or through a “knowledge base”. This is where the cost savings, revenue opportunities, continuous process improvement opportunities, and real competitive advantage begins to come to fruition.

5) Refined Experience (accurate intuition and forecasting): This is more of the inherent “knowing” what to do in a broad variety of contexts that may not be directly related to the task or issue at hand. It is when an individual can draw on that level of inner experiences mixed with intuition and make the right decision or provide the right answers when there is not enough information to make such a determination under normal circumstances. This can also be a type of “making the complex appear to be simple.”

There is a simple and effective method to capture the unstructured information, organize and classify it, and then disseminate it in such a way as to create a true learning organization. This method, outlined below, will help to move your organization through the 5 steps noted here.

Practical and Inexpensive Ways to Move Toward ERP III and SOA Today!

Since I am not a big fan of reinventing the wheel I look for existing ways to solve current problems. To that end, the key to moving ahead on ERP III is to create a collaborative culture, from the collaborative culture, you create a learning organization by using some of the existing collaborative tools. The answer lies in using some of the popular web technologies making a splash today.

Enter the “cool” and the “fun” factor in the enterprise–, “social networking” is one of the hottest, and most vibrant collaborative uses of technology anywhere–, these sites connect people for personal exchanges. While not appropriate for the types of personal exchanges on the world wide web, that same technology can be used to create a collaborative environment around cost savings, process improvements, system enhancements, revenue opportunities, customer acquisition, customer retention, customer experience, enhanced products, better services, and general business improvement for competitive advantage. The list of possibilities is only limited by what you can imagine can be leveraged from participant knowledge. The same technology options which can enable SOA are available to capture the uncodified end user “raw information.”

Forums are One Effective Method of Acquiring, Categorizing, and Synthesizing Unstructured Data and Information

Forums or other social media outlets can also be used to capture SOA related standards, common development services, and to do code or object reviews. They can be used to capture SOA best practices while facilitating broader development community participation in standards, services, and object re-use policies. The collaborative nature, and the ability to offer code improvement suggestions, bug fixes, standards exchanges, or development and solutions discussions, in a threaded forum will prove invaluable to an organizations SOA initiatives.

To make this a reality, the key is to leverage tools, and define a process that captures the unstructured information . Once it is captured, methodically move that to process changes or to structured application solutions within SAP or an SOA initiative.

Defined below is a set of free tools, along with proposed solutions on how to apply those tools in a practical manner. Please keep in mind, this is ONE solution option. There are many more and there are also some very specific and interesting ways to incorporate this type of solution DIRECTLY into the SAP application. Here is one method to get started:

1) ANY networked PC (you don’t really need “heavy duty” hardware here unless you just must have blistering performance)

2) Download the free Uniform Server application that works on Windows. It contains Apache Web Server, MySQL, and PHP (including PHP My Admin). http://www.uniformserver.com/ You only need to unzip this file to a local directory, and then double-click (or execute) the Start Server file.

3) Download and Install the latest PHP Bulletin Board open source application: http://www.phpbb.com/downloads/ (Set up the MySQL database and copy the web files to the proper local directory of the newly created web server from step 2). To see the forums in action, go to the PHPBB site at: http://www.phpbb.com/community/

4) Structure the Groups to match the business department (create a new forum “group”), and then create 4 sub-areas under each department link. A) Cost Savings, B) Revenue Generation, C) Process Improvement, D) System Changes.

5) Structure additional groups to match SOA service development. An SOA topic with sub-forums for A) standards, B) services, C) objects, etc.

6) Have the users create the hyperlinks in their SAP user menu. A hyperlink for that departments topic in the bulletin board is easy to add to the SAP user menu (right click on the favorites menu, then add a web address, it’s really that simple.)

7) Adjust department and user goals to include evaluating forum contributions, based on points earned for participation, and aligned with the forum structure that applies to them (for example, cost savings, revenue generation, SOA standards, etc.)

8) For the system changes option, create an inexpensive interface to read the MySQL table for this area and generate a separate approval / response process. This way the changes, and responses to those change requests, as well as the details of the change request, are captured in an easily searchable database.

9) To produce the most useful solutions, follow a “PDCA” process (Plan, Do, Check, Act). After a discussion thread has reached a certain point where the exchanges have stopped, reduced to a trickle, or a specific date deadline, have someone review the entire threaded discussion, capture the most salient posts (by using the hyperlinks to the posts), and then summarize those hyperlinks into a single post. Call a meeting with the key stakeholders, review the salient points and produce a position paper or some other summary document and then publish that for final review.

The PHPBB forum software contains several developer implemented modifications that are available, and fully supported at no charge [7]. For example they have a “cash” modification that is nothing more than adding a point system based [8] on how active a forum participant is. In combination with the ability to develop groups, and to have moderators approve posts, this is an effective way to manage the information “clutter.”

Goals can be based on the number of points. Posts can be reviewed and approved by the department supervisor, or even a skip-level manager as the moderator. This ensures that the submissions are both high quality, and that they are being reviewed.

Over time, in areas such as manufacturing maintenance, or any other similar situations, enough quality information could be captured to create solution databases. This would facilitate the introduction of PM (Plant Maintenance) [9] for both preventive and predictive maintenance programs.

The searchable nature of the forums allows for quick and easy information retrieval in the short term. Over a longer period of time, the information can be structured and implemented as various types of system solutions to address recurring themes or various business opportunities.

Collaboration, virtual discussions, and even “debates” will ultimately occur in such a way that they help to refine various business issues or problems. In the future, as the issues arise again, going back through the old dialogs may yield a new perspective or new direction for the future. In the end, the cultural change to a learning organization will begin, and along with it new information and ultimately new knowledge will emerge to use for competitive advantage.

ERP III, Knowledge Management, Collaboration, and Learning Organizations – The Conclusion

Competitive advantage and the emergence of the extended enterprise through SOA, and the extended supply chain demand greater collaboration. This collaboration is a key component of creating the learning organization.

SOA and additional benefit realization from an SAP implementation depend heavily on the ability of an organization to capture competitive advantage from the knowledge of the employee base. Even skilled IT contractors must rely heavily upon the acquired knowledge and wisdom of those who actually perform the enterprise’s processes on a day to day basis.

No matter how skilled an IT professional may be, there will always be some things that escape detection or discovery because of the nature of intangible “knowledge” that exists within any individual or organization. The key to leveraging the IT investment in SAP and in implementing an effective SOA program is in finding ways to create collaborative communities to expose that knowledge. This collaboration can become the basis of a “learning organization” that is a key to transforming both the enterprise and the IT infrastructure that supports it. Using today’s “social networking” tools, as a means to advance that collaborative culture is one of the most cost effective ways to accomplish the task of organizational transformation.

~~~~~~~~~~~~~~~~~~~~~~

[1] SAP as a Change Enabler http://www.r3now.com/sap-as-a-change-enabler

[2] Knowledge Management—Emerging Perspectives: http://www.systems-thinking.org/kmgmt/kmgmt.htm

[3] Knowledge Management Journal – Business process modeling through the knowledge management perspective: http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=Published/EmeraldFullTextArticle/Articles/2300100303.html

[4] Learning Organization from Wikipedia – http://en.wikipedia.org/wiki/Learning_organization

[5] Hitachi Consulting, where I previously worked in the SAP practice as a functional consultant and the SAP Knowledge Manager has published a white paper on SOA that explains both its promise and its drawbacks; SOA – CIO Savior or Nemesis, http://www.hitachiconsulting.com/downloadPdf.cfm?ID=414

[6] One important distinction to note here is that this paper will focus on the implementation of the “learning organization” in practical ways throughout the enterprise. This “learning organization” approach has far reaching affects beyond SOA, it has the ability to transform business through the use of enabling technologies.

[7] For example, see this forum which lists many of the validated and approved modifications, along with full support information and enhancement options. http://www.phpbb.com/community/viewforum.php?f=15

[8] Forum with information for installing, updating, and enhancing or modifying the “cash” (i.e. points) modification to the PHPBB forum. http://www.phpbb.com/community/viewtopic.php?p=539420

How to access the modifications while the modification database is unavailable (it is currently undergoing a complete update and re-write). http://www.phpbb.com/community/viewtopic.php?f=15&t=527421

[9] For example, see SAP’s Plant Maintenance solution: http://help.sap.com/saphelp_47x200/helpdata/en/66/158661547611d182cc0000e829fbfe/frameset.htm

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SAP as a Change Enabler

April 17th, 2007 by
SAP as a Change Lever

SAP as a Change Lever

SAP can deliver amazing results or mediocrity, but that depends on you!

If your company has decided to implement or upgrade SAP the results you achieve depend on several things.  Some of the keys to business results and SAP success depend on business reasons and your commitment to excellence in staffing your SAP project.  That excellence in staffing is not just your internal resources but also the vendor you select to guide you through the process. 

SAP as a Corporate Lever for Change

The key to optimal results from SAP or any major IT investment is to use the technology as a lever for change.  If your focus is on the ERP technology rather than the business all you’ll have in the end is just another system, more integrated and requiring more discipline, but just an IT system.  In the end, you’ll never realize the promise of what a properly implemented global ERP application, such as SAP, can do for your business.

“The software is less important than the changes companies make in the ways they do business. If you use ERP to improve the ways your people take orders, manufacture goods, ship them and bill for them, you will see value from the software. If you simply install the software without changing the ways people do their jobs, you may not see any value at all—indeed, the new software could slow you down by simply replacing the old software that everyone knew with new software that no one does…  To do ERP right, the ways you do business will need to change and the ways people do their jobs will need to change too. And that kind of change doesn’t come without pain.

The important thing is not to focus on how long it will take—real transformational ERP efforts usually run between one and three years, on average—but rather to understand why you need it and how you will use it to improve your business.”

Christopher Koch, The ABC’s of ERP.  CIO.com, November 17, 2005.

This focus on business processes and process change while using SAP as a change lever automatically helps to ensure greater company “ownership” and control of an ERP project.  The whole reason a company undertakes this type of an IT strategy — a global ERP system like SAP, is for business benefit. 

Past the Marketing, what do you hope to GET from an SAP implementation?

Too often in the consulting sales cycle the focus is on your “pain points.”  Pain points are an important ingredient for an SAP implementation but it should rarely be the single driving factor for implementing ERP.  Depending on your IT infrastructure and what SAP will replace, there may be ROI opportunities, and real cost savings available, but the big “GET” with an SAP implementation is the opportunity to transform the business.  It is important to go beyond just cost reductions and consider areas of helping your organization become more competitive in the marketplace.

If you go into an SAP implementation with your eyes wide open about some of the cultural changes with SAP, you will benefit tremendously.  The software will enforce a measure of discipline breaking down silos, breaking down walls, and requiring more inter and intra departmental cooperation. It’s important to know up front that there will be cultural and business process changes.  That type of business transformation is not easy but it is important to compete in today’s economy.  You can ignore the change management!

It is precisely because of the business process revolution that executive sponsorship, senior management involvement, and the very best talent for the project team the company has to offer are critical for SAP implementation or upgrade success.

After the “pain points” and the “cultural changes” along with the importance of senior management involvement, what do you hope to get from your technology investment?

Properly thought out, properly planned, and properly implemented, SAP gives you the opportunity to effect a business process revolution where true order of magnitude changes are possible. SAP technology can enable your company or organization to make changes in how you manage your business, address market and competitive pressures, and at the same time enhance your value proposition.

While replacing numerous legacy systems, their interfaces, and the maintenance costs associated with those legacy systems can be a tremendous justification for an ERP or SAP implementation for some companies, here is a list of the Top 10 Reasons for an ERP implementation:

Benefit
Improved management decision making
Improved financial management
Improved customer service and retention
Ease of expansion/growth and increased flexibility
Faster, more accurate transactions
Increased revenue
Cycle time reduction
Improved inventory/asset management
Fewer physical resources/better logistics
Headcount Reduction

Hawking, Stein, and Foster – Revisiting ERP Systems:  Benefit Realization.  From the Proceedings of the 37th Hawaii International Conference on System Sciences (IEEE, 2004) citing from Davenport, et. al., (2002).

Notice that most of the expected benefits are forward looking and competitive in nature.  Unfortunately many companies have not implemented their SAP systems with this forward looking benefits approach.

In recent years, as SAP customer participation in public information sharing events has increased (ASUG, Sapphire, etc.), many SAP clients are seeing more and more benefit.  This benefit seems to be realized only with “Wave II” internal initiatives to add on additional automation functionality and reporting.  SAP’s “New Dimension” products like CRM, SRM, BI/BW, APO, and other technologies are making some difference for some companies, but even they aren’t fully delivering on business expectations.

Every SAP implementation or upgrade should become an opportunity to evaluate the transformation of your business.  Challenge your implementation partner and your own internal resources to make every SAP implementation or upgrade an opportunity for improvement.  Decide up front whether you will dedicate the time, budget, and energy to implementing more advanced and “benefit laden” functionality in the initial implementation or whether you will work to get the “core” package installed and then do a “Wave II” add on project after the business has had a little time to stabilize. 

I personally tend to favor a staged or “phased” approach because it gives the business an opportunity to evaluate the implementation vendor’s capabilities, develop some internal competence or expertise, bring some knowledge into the organization, and generally evaluate the company or organization’s ability to absorb the change.

How to use SAP as a change enabler to Transform your Business

Determine from the very beginning, even before the project begins, what the key performance indicators for your business are.  SAP has done a great job of compiling an example list of KPIs that they include as part of their ASAP methodology.  Right here on this site I’ve written extensively about the process and alignment of KPI indexes for business success.

What are the critical measures for each department within your business?  What are your goals and what are the crucial employee performance measures that are used in their reviews?  Look forward, what is the direction of your company, your marketplace?  What should you be positioning yourself for?  What benefits do you hope to get from your implementation or upgrade?  These and many more questions like this must be answered clearly before you even begin your formal project planning.  This should become your project charter.

Armed with this, you can make the most intelligent decisions about scoping your SAP implementation.  SAP is a massive application and contains some sort of solution to address nearly any performance measure or business benefit imaginable.  And while it may not be a 100% perfect fit for that particular measure, the application can be molded and shaped to fit nearly any requirement.  Between the intelligent use of reporting tools and SAP’s generous “user exits,” pre-delivered enhancements options, or a standard SAP bolt-on, you can implement an application that will enable significant changes in your enterprise.  Davenport, et. al., classify ERP potential three ways, Integrate, Optimize, and Inform.  Basically, the process of implementation, improvement, and then data analysis in an ERP application.

The key to ROI is getting to the data analysis stage as quickly as possible.  I call this transforming the management culture from an operational and task orientation to a strategic and analytical culture focused on competitive advantage.  To make that transition, it is crucial to ensure that your implementation partner provides consultants who are more than just SAP application consultants, they must be true business analysts.

Some of the steps to getting there include doing more of the up front work surrounding your ERP or SAP business case.  A proper business case will help ensure a far better vendor selection process, a better business blueprint, a better managed project, and more likelihood to deliver on-time and on budget with real business benefit.

You need Solution Experts for your SAP, ERP, or IT Implementation or Upgrade Project

To transform the culture, you must have SAP consultants who are also business savvy.  They must be business consultants who understand when it is time to “push back” because even though there may be a technical solution, there is a deeper business process issue that needs to be addressed.  You need real consultants who won’t just design technical “band-aids” but who have the experience and the skill to look at a problem and understand whether it is a technical issue or a business issue related to people or process (i.e. analyze people, process AND technology).  A true solution expert will help to resolve underlying business process problems, look for ways to make them more efficient or productive, and then apply technology to the process to automate it.  A solution expert is a business consultant first and knows how to apply technology to business processes.

If you are successful in partnering with a firm that provides solution experts and not just technicians, you will go far in realizing many of the benefits that SAP promises in a shorter period of time.  Not everyone on the entire project team needs to be a “solution expert” although that would be ideal, but many of the team leads should be heavily skewed toward being “solution experts” and not just SAP technicians.

Using SAP or other Technology to Transform Business Processes – practical suggestions

Key areas for solution experts to focus on during any SAP implementation or upgrade are growing your business or generating revenue combined with efficiencies or cost reduction.  When you begin any SAP project these two key factors should be built into the project planning process.  Otherwise, why are you doing an ERP project anyway if not for some business benefit?

Right from the beginning of the project this communication must be set, and the communication repeated and reinforced throughout the project.  Weekly team meetings should emphasize these key business benefit components and rewards recognizing and encouraging these benefits should be liberally used.

1)    Plan right from the beginning of the project (implementation or upgrade) for business growth / revenue generation and efficiencies / cost reduction.  Build it into the project charter.

2)    Gather all of your companies departmental or individual performance goals along with any key company metrics…  From these derive a set of KPIs.  Additional sources for deriving KPIs might be reports.  What are the commonly used (rather than ignored) reports that people use to do their jobs?  Are there any spreadsheets still “hanging around”?  All of these are good candidates for deriving KPI’s from.  Either for enhancing revenue or reducing cost.

3)    No matter how much effort it takes, be sure to read the resumes proposed by the implementation partner.  Ensure that most, if not all, of the team leads are real SAP solution and business experts, not just SAP technicians.  Pick your implementation or upgrade team carefully, you’ll be spending a lot of time and money on them and you’ll be entrusting your business to them as well.

4)    Use good project management techniques.  Glitz and glamor during the sales cycle won’t deliver an SAP solution.  Make sure your implementation partner has a REAL methodology, tools, templates, and resources to ensure a successful project.  Once you decide on an implementation partner, insist on a project plan and then publish it.  Even if it has to be frequently adjusted or modified, it gives targets and goals to aspire to.  If your implementation partner project manager doesn’t provide a project plan, or if they want to keep it hidden, get it corrected quickly or GET RID OF THEM IMMEDIATELY!  That may be a dangerous method of them trying to avoid some measure of accountability and responsibility.

5)    With a true focus on business benefit, be prepared to spend more time in the project preparation and blueprint phases with your implementation partner and a few key resources.  Get the scope and the project focus right from the beginning and it will make a HUGE difference!

6)    When contractors must be used, be sure your implementation partner uses the screening methods to find the right SAP consultant.

The next edition will focus on rapid but effective project scoping.  There is a simple project scoping method which will allow you to effectively scope even an initial implementation and then use it for a more effective RFP.  In a future edition I’ll cover effective RFP writing.  How to be sure your implementation partner candidates are proposing apples to apples.




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Screening and Interview Methods to Find the Right SAP Consultant

April 14th, 2007 by
SAP Consultant Screening

SAP Consultant Screening

Whether you are a business or a consulting firm, get what you’re actually paying for by avoiding the fakes, frauds, and cons with great looking resumes.  Software consulting fraud is rampant, widespread, and overwhelmingly involves H1B fraud.

High salaries with few “entrance requirements” make SAP consulting a prime software consulting fraud target.

SAP implementations are crucial for competitive advantage in business.  Some of the competitive advantages are efficiencies, integration, and automation when SAP is properly implemented.  To achieve these benefits, you entrust your business, your company, your enterprise, and your employees to a group of SAP or ERP consultants and business “gurus” believing these experts will help you achieve your goals.

In such a critical business endeavor you need the best software and the best ERP consultants that money can buy.  As a result an SAP consultant is often among the highest paid of the business software professionals in the technology sector.   With one or two full SAP implementations ( or with about 2 to 4 years of experience) it is not difficult to get a full time position in industry or consulting paying senior management wages.  For a decent contractor, that amount can easily be double or more.  The U.S. average salary for a doctor or lawyer is around the amount of the full time position.  However, unlike doctors and lawyers, there are no hard “entrance” requirements except claims of experience and the ability to get through the interview process.

Because of the potential “goldmine,” SAP consulting is a target for software consulting fraud, IT fraud, and H1B fraud.  Armed with fake resumes for SAP experience there are countless frauds and cheats who claim to be SAP consultants.  Worse yet, there’s an entire cottage industry organized to help write fake resumes, coach potential applicants, and even do initial phone screens to help these individuals engage in software consulting fraud on your SAP project.

Add to this that there are way too many recruiters and staffing firms who are more interested in making a buck than in working to police or stop the fraud and it is a mess.  Unless you use a genuinely reputable staffing firm or placement agency that has a solid reputation for doing actual background checks, employment / contract verifications, and some type of skills evaluations then you are wasting your time and money. 

Actual Experiences With Software Consulting Fraud, Fake SAP Consultants, Fake SAP Resumes, and Frauds

Having done SAP work since 1994, and being a project manager or team lead on many projects, I am often asked to screen and interview potential candidates for SAP consulting work.  I’ve certainly had some memorable interview experiences.

Real-life SAP bait and switch – Make Sure the person you interview is the one that shows up for the job

As a project manager for a mid-size national consulting firm, I got a request to screen a few potential candidates for an SD (Sales and Distribution) role.  The client requirement was very specific, to handle some reasonably straightforward pricing condition setup work.  The design was already done, and the requirements were already laid out, there was nothing complicated, no unusual requirements, really it was nothing special.  I would have done it myself if I weren’t up to my eyeballs on another project.

I contacted the applicant for the interview and the phone screen went great!  This candidate knew SD inside, outside, and upside down.  Great communication skills, clear, straightforward, relaxed–, no struggling or fumbling for the answers.  He pegged everything and it was very clear he had been working on SAP for many years, just as his resume said.  He’d be starting at the client the following Monday as a contractor.

A week and a half after that Monday start date, I got a call from the project manager at the client site.  The SD consultant was saying that everything they needed to do was going to require a programmer because what they wanted couldn’t be done with standard SAP.  The SD consultant I thought I had interviewed got on the phone and his English was HORRIBLE!  You could barely understand a word of what he said, worse yet, the little I could make out, this guy was totally clueless.  He didn’t even know how to do the simplest pricing related setup (using the SAP “condition technique”) and it was painfully obvious that this was NOT the same person I had screened on the phone.  A similar thing happened again to someone else in our company, the “bait and switch” in SAP consulting is alive and well.  While lots of people “pad” their resumes, there is a new breed of TOTAL CONS!  Watch out for the con artists!

SAP consulting is a target for software consulting fraud, IT fraud, and H1B fraud.  Armed with fake resumes for SAP experience there are countless frauds and cheats who claim to be SAP consultants.  Worse yet, there’s an entire cottage industry organized to help write fake resumes, coach potential applicants, and even do initial phone screens to help these individuals engage in software consulting fraud on your SAP project.

Lesson learned – ALWAYS screen and interview a second time in person, with different questions.  I can’t tell you how many interviews I’ve done where it was obvious by the delays and the keyboard clicks in the background someone was doing an Internet search, or an SAP help search during the interview.  During the second screening, make sure to have some fairly simple IMG task for the applicant to do.  Then log into a development system and ask them to show you how to do “x.”

Beware the SAP software consulting “fraud factories” – teaching them to lie, cheat, and steal – can you trust them at your company?

At a moderately large client site as the team lead, I was working on SAP’s R3 / CRM Internet Sales B2B application.  We needed a developer and it was a critical time in the project.  Because the enhancements were significant, it *had* to be someone with real experience, not a blowhard.  They needed ABAP, Java, and CRM or R3 Internet Sales experience.  This candidate had to be able to deliver on a compressed timeline and this was a critical path item for the entire project.  Because a significant portion of the company’s customer base was already using the web for all ordering processes, this was a mission critical, go or no go development effort. 

In come the mountains of resumes.  I probably did 30 or more technical interviews, and please keep in mind, I’m a functional consultant without all of the coding skills, but I can usually find someone who has the experience necessary to get the job done.

I learned a LOT about the fraud, the cons, and the “games” out there around the “SAP consultant factories.”

During this long, painful screening processes, there were probably 4 genuine candidates who had spoken to questions and requirements clearly, concisely, and explicitly enough that I was certain they had “been there and done that.”  Those interviews showed they were the real McCoy.  Then the oddest thing happened, after some measure of assurance they were genuine, I followed my own suggestion from prior lessons learned and asked when they could come in for a second screening face to face.  One consultant just simply said he couldn’t, no explanation, just refused.  A second one tentatively agreed then called back a few days later and said he accepted another contract offer.  The third one just never showed.  At least one, probably two, and possibly all three were the classic “bait and switch.”  They had someone else do the phone screen for them, and then they would show up with NO experience and potentially jeopardize the go-live date.  And because of the mission critical nature at this client, they would potentially jeopardize the entire project.

One of the candidates (not among the 4 with real experience) I was given to screen was the most revealing candidate of all.  I was handed a resume, with a LOT of the *identical* projects, descriptions, and timelines as many of the other resumes I saw.  Except this one was different.  This one had a project listed at a company where I knew literally everyone on the project team.  I hadn’t worked on the client, but as the SAP Knowledge Manager for the consulting firm that has a great, long-term relationship with the client, I personally knew everyone on the project.  Because of my position, I also knew many of the contractors that our firm used and this person’s name was not one I recognized. 

This phone interview revealed the “SAP software consulting fraud factory” to me in ways I’d never considered.

Since I knew the project manager at that client, and the technical lead, both of whom had been there for close to 3 years, I decided to ask a few key questions.  In a rather friendly manner, when the candidate got on the phone, I asked him if he’d worked at that particular client before.  Of course he replied he had.  I then asked “So, how’s Jack doing there these days?” to which the candidate said he didn’t know any Jack.  And I said, “Sure, you know, the project manager, how’s he doing?”  Still he said he didn’t know a Jack and then said he worked in a technical area away from the rest of the project.  So, I asked how was Sri doing?  As a side note, Sri and I are personal friends who go back many years and have worked on several projects together.  He is probably one of the most talented ABAP / Java / Portals / CRM / SAP gurus you can find anywhere.  Still he insisted he didn’t know any Sri and that he worked in a different area.  When I pressed and insisted that Sri had been there for several years, that he was the technical lead, and that I knew him personally, this candidate wouldn’t relent.  Even after I told the candidate that I knew everyone on the project personally, and that Sri was responsible for all of the SAP related CRM and Portals development work, he still insisted he had the experience and had worked there but didn’t know Sri.  Knowing he was lying (he had no way to know how well I knew the project participants), I called my old friend Sri on his cell phone, and did a three way call to get him on the phone.  At this point in the interview the candidate finally admitted the truth… 

He lied, he had some service out there put a fake resume together for him, with legitimate SAP projects (probably gleaned from SAP resumes out there today), and had gotten coaching on how to lie his way through the interview.  This candidate actually had the nerve to ask if he could still come onto the project even though he had just admitted he lied about his experience and that his resume was a fake!

Lesson Learned – a resume is a piece of paper, just because it has all of those “cute” SAP terms and buzzwords on it doesn’t mean much.  An SAP resume should only serve one purpose–, to consider whether or not to interview the individual.  NEVER base a hiring or contract decision on a resume and a “personable” interview alone.  Even if the interviewee comes across as knowledgeable and authoritative, remember my example above, this guy actually had the temerity to still ask for the job even after admitting to be a fraud!

How do you screen or interview to find good SAP consultants?

At first this statement will sound counterintuitive, but let me make the statement first and then explain.  The goal with every interview must be to qualify an applicant, not to disqualify them (but do NOT be afraid to dump a fraud immediately).

The following background is important because depending on how you screen, you may miss the absolutely best qualified, skilled, and experienced candidates and hire some of the worst. 

Why current SAP screening and interview methods miss good candidates and let the SAP con artists in.

SAP is so massive with so many industry specific solutions, that a good “con” can sound like they know what they are doing.  The depth and breadth of the application is so big that even though I’ve been doing SAP projects since 1994 I still learn new things on every project. 

A liar, with some coaching, or industry exposure, who has spent some time online doing a little research, can sound pretty convincing.  My interviewing experience for technical consultants showed that on a good day maybe 1 in 3 resumes are valid.  For the functional consultants, it’s still less than half. 

The number of fakes, frauds, and cons trying to get into SAP to help design YOUR business solution is incredibly high.  When considering the stakes to your business, and the overall expense of a full ERP implementation, the cost of those fakes is too high no matter how convincing they may be.  If it means “eating” the expense of a few airline tickets for the second screening, then so be it.  It is a cost that is well worth it to know for sure.

After experience since 1994 with SAP, numerous full cycle, extensive scope projects with both SD and MM, and after exploring and configuring a substantial portion of the application in areas of SD, MM, LE, and some FI, I will be the FIRST to admit during an interview that there are some things that I have not done before.  That list is getting smaller as the years go by, but I still learn new things on EVERY project.  This in spite of the fact that I have received written accolades, formal recognition, and even client initiated bonuses as a contractor! 

There’s one or two things I’ve learned along the way about screening or interviewing applicants.  One of those lessons is that different personalities and different communication abilities make it almost impossible to genuinely determine the amount of experience.  For example it is difficult to determine if someone like me, who started with SAP in 1994 actually HAS that much experience!  However, the following screening method will enable you to determine if the applicant has real SAP experience, it just can’t be used to determine how much experience they may have.

Screening and Interview Rules for Finding Real SAP consultants, experienced, qualified, high quality SAP consultants

•       YOUR GOAL IS TO QUALIFY AN SAP CANDIDATE (but DUMP THE FRAUDS IMMEDIATELY)! 

If a candidate can’t answer every question or deal with every issue it does not mean they don’t have experience.  What you are looking for is a high comfort level within yourself that the candidate really does have SAP experience in the area you need.  That does mean you really must check with their prior clients.  If you go in with the perspective of disqualifying a candidate, you can always find something that wasn’t answered or dealt with to your satisfaction.

•       Before you even decide to waste your time with an interview do an old-fashioned HR check with the prior companies. 

Many company’s HR departments will do a simple validation of contractors.  Even if they don’t have direct records, they are more than willing to check with the project manager or others who might know. And most companies list an HR contact or hiring information contact online to send an e-mail to.  What I do is copy the section of their resume related to that company, send it to the HR manager, and ask them if that person was in that role or had the listed responsibilities at their company.  Basically I just want them to verify that the information is true.  If the resume lists companies in foreign countries, or organizations that there is no way to reasonably verify them then disqualify that experience from their resume.  It is not that it should be necessarily considered fake, but it SHOULD BE COMPLETELY IGNORED as if it didn’t exist on their resume at all.  It is a very common tactic to list several foreign SAP implementations which are completely fake.

•       As an alternative to the HR check, or possibly in conjunction with that check, you may wish to ask the candidate for a specific contact who is STILL AT THE COMPANY they worked with. 

Even this has to be carefully verified.  I’ve been given bogus phone numbers and e-mails that are not at the company being used for a reference.  Be sure it is a legitimate phone number and e-mail address.  Also try to verify that the internal company reference is the person they claim to be.  I had one situation where an internal company reference was provided that was supposed to be the project manager, it turns out the individual was an ABAP programmer and a personal friend of the person trying to sneak the fake resume through.

•       Look for “giveaways” that the SAP “consultant” lacks the experience they say.

If their resume shows 6 -10 years of experience and you have a very difficult time understanding them that’s a pretty significant red flag.  After all, just exactly how did they participate in the numerous meetings and requirements gathering sessions?  Just how did they handle writing a blueprint?  How did they manage and work issues when they can hardly be understood?  Even if they babble all of the “buzzwords” how did they work through business issues and actually transfer any useful knowledge if they “talk the talk” but it is not understandable or in plain, common terminology that everyone can understand?  In other words, beware when during the interview, OR on the project when they try to “baffle you with feces.” 

Although they may be legitimate, beware of resumes that match too closely to a highly detailed requirement or unusual requirements.  Some unscrupulous consultants, ESPECIALLY those who managed to start their SAP careers as frauds have no problem producing fake resumes with fake experience and fake qualifications for any position they seek.  After all, if it worked for them before they continue to do it.

•        Does their resume show they started SAP at 16 years old? 

I’ve also received resumes that show 8+ years experience in SAP and the person who showed up was in their early 20’s.  That means they would have started doing SAP work at 16??  You get the picture.  If the person is obviously in their early 20’s and they have 5 – 10 years of experience listed on their resume that’s a dead giveaway that they are a fake and a fraud.

•       Do your homework about SAP interview questions.

Go online and find some of the resources for interview preparation.  There are lots of sites and lots of SAP forums out there to “help” some of the cheats.  AVOID those questions in your screening process.  However, if you must use them, take the time to rephrase them so they make sense but do NOT use any “SAPspeak” terminology or any SAP specific phrases that they might have been “trained” on.

•       Develop a specific interview script to use on the phone, and a separate one with different questions for the in person screen. 

Again, if possible, avoid “SAPspeak” in that script, and above all else, be careful to avoid questions that give the answer away.  If a candidate has trouble understanding the question, carefully re-phrase it in such a way that doesn’t directly give the answer away.  (e-mail me for examples, if I can verify you are a legitimate end customer or reputable consulting firm I will provide you sample / example questions with absolutely no obligation!).

•       Establish key baselines for the SAP interview, even if it is already stated on the resume. 

Be sure to quantify how much experience in time, number of implementations, or how many years before beginning any screening or questioning.   Use these as baselines and note any avoidance of committing to an amount of time or number of implementations and explore the avoidance.  If someone claims experience on their resume and then reiterates they have done X number of full-cycle implementations, or they have Y years of experience, and then backpedals, or doesn’t demonstrate that level of experience, or starts to make excuses for the lack of experience they are likely a fraud.  Move on.

•       Press for specifics, press for specifics, press for specifics, press for specifics.  During the interview process, do not accept vague or evasive answers! 

If the candidate doesn’t know the answer, they should say they don’t know.  Vague and evasive answers should generally be considered a red flag (although there are occasions that there may be a misunderstanding, so remember, the goal is to qualify, not to disqualify a candidate).  Also, be careful if they “sound” like they might be answering the question but you really don’t know what they are saying.  After all, if they really have the experience and are a qualified consultant they should be able to translate SAP speak into plain business language that anyone can understand.  How else are they going to develop a blueprint, or write position papers, or resolve problems / issues so that they can be understood?

•       During the Interview ask for details related to actual SAP configuration settings. 

Someone may not remember the *exact* settings, but they should be able to speak to it in enough detail that an experienced consultant will leave you with some assurance they have been in those IMG settings before.  Be careful not to “give the answer away” in the questioning process.  So carefully craft your questions so that they are clear enough to understand the what you are trying to have them configure without using the specific terms that you see in the SAP IMG.  Also be attuned to questions from the applicant that are seeking more understanding and those that are actually trying to get you to give them the “answer” that they can parrot back to you in a different way.  There is no way that anyone, even after many years, is going to remember every value, or every setting of the thousands of possibilities from memory.  What you’re looking for here is enough specifics to help you understand that they actually have done configuration before.

•       Define a couple of business challenges or scenarios that you had to solve in the past, or are trying to solve now then and ask the candidate for specific ideas and methods for how to address the issue. 

With many things in SAP there are several methods or approaches to resolve the same issue, if you get the same answer that you have used in the past, great!  If you don’t get the same answer, listen very carefully because you may learn a new and possibly better way of doing something from a real SAP consultant or you may discover that they are making it all up. Probing in this area, around issues you have already solved, or issues you are facing is a great way to find out if someone actually has the experience they claim.  In a nutshell, can they solve your business problems or apply the correct SAP solutions to the issues you face?

However, BEWARE HERE, I HAVE HEARD MORE BOGUS, SILLY, AND RIDICULOUS EXPLANATIONS THAN YOU CAN IMAGINE!  Make sure you read the follow up piece to this one because it is absolutely critical to understand the applicant (Screening and Interview Methods to Find the Right Consultant – Part 2).  Part of the critical skills you are looking for is the ability to translate the complex and technical into the simple or at least understandable.  If they lack that basic skill then they will be unable to to “consult” you on your project.  If no one can understand their “gibberish” then how can they consult?

•       ALWAYS, ALWAYS, ALWAYS be willing to have them come in for a second, face to face, technical SAP interview with different questions. 

When you consider the amount of money you will be paying a month for this person’s services, some potentially lost air and cab fare is pretty cheap.  After a good phone screen, to avoid some of the obvious cons, come right out and tell them that you will have them come in for a second face to face screen with different questions and that you will have them demonstrate some configuration tasks at that time, keep the tasks simple, but do not tell them what they are.  Some of them will never show up and you can avoid the wasted time and expenses.  If they show up, pay careful attention at how comfortable they are in finding the configuration locations and in navigating in the IMG.  Consider it a red flag if they come in with an agenda of what they are going to show you, unless they can easily demonstrate the skills you request.  That can be an indication that they got coaching to con you and are going to try to take you through their own “scripted” demonstration that some friend showed them.

•       If you are a consulting firm who routinely recruits SAP talent, change up your questions and interview techniques at least a couple times a year. 

This will help to ensure that if the questions or other information is leaked, they will become obsolete by the time any significant circulation happens. 

=========================

This is part of a series which explains the widespread FRAUD involved with SAP, Oracle, or other business software consulting.  I have no issue with H1B’s, student visas, etc., but these folks should be willing to work their way up just like many hard working folks rather than wreck your business and damage the industry through fraud.  For more extensive insight into the problem, AND specific methods for dealing with it, please see some of the other posts:




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