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Business Solutions with SAP

Tips to Overcome Sales Tactics by SAP-ERP System Integrators

May 2nd, 2011 by
Organization Change Management and Vendor Selection

SAP-ERP Vendor Selection

This is the beginning of a series reviewing some of the typical tactics and sales scams many software vendors use to gain your business.  Rather than competing on merit many vendors resort to various strategies or techniques designed to prevent you from gaining the critical insight you need to make the best possible decision.  Their strategies and tactics are designed to deflect you from discovering any of their weaknesses or even deceive you into believing they have qualifications that do not exist (see the previous post, Scams, Shams, ERP System Integrator Tactics).

You’ve Determined You Need an SAP or ERP System

You’ve done initial analysis and some internal due diligence and realize all those Excel spreadsheets, Access databases, home grown, patched together, and exploding data sets are everywhere.   The landscape of data sources resembles more of a third-world war zone rather than a well rehearsed symphony orchestra.

Senior management and the executives keep asking for information or reports that take days, or in some cases even weeks to cobble together from way too many sources.  The “answers” you get from the data never seems to be the same no matter how many times you redo it. It’s past time to look at SAP or another ERP application and the implementation vendor.

Now You Start the Selection Process

Even though using a structured business software vendor evaluation and selection methodology  may seem elementary there are still too many companies who do not follow one.  Some companies get overly complicated in how they select their vendors (using more of a software selection methodology) when what really matter are the consultants and the project team that is responsible to deliver the results.  One of the ERP critical success factors is to focus on what matters to you and your company’s project:

Often there are a lot of gaps for the selection process to be “gamed” or manipulated, or you fall prey to sales tactics that are designed to manipulate the person rather than dealing with the requirements.  When that happens the company making the investment suffers.  They suffer from poor results, serious cost overruns, blown time-lines, and damaging shock-waves to their company culture.  They are sold a chocolate pie only to find out the chocolate has been substituted for other brown stuff that might look like chocolate but stinks enough to make you puke.

Understanding the Stages of the Selection Process and How to Deal with Each Stage

The selection overview consists of a few steps that are not hard to understand but they can be tedious.  I have outlined them as follows:

  • First Things First (Governance and Control)
  • Early in the Sales Cycle – Software sales and System Integrators
  • Progress on the SAP or ERP Software and Vendor Selection
  • Deep Into the SAP or ERP Sales Cycle
  • ERP Software and Integration Vendor Tactics
  • Site Visit or Phone Visit to Verify ERP Vendor claims
  • The Finals

Over the next several weeks we will explore a series of posts based on each of these topics.  These topics are from part of a business software and vendor or system integrator selection methodology I’ve used in RFI and RFP consulting.  The approach I use addresses areas and solutions that very few (if any) of the RFI and RFP consultants ever address.  At the end of the day my goal is to see you make the best possible selection to propel your business forward.  And as a result of my passion to see businesses succeed with their large implementation projects I am making this information freely available.

Stay tuned next week for the first part of this detailed series.  We will look at “First Things First” in preparing for and initiating your software or implementation vendor selection.

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Scams, Shams, ERP System Integrator Tactics

April 25th, 2011 by
SAP System Integrator

SAP System Integrator

 

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

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

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

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

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

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

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

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

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

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

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

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

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

The Alternatives to the Consulting Fraud Factories

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

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

1. Do not promise what you cannot deliver

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

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

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

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

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

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

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

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

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

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

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

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

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

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Breakthrough Project Success: Part 4 of 4, Last Low Risk Chance for Results

January 18th, 2010 by

R3Now.com - Breakthrough ERP, SAP, or IT Project Success

After you have done all of the hard work, selected the vendor, and started on the blueprint path you have one more “low risk” opportunity to ensure breakthrough project success.  Keep in mind here there is more risk involved in this area of the project than in the previous stages because they were fully under your control.  You could directly mitigate the risk, you could decide against contracting with a particular vendor, and you could simply back away from anything up to the selected vendor beginning the project. 

Now that the vendor is selected you have one more major set of tasks that is still relatively “low risk” to the business to see solid results.  This is the last big opportunity before incurring huge costs to ensure that you are getting what you pay for–, that is in the blueprint phase.

Keep in mind that during or at the end of the blueprint phase of the project there are risks to changing out problem or underperforming consultants, and those risks are compounded by the size of the team covering a particular area (for example, a smaller team covering a single SAP module like SD, MM, PP, FI, CO, etc., carries higher risk than a larger team covering a single module).  If everything goes well up to this point then the reason you may end up replacing a consultant will probably be related more to personality and team dynamics than a lack of skill.  Some of the personality and dynamics you can work through, however a lack of skill is dangerous to your entire project.  As a result if there is a risk to replacing consultants during or at the end of the blueprint phase it may still be your best course over the longer term of the project.

You may wish to define in advance with the selected implementation vendor how they would mitigate the risk of replacing one or more consultants during or at the end of the blueprint phase of the project.  This way you are both setting the expectation in advance and forcing them to consider how they would actually take care of this problem.  By doing this you will help to ensure that the right tone for quality and results are set throughout the project.  This is your last chance to ensure that the vendor resources are the right fit and have the right skill and talent for your company.

  1. A proper blueprint must contain the details of the HOW the functionality will be implemented, not WHAT will be implemented.  The WHAT of the blueprint is the scope.  You wouldn’t consider a home plan a blueprint if it only included an exterior elevation and a few artists’ renderings of the interior would you?  If the home plan didn’t have the foundation details, roof details, electrical, framing, HVAC, etc., you wouldn’t consider it a blueprint at all.  If your vendor provided blueprint document doesn’t contain the translation of the business requirements into the “HOW” of the functionality then it is not a blueprint, it is just glorified scope.

  2. Be sure the implementation vendor provides a Blueprint Template ON DAY ONE of the blueprint phase.  Ask for examples of prior blueprints (scrubbed of the client name if they wish).  Ask for these as part of the proposal.  If ACTUAL samples are not provided, with significant setup details then disqualify any non-responsive vendor. 

  3. Pay close attention during the start of the Blueprint to find out whether the consultant has any idea of what meetings to schedule, what key company individuals (by job / role) need to be in those meetings, or whether they know what to do.  This is a HUGE indicator of the fakes, frauds, cons, and those who do not have experience.  They don’t know where to start; they don’t know what people they need in what meetings or what order the meetings should be done in.

  4. Be sure to sit in on the first couple of requirements gathering sessions for EVERY consultant.  If they seem clueless here, they probably are.  You might want to consider an IMMEDIATE change before you invest in a mess.

  5. If you are a large enough company that you have more than one consultant assigned to a module you will want to insist that EVERY consultant conducts requirements gathering sessions with you there to observe. 

  6. Unless they have been clearly noted as “juniors” or otherwise made clear to you as the paying customer they do not have experience, there is no reason companies should pay outrageous rates for inexperienced but “smart” folks.  And just to ensure that more senior consultants aren’t “flying cover” for them you might want to insist that they lead their own requirements gathering sessions while the more senior consultants are doing other work.

  7. Create a blueprint project requirement that at least one entire process string, start to finish, for a simple process area must be completed by every single module.  This should include basic organization structure requirements and should be completed in less than 2 weeks after the first meeting (a really good consultant can do an entire process first pass including all documentation and requirements in a week).  This is another check point where you can evaluate the quality of the consultants that the system integrator has brought to your project.  IF you find that a consultant was unable to accomplish the task, or if their process blueprint documentation is so lacking in the HOW it will be done in SAP (rather than just the “what” the process is) then I would seriously consider asking the integrator to REMOVE this consultant from the project.  Better to do it now and possibly hurt a little of the blueprint timeline.  The alternative is to have this person possibly slow down the whole project, or make a mess out of the system design, setup, and testing, and then possibly blow the budget and timeline.  And even if they don’t blow the budget and timeline, and even if they don’t make a mess out of the project, WHY do you want to pay that integrator such a premium price for some junior resource that will not add any value to your business?  If that is what you want, PROMOTE FROM WITHIN!  It is cheaper and it creates more visible opportunity within your own company.  You don’t need this kind of high paid dead weight on your project.

  8. Insist that a prototype of the simple process they defined is performed within 4 – 6 weeks of the blueprint start.  No matter HOW big, or complex, or far flung your company is there is no reason that a basic but CORRECT org structure and basic business process can not be set up and demonstrated within 6 weeks unless you have less than optimal consultants.  This is another chance to evaluate whether or not you should keep this person on your project.  If you want breakthrough business results then you had better have truly talented consultants.  If you settle for less then you will also settle for less than the results you really want from this huge investment.

Obviously there are risks involved in any SAP, ERP, or technology project.  If those risks are identified and addressed early on in your project you will set clear expectations about the quality of the work and what the final result should be.  There are things that need to happen on the company side of the equation as well, but this article addresses your investment in the system integrator.

If you make the hard decisions up front, and if you are diligent with taking steps like what these articles define then key project expectations about success and results will be set.  These approaches help you to see through a lot of the hype, hoopla, and sales garbage that is so prevalent and also sets expectations about the quality of resources you want on your project.  There is no way to anticipate every avenue some unscrupulous or desperate vendor might take, but by setting certain expectations and keeping the “traps” in place early on you are more likely to eliminate those vendors from the process before they can do any damage.  By being diligent early in the process through changing improper resources (and possibly demanding credits) you can help to set a tone and expectation about the quality of results you expect as well.

Four Part Series:

Achieve Breakthrough ERP, SAP, or IT Project Success: 1 of 4
Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP
Breakthrough Project Success: 3 of 4, Vendor Selection and Contracts
Breakthrough Project Success: Part 4 of 4, Last Low Risk Chance for Results

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