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9 Games ERP Consultants Play

January 14th, 2013 by

ERP Consultant Games

Most in the ERP industry agree that software consultants can play a major role in helping their clients successfully implement a new ERP package. While some consulting firms have more expertise than others do, at least most firms try to operate with their client’s best interest in mind.

However, there are many firms within the ERP industry that are outright thieves. They will not hesitate to take advantage of their clients in order to pad their own wallets. In fact, some firms are so good at this it has become part of their standard operating procedures.

Clients that are educated and aware of the games consulting firms play can save themselves a few headaches and a lot of money. Below are some of their tricks to watch out for.

1)      The “Bait and Switch” Routine

During the sales process, this is when certain consultants are brought in to display the expertise within the firm. They may know best practices and the software, but it might be the last time you ever see them.

2)      Resumes: Lies and Half-Truths  

Outright falsification of consultant resumes is more common than you think. In addition, many resumes presented by the firm are not really resumes, but vague “profiles” that lack detail and read like sales literature.

3)      “Lowballing” the Quote

This is the oldest trick in the book, yet surprisingly many clients continue to fall into this trap. For example, all consultants know that for time and material quotes the actual implementation costs are usually much higher.  Also, most fixed price quotes are only fixed until further notice.  When the client wants to make only minor changes in the project scope, they are hit with expensive change orders. The change order costs are usually 100% greater than the actual time for the consultants to perform the work.

4)      The “Best” Implementation Tools & Methods

Most firms claim to have the very best implementation methods and tools available. However, do not be surprised when their consultants run off and do something entirely different during the project. Maybe the tools are not so great; otherwise, their consultants would use them!

5)      The Less You Know – The More Money They Make

For some firms, a potential client that has ill-conceived project objectives, an undefined scope, or lacks basic knowledge of ERP; is considered a gold mine. The idea is to gloss over these “minor” details until after the client signs the contract.

6)      Marquee Accounts for Reference Checks

When a potential client asks for a list of the firm’s other clients for a reference check, many firms provide only their “marquee accounts”. These accounts are compensated by the firm in some form for being a reference. Therefore, do not expect these clients to mention anything bad about the firm.

7)      Not Enough Time and Talent

Most consulting firms would love to “camp out” on your ERP project. One way to do this is convince the client that the organization lacks the right employees for the project. Also, some firms too easily support the premise that the client’s best employees have other tasks to perform that are more important than an ERP project. That is, “No need to get your hands dirty. Our consultants will do the project for you.”  

8)      “Add-on” Services 

Once consultants get their foot in the door, many try to sell their clients additional services. These include more consultants for readiness assessments, change management programs, best practices, and other services you may not truly need. Also, do not be surprised when your consultants push for software functionality that was originally out-of-scope. 

9)      The Promise of Software Knowledge Transfer

Most firms state that one of their goals is to “work themselves off the project” by transferring software knowledge to the client. However, nine times out of ten, if it is going to happen, the client must force the issue. Considering their hourly rates, what incentives do consultants have to transfer software knowledge?

This guest post is by Steven Phillips, author of the Street Smart ERP blog and the new book Control Your ERP Destiny.




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SAP Project Implementation Strategies and Approaches

October 25th, 2010 by

SAP project successFor a brief intermission before I make the final posts on managing the shared responsibilities for SAP project success I thought I would offer this explanation of the different strategies and approaches for an SAP project.

 There are three key dimensions to an implementation strategy–, they are: 1) the vendor type; 2) the methodology-tools-templates-resources for a project, and; 3) the implementation approach.  The decisions you make around these three areas generally make up the implementation strategy for your SAP project.

SAP Implementation Methodology

For the methodology approach I will assume you are using the SAP ASAP methodology.  As a result other than mentioning it here I won’t spend a lot of time on this one.  With only a few exceptions, nearly every SAP system integrator claims they follow the SAP ASAP methodology.  As an ASAP certified consultant since the late 90’s I can assure you that few SAP system integrator project managers actually follow much of the ASAP methodology no matter what claims they make during the sales cycle.

The SAP ASAP methodology will help to ensure you are doing the right things in the right way

I’ve written on the ASAP methodology in A New SAP Implementation Methodology and Implementation Steps and for more background on the different vendor or project approaches see Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP .  And let’s put this in context, the SAP ASAP methodology has been used literally tens of thousands of times.  It is tested, proven, and it plain works!

The SAP ASAP Methodology is tested, proven, and it plain works!

As a parting note I would strongly encourage any SAP customer to get their own copy of the ASAP methodology.  No matter what stage of your SAP project the SAP ASAP methodology will help to ensure you are doing the right things in the right way. 

For more information on acquiring your own copy of the SAP ASAP methodology, see the 10 steps I previously outlined under the section “Where to start with developing a solid SAP business case based on business and IT strategy” in the post ERP and SAP Business Case for ROI, Business Benefit, and Success.  During the sales cycle (or during your project if you are past that) ask your SAP system integrator to show you the SAP ASAP methodology.  There are two identical versions, one is an HTML web server version and the other is integrated into Solution Manager.  Both are free, and the HTML version is available to any customer or vendor free of charge who wants to download it directly from SAP.  There really is no reason they can not make it available.  Because of its wide availability you should beware of any vendor who pitches the SAP ASAP methodology and can not make it available to you! 

If you are an end SAP customer contact me and I will arrange for you to get your own copy!

SAP System Integrator or Implementation Vendor Type

This topic is a little different because there are several possibilities for how you approach your vendor selection or project staffing.  Each of them has their benefits and drawbacks and some of them can be substantially different in cost and results.  The type of implementation vendor and consultants you use will also affect your implementation strategy.

You may wish to employ a well established system integrator; a “boutique” consulting firm; or completely manage the project with your own selected staff of contractors; or you may want to consider a hybrid approach.  If you are considering the contractor route, of staffing a project yourself, you might wish to review the screening methods to find the right consultant Part 1 and Part 2.

You will also need to determine your project implementation model.  Will you do a pure time and materials approach, or fixed fee, or time and materials with penalties for under-delivery (over budget, over time) and rewards for over delivery (under budget, early), or time and materials with cost controls, or a blend of some of the approaches.

Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP

If you choose the large integrator be prepared for the full sales pitch about their “special” methodology (whether it actually exists or not).  This is one of the classic approaches the larger consulting firms use to try to differentiate themselves.  However the SAP ASAP Methodology has been tested and proven so many thousands of times that any other approach actually introduces risk into the project.  That does not mean that there aren’t ways to supplement that methodology — there are a few gaps — but the ASAP methodology is very solid, reliable, proven and consistent.

The boutique firm may work well for many companies, but they have the drawback of being focused on a narrow niche area. 

The company run implementation with outside contractors (rather than a system integrator) requires a very experienced, very skilled SAP project manager.  I have participated on two of these projects that were very successful and their rates were about 35 – 50% less expensive than other consulting options.  One significant caution here is this type of approach can be a disaster without the means to carefully screen consultants and without a very seasoned SAP project manager.  The other problem is that many (though not all) of the staffing and recruiting firms are so “sleazy” that you are better off putting in the effort to screen yourself.  Back to the chicken or the egg problem, this requires someone who has the capability to do the screening.  This approach has probably the highest reward and the greatest risks associated with it. 

SAP Project Implementation Approach

Over the years I’ve only ever seen two key approaches to SAP implementation projects–, Big Bang or Rollout projects.  Within these two methods you can do a Phased Approach as well, but that is more of an issue of functionality scope rather than organizational scope.

Organizational scope would cover the “Big Bang” SAP implementation approach and the “Rollout” SAP implementation approach.  It affects the amount of the company or organization that is affected by the project. 

Functional scope would address the amount of the SAP business software that you plan on bringing into your organization(s).  This would generally be a “Phase” of the project.  For example you might bring in Financials and Supply Chain functionality in Phase 1, and then CRM or online ordering or BI / BW (reporting) in Phase 2, etc.

ERP Big Bang

The “Big Bang” SAP approach is probably the most common and generally involves a single major functional event.  It usually affects all “legal companies” where financial reporting is required for taxes or regulatory requirements.  This can be a large implementation across multiple countries, multiple business divisions or product lines, and generally affects the whole of the organization.

The “Big Bang” approach may be easier from a single “change event” or “change shock” to the company and organization but it has a number of drawbacks as well.  For example with any ERP application some of the potential design, data, and knowledge transfer problems are only discovered after the system is live.  So if your SAP system integrator or vendor is not as skilled as their sales presentation might have indicated you could end up with serious long-term difficulties, cleanup, and ongoing maintenance headaches.

ERP Rollout

The Rollout approach is fairly popular among a number of larger SAP customers with several legal companies, several locations, or multi-nationals that do business in several countries. 

Advantages of this approach includes the ability to “learn” from each rollout and improve subsequent operational rollouts.  Rollout risk can be more carefully managed because data and configuration inconsistencies can be discovered, remedied, and resolved while the subsequent rollout is occurring.  Change is better absorbed over a longer period of time in the company and knowledge transfer is generally better handled if the customer insists their resources are involved (done correctly this can actually reduce overall implementation costs).

Disadvantages of this approach are that it generally costs more because cumulatively it takes more time and effort to manage the ongoing operations while also bringing on new operations.  Also the blueprint will need to be re-visited for each rollout location because no matter what ANY integrator says (or what the SAP documentation purports) there always seems to be some legitimate differences between each rollout location.  Failure to re-visit the blueprint for each rollout, no matter what the integrator or SAP might say, can cause more difficulties than it is worth.  However, these later stage blueprint reviews and adjustments are not as intense or time consuming.

ERP Phased Approach

Because of the many variations and options we will re-visit the Phased Approach at a later date with more details.




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SAP Technicians or Experts

September 13th, 2010 by

Organizations must take ownership of their projects for successThey say a good magician never reveals their tricks. Well, I’m no magician so I’ll give you a little insight. Lagging indicators, those affected by process improvements, cost-based ROI and TCO methods, and current ERP mindsets are reactive.

Leading indicators, those which directly affect the competitive business landscape are proactive.

SAP and ERP technicians are reactive. They can make system settings, they can help you to make a small tweak here or there, but they are tactical and tend to be shortsighted.

SAP experts are proactive. Not only do they understand how to deliver process improvements, along with those process integration points, they also tend to be proactive and propose innovative solutions to nagging business problems.

SAP experts evaluate more than the SAP application alone, they are aware and actively promote solutions that address the key areas your business is concerned with. They consider the customers in your marketplace, the vendors in your supply chain, how you might innovate your product or service pipeline, and the competitive strengths and weaknesses of your company compared to those in the marketplace. On top of that, they know what processes, or process improvements, are necessary to address each of those areas to address those competitive pressures. Along with all of this the truly talented ERP experts can evaluate your company’s culture during the implementation to understand how much change the organization can absorb.

SAP and ERP technicians on the other hand simply replace your existing legacy systems with a more integrated IT system. They work to make your brand new shiny ERP system look and behave a lot like your old system. They are unskilled at knowledge transfer and have little ability to deliver critically needed change management and business transformation. In effect they are high-priced IT technicians and contrary to popular mythology they are NOT knowledge workers. [FN1]

SAP Consulting Skills Include Change Management and Strong Communication

And when some new “gee wiz” requirement comes up, or when some new problem presents itself, the technicians are the first to immediately race to a new system requirement to solve it.

I can’t tell you how many times I have been on projects where the client had a legitimate need SAP’s applications could address but the organization could not absorb the change. Experience has taught me to look ahead to the days, weeks, and months after go-live and consider whether or not the level of support for the new processes would be sufficient. And if not, either find some way to work through the necessary organizational changes or push back on the client because it was not in their best interests. ERP technicians will not do this, all they are interested in is being able to stick something else on their resume. Some “new skill” or “new experience” they might be able to sell to some other customer. [FN2]

What Can You Do to Help Promote ERP Project Success – Get Educated!

Be part of the solution, not part of the problem. Get educated about the best approach to use with your SAP implementation or upgrade project.

If you’re an SAP customer, take the time and trouble to thoroughly evaluate the vendor you bring into your company, carefully evaluate every consultant they propose, and not just on the face of a resume either. If you need to, do your own background checks on their resumes and if you find one that is a fake (which is more common than anyone cares to admit) then throw the entire vendor out the door. If they can’t even check the background of their own candidates then why should you pay them one dime to bring fakes onto your project.

If you want to get the best implementation you possibly can then create a structured, objective RFP process that has a rational scoring system to evaluate the vendor. When you go strictly on “relationships” you may be missing out on your own fiduciary duty and responsibility to deliver to your company the best possible solution to win in the marketplace. And in today’s world that responsibility could very well mean the difference between being in business or out of business. Or at least facing the prospect of massive layoffs and cutbacks. You can’t afford to “give away the farm” to a “friend” who might not be able to deliver on what you need.

If you’re an implementation vendor avoid getting burned by some of the sophisticated SAP fraud shops. The ones that create fake resumes, they do the bait and switch with someone else doing their phone screen, and they get some of their friends to “vouch” for their “experience” at large companies. [FN2] The minute you find one of these resumes from one of your recruiters STOP doing business with that recruiter or recruiting firm. If they can’t or won’t do a simple employment / project verification on a candidate then run, don’t walk away from them.

Take some time to get familiar with the various SAP tools and methodologies. For customers they are freely available and for implementation vendors who are partnered with SAP they have access to even more resources. And once you’re in with SAP, those tools and resources are free! If you’re an SAP customer paying for maintenance and support then take advantage of what those fees are for. Get educated through your OSS ID access to internal SAP resources and tools. If you find something internally you think will benefit you and you don’t have access to it as a customer then contact your SAP sales rep and ask for access to that resource.

In the end there are lots of things you can do. But you have to get out and do them.

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

[FN1] See the section of the following essay that explains the difference between what many companies call “knowledge management” and what knowledge management actually is. This essay addresses collaboration, social media, and SOA in the enterprise. “SAP, ERP III, SOA — Learning Organizations through Social Media Collaboration”
http://www.r3now.com/sap-erp-iii-soa-learning-organizations-through-social-media-collaboration

[FN2] See the following posts about avoiding fake SAP resumes, fake SAP experience, and get the experience you pay for.

Screening methods to find the right SAP consultant
http://www.r3now.com/screening-methods-to-find-the-right-sap-consultant

Screening Methods to Find the Right Consultant – Part 2
http://www.r3now.com/screening-methods-to-find-the-right-consultant-part-2

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