10 Steps to Manage SAP Project Sub-Contractor Risk

SAP Sub-Contractor Risk Management

Ever been the Project Manager on a SAP project that didn’t involve sub-contractors?  Me neither.   In fact, on many of my SAP projects, I have had multiple sub-contractors responsible for varying degrees of deliverables, from complete delivery of sub-elements of the project to generalized support. 

These set-ups can work well, but they do present risk which must be recognized, recorded on the Risk Register, and then properly managed.  I have found that the risk profiles tend to evolve during the lifecycle of a SAP engagement, which extends well to before the SAP project implementation starts to well after the Go-Live.  What does this mean exactly. 

 

Virtual Account Teams Present Challenges

The first major risk you encounter, and this is especially true during Net New Name Customer sales cycles, is the Virtual Account Team or VAT.  It is very normal for SAP to be part of a large, extended VAT, which eventually becomes the delivery team, which they may or may not be the leader of. 

 

 

I have seen as many as 10 different VATs assembled, all of which included SAP, and all of which were bidding using various strategies.  This information should be reflected in the CRM system.  But once the deal is won, typically only one of the VAT teams will be engaged for the implementation. 

From a sales project management standpoint, this means you probably lose visibility into each of the assembled VAT bid teams once the deal is awarded.  When you are the VAT team lead (Project Manager), you have the constant risk that your sub-contractors will not deliver a winning proposal.

You will have to balance the Risk versus Reward of a complex Delivery Team Setup

 

Once the contract is awarded, a complex deal may involve many partners, aka, sub-contractors; you now have a new set of risks to manage and measure.  Those risks fall into the following categories:

• Contract Quality. 
  
  Of particular importance, is whether the requirements are clearly stated and clearly understood.
  
  
• Reporting Process and Procedures. 
  
  Often times, what the sub-contractor is measured on is different than what you need him to be measured on.
  
  
• Status Reporting: 
  
  This is closely related to the previous issue.  What is important is that you not only know the current status of the sub-contractor's part of the project, but that you have clear visibility into problems as they develop.  You do not want to find out something will be late the day it is due.  This leaves no time to react. Your Communications Management Plan and how you solve the issues with Brook's Law are vitally important to your success.
  
  
• Technical Interchange of data. 
  
  You may have multiple sub contractors, all of whom use different project management systems.  You have to make sure you have the systems not only talking to each other, but that any required translations are being accomplished so apples-to-apples comparisons are possible.
  
  
• Awareness by all of all: 
  
  It is critical that all members of the extended VAT team are aware of what they are doing within the larger context of the overall project. 
  
  If sub-contractors have sub-contractors of their own, a very common situation, then the same is true of those sub-contractors.
  
  
• Progress against the plan. 
  
  It is critical that sub-contractors are tracking themselves against the actual project plan. 
  This can be very difficult when you are working with dispersed teams.  I find that the lack of face-to-face communications when working in these dispersed models requires a much higher degree of effort to keep everybody on the same sheet of music. 
  Of particular concern is when off-shore teams slip, that they are not accountable for the slippage. 

Off-Shore Delivery Models Add Major Risk To Your Project

That last issue is a major sub-contractor risk management factor that is little understood.  It has huge implications on the work environment.  All of these sub-contractor risk management issues should be surfaced, analyzed and recorded in your High Level Risk Register and appropriate actions taken.  You might want to use our '10 Step Guide to Sub-Contractor Risk Management' to help you with this issue.

 

Thanks

 

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