With more than 162,000 SAP consultants out there (SAP’s estimate), and dozens of major SAP consultancies in the market, how do you choose a SAP Services Partner? At the top of your list must be the ability to pull the best resources from wherever they may be to meet your requirements.
Top SAP Consultancies will have long ago embarked on a social networking strategy to attract the world’s top SAP Consulting resources. SAP BW Consulting did just that-we built the very first SAP group on LinkedIN, called SAP Certified Consultant, and it, along with our constant attention to the market, keeps the group growing and active. Our success has been emulated by many dozens of other groups, and as well by SAP.
- We have prepared a guidee ntitled "Why Engage with Us" which will show you the state of the SAP Consulting Market. and how we can help you meet the challenge of staffing up your SAP project.
- Learn the number one challenge of SAP Customers, SAP Project Managers and SAP.
Learn how to engage with us to successfully staff your project and realize the value you need from your project.
What is SAP –Top 10 Things (in answer to the question)
Believe it not, the question, what is SAP, is one of the most common questions I get from CEOs, even those whose company already runs SAP. How can that be? Frankly speaking, it is because the system is beast. It touches about every part of a business, and many parts of many marketplaces. That’s why I am adding in this blog style Top 10 Things.
It’s nothing new. It just tools to help you organize and run your business
There is really nothing new under the sun. When it comes to SAP, it is really just doing what was already being done by a variety of IT and manual systems before. Every business kept track of their finances, and so does SAP. Every business bought and sold stuff. So does SAP. Every business hired and paid people, as does SAP. They also wanted to create reports from their system and to work with their suppliers and customers. The difference between then and now is that if it was integrated, it was integrated either manually, aka sneaker net, or at best, through hand-crafted integration points which were expensive to build, maintain and use. SAP does everything you have always done as a business, but it is integrated out of the box. This is a very key point, as according to widely circulated industry figures and as well by SAP itself, each of those integration points that SAP provides cost about $750,000.00 dollars to build and maintain, and are always maintained and guaranteed to work by SAP.
There are, however, many other ways that SAP does what you have always done, just in a more highly integrated fashion. For instance, SAP has a CRM (Customer Relationship Management System) that has more than 230 built in integration points.
Not to get too geeky, but just keep in mind, if they built it to work together, you don’t have to. It is sort of like online banking. You have to trust that the system(s) that make all that possible are being built and maintained by someone else, and you get the benefit of that integration.
There are many business processes that though they have always been done by business, such as ordering products to be resold, are now better done electronically. Ordering electronically is by now not even remotely a new capability, EDI (Electronic Data Interchange) being a capability that has been a standard for decades. The difference is that now, there are multiple ways to exchange data, not just EDI and SAP provides the technical infrastructure to mix and match that data as part of the package.
Some businesses are very simple, and don’t need much of what SAP offers, though most eventually use more and more of the native capability. Other businesses, such as aircraft manufacturing, are very complex, and need to operate complex, integrated, global supply chains if they are to remain competitive in the marketplace. As SAP is a sort of operating system standard among these types of businesses, then they can all get along just a little bit more profitably.
Lessons Learned
It’s a World Changing – Significant Emotional Event.
Few, if any other type of system or activity your company is likely to undertake is going to affect everything and everybody. As they say, if you want to kill a man, change his environment. From personal experience, I can confirm this, having changed the work environment on a massive scale in an aircraft maintenance environment. The effects were dramatic, even though most people eventually got over the change. You just have to have a thick skin and listen to their concerns.
The changes wrought by SAP though, reach deep into any organization. Finance will definitely be affected, as will HR and logistics. In the past, when your company didn’t pay its suppliers on time, the common perception was that you were holding cash to make a little interest on the cash flow. In reality, often times, your financial system was simply slow (and sometimes, you really were making interest on the cash, but in a zero interest rate environment, that isn’t what’s happening now). With SAP, everything will move much, much faster, if you want it to. That’s a big change for many, if not most companies.
Process speed isn’t the only impact your company will feel. The design of virtually every job in the business will be affected. You will experience deep, emotional push back from everyone. This is the Significant Emotional Event element of a SAP implementation. There will probably also be layoffs, if you’re more efficient. While you may also be hiring new people for new jobs in new areas. This is where your leadership will be required. It is entirely that the push back can kill your implementation. VC’s won’t stand for it and will find someone who will make it happen.
Lessons Learned
Going cheap – gets cheap results
In the SAP world, there are, unfortunately, many examples of failed SAP projects. The failure rate of BI projects is currently projected to hit 75% by Gartner, and though failure has many definitions, the bottom line is, something is wrong. This author’s experience shows that failure boils down to two main areas:
- Off-shore resources
- Companies not being able to absorb the technology
Off-Shore resourcing sounds good on the surface and might possibly offer some benefits, if they were actually fully qualified ‘resources’. Unfortunately, for other than the most basic of capabilities, they are actually a huge hindrance to getting value out of your SAP system.
How can that be? After all, almost every major System Integrator (SI) has moved all or most of their SAP capabilities to India. As an SAP customer, the first indicator that this movement isn’t what it looks like is to ask yourself, “am I actually saving any money, and if so, why are so many SAP projects failing”?
Before you embark on another SAP implementation, or even your first SAP implementation, perhaps you should ask some questions:
Is my company really able to deal with off-shore resources who not only operate in a different time zone, but may ask my employees to start meeting with them in their time zone. This author recently did a project where the work was being done 9 time zones away and the customer was routinely having their people join a meeting at 11 PM, meetings which were working meetings and were scheduled to last 5 to 6 hours, and did. Do you really think that is an effective way to work? More critically, do you think this might affect the retention of your own employees? Are your project plans done to such a detailed level that they this loss of productivity into account?
There is another issue, one which is much more critical. That is the lack of user acceptance. Experience shows that teaching, or using the IT term for it, performing End User Training, when done remotely, simply doesn’t work. People need face-to-face interaction and they need it on a sustained basis for it to ‘take’. Experience also shows that a vast number of people quit their job every quarter, come hell or high water. For the CEO, this means you have to continually retrain people as turnover is constant. When you move all your knowledge off-shore, eventually, you lose control of your company, and your business fails. Then the tide may turn the other direction, but by then, it is too late, the competitor that knows more than you do about how their own operation works can simply operate smarter than you.
In short, for all these reasons, and many more, the pay me now or pay me later applies to ALL off shoring, and does untold damage to your company and endangers national security.
For many other companies, there exist an even more pernicious problem, that is, they aren’t designed, as a company, to absorb new technology. They may well be big companies using a variety of technologies, but they were never designed to be able to implement a massive system like SAP. This is normal; why would they be? They were designed to do whatever their normal function is, and IT was bought and installed as needed.
When you are considering implementing a system such as SAP, which can literally affect every business unit in your business, every customer you may have interactions with and every vendor you may do business with, you are talking about a system that requires a different set of skills to consume. Fortunately, this has been done by tens of thousands of companies, most eventually successfully. However, it is still very common to find companies that run very well on 30 year old technology while making 4 to 20 billion USD a year in revenues. They may have very little IT yet do fine.
Getting ready to change then becomes an area where you need to invest, a lot, but it is almost impossible to do this cheaply while doing it well.
Lessons Learned
Understand that offshoring your SAP implementation means you aren’t walking down the learning curve. Your implementation partner is, at your expense.
End user training needs to be done right, and forever.
Best Practices
When you hear the term Best Practices, you may have a slightly different meaning in mind that what SAP actually means when they say best practices. What SAP means is that, given their huge number of implementations, they have settings your team can implement out of the box that cover most scenarios. So, for instance, when your consulting team is setting up organizational structures, you mostly just have to select from the pre-configured models available. However, you still need the expertise of expert SAP Consultants to make the right configuration decisions.
These best practices extend across all elements of your SAP system implementation. They include test case scenarios, training models and many, many other elements. The challenge is making sure your team makes maximum use of them. If you experience a project over run, especially early in a project’s life, it’s a fair bet that the team isn’t using best practices.
Lessons Learned
As a ‘by the book’ SAP project manager, I use the SAP Solution Manager (and before that, ASAP) to drive the implementation. Until very recently, it was highly unlikely that most consultants had any exposure to Solution Manager. Now, I include ‘internal’ training with all my newly hired project consultants to get them up to speed on using it. Change isn’t just hard for companies. It’s hard for consultants.
Industry Solutions
This is one my favorite areas to discuss, seeing as how I was a Senior SAP Industry Principle. Here’s what you, the CEO, needs to know about SAP Industry Solutions. I’ve already mentioned how many SAP provides. What you need to be aware of is that you can mix and match industry solutions. You also need to know that you will need to license crosss-process bundles of licenses to support your particular industry requirements.
Lesson Learned
In order to get the licensing right on an Industry Solution bundle, someone from within SAP, typically an Industry Principle, has to interpret your process requirements as stated in your RFP. The big assumption here is that your RFP is correct and all business process requirements are identified properly within it. This is basically, never possible. That’s why we do the blueprint phase (or these days, discover phase). The big danger you need to watch out for is developments being proposed and approved on a project when, in fact, an existing SAP solution exist, it just wasn’t licensed initially. No 3rd party auditor is going to be able to catch this, try as they might. They would literally have to know the detailed functional capability of every single bit of SAP functionality, across all industry solutions. You will need a very senior SAP consultant to manage this solution. Few are available and they are never cheap. But they will save you millions in unnecessary license cost.
As someone who has frequently been the designated ‘hitter’ on behalf of SAP, inserted into the steering committee of major, challenged projects, I’ve seen this issue up close. When there is an issue between what was licensed at contract initiation and what is really needed, I usually find that a solution can be found, but both parties have to be able to compromise to keep the project moving forward. However, if additional licenses are required in order to provide a solution required by the business, and no funds can be found for this, a development will be initiated.
This is a guarantee of a project failure.
Special Interest Industry Groups
Beyond the core what is the SAP technical solution, there exist a vast, global network of SIGs or special industry groups, such as airport users group or railway industry group. Beyond this level, which is typically focused on getting SAP to develop more industry functionality, SAP is also present on many national and transnational groups, such as the Jordanian Transportation Initiative or the European Smart Meter group.
Lesson Learned
This author has often times been appointed to represent SAP in these types of committees. It is an honor to be appointed, no doubt. The challenge is getting funding to support these types of groups but they are critical to both SAP and their customers. It helps to set workable standards. These standards generally work their way back into the SAP technology stack, and ultimately, to you, the end customer.
University Training
SAP has a major problem. It is so popular and pays so well, that the demand for consultants vastly exceeds the supply. That’s why they have a very large university alliance program, with hundreds of participating universities. They don’t do this out of the goodness of their heart. They do this to produce consulants and educated SAP end users.
Lessons Learned
University graduates who have participated in SAP courses have a least an idea of what the system does. They rarely have deep knowledge of SAP. However, they have enough to get hired, which is their goal and SAPs.
Consultant Training
There are many routes to becoming a SAP consultant. This author graduated first from the SAP Material Management Academy, which was five weeks long, then from the SAP Business Warehouse Academy, and subsequently, the SAP ASAP certification training and as well, SAP Strategic Enterprise Management. That’s was just the start. There have been SAP sponsored trainings on Value Engineering, the Customer Engagement Lifecycle, Continuous Business Improvement and a long list of others. This isn’t meant to be my resume. It is meant to tell you that to truly master SAP, or at least a part of it, you have to do a lot of training and participate in a lot of projects.
Lessons Learned
This author believes you should get SAP certified first, then work on a project under the mentorship of experts. Others disagree. As a pilot, I want my team to have the most up-to-date SAP consulting skills available. As a CEO, you should want the same. It vastly reduces the risk of project failure.
Customer Training
If SAP consultants come on your project as SAP consultants, the goal for customer training is that your team become as good at SAP as they are, but specialized on your company specific requirements.
Lessons Learned
Without exception, as customer teams have upskilled, some or all have found better paying jobs somewhere else. This is good thing – for them. For you, the CEO, you need to find a way to align their compensation with their new skills and market demand.
Support
SAP licenses come with a support fee. That means you are going to be paying about 22% (rates vary) a year of the license fee annually for SAP to provide support. Support. Though it sounds like a lot of money and it causes a fairly constant level of noise in the market, your system needs support. If you pay attention to your iPhone, it gets a major update every once in a while, as does Windows. With SAP, they release thousands of support notes which need to be applied at the right time. You will also need their help with a lot of different types of issues which will vary over time.
Lessons Learned
It is not unusual, in fact, it is almost the rule, that the local SAP team, post Go-Live, will not be maintaining your system the way SAP intended. They will almost always not apply patches except under duress. Why? Because they will need to retest and retrain everybody. Nevertheless, these updates need to be done, and done regularly. You would be amazed at how many systems could be improved by simply applying support patches that have been available for years.
Need Expert SAP Strategy Consulting?
With decades of successful experience with SAP, I and my team can help you get your SAP system live, help you optimize it if you’re already live and most importantly, help you develop a roadmap that support your, the CEOs, objectives.
Lonnie D. Ayers, PMP, SCM, BSC, SAFe
Lonnie.Ayers@SAPBWConsulting.com