The 10 Step Approach to Selecting the Right SAP Systems Integrator for Your Project

June, 2010

The 10 Step Approach to Selecting the Right SAP Systems Integrator for your Project
Michael Doane

The 10 Step Approach to Selecting the Right SAP Systems Integrator for your Project
Enlightened selection of an SAP systems integrator can bring immeasurable benefit to a firm. While the selection of the right systems integrator is of major import, so also are the terms and foundation on which the engagement is made. Oftentimes, the right systems integrator is chosen for the wrong reasons and client expectations are not met. Equally as often, a systems integrator appears to be chosen for the right reasons but the selection process is flawed and client expectations are misplaced. Further, the selection process can be bewildering. Consulting skills, SAP skills, industry focus, methods & tools, organizational change management, knowledge transfer, and a host of other elements of an engagement all require scrutiny and clients are faced with a need to identify competitive advantages and disadvantages within the context of their specific needs and goals. A brief definition of the right SAP systems integrator, derived from a combination of field experience and client input, is a firm that will embrace and enhance a client vision and bring measurable business benefit in an engagement that will also fully prepare the client to efficiently maintain and enhance its SAP assets well after the engagement is completed. While the adherence to time and cost is important, our experience and research strongly suggest that, over the long haul, these elements are less important than most clients believe. Deadlines are often capricious and cost is only half of the ROI equation. What Can Go Wrong? Below is text that I retired from The New SAP Blue Book in 2005, some of which is, unfortunately, needed anew: All the same, some consulting firms in high-demand areas (SAP, Supply Chain, Customer Relationship Management, Internet et al) still play some of these age-old tricks and it is in your interest to have your antenna fully extended. Bait and switch: A firm bidding to become a client's implementation partner promotes star consultants during the proposal phase and sends inferior consultants once the deal is set. Flooding the zone: A firm assigns one or two star consultants to a project and surrounds them with an army of neophyte consultants whose SAP experience can be measured in weeks. It takes a while

The 10 Step Approach to Selecting the Right SAP Systems Integrator for your Project
Michael Doane

for the client to recognize this because at the onset of a project, neophytes seem to know so much more than the client, but mostly they are hiding behind a terminology smoke-screen. Gin rummy (spades) : A haves-and-needs body shopper sends a subcontract consultant to a client; some time later, the body shopper finds a cheaper consultant for the same job and, through some pretext, replaces the first one for greater personal profit. Gin rummy (clubs): A contract consultant accepts a six-month assignment. Two months into the job, the consultant finds another assignment that pays more. Citing 'philosophical differences', he/she abandons the first client in mid-project. Casper Consulting, Inc.: Resumes of non-existent consultants are presented to clients to puff up the size of a consulting roster. Not so curiously, these consultants are always 'on another assignment'. Sap, not SAP: Resumes are sprinkled with SAP initials like SD, MM, or PP but the candidate has no real SAP experience. This gambit was once widespread but is happily on the wane. A candidate once called me and opened his spiel by saying that he had three years of sap experience. That's what he said, sap (rhymes with zap), not SAP. Imagine the resonance of a phone slamming onto its receiver. Facing Mirrors(((()))): There are great numbers of contract consultants who cut subcontract representation deals with more than one consulting firm and thus appear on several firms' rosters. These consultants are only slightly more available than those from Casper Consulting, Inc. This is not to say that the systems integrators are always playing games with clients. In most instances, they do seek to address client needs in a forthright fashion. Be aware, however, that whenever a consulting firm comes to a client site to make its pitch, the opening remarks will include the phrase we wish to partner with you. What this proposed partnership consists of will seldom be elaborated because there is scant partnership substance in a straight billing relationship. If you purchase, you are buying the consulting firms time and assets (methodologies, tools, templates, etc.). You have one common goal, a successful completion of a project, but the definition of successful is not mutual. The consulting firm wants to complete the project to your satisfaction while making the best possible margin. You, the client, want to complete the project with the highest possible financial benefit (derived from business benefit and/or minimization of project costs). Use a Formal Selection Process Doane Associates strongly recommends that clients follow a formal Request for Proposal (RFP) process. Simply engaging an SAP systems integrator robs a client of the ability to control costs, sharpen scope & focus, and scale the SAP learning curve prior to an engagement. The complete recommended steps for a formal selection are outlined below: 1. Establish Short-listing & Selection Criteria Prior to short-listing, determine the attributes of the ideal service provider for your engagement. Is knowledge of your industry a must or is it only desirable? How important is
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The 10 Step Approach to Selecting the Right SAP Systems Integrator for your Project
Michael Doane

knowledge transfer and client ownership of the engagement? Are you seeking creative financing or will you depend upon fixed cost? 2. Informed Short Listing At least three candidate firms likely to match your criteria should be included on a short list. For large engagements, five candidate firms are recommended, with the notion that, at the point of written response to RFP, the two outliers will be immediately cast aside. Thus, clients have only three responses to the RFP to be assessed. 3. Develop the RFP According to What You Want and Demand Response in the Form of the RFP Clients often build an RFP with an eye on what they believe the service providers can do. Our advice to clients is to include precisely what is desired and leave it up to the candidate firms to best describe how they will satisfy the demand. Most IT service providers have automated or semi-automated methods for responding to an RFP. If clients accept such responses, the diversity of response results in a great burden of extrapolation, cut & paste, and document backtracking. We have seen instances in which one vendor tendered a 325 screen PowerPoint, another sent four Word files and two Excel tables, and the other three sent boilerplate Word files. Service providers should be encouraged to include salient information in addendum to the RFP response. We recommend advising all short-listed firms that a failure to respond to the form of the RFP may result in elimination. 4. Provide Sufficient Time for Response For most engagements, candidate firms should have 3 to 4 weeks after their acknowledgement of receipt of the RFP. Clients should make every effort to deliver the RFP to a vendor contact who is capable of routing the RFP to the proper individual or entity for response. Firms that are not given sufficient time tend to return responses that a) are insufficiently competitive and/or b) do not adequately address RFP aims. The following is a representative time line for the Request for Proposal Process.
Week Week 0 Week 3 Week 4 Week 5 Week 6 Week 7 Step Distribute RFP Receive RFP Written Response Response Assessment & Initial Scoring 3 Finalist Presentations Update Scoring Final Selection & Due Diligence Comments Add 1-2 weeks for very large-scale engagements Presumes responses are in the form of the RFP Full day presentations for very large-scale engagement

5. Establish and Maintain a Level Playing Field The goal is to receive the most competitive responses possible. If any of the candidate firms presumes a client bias toward one of the firms on the list, the response will not be competitive and the purpose of the RFP process will be undermined.
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The 10 Step Approach to Selecting the Right SAP Systems Integrator for your Project
Michael Doane

6. Score Responses According to Weighted Criteria Group scoring reduces the fog of vendor posturing, claims, lunches, peripheral phone calls, and the like. Scoring must be held against weighted criteria or results will be distorted. 7. Seek Out Differentiation While Flattening Price Points If all responses are in the form of a client RFP, vendor differentiation is easy to identify and clients can immediately concentrate on points of contrast. If proposed costs are not widely diverse, clients can encourage higher-priced vendors to re-structure their response to meet the lowest current bid. This is the advantage of being in a buyers market. 8. Observe Vendor Behavior Throughout the Process Vendor behavior and tactics through the RFP process reveal the passion or lack thereof that a vendor has for the clients engagement. Clients should note whether or not vendors respond on a timely basis, are readily available to answers questions regarding the response, and assign the right resource to the task at hand. During vendor presentations, clients should take note of who presents. Presentations by prospective project managers and support staff provide a client the opportunity to assess how that firm might actually perform. Presentations led by sales directors, partners, or senior managers reveal much less. Client should penalize attempts by vendors to seek outside leverage on decision-makers through contact with parties not included on the evaluation and decision-making committee such as board members, peer groups or other client associates. Client should also penalize attempts by vendors to discredit client evaluation team members (and/or third party influencers) who do not seem inclined to choose them. It is also wise to look askance at any vendor putting on an overt charm campaign of lunches, dinners, and gifts, none of which reflect the substance of a project and all of which tend to reveal vendor emptiness. 9. Cost is Its Own Criteria When making a final selection of an IT service provider, clients should balance final scoring against proposed cost. If one vendor has a large scoring lead but is marginally more costly than the second place vendor, clients should determine whether the differential in capability is worth the difference in cost. 10. Due Diligence The chosen systems integrator should be required to identify team members and provide a suitable resume for each of them. Note that these team members were probably not on projects tendered by the systems integrator in their references. Thus, clients are advised to

The 10 Step Approach to Selecting the Right SAP Systems Integrator for your Project
Michael Doane

perform resource due diligence by interviewing key proposed team members. If the client is new to SAP, third party assistance is recommended as SAP background is needed for this step. By following these ten steps, clients can set the stage for a more successful project with a greater understanding of their SI partners true capabilities, aims, and assets. Trust But Verify Beyond due diligence, clients should be looking for a vendors demonstrable ability to provide measurable business benefits as a result of any engagement. Adherence to budget and timelines is no longer the key criterion for SAP project success. In this light, we strongly recommend especially for high budget engagements- the hiring of a knowledgeable third-party quality assurance firm that can keep both client and systems integrator on track. The value of quality assurances cuts both ways. Quality assurance not only provides the client with objective insight into the systems integrators effectiveness but can also inform clients as to their own effectiveness in regard to their partnership with the systems integrator. Consider the following results of Performance Monitor research for 693 SAP engagements.
Problems Experienced by Clients of SAP Systems Integrators
Problem There were costs that were hidden or not made known to us up front Personnel not up to expected levels of expertise Insufficient post-implementation planning Cultural/geographic differences caused friction, quality erosion, and/or delays Lack of client ownership of project Scope poorly managed Business benefits not realized Results were over-engineered and difficult to use/maintain Insufficient project process, structure, and / or resource management Results did not meet our expectations Lack of product/technology expertise Service provider was not knowledgeable of our business Did not meet compliance goals or regulation requirements Cited 30.5% 29.6% 28.0% 26.2% 20.0% 19.4% 17.8% 17.5% 17.3% 17.1% 13.7% 13.2% 5.2%

Respondents were asked to cite any of the above thirteen problems that arose in the course of their SAP engagement. They were also asked to cite which group they felt was responsible for the problem: themselves, SAP, or the systems integrator. The following result underscores the potential value of a knowledgeable and objective third-party quality assurance firm. Hidden costs is a problem that is often a simple result of clients under-funding a project. Of greater concern is the citation of insufficient post-implementation planning which is the result of clients racing to go-live with too little concern about the long term.

The 10 Step Approach to Selecting the Right SAP Systems Integrator for your Project
Michael Doane

Overall Responsibility for Problems Experienced

SAP Line of Business
Results were over-engineered and difficult to use/maintain Insufficient project process, structure, resource mgmt Lack of product/technology expertise Cultural/geographic diffs caused friction, quality erosion, delays Personnel not up to expected levels of expertise Service provider was not knowledgeable of our business Results did not meet our expectations There were costs hidden or not made known to us up front Lack of client ownership of project Insufficient post-implementation planning Scope poorly managed Business benefits not realized Did not meet compliance goals or regulation requirements
0%

62% 60% 50% 44% 41% 40% 33% 31% 28% 26% 20% 15% 33%
20% 40%

8% 30% 40% 6% 18% 10% 22% 54% 56% 50%

31% 10% 10%

41% 50% 44% 15% 17% 52% 33% 46% 67%

60% 80% 100%

22% 47% 38%

Systems Integrator

Software Vendor

Own Organization

As can be seen, clients who have completed SAP engagements blame themselves more often than their systems integrators for key problems such as insufficient post-implementation planning, not meeting compliance goals, and business benefits not being realized. These issues can be corralled through the judicious use of a third party quality assurance firm as well as by client-systems integrator alignment. A successful SAP engagement can result in improved business processes, cost reductions, business agility, increased revenues, and other tangible gains. Enlightened short listing of leading SAP service providers and informed guidance as to how to engage with all candidates will help immeasurably to simplify and demystify the selection process so that the SAP systems integrator most likely to help a client to the SAP promised land will be identified.

The 10 Step Approach to Selecting the Right SAP Systems Integrator for your Project
Michael Doane
Michael Doane is a leading authority on enterprise applications, Mr. Doane has thirty-six years of business and information systems experience, including sixteen years in consulting. He advises clients on strategies, implementation and integration, service provider selection and management, and best practices and methods for deriving value from enterprise applications investments. In addition to prior roles as a practice lead at Grant Thornton and The Consulting Alliance, Mr. Doane has directed several major consulting engagements for large systems integrators, most notably in financials and logistics, in North America, Europe, and Asia. Prior to entering the world of consulting, he was the European IS director for the Plessey Company Ltd. and for Ferry Peter, a division of Wiggins Teape. From 2001 through 2007, he worked as an industry analyst at META Group and Performance Monitor. At META Group, he created and led the Professional Services Strategies group and was a contributing member of the Enterprise Applications Strategies group. He is widely published (including five books on SAP) and has led more than fifty executive seminars on enterprise applications strategies and best practices. He provided a keynote at the 2002 North American SAPPHIRE on the subject of centers of excellence and keynoted an ASUG/SAPPHIRE 2010 Kick-off on the same subject. Key associates include 3V Solutions (www.3vsolutions.com), Meridian Consulting (www.meridian-us.com), Enterprise Applications Consulting (www.eaconsult.com) and JonERP (www.jonerp.com). Mr. Doane is the author of The New SAP Blue Book, a Concise Business Guide to the World of SAP, and The SAP Green Book: Thrive After Go-Live. He is a regular columnist for ERP.com and has a blog (http://sapsearchlight@blogspot.com) In addition, he has led numerous executive seminars in the U.S. and Europe on the subjects of SAP adoption and implementation, return on information systems investments, and application lifecycle management. E-mail: michael@michaeldoane.com Web: www.michaeldoane.com

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