We have been stressing the importance of vetting your ERP Value-Added Reseller (VAR) or Systems Integrator (SI) for some time now, and the message seems to be hitting nerves across the industry. One common error we are seeing companies make is jumping to a conclusion regarding the size of the SI that is needed far too early in the evaluation cycle.
Companies considering SAP S/4HANA vs. Oracle Cloud ERP vs. Microsoft Dynamics 365 and other ERP providers have a number of SIs to choose from. It is important to find the one that best fits your needs.
Common mistakes when selecting an ERP systems integrator or reseller
In a recent conversation with a global asset management company, they shared the determination of definitely not using a Tier 1 or Big 4 SI for their SAP implementation. When asked why, they simply stated “they are not a cultural fit for us”. That is a potentially very valid statement, however “cultural fit” is an over-used term anymore and needs to be validated and compared with other selection criteria.
On a similar note, we had another discussion with a mid-size manufacturer in the U.S. who stated they were already in discussions with Deloitte and Grant Thornton for an Infor implementation. The reason? they already had a relationship with one and found the other on Infor’s website, stating they wanted a well-known name. Again, this is not the recommended path for selecting an implementation partner.
Consider the following when evaluating an SI based on “size”:
Selecting a large ERP systems integrator or reseller
Large systems integrators are sometimes referred to as “Tier 1”, although we recommend not using that term as it can be confused with Tier 1 ERP systems. While large SIs are commonly used for Tier 1 implementations, this is not always the case. These firms are generally defined as global and having a resource base to handle any size ERP implementation. These would include primarily the Big4 accounting firms and other large SIs, such as Accenture, Deloitte, Capgemini, RSM, Infosys, etc.
Pros: The pros of using a large systems integrator are that they can scale with your implementation and have access to the resources needed to cover most aspects of your transformation. They also generally are in good standing with the Tier 1 ERP vendors and have up-to-date training and certifications. They will have offices nearly everywhere, so for multi-national implementations they can draw from local offices.
Considerations: We recently published an article called “Have you ever been Accentured“, where we talked about the dangers of large system integrators taking over control of your project and potentially running them, as well as your business, into the ground. If you are considering using a large firm for your implementation, make sure you are prepared and be cautious not to hand over the reins (i.e. Hertz).
Another consideration is that these firms draw from the exact same resources as any other consulting firm. They may have some degree of a bench, but for a large implementation you can be certain they are trying to recruit from the streets. They may have a stronger HR team and ability to attract talent, but they are not bringing a full bench of consultants that know their methodologies.
The final consideration is cost. Like buying branded paper towels, you are paying for a name. As stated above, this does not necessarily mean you are getting better resources or even a better approach.
Selecting a smaller ERP systems integrator or reseller
Smaller SIs are defined by those that have limitations on capacity and/or geography. They may represent multiple ERP vendors, but have limited resources and scalability.
Pros: The primary benefit of a smaller firm is that your implementation will be one of a small handful they are working on, giving you more attention. This, in turn, will allow for:
- More likelihood to have contact with the senior leaders and even ownership of the group and
- More flexibility in their approach
- More ability to leverage your own internal resources for the implementation
- Probably less overall cost
Considerations: Primary considerations include:
- They are more likely to take on more than they can handle and get overbooked, resulting in a scrounge for resources and leaving you with less qualified consultants
- They may be lacking expertise in certain functionality, hiring consultants with general knowledge rather than specified knowledge
- They may have limitations on integrations, customizations or other modification of the software
- While they will be drawing from the same resource base as the larger SIs, their marketing and image will not be as strong and they may struggle to get qualified resources hired quickly
Selecting a mid-size ERP systems integrator or reseller
Medium SIs cover a wide range of consulting firms and can include those just below the large players and just above the small players. There is a common belief that they are a happy medium between the large and small players. They can be a good addition to a more limited evaluation of Deloitte vs. Accenture vs. Capgemini and other usual suspects.
While they do carry aspects of both pros as well as the considerations listed for large and small SIs, these are rarely in equal proportions. There are too many combinations to mention as the pool and variances of mid-size SIs is significant but be certain that you are evaluating the proper criteria.
Ultimately the message here is to do your due diligence and understand the impacts of size as well as other criteria during your evaluation of implementation partners. And, as always, feel free to contact us to discuss ideas on how to best navigate the SI landscape given your unique needs. We are happy to help!