Just after writing about the well-publicized SAP failure at Lidl, news broke about a settlement in the National Grid v. Wipro SAP lawsuit. Long story short, Wipro agreed to pay $75 million to National Grid to settle the case. (Read the original article here).
Overview of the National Grid v. Wipro SAP Lawsuit
Since I am a frequent SAP expert witness on the most well-publicized SAP lawsuits, I took a particular interest in this case. Here are some of the key facts regarding the situation:
National Grid spent close to $1B in total costs on their SAP implementation
National Grid paid Wipro over $100M in services to support the implementation
They also had Ernst and Young helping with the implementation
By the end of the project, the company was spending roughly $30M per month supporting the upgrade to SAP
After go-live, National Grid’s period-end close process ballooned from 4 days to 43 days
National Grid’s post go-live accounts payable processes resulted in 15,000 unpaid supplier invoices
What Can We Learn from the National Grid v. Wipro SAP Lawsuit?
Most SAP implementations are difficult, but this one clearly got out of control in a big way. There are some lessons here that we can all apply to our projects, whether that be an SAP S/4HANA implementation or any other ERP implementation or digital transformation:
Choose the right ERP software. You may be considering SAP vs. Oracle vs. Microsoft Dynamics for your digital transformation. Or perhaps you are considering Infor, NetSuite, Workday, or some other solution. Whatever the case may be, you will want to make sure you choose the right technology for your organization.
Choose the right SAP system integrator. You may be considering SAP system integrators, such as Deloitte vs. Capgemini vs. Accenture or other firms. There are a lot of them out there, ranging from the conglomerates to the niche players. Either way, be sure to find the one that is the best cultural fit for your organization and its needs.
Put the right project governance and controls in place. There is no reason this project should have spiraled out of control the way it did. Proper project governance, controls, and risk mitigation would have likely prevented this disaster. Invest in third-party, independent SAP or ERP project quality assurance as an insurance policy.
Remember that you are in charge of your project – not your system integrator. You may not be the SAP or ERP experts in the same way your system integrator is, and that’s okay. But that doesn’t mean that you aren’t responsible and accountable for your digital transformation. Rely on independent experts such as our team at Third Stage Consulting to keep your system integrator and overall project on track.
The final lesson above is the biggest one: this is your project. It’s not your system integrator’s project. It’s not your software vendor’s project. It’s yours. You are the one who needs to make sure things stay on track and deliver the true transformation you are looking for.
If things aren’t going well, then fix it before it’s too late. Better yet, take the proper steps to ensure these sorts of problems don’t occur in the first place. When compared to the time and cost of cleaning up an ERP failure, it’s a lot cheaper and faster to implement technology right the first time.
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
Third Stage Consulting Group is a global thought leader in business transformation, ERP software systems, operational change management, and business advisory. Let us take your organization’s digital transformation to the Third Stage.