In my experience as an SAP expert witness and SAP implementation consultant, SAP S/4HANA, ECC, R/3, and Business One are all capable of delivering game-changing business benefits. On the flip side, they can also lead to unmitigated disaster if not managed properly.
Just as is the case with Oracle Cloud ERP implementations, Microsoft Dynamics 365 implementations, and other digital transformations, SAP projects have their fair share of troubled initiatives. The causes of these problems typically go well beyond or are completely unrelated to technology issues.
I have had to analyze, write expert opinions, and/or testify in over a dozen SAP lawsuits over the years. Here are some of the biggest lessons I’ve learned from those cases:
SAP is often a cultural shock to organizations
Most focus on technology when the think of SAP. However, companies shouldn’t underestimate the potential cultural shock that an SAP transformation can cause. This is typically a much larger problem than anything to do with the technology.
For example, one of SAP’s strengths is standardizing global and common business processes across disparate operations. This can be a good thing. But, if you are beginning with highly disparate and independently operating business units, changing your culture and people to fit this new model can be extremely painful.
Effective organizational change management is the most effective way to mitigate this risk. Not change as in training to learn SAP transactions, but instead, activities that help drive the massive cultural change required. Independent organizational change management experts like the ones at Third Stage Consulting are good ways to help facilitate these changes.
Be sure you’re ready for SAP
Just as companies often aren’t ready for the cultural shifts required for a successful SAP implementation, they are often also not ready for a number of activities required to make the projects successful. There are a number of things that companies should do well before their implementations even begin.
For example, companies should:
- Create a well-defined implementation plan that covers not just your system integrator activities, but those to be addressed by your internal team and other third-party consultants
- Ensure that your future state business processes are fairly well defined and agreed upon, so your system integrator has a clear blueprint to build from
- Mobilize your internal resources to support the project
- Get a handle on your current data so you can begin data cleansing
Getting a head start on these activities can save considerable time and money later on. Even before you complete these activities, you should ensure that you have completed a careful comparison of SAP S/4HANA, Oracle Cloud ERP, Microsoft Dynamics 365, and other viable technology options.
Develop a plan to develop your internal SAP competencies
Supporting SAP typically requires an upgrade to your IT skill set. Establishing an internal SAP center of excellence early on is critical to building internal competencies and ownership. This helps reduce costs and over-dependency on system integrators and outside consultants.
The first step is to define the gaps between the competencies you have now and the ones you will need to support an SAP environment. From there, you will need to build an IT skills transition plan. Then, you will need to execute on that plan. This takes time and is often the critical path of a successful implementation.
Project governance and quality assurance is a key to success
If yours is like many SAP S/4HANA implementations, your monthly project costs will be high. This means that every delayed decision and missed deadline will cost money. If you have an army of consultants with the hourly meters running, these costs can add up very quickly.
Project governance is a key mitigating factor to this risk. Ensure that you have solid project governance with clearly defined roles, responsibilities, and decision processes. It is also helpful to enlist the help of independent SAP project quality assurance assistance – a service that Third Stage Consulting provides to its clients.
Choose and manage your system integrator wisely
Your SAP system integrator is one of the most important decisions you can make. When assessing potential integrators, you should consider things like:
- Global reach and capabilities
- Quality of the team
- Onshore vs offshore development model
- Cultural fit with your organization
- Experience in your industry
- Estimated costs
Once you have selected the right system integrator, you will also want to make sure that they are properly managed – just as you would any other project resource. At the end of the day, this is your project, so it is important that your team control the tempo of the project rather than your system integrator.
In my SAP expert witness work, I have seen some very gnarly and poorly run SAP implementations. However, I have also seen and managed very successful ones. The difference between success and failure isn’t due to luck, so I hope these lessons help you chart a course to a more successful initiative.
Learn more by downloading our white paper 20 Lessons from 1,000+ ERP Implementations.