The idea of getting everything you need in one place is tempting. Whether shopping for household goods or for an ERP implementation, one-stop shopping has become fairly commonplace. But is it always the best idea to get your car fixed at the same place you buy your lettuce and toothbrush? There are striking similarities between shopping at the likes of Walmart, K-Mart or Costco as there are Accenture, Deloitte, Capgemini, or PwC.
The primary reason “big-box” retailers and consultancies exist is convenience. We are lazy by nature and the opportunity to get everything we need under one roof is enticing. When implementing ERP, this means you simply reach out to a “big-box” provider and you get ERP software selection, system implementation, program management, organizational change management, quality assurance, data management, integration management, testing, training, Ecommerce, etc. with one phone call.
But just because an easy choice is available does not always mean it’s the best choice. Consider the following:
The first question to consider is how important quality of resources is for your digital transformation. This is not an easy question as you may not know the answer. You may not want to go to Walmart to purchase organic produce, high-end cosmetics or jewelry or quality tools and hardware. They do sell all of these items, however, and it is up to you as the consumer to determine what you want and need.
The same goes for most big ERP systems integrators. They will give you nearly every resource you need in order to keep you from shopping elsewhere, but in spreading their resource pool so thin there are sacrifices to quality. This is especially true for areas outside of core ERP functional and technical competencies, such as organizational change management and data migration.
Walmart hires some great people, but they are not known for outstanding customer service. They can’t possibly be with the range of products and services they offer along with the volume of people that flow through their stores on a daily basis. All employees are trained through the same program on standard processes and to respond to common customer needs, but are not trained to handle non-standard or one-off questions.
The same goes for large consultancies. They do have experts in different areas, just as Walmart has electronics staff, but they are not trained to speak beyond what they have been taught. Because the large consulting firms also sell and implement specific software platforms, they are limited when it comes to need for advanced functionality or integrating with third-party platforms. They do not have knowledge and are not able to fully explain options available in the marketplace. This is why we often find excess customization when reviewing implementations from larger firms and why so many of them have been involved in the biggest ERP failures of all time.
Similar to SAP, Oracle, Workday and other software firms, the term “best-practice” in the implementation space simply refers to that particular implementation firm’s approach. It does not necessarily refer to what is best for a particular client.
Firms may push concepts like cloud, blockchain, agile implementation, etc., not necessarily because it’s the best approach for the client but because they have built a competency and gain additional revenues by selling “leading” technologies. For example, agile implementations are generally a bad idea, but the concept is pushed hard in across several large firms. Consultants are well-versed in catch phrases and emerging technologies, and it can be difficult to question what they are recommending as not a lot of case studies exist. Keep in mind they are not free thinkers and may or may not be acting in your best interests.
Go to Walmart and ask for the “best television set”, and they will steer you to the top-end TV on the shelves at Walmart. They may or may not ask about your particular needs, but what they won’t offer is the new 88-inch 8K set that they don’t offer, even if that is what you need.
Likewise, Accenture consultants are programmed to answer questions and guide Accenture’s clients in the way they were trained and towards the financial interests of Accenture. This is why people hire independent ERP advisory firms for their digital transformations. The question then remains: Why do companies put all their eggs in one basket and hire just one solo firm to run their ENTIRE digital transformation?
Walk into Walmart and pricing may be lower on some items than your local grocer; they have built an empire on volume discount. However, when you walk out of a Walmart, there is fair likelihood that you have spent more than you initially intended because they have so much “stuff”. Same goes for hiring one of the large firms for your software initiative.
We recently evaluated a Tier 1 ERP implementation being managed by one of the large auditing firms and found nearly 20% excess resources had been assigned to the project. We’re talking millions of dollars of unwarranted resources hanging out and billing just for attending meetings, reviewing other people’s work and not producing anything of real value. Indeed, this client had been “Accentured” by one of the big systems integrators.
In addition to excess spend, there is also the idea of replacement cost. We spoke of quality earlier, and when you purchase a lower quality product it needs to be replaced sooner. The same goes for ERP implementation resources. The costs of replacing unqualified resources can add up, and the cost of cleaning up the messes left by kids who have never implemented ERP before can become not only costly but very risky.
It needs to be restated that the larger firms hire from the same resource pools as everyone else, and they differentiate themselves by hiring kids out of college and training them to their standards. On the other end, also consider that working 100+ hour weeks with extensive travel as required by many of the large system integrators does not generally spike interest to the most qualified and experienced people in the software industry, either. Ultimately, when you hire a big-box consultancy you are not necessarily getting the best consultants, which will escalate your ERP total cost of ownership in the long-run.
In summary, simply look beyond the option of just hiring a large, “big-box” consultancy to run your digital transformation. It may be the direction you need to go and they are in business for a reason, but consider the factors discussed above and consider your options.
Before you hire an ERP systems integrator for your project, be sure to download our Guide to Selecting and Managing Your ERP Systems integrator. This definitive guide will help make sure you find the best fit for your organization. And, as always, please contact us to informally brainstorm ideas about your digital transformation!