SAP Watch

Jan 22 2009   6:28PM GMT

What’s the real trend in failed SAP projects?

CourtneyBjorlin Courtney Bjorlin Profile: CourtneyBjorlin

The big SAP buzz on the web this week is the claim by Shane and Co. that a failed SAP ERP implementation was a catalyst for the jewelry company’s descent into bankruptcy.

Reporters often joke that anything that happens three times signals a trend. So when you consider Select Comfort’s announcement last month that it was halting its SAP ERP implementation as part of a cost cutting measure, it would seem SAP is one step away from being blamed for business failures in this economy.

But what’s the real story?

Josh Greenbaum points out in his recent blog, basically, that it’s not the software’s fault that you didn’t put it in right. He argues that blame for Shane and Co.’s failings lies more squarely with the management team and the system integrator.

The same theme runs through Michael Krigsman’s chronicles of Miami-Dade School District’s SAP implementation, which is over-schedule and over-budget. Krigsman has been focusing a lot of his ink on the systems integrators’ role, plus management’s mismanagement of the project.

As it turns out, it seems a lot more companies aren’t too happy with their system integrators.

According to survey conducted by Forrester Research, a quarter of 1,002 technology decision-makers interviewed were downright dissatisfied with the work, and only 18% are very happy with it, according to research from Forrester Research’s Liz Herbert.

So how do they get better results?

Predictably, one of the ways to ensure success is by management taking a stronger role in the project. One of the biggest mistakes that companies make, Herbert said, is not changing course or correcting problems when they’re detected and just assuming they’ll correct themselves. Missing or forgoing regular check-ins can contribute to this.

So it would seem that in this economy, stronger project management will be even more important, as the margin for error is slim.

“It’s those consensus-driven companies that really cause projects to fail and to take forever because you can never move forward,” said SAP retail vice president Isaac Krakovsky. “It really does come from the top down.”

5  Comments on this Post

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    Courtney; You and Josh are so right it is the integrators not SAP the SW...when you look at the companies having issues with their implementation it is the firms who went with the cheap offshore route...Ciber at the Shane Co. in particular was not a good fit from day 1 and the off-shore firm from Select comfort was just the same. What folks need to look at is first and foremost if you want to go with the cheapest firm (typically off-shore firms) you need to be aware that you are going to have these issues. If your budget can not support one of the big 5 then you need to look for on-shore firms who truly know the SAP eco-system. Too be honest more firms need to look to firms like CCI, L2P, Exaserve etc...US based firms who are SAP partners who know how to install SAP not just know how to spell it.
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  • CourtneyBjorlin
    SAPNANO: Thanks for the insight. Any tips on what people should be looking for when choosing an SI?
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  • JHillesheim
    These failures are certainly related to the implementation partner, we have been generating most of SAP reference clients in the HR space and it always amazes me when clients buy SAP based on the successes we have delivered and then figure "this bigger company or offshore company can do it as good". Joseph Hillesheim | Founder and President E: | W: Think about it. These failures and overruns have spurred a slew of new procurement processes to address the past issues. Formalized RFPs, complex weighted selection criteria, one-throat-to-choke requirements, preferred vendor programs, etc. which have done nothing to reverse the trend—in fact they have enabled these horrible decisions to be made with tremendous efficiency at alarming new speed.
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    It is easy to blame the SI /big offshore indian firms for failure ,SAPNANO. But what organizations need to introspect is their readiness to take the big leap in ERP implementations. Homework should be properly done before plunging into big ticket ERP implementations Some of this would help 1) A dilligent RFP, with requisite details on the business processes and clearly laid down evaluation criteria 2) Authentic and Proven PMO in charge of implementation and not a makeshift project team 3) Change Management- Information Sharing with employees and initiating training sessions early in the implementation phase 4) Start Simple and not exhaustive right at the beginning. Organization dip stick test would reveal the mood and then it could be extended to other functions. My 5 + years SAP consulting experience has been that you should start with FI and HR . You need to show value to the employees and the shareholder and then you can expand your horizons. Ritesh
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    When you look for the SI look at QUALITY. Look at a firm that does not bring in a new rep/evaluation every time they come in your door. DO NOT look just for price. If that was the case then everyone would be looking to IBM or Accenture...or in the other direction to the Off shore lot. What needs to happen is to have strong management who is willing to look at the quality of the SI team and employees, do a strong review of their quality and not to let them dictate by putting low caliber labor on-site or off-site just to have sheer numbers as this would be terrible. Make sure you have a strong PM & CM aware of not getting training or no knowledge transfer as you really need this badly for success!
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