If you're thinking of implementing SAP's R/3 product, be forewarned: it ain't chump change. Though it's hard to...
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pinpoint a one-size-fits-all ballpark figure, your typical $5 billion company can easily spend in the $50 million range for the software, hardware, system integrator and internal team. When your company is spending that kind of money, you'd better be sure you're delivering the ROI you promised. To help save you from disaster, we're presenting the Top 10 implementation mistakes to avoid (in Letterman-style, starting with #10). Here's the first five:
10. Believing the journey is complete at "Go Live"
Too many companies see their SAP implementation as a distinct project with a start and finish, says Clive Weightman, a Deloitte Consulting partner who heads client services for Deloitte's large SAP clients. "We say treat the day your ERP project goes live as the start of the next phase of your journey, not your finish."
Paul Krant, a principal with Diagonal Consulting in Berwyn, Pa., tells of a recent client who failed to plan for post-go-live and wound up having to pay for an extra six-months of on-site services from its consultants. "We'd normally expect three-to-four weeks of post-go-live support before self-sufficiency," says Krant. "It was as though they'd planned for the wedding as opposed to the marriage."
9. Failing to develop a business case
Don't start an SAP project just because you, the CIO, think you need new software. It's just too expensive and complicated to risk going forward on that basis. "The decision must be value-driven. There must be a specific business case," says Mark Willford, leader of Accenture's SAP practice in the U.S.
The risk of not having a business case is that you'll treat this as just another software implementation without redesigning your processes to maximize SAP's business-improvement potential. "At the end of the day, if all you do is implement the same processes you had before, all you've done is paint cowpaths," says Michael King, leader of the SAP practice at BearingPoint North America [formerly KPMG Consulting] in Radnor, Pa.. "You have a newer system but you didn't attack the business problems that existed." Meanwhile, all the business benefits you promised the CEO never appear.
8. Failing to staff your implementation team with "A" players
King says he often sees SAP projects become a dumping grounds of people the client doesn't know what to do with. But if you're going to redesign the processes for your company, you need the best and the brightest from all segments fo the business. They're the last people anyone wants to give up, but they're the ones who will help you get the project delivered on time, on budget and with the optimized processes that most closely match the vision. "It's amazing the fights you get into with clients to make them understand how important this is," he says. Worse, warns Weightman, if you have a bad team, you'll never get to the endpoint. "A company can easily end up abandoning a projecte halfway through," he says.
7. Creating a solution that's incompatible with the company
For example, Weightman tells of a global chemical company who operated in a decentralized manner. It tried to become centralized via SAP and suffered a total failure in implementation. The technology was perfectly capable of centralizing the company, "but that's only half the problem," says Weightman. "The other half is the company's culture, where senior staffers were used to making decisions for their own companies and areas of operation. They weren't willing to give up those responsibilities. The moral here is never to use technology as a vehicle to change your culture."
6. Using inexperienced consultants
"A lot of [consulting firms] will put in people through 'the academy,' where they take a training course and get sent straight out to the client. That won't work," says Krant, who advises that your consultant team be a balance of new and old. "Make sure ahead of time that there are experienced people on the team, and get that in writing. Look at their CVs and such."
Eric Berkman is a freelance writer living in Framingham, Mass. You can reach him at email@example.com.