SAP Consulting is a popular option for companies looking to improve their implementation experience, which can range from complex to downright frustrating. But only recently has it lived up to its promise, according to a new study.
Thanks to its ties to SAP, SAP Consulting's involvement in projects can be varied. It often serves as the lead integrator, but it can also work as a sub-contractor with alliance partners. Either way, SAP Consulting is involved in a lot of SAP projects, according to Paul Reynolds, chief research officer for Peachtree City, Ga.-based Performance Monitor LLC.
The question is: What impact does SAP Consulting have on these projects?
As recently as 2004, projects were actually worse off when SAP's consulting arm was teamed with an alliance partner, according to a study by Performance Monitor.
The study has shown, however, that since then there has been a steady improvement in SAP Consulting's performance -- and the success of projects it was involved in.
SAP Consulting is involved quite frequently as a sub-contractor on projects, according to Reynolds. In fact, 75% of the projects in Performance Monitor's double-blind survey of 809 SAP systems integration projects from 2004 to 2006 included SAP Consulting in some capacity.
Performance Monitor has released preliminary results from its research on SAP Consulting, but the study examined a group of leading systems integrators, including Accenture, BearingPoint, Capgemini, CSC, Deloitte and IBM, and ranked each one's performance on a scale of 1 to 10. Data was also gathered for several India-based firms such as Cognizant, Infosys, Satyam, TCS, and Wipro, but was not included in the overall findings owing to lower response rates.
In 2004, SAP Consulting's performance was .12 points below average, but by 2006 it was .12 above average. These differences may not seem like much, but with the top 7 companies separated by just .50 points, the improvement is significant, according to Reynolds.
SAP Consulting has improved thanks to a steady decline in problems related to management of its resources, how it deals with changes in scope and how it reacts to changing conditions during an engagement, Reynolds said.
These improvements have not happened by accident.
"We've seen that SAP Consulting has brought in talented people with focused expertise," Reynolds said, "and that has gone a long way towards improving their delivery."
Even with SAP Consulting becoming a more attractive option for those considering SAP projects, there are some factors to consider when deciding whether to bring the organization on.
First off, companies must decide whether the hassle and cost of having an extra contractor will be worthwhile.
"While including multiple providers does add a degree of difficulty from a project management standpoint, it does offer some specific benefits," Reynolds said. "For example, clients like knowing that SAP has some stake in the outcome of their project -- that it was more than just a software sale."
Of course, the warm, fuzzy feeling of knowing that SAP is involved pales in comparison with real, measurable results. Performance Monitor's research did show that a higher percentage of projects attained their cost-reduction goals when SAP Consulting was teamed with an alliance partner.
"The most significant areas of benefit when SAP Consulting works with alliance partners on projects are around cost reduction -- specifically, in reducing IT costs, as well as production, supplier and other business costs," Reynolds said.
Companies must also determine whether to hire SAP Consulting as the primary systems integrator or as a sub-contractor with another consulting organization. A major factor in this decision, Reynolds believes, should be the size of the company and project.
"SAP Consulting has been particularly effective serving as the lead integrator for clients in the midmarket," he said. (Performance Monitor considers this to be companies with between $300 million and $1 billion in annual revenues.) "But many of the pure-play integrators demonstrate stronger performance for larger companies."
Customers can't stop being vigilant once they've decided to bring SAP Consulting onto a project. Companies must continue to evaluate how SAP Consulting will help them even after their projects go-live, according to Reynolds.
"SAP Consulting has a lot of strengths as a systems integrator," he said. "However, one area where clients should be particularly wary is their ability to plan for the post-implementation environment."