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Selecting the right SAP implementation partner demands metrics, relationships

Little things can add up to ERP failure. Forrester Research's Liz Herbert has some tips on how to make ERP implementations and upgrades with implementation providers successful.

One of the main factors in Super Sailmakers choosing SAP Business One over Microsoft Dynamics was the SAP implementation provider -- Sunrise, Fla.-based Netsirk Technologies.

"The implementation company seemed very knowledgeable and very focused, and able to make this program what we would need," said Bob Meagher III, vice president of the Fort Lauderdale-based sail maker. "We really think the experience of the folks at Netsirk makes this [work]."

Between new ERP installations in small and medium-sized businesses, upgrades to SAP ERP 6.0 and trying to maximize the value of current software by adding modules like business intelligence or other analytics, SAP customers are spending a lot on ERP implementation providers.

More than a quarter of companies' services budgets, in general, are going to consulting and systems integration work such as strategic planning, implementations and upgrades, according to a recent Forrester Research survey of 603 services decision-makers in North American and European companies.

But a quarter of 1,002 technology decision-makers are downright dissatisfied with the work, and only 18% are very happy with it.

"Most firms expect that their provider will proactively suggest best practices based on what they've learned from projects with other clients," the report states. "In reality, many firms do not have these positive experiences with their providers."

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Satisfaction means more than simply finding someone with experience in your industry and with specific modules, according to Liz Herbert, senior analyst at Cambridge, Mass.-based Forrester Research.

Because projects are typically lengthy, it's very important that the consultants be the right cultural fit -- meaning they get along with employees and fit the style of work your company likes, Herbert said.

Meeting the firm's employees before the project starts will help, she said. She recommends bringing them in for a demo day, or going out to lunch with them.

"Those softer factors can be the hardest," she said. "That has to do a lot with just liking the people."

Identifying the appropriate metrics for success is also important. Companies typically use metrics like revenue gains, cost reductions or improvements in customer satisfaction, Herbert said, while IT providers measure success by being on-time and on-budget.

Breaking those metrics into reports delivered at certain dates, number of tests run, and the number of systems integrated helps IT and business speak the same language.

"Oftentimes we hear companies talk about the goals they're hoping to achieve being business-focused goals," she said. "But they need to think about how the metrics are going to get them to those goals."

Don't focus so much on the contract as on building a relationship with the provider, Herbert suggests. Finding someone who will be flexible with the contract and comfortable being proactive will ensure that the focus is on making the ERP implementation or upgrade successful.

Make sure to set up weekly, or even daily, check-in meetings in the project's nascent stages -- and stick to what is decided in those meetings. 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.

"We've seen companies go wrong because they're too reliant on the provider to take the reins, or they retain too much control," she said.

Setting up a repository for the work, to refer to on future projects, will ensure that the knowledge isn't lost from one project to the next. Organizations should insist on a debriefing with the consultant after the go-live to discuss what went well and what could be improved.

These tips will help ensure ROI from the provider and the software.

For instance, Neoris, a Miami-based global business and IT consulting firm, finished an SAP implementation for Vitro, a Mexico-based glass manufacturer, of 45 different modules -- including financials, human resources and master data management -- in 18 months, according to Carlos Manuel Perez, regional managing director at Neoris.

Today, a total of 3,000 Vitro employees use the software, which went live in October 2007. And in January, net sales grew by 6.7%, from $2.4 million to about $2.6 million, according to the company.

"Everything started with a project oriented to improve the process," Perez said. "They now have the power to negotiate with a supplier, and a better understanding of what they need to purchase."

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