We all have our perspective on why SAP projects fail. Michael Krigsman, Dennis Howlett, Michael Doane , Vinnie Mirchandani et al have riffed at length on this topic. I am not sure what is left to be said, and then I saw this post today by Dennis. Intransigent clients to blame for failed SAP projects? . I wondered aloud on twitter whether I should just add a comment, or blog as a reply. Dennis said I should riff, and here I am riffing :) . As always – this is just my personal view, not my employer’s view. Intransigent is not a word I have ever used myself, and I had to look it up. I will save you one google search as the prize for reading my rant – it means “uncompromising”.
Since Dennis is comparing the positions of Michael D and Michael K – you might want to read their pieces first (links in Dennis’ blog above) before reading further. Just as Dennis agrees and disagrees with the other 2 gents, I also agree and disagree with Dennis, and with both Michaels. I am sure readers will also agree and disagree with me and all the other guys and gals who opined on this topic. In short, this is not a binary issue at all. I agree with Dennis on that one.
Michael Krigsman deserves credit for his Devil’s triangle concept. SAP and Customers have some share of the blame when projects fail. Off late, I have started to say “Devil’s Polygon” - since there are other parties also involved in a failure, like the “buy side” advisers who originally told the client to buy software, or choose an SI, analysts who highlight failure, but not success etc.
Michael Doane is spot on talking about his reasons for ASAP not living up to its billing, and the problems of aiming for “just go live” as ultimate goal of a project. He is also completely correct on pointing out the failures of some kinds of COE set ups, and where he pointed out the problems of cutting training budgets. Like Doane, I am also not a fan of RDS in general. I already riffed on that here Rapid Implementation – is the promised land finally here ? . I already left a comment on his blog today with some thoughts. Racing to Mediocrity: The False Grail of an Accelerated SAP “Go Live”
Now on to where I beg to differ, and where I want to augment their view points.
Both Howlett and Krigsman both make one argument that is just not true anymore – they just use different words. (yeah, that is right – they actually have common ground after all :) ).
Dennis says (emphasis added by me to show where I disagree)
Senior people I know at both Deloitte and IBM have told me they are committed to customer success. Snicker if you want but they are only too aware of the problems. Both tell me that customer expectations are never well aligned to what can be achieved as originally envisaged but claim they do their level best to make sure clients understand what is realistic during the blueprint phase. I have no reason to disbelieve their intent but we have to remember that they are employed by firms that are driven by the concept of the billable hour and not outcomes.
And Michael K says in his RDS blog that
Enterprise customers are weary of open-ended, hourly consulting arrangements.
I had a big smile on my face when I read these two statements. They are a misrepresentation of market reality . There was a period in time where most SIs did almost all contracts on Time and Materials (T&M) basis. I have not seen even 10% RFPs ( in last 5 years at least ) that will let an SI bid for a project on T&M. Vast majority of customers want the SI to be held to outcomes – based on fixed prices for well defined milestones. There are a handful of T&M projects where client generally runs the project, and just want specialized skills from SI for some roles. Essentially, the concept of billable hour is barely alive in the projects that the big SIs work on. It is still very much the concept for independent contractors.
When scope can be defined and bound, there is no reason to do it as a T&M project in general. And when scope changes there is an agreed up on change control process that uses change orders. That concept applies to RDS too. RDS is fixed price, but will need change orders if customer wants anything more. SIs follow the same model – so there is no substance to this argument at all.
Apart from the contract point of view – these SIs have a brand to protect, that will only work when customers are happy, and will do repeat business.So there is no good reason for an SI to make a client unhappy. But like in every other buying situation – the customer should carefully consider all options and make a good business decision. SIs are not the only vendors customers deal with – most often, SIs are not even close to the top 5 vendors based on spend for the whole company. So it is not as if the customer will just be fooled by a clever SI off the cuff . Even when they don’t have sufficient procurement expertise in house, they can get external help for that.
Dennis then quotes Vinnie
It is Vinnie Mirchandani’s lamentthat after so many years and thousands of implementations, we still don’t have a good way of bringing projects in on time and at reasonable cost.
If IBM was truly innovative it would be automating and commoditizing much of that labor – its own and that of the rest of the market.
What I find disconcerting is that even at the top IBM confuses its nice margins from milking old software and old data centers and old partners like SAP as “innovation”.
Vinnie has the right ideas and he has a lot of experience, but I feel he is just not up to date on current state of affairs on how IBM and other big SIs execute projects. I think his expertise is more on the contract negotiation and deal management side, and less on execution side. I see from his bio that several years ago, he worked in outsourcing too. But just as deal management has changed from those years to today, project execution also has changed. There is plenty of automation in projects – including SAP projects, and the percentage of automation tasks and accelerators are only increasing with time. And the fact that IBM is the leading SI for SAP implementations worldwide ( check SAP awards, Gartner and Forrester reports etc or just ask customers ) pretty much speaks for itself. I know from Vinnie’s blogs that he likes “new” technology and is a fan of consumer technology, and less of enterprise technology. I respect that – he is entitled to his opinion, although I couldn’t disagree more if I tried. I did try here Innovation and the Time dimension and Vinnie responded with this IBM: SAP, Sabre and Smart Systems
Dennis says about Krigsman’s Devil’s Triangle that
I don’t doubt that aspects of the analysis hold true but my experience suggests that there is always a root cause that can be identified which in turn leads to some of the symptoms Krigsman observes in hindsight.
Well – I have almost never seen a (as in one single) root cause in project failures. Project failures are multi-dimensional, and there is never “a” root cause. It is not just SAP projects – if your car and some one else’s car hits each other, the insurance companies will apportion the blame. It is just an academic fantasy to try to find one root cause. The one aspect of Devil’s Triangle that could be made better is to make it more quantitative in project failure analysis and apportion the blame based on data. I am sure Michael should be able to do this, since he has been following failures for a while now, and should be having enough data to quantify.
Dennis goes on to say
Where I believe both fall down is in the recognition that failure can almost always be traced to:
- Over eager salespeople minimising risks around complex solutions.
- Over eager buyers wanting to buy into the brand. I’ve seen entire customer panels talking about SAP Business ByDesign making this mistake.
- Customers not having enough information during the decision taking process. There is a lack of truly independent voices prepared to vigorously speak to reality. Way too many who know the reality are afraid of upsetting their paymasters.
- A lack of willingness by customers to acknowledge that they didn’t do all they could have to mitigate risk. There are exceptions to this acknowledgment – check SAP Me Sideways.
As I mentioned before there is no “always can be traced to” point of failure for projects – there are many other reasons other than the ones Dennis points out.
I agree with point 1 above. Sales people are paid to sell, and all I can say is “buyer beware”
I partly agree with point 2. But this is more true for newer products and less so for ERP and other business suite and BI software. Buying into a brand is not always a bad thing, since there is slightly less risk that the vendor will fly by night, or go belly up in short term. But on the flip side – using that as a sole criteria is a terrible idea. I don’t think customers are stupid – and what they say on panels is rarely indicative of how the majority views the world. Panels are usually organized by vendors and of course they will cherry pick a few that will speak well of their products.
I mostly disagree with point 3. Who has the independent voice ? A customer is best served by listening to multiple people and then making up their own mind . I expand on my thoughts here Let he who is without sin cast the first stone
I agree with point 4 as a general statement – but it is a lot more nuanced than how Dennis puts it. I also think SAP and SIs owe it to customers in educating them on what is possible and what is not, and then standing their ground on that.
Dennis responded to a tweet I made yesterday night from my cab ride home from the airport.
More prosaically this exchange between myself and Vijay Vijasankar, associate partner IBM last evening illustrates both the cynicism and playful snark that abounds around SAP projects:
@vijayasankarv: Landed in PHX to see note from one of my delivery project execs that she is going live successfully . Back to back successful projects yay!!
Do you see how in this example go live remains the primary goal? Doane would likely say: ‘Let’s take a peek in another year.’
I have no idea what made Dennis think “go live remains the primary goal” or that “it is a rarity” when he read my tweet. He just jumped into a conclusion that fits his hypothesis without any basis. This go live is for a big application maintenance project that has been thoroughly planned and executed, and the go-live I mention is one of the many phases of a several year long program. And yes, we celebrate every success and we analyze every failure to the minutest detail to make sure we never repeat it. The reason I tweeted out the back to back success is just out of sheer pleasure of watching my hardworking teams not missing a beat despite all the challenges that were thrown their way. I would have gladly explained all of this if he cared to ask before he jumped to the conclusion he arrived at. But since Dennis and I have great respect for each other, we can very easily joke about all of this – with plenty of snark mixed in :) . I only bothered to explain since he put this in his blog, and I did not want readers to misunderstand.
Enough about the failures and its analysis. What about “how to prevent failures ?”. Since failures have no one cause, prevention also does not have one silver bullet. It is a multi-dimensional endeavor that needs a lot of people with diverse opinions and backgrounds to play together. The fact that there are plenty of successes (of course less published because of poor news value) means it is not rocket science. And it is not – I have worked in and managed several successful projects, and can vouch that it can be done with sufficient common sense and patience. I just don’t have enough time and energy to go into the details of that now – since I promised to help organize my kiddo’s seventh birthday party tomorrow, and she is standing here with an annoyed expression. So off I go after I hit the publish button.