Protecting the SAP Project's Budget and Timeline - Innovate. Integrate. Transform. Run.

For years I have heard stories about blown SAP budgets and blown SAP project timelines. Personally, I have experienced a few project overruns [FN1], and a few where we came in under budget. However, I can’t say any of the projects were ever early.

While I believe that coming in under budget is often possible, reducing the time frame is much more difficult because of the planning and coordination processes. You need to adjust all of the parallel work streams and get the coordination and timing correct, which is much more of a challenge. In other words, you have to change the timing on a lot of moving parts. That is, unless you are an SAP project manager who has an aversion to using normal WBS, Network, and Activity based project plans.

Aside from 1) scope management, 2) executive buy-in and participation, and 3) using a proven methodology, other factors can cause some SAP or ERP projects to go over budget and over time– namely, basic issues of project coordination and consultant skill.

SAP Project Management Planning and Coordination

After the scope, deliverables list, and a project plan, you need good monitoring tools. A project manager must also consistently communicate the timeline and deliverables ahead of time, throughout the project, to mitigate blown timelines. Finally, they must provide key templates and the instructions on using them effectively throughout the project ahead of time. However, other project management planning issues still need to be addressed.

A good project plan and methodology will have tools and templates that are sophisticated enough to allow time to resolve resource and task leveling constraints. The deliverables must support the completion of key milestones and project activities to demonstrate quality. More than just a checklist, deliverables should instill some confidence in the project activities they address.

If deliverables tracking tools cannot support task and resource completion status of the deliverables, then a project manager does not have the correct tools to make critical resource leveling decisions. Your project and its deliverables will be inconsistent and untimely. And by deliverables tracking tools, I am not referring to the project plan. Project plan micromanagement has a way of killing project momentum and destroying project team morale. For more information on this topic, please see the first section in ERP, SAP, or IT Project Management and Prototyping for Success.

I have often observed that inexperienced project managers share a significant problem: planning at such a detailed level that they spend all of their time micromanaging individual tasks. Because of this, they miss a lot of the “trains” coming at them further up the project track. They attempt to manage a project through trackers and monitoring tools that are overly complex and add little value to the project. Unfortunately, they often overload the project as a result.

If you have the wrong consultants on the project, you will be in design mode throughout the entire project, which can also blow timelines and budgets. One of the unfortunate side effects of this type of consultant is that you may only notice issues by integration testing time. By the time you are at integration testing, it may be too late. For some ideas on how to prevent consulting mismanagement, please see the post Breakthrough Project Success: Part 4 of 4, Last Low Risk Chance for Results.

Business Process Chains Are Only as Strong as Their Weakest Project Link

SAP’s integration between all of the functional modules creates interwoven process chains. To ensure proper integration touch points, these process chains require complete dependence on each other during an implementation. For example, SD (Sales and Distribution) and MM (Materials Management) must tie into FI (Financials) for posting Revenue (SD-FI), issuing stock from inventory (SD-MM-FI), scrapping stock (MM-PP-FI), and a whole host of other areas where there are tight process dependencies.

As an SAP project (or any ERP project) progresses, each of those process silos (SD, MM, PP, FI, CO, TR, HR, etc.) needs to be coordinated so that they are at roughly the same place at roughly the same time. If you are configuring master data in one area (for example, the material master setup), purchasing, sales, production and finance can’t be very far ahead. In this case, the other silos are directly dependent on the material master setup. And for finance, if you setting up the sales and invoicing processes, you need to slow down enough to ensure that the accounting for revenue recognition and customer receivables is properly configured. If any module gets too far out in front of other modules, it can negatively impact the others. For instance, if a dependent area gets too far ahead, it may consume too much of the other module consultants’ time and attention trying support that module’s integration points, and their work may suffer unnecessarily. To avoid this, you may need to significantly rework or redesign the configuration.

Why SAP Project Timelines and Budgets Are Blown

What key problems blow budgets and timelines?

The first and most obvious is when the timeline and scope are not realistic.

Beyond this, anything that causes a project area to get out of sync with another project area can impact the budget and timeline. A project may get out of sync when scope is too large in one particular module for the number of resources assigned. Additionally, one consultant or module may be far behind, or far ahead, of another module for any reason at all.

Other times, the business may have not dedicated the right core team members. The team members may not have sufficient knowledge of the business, or know where to find this knowledge. When the wrong business-side core team members are assigned to a project, you will observe many missed items and lots of rework, no matter how skilled a consultant or system integrator is. You cannot substitute for the business-side resources and their level of experience within your company and industry. Finally, a consultant’s lack of experience may contribute to problems.

You can resolve many of these issues with the following two solutions:

1) First and most importantly, ensure your vendor staffs your project only with consultants who have verifiable and deep SAP experience (see Screening and Interview Methods to Find the Right SAP Consultant and Screening and Interview Methods to Find the Right Consultant – Part 2).

2) After that, be sure that the project manager keeps the client and consulting resources as leveled and adjusted as necessary throughout the project. When a project manager tries to manage a project at a too detailed task level, they can focus too much on minor issues and not realize that their project is headed for trouble. The project manager must have the tools and resources to recognize if the teams are on track, off track, or starting to get out of sync. Finally, the tools to support must allow early enough notice to make necessary staffing and resource adjustments.

In a nutshell, a project manager must have a list of deliverables, and with that list of deliverables a set of mechanisms for tracking the progress as they roll into the project plan.

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[FN1] I attribute that success rate to the two consulting companies that I worked for before going independent. They had philosophies about implementation that helped clients realize success. Both of them had very focused policies about getting experienced consultants who had both SAP and business experience. Since I have been independent, I have seen few projects with that caliber of consultants. It took me a while to realize that the companies I previously worked for frequently staffed projects with you could consider “Platinum” level resources.