Project success depends on an implementation partner’s ability to ensure business transformation occurs.
Can the SAP implementation partner or company deliver business process engineering together WITH the new system? Or, as with so many of them, do they just install systems and call that an implementation?
Lately, I have been focused on developing a solid and repeatable ERP software and vendor selection process.
While reviewing the academic literature and reflecting on my time working with SAP, I found an interesting study from Romania. The study addressed software vendor selection criteria and methods related to the limited information they had within the country. The opening abstract certainly lines up with my personal experience about whether or not you will ever see ROI from your software investment:
Successful implementation of an ERP system is the result of knowledgeable and dedicated people working together. It entails 1) company-wide commitment, 2) openness to change, 3) good planning and 4) experienced guidance.
These key ERP implementation success criteria help you realize significant return on investment (ROI) from an ERP system. When you use these criteria as guidelines during the system selection process and subsequent implementation, you can ensure that the chosen system will support and enable the business improvements many SAP implementation partners claim during the sales process (Hurbean 2009, pg. 1).
SAP or ERP Software Installation or Implementation?
This study has a lot of substance. For example, it notes that the software implementation strategy and methodology are critical success factors for both the project and the software vendor selection. One of the important differences they identified for ERP or SAP implementation companies is companies that merely install the application (more of a technical exercise) and companies that implement the software (focus on business drivers and business change in addition to the technical exercise).
The point of failure for many software vendor selection processes is a focus on the “product features” and “less or not at all the implementation.”
This study reaches the conclusion I have been pointing out for a long time on this site: there is a significant difference between software installation (with “technicians”) and software implementation (with “experts”) (see CRM, ERP, BI, and IT Investment — Where Do You Find the Business Benefit?).
The Romanian study provides a meaningful definition between the two “goal posts” of software implementation methods and processes (see Software Engineering or Business Process Engineering?). The goal of a software installation is to move from one software system to another with a minimum of disruption. An implementation focuses on the business drivers and business goals through a transformation of processes with the right software (paraphrased from Hurbean 2009, pg. 2) and the right implementation partner.
Key Implementation Success Factors that Apply to the Type of ERP or SAP Implementation Company or Partner
The key vendor factors identifying the differences between an implementation and an installation are the following:
- Lack of training and education to the company (typically a part of the change management process)
- Lack of in-house expertise (related to a knowledge transfer strategy)
- Lack of clear goals or business objectives (poor business to IT alignment)
- Lack of companywide support and involvement (change resistance – insufficient change management)
- Lack of top management commitment and support (critical success factors and the senior leadership imprint)
- Lack of data accuracy
Only items 3 (goals and business objectives) and 5 (top management involvement) are directly dependent on the company that selects the ERP implementation partner. And even those two items can be strongly influenced by an ethical SAP implementation company. Regarding item 5, I have been on a few projects where the vendor project manager refused to engage company leadership, even though the leadership was more than willing to step up but just needed some guidance. Regarding item 3, I have seen many implementation vendors who bring unqualified consultants to a project who were incapable of helping a company align an SAP implementation to business goals and drivers. Additionally, I have seen companies where the internal political culture or the company project team prevented these two success criteria. The Top 5 ERP Success Factors by Project Stage from 22 Critical Success Factors is about another study I reviewed and wrote about, which lines up with several of these key SAP implementation success criteria.
SAP or ERP Implementation Success Criteria
The study continues to provide some great insight into corrective actions that you can take to more properly align your IT/ERP/SAP investment to your business goals and objectives. The study also provides an overview of ERP implementation partner and implementation company selection criteria that help ensure SAP project success.
This site has addressed key shortcomings in much detail. Below, you will see the numbered problem area from the list above, a summary explanation of how to address it, and then an in-depth article on the topic or subject.
- Lack of training and education – Ensure you have carefully considered both knowledge transfer and training requirements (see Change Management and Knowledge Transfer for a Successful SAP Project).
- Lack of in-house expertise – Look into knowledge transfer and the best business employees to support your implementation efforts (see ERP Consultants: Is the Promise of Knowledge Transfer just part of the Sales Pitch?).
- Lack of clear goals or objectives – If the project requirements are not carefully aligned to business needs even before you begin, you will have trouble finding value and finding the right vendor (see e.g. Aligning SAP Scope to Meaningful Business Requirements and Business and IT Alignment – Integrating Technology and IT Spend with Business).
- Lack of companywide support and involvement – You need solid change management focus and communication, which require software implementation vendors who can help lead the change activities (see Leading Change (and Change Management)).
- Lack of top management commitment and support – Senior leadership must be educated as to the business benefit and the business direction of the project, and the importance of their strategic imprint for success (see The Real Reason Executive Participation Creates IT Project Success).
- Lack of data accuracy – Ensure that your vendors focus on the right data migration strategy and use the right data transformation tools (see Planning For a Smooth SAP Go-Live: Part 2).
Doing the upfront work to carefully understand your business requirements, and then demand that an SAP implementation company or partner provides skilled and experienced consultants, is critical to project success.
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Hurbean, L. (2009). Factors influencing ERP projects success in the vendor selection process. West University from Timisoara (Romania), MPRA Paper No. 14430, Faculty of Economics and Business Administration.
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Note: This post has been split into two key parts. This first part focuses on a review of the study, whereas the second part (More on Vendor Selection Criteria and Methods for ERP Project Success) focuses on some specific methods or approaches for vendor selection.
It is common for companies to jump into an enterprise resource planning initiative without first conducting the due diligence and planning required to make the ERP implementation project successful. Organizations first need to “get their house in order,” which means to analyze exactly who they are as an organization, what they want to be in the future as well as pinpoint their strengths and weaknesses, core competencies, and areas in need of improvement.