SAP Project Implementation Strategies and Approaches

For a brief intermission before I make the final posts on managing the shared responsibilities for SAP project success, I thought I would offer this explanation of the different strategies and approaches for an SAP project.

There are three key dimensions to an implementation strategy: 1) the vendor type, 2) the methodology-tools-templates-resources for a project, and 3) the implementation approach. The decisions you make around these three areas generally make up the implementation strategy for your SAP project.

SAP Implementation Methodology

For the methodology approach, I will assume you are using the SAP ASAP methodology. As a result, other than mentioning it here, I won’t spend a lot of time on this methodology. With only a few exceptions, nearly every SAP system integrator claims they follow the SAP ASAP methodology. As an ASAP-certified consultant since the late 90’s, I can assure you that few SAP system integrator project managers actually follow much of the ASAP methodology, no matter what claims they make during the sales cycle.

The SAP ASAP methodology helps you do the right things in the right way.

I’ve written on the ASAP methodology in A New SAP Implementation Methodology and Implementation Steps. For more background on the different vendor or project approaches, see Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP .

Let’s put this in context: The SAP ASAP methodology has been used literally tens of thousands of times. It is tested and proven to work!

As a parting note, I would strongly encourage any SAP customer to get their own copy of the ASAP methodology. No matter the stage of your SAP project, the SAP ASAP methodology ensures you are doing the right things in the right way.

For more information on acquiring your own copy of the SAP ASAP methodology, see the ten steps I previously outlined under the section “Where to start with developing a solid SAP business case based on business and IT strategy” in the post ERP and SAP Business Case for ROI, Business Benefit, and Success.

During the sales cycle (or during your project if you are past that), ask your SAP system integrator to show you the SAP ASAP methodology. There are two identical versions: one is an HTML web server version, and the other is integrated into Solution Manager. Both are free, and the HTML version is available to any customer or vendor free of charge who wants to download it directly from SAP. Because of its wide availability, you should beware of any vendor who pitches the SAP ASAP methodology and cannot make it available to you.

If you are an end SAP customer, contact me and I will arrange for you to get your own copy.

SAP System Integrator or Implementation Vendor Type

This topic is a little different because there are several possibilities for how you approach your vendor selection or project staffing. Each of them has their benefits and drawbacks and some of them can be substantially different in cost and results. The type of implementation vendor and consultants you use will also affect your implementation strategy.

You may wish to employ a well-established system integrator, a “boutique” consulting firm, or your own selected staff of contractors. Alternatively, you may want to consider a hybrid approach. If you are considering the contractor route of staffing a project yourself, you might wish to review the screening methods to find the right consultant (Part 1 and Part 2).

You will also need to determine your project implementation model. Will you do a pure time and materials approach, or fixed fee, or time and materials with penalties for under-delivery (over budget, over time) and rewards for over delivery (under budget, early), or time and materials with cost controls, or a blend of some of the approaches.

Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP

If you choose the large integrator, be prepared for the full sales pitch about their “special” methodology (whether it actually exists or not). This is one of the classic approaches the larger consulting firms use to differentiate themselves. However, the SAP ASAP Methodology has been tested and proven so many thousands of times that any other approach actually introduces risk into the project. That does not mean that methods can’t supplement that methodology — there are a few gaps — but the ASAP methodology is very solid, reliable, proven and consistent.

The boutique firm may work well for many companies, but they have the drawback of being focused on a niche area.

The company run implementation with outside contractors (rather than a system integrator) requires an experienced, skilled SAP project manager. I have participated on two of these projects that were very successful, and their rates were about 35–50% less expensive than other consulting options. One significant caution here is this type of approach can be a disaster if you do not carefully screen consultants or have a seasoned SAP project manager. The other problem is that many (though not all) of the staffing and recruiting firms are so “sleazy” that you are better off putting in the effort to screen yourself. Back to the chicken or the egg problem– this requires someone who has the capability to do the screening. This approach has the highest reward and the greatest risks associated with it.

SAP Project Implementation Approach

Over the years, I have only ever seen two key approaches to SAP implementation projects– Big Bang or Rollout projects. Within these two methods, you can do a Phased Approach as well, but that is more of an issue of functionality scope rather than organizational scope.

Organizational scope would cover the “Big Bang” SAP implementation approach and the “Rollout” SAP implementation approach. It affects the amount of the company or organization that the project affects.

Functional scope addresses the amount of the SAP business software that you plan on bringing into your organization(s). This would generally be a “Phase” of the project. For example, you might bring in Financials and Supply Chain functionality in Phase 1, and then CRM or online ordering or BI/BW (reporting) in Phase 2, etc.

ERP Big Bang

The “Big Bang” SAP approach is probably the most common and generally involves a single major functional event. This event usually affects all “legal companies” where financial reporting is required for taxes or regulatory requirements. This can be a large implementation across multiple countries, multiple business divisions, or product lines, and it generally affects the whole of the organization.

The “Big Bang” approach may be easier from a single “change event” or “change shock” to the company and organization, but it has a number of drawbacks as well. For example, with any ERP application, some of the potential design, data, and knowledge transfer problems are only discovered after the system is live. If your SAP system integrator or vendor is not as skilled as their sales presentation might have indicated, you could end up with serious long-term difficulties, cleanup, and ongoing maintenance headaches.

ERP Rollout

The Rollout approach is fairly popular among a number of larger SAP customers with several legal companies, several locations, or multi-nationals that do business in several countries.

Advantages of this approach include the ability to learn from each rollout and improve subsequent operational rollouts. Rollout risk can be more carefully managed because data and configuration inconsistencies can be discovered, remedied, and resolved while the subsequent rollout is occurring. Change is better absorbed over a longer period of time in the company, and knowledge transfer is generally better handled if the customer insists their resources are involved (done correctly, this can actually reduce overall implementation costs).

Disadvantages of this approach are that it generally costs more, because cumulatively it takes more time and effort to manage the ongoing operations while also bringing on new operations. Also, the blueprint will need to be re-visited for each rollout location, because no matter what any integrator says (or what the SAP documentation purports), there always seems to be some legitimate differences between each rollout location. Failure to revisit the blueprint for each rollout, no matter what the integrator or SAP might say, can cause more difficulties than it is worth. However, these later stage blueprint reviews and adjustments are not as intense or time consuming.

ERP Phased Approach

Because of the many variations and options, we will revisit the Phased Approach at a later date with more details.