Dexteyra Consulting Group Inc.

A tip to CIO's: select the right SAP consulting partners

Mandeep S. Oberoi*

March 08, 2010

Overview

Often the question is asked why should businesses pay more and engage highly competent SAP experts instead of the less experienced and cheaper ones? It is so because SAP software has so many functionalities inbred in itself and continually evolving, so it becomes very important to identify the right processes on the context to meet specific business requirements. It is very challenging even for experts, given the high complexity of the functional options offered by the SAP software; because of the complexity of the business processes themselves; and also because of the integration between different functional modules. Enterprise resource planning (ERP) can be done right in so many different ways. The challenge is to implement it most effectively to improve operational and financial efficiency. And that is why it becomes so important for the chief information officers (CIOs) to partner with right systems integrators (SIs) and with highly experienced SAP consultants.

On a broader note, 90 out of the fortune 100 companies and 75 per cent of fortune 500 companies run SAP. These companies are so diverse such as the shoe manufacturers Nike and Reebok; electronics manufacturers Sony and Intel, Johns Hopkins medical school, top automotive, food, pharmaceutical manufacturers, and software manufacturer Microsoft, among others run SAP. The business processes relate to finance, production, materials management, human resources, sales, and so on. These diverse business processes are integrated on a single information technology (IT) platform within SAP to share common data, to interact within the enterprise, and to interact with extended business partners such as the vendors and the customers.


Examples of fallouts


If not done correctly, ERP can be very disastrous to a business. Most often, the dollar value of the SAP consulting projects would be less than the value of losses incase things go wrong. And the fixes can be very simple. All you need is an expert who knows exactly where and how much torque to apply. Experienced SAP consultants can foresee the implications of business decisions early-on and they can propose options to fix the software configuration.


Some well known examples of multi-million dollar ERP implementation failures include those of Hershey Foods, Whirlpool, Waste Management Inc., Nike (though the ERP in concern this time was not SAP, but the planning software from I2 Technologies), and American LaFrance, among others. FoxMeyer, a former $5 billion drug distribution company alleges that a botched implementation of SAP's R/3 software helped send FoxMeyer into bankruptcy in 1996.


Hershey Foods was among the most publicized cases in the Wall Street Journal during the September of 1999 that hit the company's stocks temporarily. The positive side of the debacle is that today when a company declares a successful ERP implementation, it impacts its share value favorably to benefit the investors. But unfortunately, if things go wrong with the ERP, the gun is pointed on the CIO's.


SAP consulting overlaps with business transformation


SAP is a business software that directly impacts the operational efficiencies and profitability of large companies. SAP consultants often meet with road blocks that need to be addressed tactfully to steer the projects. There are times when consultants have to motivate the clients to make tough but educated decisions. Most often, these decisions relate to business transformation. You need consultants who can involve CIOs and IT Line of Business (LOBs) to convince VP of manufacturing or finance to drastically change their current operational practices by educating them about the benefits of the related new processes. So often, it also involves tactical Change Management that these consultants need to address.


What do SAP consultants do?


The work of a SAP consultant involves studying the existing business processes relating to the current IT solutions, be it legacy software or earlier versions of SAP incase of functionality enhancement and version upgrade projects. The consultant then maps this knowledge into a future state process that relates to SAP Best Practices scenarios and provides possible options for the end state processes to the clients. At this point, the consultant also educates the client on the possible implications, pros, and cons related to each of these selections. The clients then make educated decisions to select the end-state process that meets their business requirements and regulatory requirements such as those derived from Sarbane's Oxley (SOX), US Foods and Drug Administration (USFDA), Goods Manufacturing Practices (GMP), and so on.


What constitutes your best SAP consultant?


SAP consultants work with personnel from different areas such as finance, human resources, procurement, manufacturing, sales, and so on to design, document, configure, test, commision, and support the projects. They need good understanding of the SAP software in their respective module, domain knowledge in their specaility, excellent communication skills, client engagement, and interpersonnel skills. It does happen during implementations that the clients become skeptical about the success of the project mid way during implementation. A consultant tries to bring the confidence back by creating demos for individual process steps and through client engagement skills.


What constitutes your best SAP consulting partner?


A good consulting partner is usually a SI with past experience in dealing with businesses to help them achieve their ERP goals. Project objectives and business requirements change during different phases of implementations. So your consulting partner should be flexible enough to change the course to meet your dynamic requirements throughout the duration of implementation. Unfortunately, your best consulting partners may not be the cheapest. It will be worthwhile to invest a buck to save nine down the line.


Conclusion


The process of implementing a true SAP based solution is complicated. Since the software impacts every segment of business, it is more important to engage consulting partners who have a broader understanding of the end-state processes and have worked on multiple templates. Even though most businesses have witnessed turbulences during initial roll-outs, majority of the companies were able to address their impending concerns. Streamlining your business into an ERP software is a slow process such as peeling an onion layer-by-layer. It needs to be addressed diligently and very patiently.


 

*Mandeep S. Oberoi works as Director & Principal Consultant with Dexteyra Consulting Group Inc. He has also worked with large consulting firms such as Hewlett-Packard Canada’s Business Consulting Group and Capgemini USA LLC, among others. Some of his key past clients include Canada Revenue Agency (CRA), Bank of Canada, MolsonCoors Brewing Company UK, Winnipeg Regional Health Authority, Ministry of Works - Government of Trinidad & Tobago, and Bacardi Rum, among others. He specializes in designing SAP Best Practices based banking, finance, public sector management, and supply chain solutions. Mr. Oberoi has worked on projects across North America, Caribbean, Europe, and Asia Pacific. He was awarded a Medallion by the Indian National Academy of Engineering (INAE) in 2001. 

 

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