- Pro-ERP consultants personally attack ERP critics and point the finger away from the software products when discussing ERP failures.
- Pro-ERP consultants and ERP software vendors motivated to sell products, silence ERP critics and create a narrative that project management teams are to blame for ERP failures.
- Lawsuits, which are often revealed due to public disclosure laws, reveal that many companies are unable to successfully implement ERP products.
ERP implementations have a large money trail behind them. It has come to my attention that there is a strong network of pro-ERP consultants that spend at least some of their time attempting to promote a very strongly pro-ERP overlay or interpretation onto ERP failures. Those who disagree with the “ERP friendly” post-mortem analyses of ERP failures are singled out for personal attacks.
In this article, we will review a textbook case of this type of personal attack.
A Standard Pro ERP Comment
The following is a share on a LinkedIn post by Eric Kimberling, who published the statistics of ERP implementations. The following is the slide that Eric shared.
Now notice the response from a pro-ERP commenter regarding this analysis.
“Hi Eric Kimberling your assessment is cruel but dare to say you are right especially with 80% of mediocrity.
That is “awesome” that with 30 years of ERP on the market and so many beautiful methods, tools, and certifications we still can see poor picture with many hysteric voices around ERP. Of course, even these mediocrities are not really so bad (as it somehow works) but bad things are much louder than good.
After all, here is definitely a lot of things to do. My take is we tend to much focus on material things and toys are drawing our attention away from the main area of ERP – these solutions are still for people not for robots or AI!
Studying loud failures, I found all these started very shiny with sound reasonable vision. They drifted astray. The cause of poor picture is that ERP project management lack at persistence with this vision.”
Let us review the assumptions within this comment.
Non-Pro ERP Voices are Hysterical?
The commenter states the following:
“many hysterical voices around ERP.”
This implies that if a person critiques ERP implementation failures, then that voice is hysterical. However, I review ERP sales material, and on the hysterical scale, the arguments made to promote ERP systems appear far less rational than those that critique ERP implementation failures. In the article What Was the Real Story with the Revlon S/4HANA Failure?, we found that the ERP system implementation undermined Revlon’s ability to function. Revlon was not told anything about how this ERP system was not ready to be implemented.
Conversely, one would naturally assume those that cover up ERP failures or defend them or point to the customer being responsible are level-headed and rational (not hysterical).
This sets up the debate under the artificial construct between people that are sane (defenders of ERP failures) and those that are insane (those that critique ERP failures). What a convenient way to move away from addressing the points of your opposition.
Many Beautiful Methods, Tools, and Certifications?
The commenter states that:
“so many beautiful methods, tools, and certifications we still can see poor picture.”
But how true is this contention?
I have reviewed many of these methods in the article, The Real Story on SAP Implementation Methodologies, from SAP and many consultancies. My conclusion is that these methodologies are primarily written by marketing and sales entities, and they don’t have much of an impact on projects. Having reviewed so many of them, I have no idea what this commenter finds so impressive. Some methodologies, which have been backward engineered to sell more services, do not address the primary risk factor.
How do I know this?
Well first, it is clear from reading them. In fact, many readers of these methodologies are not even aware that a methodology is not what they think it is, as I cover in Why Methodology Does Not Mean What You Think it Does.
Secondly, when I worked on Deloitte’s methodology for SAP, I was told to adjust it so that it could incorporate as many of Deloitte’s services as possible. Therefore it was less of an implementation method than it was a sales document. Deloitte presented hirees all of their various services as part of a “proven approach” to improving the project. The statements had no foundation in research and the only thing they were proven to do is meet a quota for a partner. I have spent many hours with partners at these consulting companies and none of them care about their customers. They care about money. They are all under heavy quota pressure and cannot afford to put their customer’s interests first. These are the institutional incentives within these companies.
Reviewing the History of Implementation Methodologies (for SAP)
If we look at SAP for a moment, for over 20 years the company has introduced an array of methods that were ostensibly designed to speed implementations, such as ASAP (which we cover in Did ASAP Ever Reduce SAP Implementation Timelines?) and the Rapid Deployment Solution or RDS (which we cover in How to Best Understand the Faux SAP RDS).
I have never seen one of these methodologies make one bit of difference on any SAP project. In fact, they aren’t even designed or primarily designed by implementors, but instead by partners and marketing resources — people without a an authentic understanding of the reality around implementations.
SAP’s ASAP was introduced with great fanfare, but did anyone go back and check if it did what it said it would do?
Of course not.
Let us say that a consulting partner did, and the method did nothing. How would they publish this results and expect to keep on good terms with SAP? Experienced implementers (like myself, I say, implementers that do the work, not PMs that are associated with management and do not touch SAP) say that these methodologies are to romance the executives.
The ERP consulting space does not question the intent of these “methodologies.” Perhaps they are never intended to improve implementations, but rather intended to do what they look like, which is to improve the consulting company’s ability to close sales.
The Result of All of These “Beautiful Methodologies?”
Now, after all of this, how long do SAP implementations take? Well, our research shows that SAP implementations are lengthening not shortening.
With products like HANA and S/4HANA being so immature, (for details, see Analysis of Steve Chaflen’s Article on S/4HANA Maturity), these implementations are restricted from completion. With SAP’s new C/4HANA, its maturity is so far out, yet still, the company already started promoting it at SAPPHIRE 2018. Bluefin Solutions published an article trying to hype customers on C/4HANA as covered in the article, How Accurate Was Bluefin Solutions on C/4HANA? Bluefin Solutions could have told its prospects the truth about C/4HANA’s maturity in the critiqued article, but did they? Of course not. That would be bad for sales. This gets to the issue of why the consulting companies that implement solutions don’t have any interest in honestly informing their “clients” of the reality of these applications.
There is also no evidence that success rates for ERP projects have increased.
Studying ERP Failures Honestly or Through the Lens of Financial Bias?
To study failures in a way that leads to a beneficial outcome for future ERP projects means to study them honestly and not from the perspective of “what is in it for me.”
As I have observed in the past, the majority of those writing about ERP failures are riddled with financial bias, as they want ERP implementation to continue unabated. In my meta-research into all (literally all) of the academic literature on the returns from ERP systems going back to the 1980s, the research showed no ROI from ERP implementations. This is covered in the book, The Real Story on ERP. This should be no great surprise as these systems are so expensive to implement. ROI is possible from ERP, but not if you choose a Deloitte or IBM to implement.
ERP Failures Are Loud?
The commenter argues that ERP failures are “loud.”
The implication is that these failures attract people’s attention and distract them from the great story of ERP.
But where is this great story?
The idea of ERP systems as some great enabler has clearly been a fiction constructed to sell ERP systems. Furthermore, how much money goes into publishing ERP failures?
Now, let us see how much money goes into promoting ERP as valuable items to purchase. As covered in the article, How to Best Understand the Control of SAP on IT Media, SAP funnels money to major IT media outlets for positive media coverage. Oracle and other ERP vendors with large resources do the same. IT media sources serve as a PR/marketing function for the IT companies, and this means that anything that increases revenues and margins will be covered. When vendors interact with IT media entities, they basically say the following.
“Impress us, show us that our spend with you is driving our revenues and lead generation.”
And of course, the media entities do what they can to bend over backward to show them why they should spend more with them.
IDG owns 8 of the top 20 IT media brands.
This is the page that readers of IDG IT websites don’t see, it is directed towards advertizers and those that want to publish paid placements. Notice the quotation.
“IDG organizes our content, demand generation, and ad serving so that we can segment audiences deeper an anyone else. Our customers know they can rely on IDG to deliver the right buyer at scale exactly when they are most receptive to a marketer’s message…”
That is journalism?
Producing rigged content designed to get the “audience” to buy. IDG is willing to republish anything vendors or consulting companies say, and the other IT media entities work the exact same way. You can even choose the media “brand” you would like your false information published. It is really customer focused!
It should be noted that there is no overlap between what the IT media entities do and journalism. Journalism only arose under a condition where the reader in some way compensates the publisher for the content they consume. In every situation, when the publisher receives their income from companies exclusively, the content devolves into propaganda. This is a problem in media that cuts across the different media categories as publishing have been demonetized by the Internet and by companies like Google that take the advertising dollars for themselves choking off revenues from content creators.
Not only do vendors and consulting firms not care about what is true, but there is also an industry willing to repeat any message in return for money.
To flourish as an IT media entity one must get advertising dollars and paid placements or email addresses (in the case of TechTarget, which only exits to collect and share e-mail addresses). IT media entities compete with each other for these industry sourced dollars and people are promoted or demoted on the basis of how well they cater to industry income sources.
In IT media there is no dedication to the readers, as readers (after demonetization of media brought by the Internet) do not pay for content. And in this milieu, ERP vendors are some of the largest spenders.
For companies that want to get their story out, each media entity has a dollar figure attached. Gartner is the leader because they can charge the most for access to their readers. In fact, Gartner can punish companies that don’t pay them by excluding them from various ratings.
ERP consulting companies have great reach and there is no mention of the actual ROI or success rate of ERP systems on any of their web pages. The ERP and consulting marketing spend is massive and it’s all designed to get companies to purchase ERP systems. The argument that more corporate money supports the case against ERP (by promoting ERP failures) overhyping ERP purchases is very difficult to make. Let us think for a moment:
How much money do IDG, Gartner, and others receive to criticize ERP? How much money do they get to promote ERP?
Once again, nearly all the money is on the side of promoting ERP!
*I want to apologize for using that exclamation point. That came extremely close to being “hysterical.” It’s important to observe corruption but to be non-plussed. It is the true sign of maturity to accept corruption as completely normal and nothing to get worked up about. People who nonchalantly accept corruption are well-balanced and perfectly adjusted members of society. People that are revulsed by corruption need counseling.
A History of False Constructs to Promote ERP
Over the decades since ERP was introduced, ERP has been promoted with a series of false constructs ranging from how they replace legacy systems (covered in How SAP Used and Abused the Term Legacy) to the idea that a significant competitive advantage could be attained through re-engineering (covered in Reengineering and its Impact on ERP Sales). We have analyzed all of the constructs behind ERP and found nearly all of them to be false.
Yet, how often has the accuracy of these constructs been challenged by vendors, consulting companies, or IT media entities? How does the money flow into these entities? ERP proponents have not been held accountable for the many things (benefits) they said that would happen with ERP, which did not happen. If the field was titled “against ERP proponents,” they would not have gotten off “Scott Free.”
The Reality of ERP Systems Versus the Fantasy
Companies that have implemented ERP systems do not have the competitive advantage they were promised by vendors and consulting companies. They have spent mightily and made vendors and consulting companies, but what company is today using ERP is “enthused” about the system they now have? What company that has ERP sees it as some empowering system, versus a clerical system that gobbles up the IT budget?
Who was the ERP system designed for? To benefit the customer, or for the vendors and consulting firms?
A Single Reason for ERP Failures: Project Management
This commenter states the following.
“I found all these started very shiny with sound reasonable vision. They drifted astray. The cause of poor picture is that ERP project management lack at persistence with this vision.”
Did all of the failures start with a reasonable vision? Let us parse that comment.
Did the management begin with a realistic understanding of what they purchased, or was inaccurate information given both in the sales process and during the implementation? I would say it’s the latter. Finally, this commenter concludes that the single reason for ERP failures is a “lack of persistence” with a “reasonable vision.”
Every ERP implementation fails because of a lack of persistence?
This is the status quo explanation that obviates any need on the part of the vendor or the consulting company to provide accurate information to the customer. How convenient. But also, observed through its proper lens, what an intensely self-serving comment. It appears that all of the customers that fail with ERP are losers, and lack the fortitude and persistence to follow through on the vision of ERP. That is to persevere so that they can finally attain the golden chalice of a system with a negative ROI.
They are weak and soft-bellied! This falls into the category of victim shaming. We cover this in the article How to Know if You are Tough Enough for ERP?
Unfortunately, I have also been categorized as a weak soft-bellied loser who would not jump on board (aka get with the program) with the “vision” of the company being created by the head of sales for a vendor.
The man who famously said…
“I never want to hear something not existing as an excuse to not sell!”
The Illumination of ERP Industry Practices Brought by Court Cases
These public ERP failures and the lawsuits are of great concern to ERP proponents because they expose the truth of these implementations. This is really the only time that the dirty underside and tricks played by vendors and consulting companies are given a public forum. And let us remember, the only reason this occurs is that the legal systems in the countries where these cases are filed require public disclosure of the complaint. Corporations do not share the truth in a public forum. If it were left to corporations, the PR and marketing departments would massage all information. However, the courts require the publication of the complaint. Court complaints are why we know of ERP failures, and they are what ERP entities seeking to defend their money train find so disagreeable.
Since ERP projects began failing, there has been a strong attempt by vendors and consultants to control the narrative in a way that is favorable to the industry. In fact, SAP has a specific way they release paid placements through major IT media entities in order to control the narrative to point entirely away from themselves as covered in the article The Art of Blaming the Client When a Project Fails.
- This article points out that Michael Krigsman (the IT failure “expert”) makes comments about project failure that have nothing to do with the facts of each of the project failures on which he comments. No matter which projects, Michael Krigsman is there with aphorisms that discuss how “training is important.”
- Neither the IT media entity nor the sources that are compensated by SAP disclose their financial bias. One wonders why a media entity would not disclose its payments from a vendor to help point blame away from the vendor. Could there be any possible reason for leaving out such information from the reader? If anyone can figure out this intensely complex question, please comment because it is simply too complex for this author’s limited brainpan.
Lying About ERP’s Mapping to Requirements Cannot be Discussed
Deloitte/IBM/Infosys etc.. lie to accounts before they close the account. They habitually exaggerate how much SAP will cover the requirements as covered in the article The Overmapping of ERP Systems to Requirements. This is so well known at this point, it is outrageous to see status quo ERP defenders imply it does not exist. Deloitte/IBM/Infosys etc.. lie to accounts during the implementation to put off the day of reckoning.
When these behaviors are brought up, the personal attacks begin from the SAP consulting defenders! Why is it virtually every time the SAP consultants, whether they work for the implementation company ceaselessly defend the consulting company and never address (i.e., quickly pivot away) from the issues with the vendor and the consulting firm? Interesting isn’t it. The response is thus…
“Its really much more complicated than that……”
Now the pivot…
“….the real issue is the lack of training, focus __________ (fill in the blank)”
Notice…” it’s much more complicated” always results in “it is the client’s fault.”
No matter how much money is wasted on ERP projects, ERP status quo defenders are always there to tell pro-reform individuals to not be negative. When provided the example of the Air Force’s $1 billion ERP failure, that was again highly based upon lying on the part of the Oracle and the consulting partner, the answer I received from the pro-status quo SAP consultant was that the project was “complex.” For these individuals, there is no amount of money that is too large to waste on ERP!
Something that has not escaped my attention is that the SAP proponents, with their financial bias, never seem to call out many of the very obvious failings of the industry side of the equation. ERP proponents have a story to tell, which is to pay no attention to ERP failures or accept their biased explanations as to the “whys.” However, ERP proponents telling their story means silencing those who critique the overall industry. That is why those critics must themselves be criticized.
The Problem: A Lack of Fact-Checking of ERP Vendors
ERP vendors leave out the fact that the ERP systems they sold did not revolutionize the companies where they were sold. Most companies that have ERP systems do not see them as strategic. That is they are not systems that should continue to absorb the percentage of the budget that they absorb.
Being Part of the Solution: What to Do About ERP Support Costs
ERP vendors want high support payments without really doing that much for the support income. ERP systems absorb of the IT budgets far more than they were every forecasted to absorb and deliver less than they were promised to deliver. The constant yearly cost of ERP systems robs the IT departments of the resources they could deploy on applications that meet many open business requirements that ERP systems said they would meet but only met partially.
If you need independent advice and fact-checking that is outside of the ERP vendor and ERP consulting system, reach out to us with the form below or with the messenger to the bottom right of the page.
Financial Bias Disclosure
Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.
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The negative ROI of ERP systems from academic studies is covered in the following book.
The Real Story on ERP
How This Book is Structured
This book combines a meta-analysis of all of the academic research on the benefits of ERP, coupled with on project experience.
ERP has had a remarkable impact on most companies that implemented it. Unplanned expenses for customization, failed implementations, integration, and applications to meet the business requirements that ERP could not–have added up to a higher Total Cost of Ownership for ERP were all unexpected, and account control, on the part of ERP vendors — is now a significant issue affecting IT performance.
Break the Bank for ERP?
Many companies that have broken the bank to implement ERP projects have seen their KPIs go down— but the question is why this is the case. Major consulting companies are some of the largest promoters of ERP systems, but given the massive profits they make on ERP implementations — can they be trusted to provide the real story on ERP? Probably not, however, written by the Managing Editor of SCM Focus, Shaun Snapp — an author with many years of experience with ERP system. A supply chain software expert and well known for providing authentic information on the topics he covers, you can trust this book to provide all the detail that no consulting firm will.
By reading this book you will:
- Examine the high failure rates of ERP implementations.
- Demystify the convincing arguments ERP vendors use to sell ERP.
- See how ERP vendors take control of client accounts with ERP.
- Understand why single-instance ERP is not typically feasible.
- Calculate the total cost of ownership and return on investment for your ERP implementation.
- Understand the alternatives to ERP.
- Chapter 1: Introduction to ERP Software
- Chapter 2: The History of ERP
- Chapter 3: Logical Fallacies and the Logics Used to Sell ERP
- Chapter 4: The Best Practice Logic for ERP
- Chapter 5: The Integration Benefits Logic for ERP
- Chapter 6: Analyzing The Logic Used to Sell ERP
- Chapter 7: The High TCO and Low ROI of ERP
- Chapter 8: ERP and the Problem with Institutional Decision Making
- Chapter 9: How ERP Creates Redundant Systems
- Chapter 10: How ERP Distracts Companies from Implementing Better Functionality
- Chapter 11: Alternatives to ERP or Adjusting the Current ERP System
- Chapter 12: Conclusion