Personally Attacking Those Who Critique ERP Failures

Executive Summary

  • 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.

Introduction

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 recent 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. 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. 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 implementer (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.

Why?

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? Not much. 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. 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) over hyping 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!

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.” 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.”

Really? 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 and negative 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! 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 of i2 Technologies. A sociopath with a sex addiction who lied as soon as his eyes popped upon in the morning with what could be described as negative software knowledge. The man who famously said…

“I never want to hear something not existing as an excuse to not sell!”

Right….his vision. That vision. And who leveled these charges against me? Well, salespeople whose primary experience was reading sales material, had worked for the company for around 6 months, and never had to show up on projects and do any work.

The type of people who told our prospects that XML was middleware. Isn’t it amazing how appealing a vision can be….if you don’t have to make it happen yourself?

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!

Conclusion

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.

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References

The negative ROI of ERP systems from academic studies is covered in the following book.

The Real Story on ERP

ERPThe Real Story Behind ERP: Separating Fiction From Reality

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.

Chapters

  • 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

Why are Functionality Gaps a Problem on ERP Projects?

What This Article Covers

  • Conventional Wisdom Versus What is True
  • The Built-In Problem with ERP
  • The Problem with Gaps
  • Allowing Interpretations to be Set Through the Use of Terms of Propaganda
  • Overstated Functionality Match of ERP
  • Using Open Source ERP for Customers with Lot of Development to Do

Introduction

Recently we were asked the why gaps are a problem on ERP projects. In this article, we will explain the normal ERP sales process and why gaps proliferate and the issue this brings up to development.

The Problem with Gaps

Gaps are a problem when they are unplanned. ERP systems are oversold to customers in a number of dimensions. One dimension is that the ERP system contains the way companies should be doing things. Which is the BPR thread? Consider, there is never any evidence provided (and none asked for) that the company should engage in BPR. It is simply proposed because it is part of conventional wisdom that processes must be changed. What they are changed to is a topic for another day. If we look at the US political process, whenever one wants to change something, they slap the label “reform” on it. The term is meaningless except to describe the change. The change will in many cases make the program worse. One would have to be a bit simple-minded to accept “BPR” or “reform” as being inherently virtuous. They simply mean a change, change can be good or bad.

Allowing Interpretations to be Set Through the Use of Terms of Propaganda

In fact, the primary reason for using such terms, we call them terms of propaganda, are so that the individual does not have to provide evidence.

As in who doesn’t want “digital transformation?”

The term reform has been used for decades to sugar coat changes to laws and to programs as a form of virtue signaling. The term hides the fact that there will be winners and losers in any change. It casts a positive light on the change, without providing details of what the change will be. The first question when one hears terms of propaganda like digital transformation, reform, reengineering, is to ask what is the specific change that is being proposed. 

Overstated Functionality Match of ERP

The second dimension is that, as with the Oracle Air Force case study — where Oracle sales told the Air Force that all of their specialized custom military systems could be emulated and thus replaced with Oracle ERP, during the sales process the match between the ERP system’s functionality is overstated. Therefore you end up with one assumption of gaps in the sales process, and a completely different number of gaps in the implementation — part of the reason for the out of control RICEF list.

Curiously, ERP vendors are not held accountable for overstating the match of the functionality the customer’s requirements. And a primary reason for this is the pivot to the project being unwilling to perform a sufficient level of BPR — the sufficient level of BPR being determined by the software vendor and the consulting company. Two companies that benefit from as much BPR as possible. Honestly, for a vendor that has oversold their application into a customer and has to answer for large cost overruns, what else are they doing to say?

Using Open Source ERP for Customers with Lot of Development to Do

This is why we have proposed that companies with a lot of unique requirements choose an open source ERP system that they can customize inexpensively. A system like ECC and to a lesser degree other ERP systems, are expensive to customize. I can hire developers in languages outside of ABAP to get things done far more efficiently than in ABAP. If your development work is smaller, then it’s not as much of an issue, but in most cases, it is significant. Therefore, one has to keep an eye on the development ball and development productivity. 92% of SAP ERP systems are either moderately or extensively customized. And as a final point, no ERP vendor, or application vendor, should be telling the customer what to develop in. We don’t need entities with a bias taking control of other areas of IT simply because they sold the company the application.

Therefore in most cases, SAP and other ERP development is going to have a big impact on timelines and budget. There is no ERP vendor who is going to offer a set of development tools that is as efficient as what is available on the open market where one can choose from a variety of languages.

So you can end up selecting the software thinking you won’t customize much, and quickly get into a costly project — a major reason being that the cost to customize SAP is so high. If you have to use specialized applications in addition to the customization, now ECC or S/4HANA really becomes a costly and high maintenance item.

References

Brightwork Explorer for ERP Parameters

How to Tune ERP Systems

ERP applications require MRP parameters to be optimized externally to the ERP system. Having analyzed many ERP systems, we developed the Brightwork MRP & S&OP Explorer. It is free to access until it sees “serious usage” and is free for students and academics. Click the image to find out more.

The Real Story on ERP

ERPThe Real Story Behind ERP: Separating Fiction From Reality

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.

Chapters

  • 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