The Problem with S/4HANA Consulting Company Case Studies
Last Updated on March 21, 2021 by Shaun Snapp
- The High Number of Consulting Companies Implementing S/4HANA.
- The Problem with Taking Much from These Case Studies.
- Consulting Marketing of S/4HANA.
Introduction to the Types of Companies Implementing S/4HANA.
One should note that a not insignificant number of the public S/4HANA case studies are from SAP implementation companies. In fact, 31% of the public S/4HANA implementation 6/19 case studies are from these companies. You will learn about the problems with who is implementing S/4HANA.
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Lack of Financial Bias Notice: We have no financial ties to SAP or any other entity mentioned in this article.
- This is published by a research entity.
- Second, no one paid for this article to be written, and it is not pretending to inform you while being rigged to sell you software or consulting services. Unlike nearly every other article you will find from Google on this topic, it has had no input from any company's marketing or sales department.
The Reliability of the Case Studies
There are some problems in taking very much from these case studies.
Due to the marketing benefit, these case studies are the most likely to contain exaggerated claims. A single case study of S/4HANA implemented by a consulting company has ever described the implementation as a failure or a low ROI.
Lack of a Business Case
The lack of a business case for implementing something like S/4 at such companies is a prime indicator that these implementations were undertaken purely for marketing reasons.
Little Need for Any ROI
Consulting companies that implement S/4HANA can add S4/HANA to the resume of many of their consultants. And those skills are rare. This sort of thing is done to get skills and to get marketing coverage. The system benefits are secondary. An ERP system makes no sense for a consulting company, but this has happened several times with S4.
S/4HANA Implemented by SAP Consulting Partners
Every one of these companies is an SAP consulting partner. This means that their existence is tied to their relationship with SAP, but as a partner, SAP approves, and marketing released information from these partners. Therefore, a press release of information from an SAP consulting partner should be viewed as merely a release of SAP itself. SAP consulting partners would be barred from truthful information that contradicts SAP’s official marketing and positioning. It is against the partnership program for its consulting partners. Such partners are only allowed to release information that promotes SAP. Read the partnership contract; you turn over all marketing related to SAP to SAP when you become an SAP partner.
Little Paid for S/4HANA
These partners most likely have a special set of commercial terms. First, it is unlikely that the consulting company paid much for the S/4HANA software, and maintenance fees have probably been waived as well. At one consulting company, I am aware of, SAP offered them all types of S/4HANA access and implementation support for a flat fee of $75,000. The companies that implement S/4HANA that are not consulting companies will not receive the same terms. And secondly, a company that implements S/4HANA will not have the opportunity to resell this experience in the form of consulting. Therefore the “ROI” of such an implementation is entirely different for a consulting company than for a “real” company that intends to use the software. A consulting company requires no ROI from a S/4HANA implementation as the entire initiative can be considered a form of consultant training and marketing.
Consulting Marketing of S/4HANA
All of the publicly available information on S/4HANA is strongly tilted because SAP wants to sell more S/4HANA, and SAP consulting companies want to be known as effective implementers of S/4HANA. As soon as a client goes live on S/4HANA, the consulting company (and SAP) will use the event as part of a marketing initiative to help get more S/4HANA business. When so much money is at stake, and when the marketing divisions of these consulting companies are involved, this introduces a great deal of positive spin or bias into the reporting of events. Some quotations from implementations that are not meant to be concerning actually are.
Here is one example from a consulting company Soltius, that helped implement Ballance Nutritionals.
“Functionalities that are considered non-strategic going forwards fall into what is now termed ‘Compatibility Scope’, whereby a specific existing solution, while not the recommended target solution, is still available in SAP S/4HANA on an interim basis. One particular example for Ballance Nutritionals was the Cost-Centre Planning functionality of ERP. During the course of the implementation, we identified that this functionality had been removed and that SAP was now advising customers to use ‘Integrated Business Planning’ (IBP). An SAP note allowed us to switch Cost-Centre Planning functionality back on temporarily, but the note also stated that this functionality would be removed completely at an undefined point in time. The moral of the story is to not presume that all the elements of SAP ERP you are using today will be available in the new solution.” – Soltius
Now for a consulting company, this is not a concern. This is because the more change that occurs in the system, the more billing hours they receive. However, for an implementing company, this is just reworked. This is only one example of how reporting what happened on a project changes depending upon the party doing the reporting.
A most accurate interpretation when a consulting company implements software and then issues press releases on it is that the consulting company is telling the market, “this is the software we want to implement.” And that we are ready to implement it, so please call us for implementation services.