Does Hiring Large SAP Consulting as Work as Political Insurance?

Executive Summary

  • A primary reason for hiring the major SAP consulting firms is for political insurance.
  • This means that if the project does poorly, that the decision makers can say they went with a major brand.

Introduction

Large SAP consulting companies have a long history of ripping off their clients. However, they continue to be used. Why? Well, one hypothesis is that the large consulting companies provide political cover for decision makers. Even though Deloitte or Accenture or WiPro or Cognizant or another SAP consulting firm constantly take advantage of their clients, they are at the very least “major brands.” Looked at this way, they can be seen as political insurance.

Paying to Get Robbed?

I recall a project where IBM was not getting what it wanted and they declared

“We cannot guarantee the success of the project if XYZ happens.”

I remember thinking, how does IBM guarantee the success of anything? You pay IBM and they support a project. There is no guarantee.

The risk is with the client. All that IBM does is bill the customer, there is no “guarantee” provided by any consulting firm.

How SAP Consulting Firms Increase Project Risk

These firms greatly increase the risk of failure of projects. Here is why:

  • The Consistently Poor Quality of Product Information Emanating from SAP Consulting Firms: The information they provide is of such self-serving and inaccurate quality. If you cannot find out what is true from the SI, then you are destined to implement incorrectly.
  • The Inability to Contradict SAP: The SAP consulting firms compete with each other to gain the approval of SAP. They will agree with SAP on anything they say, creating a fake impression of an independent third party.
  • Intense Hierarchy: No one but the top people on a project have any ability to determine what information will be released to a customer. All of the technical resources are entirely subordinate to the senior members, who are in turn subordinate to the most senior members within the consulting firms where policy is made.

Therefore the waste is worse than just their billing rate, they push companies to implement the worst systems (the most immature, worst fit for the requirements — the ones that the consulting firm specializes in billing for) and often in the worst way for their clients.

It is similar to paying robbers to come into your house to rob you. Typically you can just get robbed for free.

Given Their Track Record, Why Do the Major SAP Consulting Firms Continue to Sell Work?

As observed by Ahmed Azmi.

“Customers really don’t have better options unless they’re willing and capable of doing the work themselves. Many don’t have that ability in house. It’s much easier to outsource everything to an SI and take what they can get. If the system under-delivers, they must downplay the problems because they are part of the project. Customers really don’t have better options unless they’re willing and capable of doing the work themselves. Many don’t have that ability in house. It’s much easier to outsource everything to an SI and take what they can get. If the system under-delivers, they must downplay the problems because they are part of the project.”

Where Does Competition Occur in SAP Consulting?

The description laid out in the previous comment essentially proposes the SAP consulting firms as being selected primarily for appearances (insurance, lack of personal responsibility in selecting a “brand” etc..).

This means that the various consulting firms “compete” but only within the context of agreeing with whatever SAP says. Therefore customers can choose from what amounts to the same rigged advice from any of the companies.

  • The consulting firms do not complete on which can implement in fact, because the implementation history of each is unknown.
  • SAP recommends companies that follow SAP’s directives, always placing client interests at the bottom of the trough.

Those that do what SAP says, get more business. In this sense the more you lie for SAP, the more business you get. In fact, in our research into the media output of SAP consulting firms, we find almost no variance between the information published by any of them. This would not be such a terrible thing, but the issue is that so much of the published information is false. That means that a wide variety of consulting entities are publishing the same false information……because it comes centrally from SAP.

Therefore, the competition is greatly based upon who can lie better for SAP.

Conclusion

The competition between the SAP consulting firms is within a very narrow context, and mostly not what is good for customers. If one chooses Deloitte or Accenture there is little practical difference in the quality of information that the customer will receive.

The political insurance that decision makers obtain from selecting one of the major SAP consulting firms comes at an enormous cost, and not only greatly increases the costs of implementation, but also increases the risk of failure. Therefore, while perhaps functional for the decision maker, it is dysfunctional for the companies that end up paying the consulting bill.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

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References

Enterprise Software Risk Book

Software RiskRethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

Rethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

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