- The advice driven by SAP consulting firms is nearly entirely based on financial profit incentives.
- Because of this SAP customers get terrible advice. We cover how to protect yourself.
I am going to talk about something that most companies that choosing and implement SAP have a hard time doing, something that few decision makers of SAP implementations get to access….what is this great quantity?
I am speaking of getting unbiased advice. The subject of bias has been a long-term interest of mine, and it probably started off with the study of forecasting, where bias is a huge topic of interest, and after reading many of the studies on the bias, it turns out to be a topic with so many fingers that connect into so many areas.
Sales Forecast Bias
In this article that I wrote several months ago titled A Frank Analysis of Sales Forecast Bias, I discuss the relatively uncovered and the intractable problem that belies sales forecast, and that is intentionally biased sales forecasts.
The word bias is often misused. I have seen it used when one supports an application that they like. If another person wants to undermine the first person’s support for an application they might say that the first person is biased.
What I find most interesting is how the most provable bias, which is financial bias is most often swept under the rug. The single most important factor that promotes intentional sales forecast bias is what is known as institutional incentives. Let’s take the example of SAP as I know them best. The biased advice comes to SAP customers from some directions, not only from SAP. Obviously, SAP is not a source of unbiased information about SAP (they certainly know a lot about SAP, but their bias is 100%). But financially biased information comes from many places regarding SAP. Other companies that often pose as unbiased have an enormous financial bias for SAP.
And this bias is reinforced with how SAP treats customers about its partners — as discussed in the book SAP Nation 2.0 by Vinnie Mirchandani.
“SAP has a tendency to write code, and then hand it over to partners. It fails to think enough about customer deployment issues. Worse it lets customer fend for themselves in dealing with its partners. Partner interests, it would appear, trump those of its customers. The sum total of partners’ inefficiencies explains much of the excess of the SAP economy.”
In this article, I focus on the consulting partner/consulting companies. The same factor of incentives underlies the biased advice that most SAP customers receive from consulting partners.
Evaluating the Consulting Partners
There are SAP consulting partners of all sizes, but the vast majority of work is performed by the large SAP consulting companies, I have based most of my analysis in this article on these large entities.
Now I recently had a commenter on my article where I laid out how I do things the opposite from the large consulting companies that taught me. This commenter did not like the article as he worked for one of these enterprises. His argument that by stating that large consulting companies provide incorrect advice on SAP I was, in essence, writing off what hundreds of thousands of consultants, many of them well-meaning.
This is an argument that is based around the idea that you cannot generalize large consulting companies provide bad advice because so many people work in them, and many of those people have good intentions. This is an argument that is used to defend many corrupt institutions. It focuses on some points of light rather than analyzing the overwhelming output. I was one of these points of light myself. I wanted to bring objective advice to clients, but on every occasion, I was told to change the advice to what would be profit maximizing for the consulting firm. How can I say this? Deloitte changes you; you don’t change Deloitte. They have the way that they make money and you either get in line with that, or you find another place to work. Luckily for me, I was able to enter the independent contractor market where I have considerably more freedom. In fact, I could not write the articles that I do if I worked for an SAP partner. SAP would complain and then the consulting company would ask me to take down the articles or be fired.
But getting back to this argument brought up by the person defending the large consulting companies. It very conveniently omits where policy is made in these enterprises. The policy is made at the tippy top. The average working consultants don’t have any influence on this policy. They give out promotions, bonuses, retain and fire to a strong degree based upon compliance with the policy. Competence is part of it, but compliance is a critical component of who is promoted. People have done well in life in institutions often emphasize their competence. They don’t much talk about how they had to follow orders, and that they often followed orders that were foolish or unethical. To be effective within a corrupt organization, you at some point must yourself be corrupt.
The argument presented by the commenter provides a pollyannish and essentially non-thinking viewpoint. It is designed to obscure the actual behavior of these consulting firms. This same argument could be used to defend the US Senate, Goldman Sachs, etc..Not ever single member of any institution need be corrupt, just those that set policy. After that, the rest will fall in line with the policy. If we look at the US Senate as an example, no more than roughly five people control the policy of the overall US Senate. This is because these senior members control the major committees and who sits on them. Through this monitoring, they determine how the other 95 vote. Oppose these top 5 Senators, and you will find yourself on no committees and party money, and you will find funding flowing to your competitor in the next election. Now do some Senators go to Washington with good intentions? I would say yes. But do these good intentions amount to anything if the overall institution is so corrupt? I would say no. Any analysis of an organization which starts with pointing out some of the good intentions of its more junior members is destined to be non-predictive.
Lying About Bias
SAP consultancies sell either SAP products or services — however, they have to give the impression that they are not biased. The primary way they do this is by lying about this bias and trying to hide it from clients.
Textbook Case of Lying About Financial Bias
We found a textbook case of this lying in a comment from Mark Chaflen, who (at the time of this writing) works for PwC. Mark Chaflen is a Director at PwC, and notice his comment.
“To be clear PWC does not sell SAP licences and are not tied into SAP to sell products. Therefore there is no quota.”
This is designed to work on people that don’t know much about the industry but it is an incredible lie. Mark’s quota is based upon selling SAP services, not based upon products. But Mark Chaflen is attempting to confuse the topic by saying because he does not sell software, that he and by extension PwC do not have a financial bias. Mark Chaflen, a Director with a significant services quota, is declaring that PwC has no quota. The deception is absolutely breathtaking. One has to stand in awe of a lie that it this large.
The Agreement Between SAP and Consulting Their Partners
Most software companies perform a lot of the implementation work with their own consulting organizations. This has been true since the beginnings of the enterprise software market. However, several decades ago, SAP made a very important decision. They decided to let the large oligopolistic consulting firms take most of the consulting work. This resulted in consulting firms recommending SAP with a very high frequency. Years later Oracle then copied this practice for its ERP application. There are now very large SAP and Oracle practices within most of the major consulting companies, and many of the smaller consulting firms as well.
How it Works
Large consulting firms perform a variety of functions for clients with respect to enterprise software, but two of the major ones are making recommendations on what software to buy and implementing software. The problem is that software selection is a very small portion of the business of the large consulting companies, and most of their money is made is software implementation. Secondly, because companies usually rely upon the same consulting company to implement as they rely upon to provide their expertise in software selection, the consulting companies have a strong incentive to recommend software which maximizes the revenue goals of the consulting company rather than picking the best software for the client’s needs.
When SAP first essentially gave their consulting business to the large consulting firms, they certainly knew that this would create a financial incentive for the consulting companies to recommend SAP. It was not difficult to do, the major consulting firms are highly corrupt and always have been. Most of them began as auditing organizations, which is really a very little amount of work that results in a signature at the bottom of an annual report in return for quite a lot of money.
The biggest problem is the incentives put in front of those that work for consulting companies. First of all, getting to a partnership position in a large consulting firm is quite competitive.
Partners in SAP practices must show the ability to bring in a very substantial amount of money per year in consulting billing. This is a severe pressure, and this quota can only be met by following specific approaches to selling. Partners and directors that cannot maintain their quota will, after a couple of years (and depending upon the economic environment) lose their partnership. But meeting these quotas means a lot of lying. As a partner, you must compete with what are great liars.
So the first thing to understand is that partners in consulting firms are under lots of pressure to keep their billing up.
The Importance of Institutional Design
The design of institutions regarding how they create incentives and disincentives are critical to understanding both individual and institutional behavior.
Advisement or Implementation?
Why this not brought up more often I have not been able to determine, but there is a conflict of interest if the entity that is advising the SAP customer is also in the line of implementation business. This is for obvious reasons that the adviser is in a position to steer the client into directions that may financially benefit the advisor (in this case the consulting company) rather than help the customer. This exact point is explained in the book SAP Nation 2.0.
“There used to be real, objective independent management consultancies that saw an ethical barrier between evaluation/risk management/making recommendations and being (what Rogow calls) the “decay.” Unlike management consultancies, doacies are firms whose primary revenue driver is the large project work of design, implementation or ongoing operations. These doacies masquerade as management consultancies..” – Bruce J. Rogow
This combination of the advisement and “implementation” has been tested thoroughly in the financial services industry and it has lead to a predictable outcome. That is financial advisors who put their clients into financial instruments that pay out the most for the financial advisor. In the US we cannot even get legislation passed that requires advisors to be fiduciaries. That is not to recommend investments that are bad for the customer. That is the ethical level and the lobbying power of the US investment community.
How Does This Compare to the Bias of the Software Vendor?
Now for every software vendor, the bias is clear, they prefer the customer to purchase and implement their application over all others. And there is not much of a question on this topic, and in fact, software vendors do not have a conflict of interest because they are not presenting themselves as unbiased participants.
Bias in Writing
This is not to say that software vendors always present themselves this way of course. And when they offer an opinion or write an article or otherwise present a view, with the perspective that they are simply providing an unbiased opinion, then that migrates into the area where bias should be acknowledged.
People tend to get quite offended when you accuse them of bias. However, we live in a society where people are paid to work for companies and the better job they do in supporting/endorsing their employer, the better they do economically. How could this not lead to substantial bias? So every person who says works for Oracle (or SAP, or Teradata, etc..) thinks that every application they have is superior to every other application in every software category? Really? How curious.
And do these opinions change even the slightest bit when say people move between employers?
Something tells me they do.
Consulting companies, and in particular the largest consulting companies (that have the greatest influence over IT decisions) do in fact present themselves as unbiased advisors when in reality, they have an enormous bias.
Just Eat the Fish?
Now just because an entity has a financial bias does not necessarily mean they act upon it. But more often than not they often do.
Consulting companies make a wide number of statements all pretty much related to how they put their clients first, and they always look out for their client’s interests. You can find them on the company websites, and they can be funny to read. As I have seen so many consulting companies in my time and come in after IBM or Deloitte massively ripped off an account, I can say that these statements are meaningless.
However, these types of comments are also very common in the US financial services industry, and the results of decades of doing the exact opposite of client interests are so well documented at this point that there is not much more that needs to be said on the matter.
In this video, Goldman Sachs created mortgage-backed securities that it knew were close to worthless, and internal emails show the executives called on of the investment products they created “shitty.” However, Goldman increased the profile and the commissions paid on the product they created that promptly lost value right after they sold them. In finance most often the worst investments are given the largest “spiffs” or commissions to salespeople. This motivates the salespeople to “take out the garbage” that is move the shitty investment out the door. Why worry about your customer when a new Lamborghini is on the other side? This same motivation can be seen in applications that SAP sold — perfect examples being SAP CRM, SAP PLM, MDM, NetWeaver (not anything but a marketing construct), ByDesign. An incomplete S/4 HANA application falls into this category as well. All the big consulting companies sold implementations in these areas because the major consulting companies could not care less about the implement ability or quality of applications that they recommend. You have to be “man enough” to sell a complete piece of garbage.
After the financial product had been sold, called Timberland, the value dropped more than 70% in 6 weeks. The mortgages that backed the security were low value, but they paid off a rating agency to give it an excellent rating, and then put their name behind them. It is the textbook definition of fraud, but Obama stated on the Tonight Show that…
“No laws were broken”
Which is curious, but what he meant to say was that no laws were broken, because those breaking the law had so much money, or because those people that broke the law gave so much money to the Democrats (and the Republicans)…which is a different statement entirely.
One of Goldman’s defenses was that the investors that bought these securities had a lot of experience. I think the argument is that their clients should have known better than to trust them.
Goldman Sachs also states that they put their customers first, however, if all of Goldman Sachs’ bias and conflicts of interest were removed they would become a much less successful and business. Bias and corruption are the sources of a large amount of wealth, and in general is the easiest money to be had. Goldman Sachs is not particularly useful. Their primary stock and trade is the type of corruption that would make a Latin American dictator blush. Anyone given Goldman Sachs same monopolistic advantages would have to be a fool not to benefit in a similar manner.
Dealing with Conflicts of Interest
The best way to manage conflicts of interests is to remove them, not to make powerful sounding statements and touch up your website with new stock photography. Heroic statements are cheap band-aids, and they carry no information.
But if you intend to make money from conflicts of interest, then the best approach is to keep the conflict of interest but then either state that it has no impact on your behavior, or that it would never affect the way you do business.
First-Hand Experience: The Unnecessary Transportation Software Implementation Example
I once worked with a consulting company that wanted to sell an expensive transportation application and implementation to their client. I was working on something else on the project, but when I heard of the plan and the business requirements, I pointed out that it made little sense for a company to implement an expensive transportation implementation as the use was for trucks that were simply driving in a daily repeating pattern to the same factories every day (a so-called milk run).
When I told this to the manager at the time, he began rubbing his head and said.
“Shaun, please don’t talk about that with anyone of our clients, as we have a $7 million proposal on the table to sell this transportation project.”
This is one example, I have many of these, that I picked up over the years. I am sure the readers of this article have their stories, although they probably don’t want them published.
Bias and Infrastructure
The major consulting companies in IT make most of their income from software implementation. They have selected the software that they want to implement before they ever set foot on the client’s premises. The big consulting companies will always recommend those applications that they can bill the most hours, which is why they will twist themselves up into pretzels to come up with ridiculous reasons to not support pure SaaS solutions (yes most SaaS applications offered by SAP do not meet the technical definition of SaaS), as I covered in the article How SaaS Changes the Labor Needs in IT. In this article, I pointed out the following on high consulting company advice.
“That is why moving to the cloud completely undermines their business model. They haveno financial incentive to support SaaS, and therefore, in their “opinion” one should move towards SaaS slowly. Now more than perhaps ever listening to the big consulting firms is a huge impediment to progress.”
These decisions related to software by the big consulting firms are entirely predictable and are made at the highest level of the company.
I am often amazed a the riskiness of so many implementations that I see at clients. This risk is driven by several factors; it is certainly not entirely on the major consulting companies as any number of executive decision makers get pumped up by conferences or vendors into implementing the new sexy.
I have often seen SAP implementation partners push their customers into risky implementations that are entirely obvious to me have a low probability of success.
Why? I believe it is the motivation for billing hours. More scope and more functionality/complexity translate into more billing hours. I cover this in the book Rethinking Enterprise Software Risk: Controlling the Main Risk Factors on It Projects. This is an entirely different way of looking at project risk from the traditional view; that does not incorporate concepts of information source quality.
How SAP Allows Partners to Take Advantage of Customers
SAP does little to protect their customers from their consulting partners. This is covered in the following quotation from the book SAP Nation 2.0.
“SAP has a tendency to write code and then hand it over to its partners. It fails to think enough about customer deployment issues. Worse, it lets customers fend for themselves in dealing with its partners. Many SAP customers have not done well negotiating with or monitoring hardware vendors, hosting firms, telco carriers, offshore application management vendors etc. In fact, it has been suggested that unlike Ford, for SAP, “Partners are Job #1.” Partner interests, it would appear, trump those of its customers. The sum total of partners’ inefficiencies explains much of the excess in the SAP economy.”
Bad Software Selection?
The large consulting companies will never open a competitive selection unless the customer demands it, and they will steer it every step of the way. Buying companies need to consider the large consulting companies cannot keep on staff consultants for every — or even the best software vendors. Therefore, anytime a customer selects a non-supported application, the consulting companies lose revenues. This enormous financial bias is simply incontestable.
This is why I continually run into clients that have been misinformed about the success of SAP at other clients with specific functionality. The large consulting firms do not publish their experiences with badly designed functionality and do not share them with clients. I have sat by while I listen to consultants from the big firms lauded extremely weak capabilities such as the Planning Book, and recommend functionality that has never been implemented to unsuspecting clients. IBM once recommended the use of something called the SNP deployment optimizer for a task for which IBM could not find a single operational client. They did this because they could bill more consulting hours than if they had used a 3rd party solution. The major consulting firms are completely blind to the best solution for their clients because every advisement decision is controlled by whether it maximizes revenue for the consulting firm. These and many other experiences are clear evidence that the internal institutional structure of these firms is so corrupt, that few of their statements can be trusted to be true.
Success Rate of Consulting Company Lead IT Projects?
The success rate of projects managed by large consulting firms is difficult to measure, but it is low. It depends upon the area. Large IT projects are generally estimated to meet expectations around 30% of the time and to actually pay back the investment a little less than 50% of the time. However, one major reason the success rate is not much higher is that the large firms make the projects so expensive. Overall the project success figures are a bit dodgy because they rely on the client firms to self-report the success rate. Another issue is there are remarkably few lawsuits in this area. I work with clients that know they were mistreated and ripped off by a major consulting firm, yet they do not litigate. One reason may be that they do not want to draw attention to themselves for having mismanaged a consulting firm. However, litigation is an important mechanism for changing the business model of these consulting companies.
How Companies Can Protect Themselves from IT Consulting Firms
As we discuss in this post. It is important not to give sign off the consulting companies if the solution is not working. If it is clear that the solution is non-functional and after the consulting firm has been given opportunities to fix it and if they can’t, this is the time to remove all of the firm’s consultants from the building and to hand the issue over to the company legal department. Suing professional service firms is most likely not the expertise of an in-house legal department, but they can cover all the bases in terms of preparation and then select an outside firm that handles this type of work.
Is There Really Independent Advice in SAP?
Large consulting companies pretend they are independent while being controlled by SAP.
On a recent article about G2Crowd, a commenter stated the following…
“With software solutions, the best approach is of course to take independent professional advice . . .”
We hear this comment quite a bit. That companies should look for independent advice in SAP. But the question is where is this advice found?
I recently wrote this comment to a person at a company reaching out for advice where both he thought, and I thought that SAP was providing him with false information.
“If I were employed by Deloitte, I would be told to not contradict SAP, and to tell you that it is all true. If I varied from that, it would show up on my review. The media companies that cover SAP only speak in favorable terms around whatever SAP says to keep the advertising and paid placement revenue flowing. It is incredible how every public and private source is necessarily required to tow the line.”
This is my continual point that there are not independent sources of information on SAP. This is verifiable in public, but I am told…
“That is not true in private Shaun, in private great independent advice is given.”
Often this is followed by..
“my firm….XYZ is providing that advice.”
Which of course is not verifiable. But when I run into or debate other SAP consultants, it seems like they are repeating the same talking points from SAP. I am periodically sent emails with advice from consulting companies to SAP customers where clear falsehoods permeate the email. Often the consultant will declare they are just “repeating what SAP is telling them.”
Zero to No Independent Advice
Therefore, in SAP, there really is very close to no independent advice, and there is close to no business model for it to develop. The companies that make the most money from SAP, companies like Deloitte and Accenture are lying factories for SAP, acting as extended arms of SAP. And when the correlation between repeating what SAP says and consulting income is so high, and it is incredibly difficult to find consulting companies that follow the opposite approach, where does that say the real business model is in SAP consulting?
Becoming a Controlled Certified SAP Partner
SAP remotely controls consulting companies that work in SAP. This is declared in the most controlling language possible in the partnership agreement.
Companies that consult in SAP become “certified partners.” In this way, they agree to have their media output controlled by SAP, and in practical terms, they agree to place the interests of SAP above the interests of clients. I have been in SAP for decades, and I can’t recall coming across any independent advice. In my field, everything is driven by quota attainment. And the people that can tell the biggest lies, most convincingly win the quota competition. It’s a competition for narcissistic sociopaths for who can tell the biggest whopper. I once made the mistake of asking a salesperson the following.
“How are we going to implement S/4HANA if we don’t have anyone with the experience who has implemented S/4HANA, and if these resources are so difficult to find in the market?”
And I was told the following:
“Shaun, we don’t have to boil the ocean right now.”
The idea is that you tell the account what they want to hear, and then you worry about the inability to meet expectations later. This is particularly self-serving for sales, because they not only not have to worry about coming up with a solution before the sale (and in fact there really was no good solution – this was a hard resource constraint) as they aren’t involved in staffing or the implementation, they don’t have to worry about “boiling the ocean” after the fact.
At many SAP consulting companies boiling the ocean is considered planning to be able to implement what is being sold.
In most cases when I see presentations on SAP, I am in the back of the room thinking “wow what a tremendous lie.” SAP consulting companies will frequently tell customers things that have been disproven seven years ago.
Does Independent Consulting Advice Exist Outside of SAP?
There might be independent advice available outside of SAP. But it would have to be evaluated. Independent should never be assumed because it is stated. Independence must be proven as just about everyone declares their independence. In the same way that the cheesiest salespeople I have ever met in my life declare that they are “trusted advisors.” Really, how many salespeople out there think they are trusted advisors when they aren’t? Furthermore, how can you be a trusted advisor if your quota pushes you in the direction to sell the most possible software or services to a customer?
Trusted advisors are not trusted advisors because they claim to be. Someone must actually trust them for them to earn this accolade.
The term, “trusted advisor” gets our Golden Pinocchio Award.
Come to find out, the term trusted advisor was used apparently more in the 2011-2013 time frame for salespeople to intimate to their management on sales calls that their relationship with their customer was better than it actually was.
SAP Platinum Consultants and Objectivity on Difficult Issues with SAP
An SAP Platinum Consultant is a consultant who works for SAP who is very experienced in their module areas and has passed some type of internal certification. Platinum Consultants specialize in helping clients out in situations where they have had repeated problems getting an area of SAP working. Often they are seen as a magic bullet, and in a meeting, you may hear someone say
“What we really need is an SAP Platinum Consultant to come in here and fix it.”
On several occasions I have followed Platinum Consultants (I am an independent SAP consultant myself), to attempt to fix something that is broken and to provide a third-party viewpoint on the situation.
What Problem with the “Platinum” Designation and Objectivity
What I have observed repeatedly on projects where there is a serious problem in the module, is that in most cases SAP’s functionality is either not able to be brought back to life because it either does not work, does not work the way the client wants or simply is not very good. I have found that the best alternative is to find a third-party application, which can usually easily do what SAP cannot and to recommend to the client that they integrate the best of breed solution to SAP. Of course, this is not a recommendation that an SAP Platinum Consultant can make. The job of a Platinum Consultant is not an easy one.
You need to solve the toughest problems, without exposing the weaknesses or shortcomings of the software and you need to tow the company line. As SAP product management will not admit to the fact that a variety of their functionality does not work, and the client’s requirement is not going away, often the Platinum Consultant will resort to making something up in order to serve as an excuse for why the SAP functionality is not working as expected. One trick is to say that SAP is built on best practices, and the requirement is not a best practice and so SAP can’t do it. This overall assertion with respect to best practices is false and is described in this post.
One of the most amusing explanations I heard for why SAP DP was not meeting the needs of the client was that the client’s volume was simply too high. This was a company with roughly 70,000 SKU-Ls (location combinations). That statement really took me back and can show how desperate the situation must have been for the Platinum Consultant to have made up such a ridiculous excuse. However, that is not the first ridiculous excuse that I have heard coming from SAP when their software cannot make the grade. Another popular excuse, which actually is used by many vendors, is that the issue will be solved in the next release. Clients convince themselves of this one as well, they tend to superimpose their desires onto the next release. I often have to tell them that nothing in the release notes covers the desired functionality, and they are always disappointed.
The Importance of the Willingness to Make Up Stories
A Platinum Consultant who is unwilling to cover up problems that cannot be resolved in SAP will not be either a Platinum Consultant or in fact a consultant employed by SAP for long. I know something about this as I was often pressured to lie by salespeople when I worked for i2 Technologies. I was once asked to have my project team try to custom code a pre-existing solution that the sales team had forgotten to sell the client. Rather than go back and tell the client they made a mistake, and include the right software, they wanted the consulting team to perform acts of heroism rather than go back and admit a mistake had been made. This another experiences of pressure that has been applied to go along with a false story gives me insight into the pressures that platinum consultants are under.
Why SAP Consultants Have to Errr….Stretch the Truth More Than Consultants from Other Vendors
SAP is a very ambition vendor. They essentially want to take over all enterprise software. However, and unsurprisingly, they lack the resources to do so. They steal other software company’s intellectual property, (usually by developing partnerships with companies that lead the partnering best of breed application to think they will gain access to SAP customers). This is what the xApp program was primarily about (which you can read about here).
This over-ambition has left large numbers of the area of functionality not working, even though they are described in the release notes. I have brought this up in other posts, which some SAP consultants object to because they don’t like criticism of SAP’s product regardless of its accuracy. However, what many other SAP consultants do not know is that publishing functionality that is known to be non-functional is actually illegal. This is because release notes are supposed to be the published record of what the software does.
Secondly, SAP’s development strategy is to put as much functionality as possible into the module and this creates a large amount of work, too much to do at a high-quality level. And SAP’s developer productivity and SAP’s investment in development is not up to the task. This means that SAP is a bit like DNA, which is why I never vouch for any functionality in SAP unless I have personally tested it.
Functionality almost never comes out properly during the first release and can be broken for several releases, and some functionality just never gets fixed. The existence of a statement about a capability of SAP in any PDF or in the actual release notes means nothing. I have never run across another vendor that has so much of its stated functionality non-operational.
Advice From Whom?
One of the major problems of the enterprise software market is who companies listen to for advice. One of the best examples of this is that the major consulting companies see themselves as advisors to clients, and in some cases, the clients themselves see the major consulting companies in this light. However, the major consulting companies recommend software not based upon its inherent qualities or the fit with the client requirement, but by which application allows them to bill the most hours from the client (which is why they like SAP so much). Again, due to their internal review and compensation system, any Partner who did not follow this approach would not be a partner for long. In fact, the major consulting companies have practices built around specific high yielding applications, so recommending alternatives is simply not an option. The fact is, no major consulting company’s advice is worth much of anything, because they are following a model of revenue maximization, and no advisement business can provide good advice while following a revenue maximization model.
The issue with bringing in an SAP Platinum Consultant to solve your issue is that they are highly biased by the fact that they are controlled by SAP, and can only see and recommend SAP solutions. However, if SAP has failed to meet expectations in a specific area, most likely SAP simply lacks the capacity to perform the desired function, and an SAP Platinum Consultant is not going to change this. This is one of the problems that companies run into that “try to get more out of SAP” which is described in the post. The degree to which the SAP consultant is hamstrung in providing accurate advice as to not only SAP’s deficiencies, but also the deficiencies of its consulting partners, comes out in court documents, in this case, the highly interesting Marin County vs. Deloitte and SAP case.
The final set of allegations that Marin (County) relies as predicate acts of wire fraud are communications made in Spring 2006, in which SAP allegedly instructed its own employee – Christopher Metz – to refrain from advising the County on deficiencies in Deloitte’s work. AC ¶¶ 80-96. SAP argues that it cannot be liable for its alleged “silencing” of Metz because Marin has failed to allege that SAP had any duty to disclose to Marin its views about the Project’s implementation. Marin argues that where parties have an ongoing transactional relationship, and one party disseminates a half-truth, a duty to disclose information necessary to prevent the prior statement from being misleading arises.
(More on this case can be read at the post.)
Therefore, one should expect SAP Platinum consultants to cover for any poor work performed by the major consulting companies (firm they have the strongest partnerships with. Essentially the SAP Platinum consultant has very little freedom to express the actual issues that exist with an installation.
Dealing with Reality
Executives who make the decision to purchase SAP are clearly reticent to admit that SAP can’t get the job done in one area. People generally enjoy delusion over reality which is why when polls are conducted a large percentage of the population believes they have their own personal angel that watches out for them. However, I have literally a list of functionality of things in supply chain management that should probably never be attempted in SAP, and I also have a list of vendors that do all of the things that SAP cannot do, and can do these things pretty easily. Fantasizing about some super SAP Consultant or that the next release of the software will fix all the problems is not a functional way to provide the business with the functionality it desires. Taking action on addressing missing functionality of SAP with best of breed solutions is.
The major consulting companies in IT make most of their money from software implementation. They have selected the software that they want to implement before they ever set foot on the client’s premises. These decisions are made at the highest level of the company, and this drives everything from hiring to the information that is provided to clients. This is a major reason why the value from IT purchases is not higher.
For better decisions to be made in IT and for enterprise software efficiency to improve, there must be more sources of unbiased information. Any information source cannot make income or take advertising or be focused on staffing consultants to work on projects. Try coming up with an advising entity that does none of these things. It is not an easy task.
In my time in enterprise software, I have seen little energy put forward by enterprise software buyers to find independent and financially unbiased sources of information. It should be understood that independent and financially unbiased sources don’t have the budgets of the biased sources. So companies that are interested in this type of advice need to do more work to find them. If the entity you are speaking to has a big booth at a conference it is most likely not an independent entity.
Biased information is like finding advertising; it is omnipresent. Unbiased information, on the other hand, is scarce and takes an effort to find, and the biased providers of information hope that you never find it.
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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