How SAP Consultancies Keep SaaS Cloud Innovation Out of Their Clients

Executive Summary

  • Consulting companies know what following and applying cloud would do to their business models.
  • They fight changes towards the cloud by disguising simplistic platitudes that are false as advice.

Introduction to Blocking Innovation

In the article the Fallacy of the Benefits of an Integrated Suite.

We covered how consulting companies push their clients away from innovative software if the software is not from a major branded vendor that they have resources ready to bill.

“Consulting companies like to create “uni-crop” software environments which allow them to have large numbers of consultants in a relatively smaller number of applications. Consulting companies overstate their software coverage and resource specialization to their clients on a routine basis. They will often hire independent consultants off of the market (as the client could have done) and then present the independent consultant as if they are a full-time employee, and that represent furthermore, the consulting company was somehow responsible for developing their skills. The consulting firms demand a significant margin on the resources even if they just met the resource a week ago.”

Disguising Simplistic Platitudes that are False as Advice

The largest entities in the space state things and they become the accepted truth, but being big means (appears to mean at the very least) that you can get away without having to provide evidence. You can merely assert. And assert in the face of all the contradictory evidence.

I have been on so many projects where none of these assertions are questioned. The assertions come at decision makers at high speed.

  1. It is much like “ABC because of an unproven assertion.
  2. XYZ because of an unproven assertion.”

The point is not to have your assertions questioned so you can move the customer down the rat maze that is in the desired routing.

Companies like Accenture and Deloitte perform no research and wouldn’t know what to do with it if they did because don’t make their decisions by what is true. They make their decisions based on what they find profit maximizing, and then craft the simplistic platitude to be used by backward engineering from the outcomes that are profit maximizing to them. And these are the companies we have advising other businesses on enterprise decision making.

Keeping Innovation and Threats Out

Additionally, a critical function of major consulting companies is to keep innovation and better applications out of their clients. Their continual quest is to keep smaller point solution providers out of “their” accounts. A small vendor or non-ERP suite vendor may produce a fantastic value proposition and fit with requirements, but the entire time of the software selection which the consulting company is “advising” the client, the major consulting company is telling their client,

“but the vendor is not one of the major brands and “it won’t be integrated like a single branded application.”

The translation is (gee, we won’t be able to staff that project, so let’s block that vendor from getting into our account!)

Beyond the loss of the specific application consulting business, non-major branded vendors pose an existential threat to the consulting company’s ability to extract from the account. What if the vendor implements successfully and makes our high TCO and low utilized applications implemented by the consulting company look bad!

It could lead to a realization for their client, and they could lose control of our low value-add revenue stream.

Fighting Changes Towards Innovation and SaaS

SaaS and cloud advantages existed for at least 15 years at this point, but true SaaS applications are still not that common. Vendors like SAP have cloudwashed their solutions — so it seems like there is more cloud than there is. Certainly, AWS has seen great growth. But SaaS was supposed to be the way to break the stranglehold of the on-premises suite vendors and their partners (the major consulting companies). This is taking a very long time to happen.

To make it work, they have to be careful never to quantify TCO or project success. The lack of quantification pushes the advantage to the highest cost and least efficient providers.

So here is the big challenge. Bringing this message across in a way that is tolerable to those people that have only ever been exposed to the evidence-free assumptions of the biggest vendors and of the consulting companies.

Can Integration Vendors Speak Up?

One question is why integration/middleware vendors like Informatica do not provide this storyline that ERP and suite thinking and being overly afraid of integration leads to worse outcomes?

I would think they would want to highlight these points. However, they may have to be concerned with offending the major consulting companies that are in accounts they want to get into.

Conclusion

It is increasingly obvious that SAP and the major SAP consulting companies are looking for soft targets and when they find them, they like to keep them in a permanently infantile state. Not only is indirect access ridiculous, but then the assumptions that SAP sets forward for how they intend to have the customer be controlled by indirect access can only work if SAP can control other aspects at the customer beyond the license purchase.

Financial Disclosure

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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References

Enterprise Software Risk Book

Software RiskRethinking 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