Who Wants Honest SAP Advisement and Software Selection Business?

Last Updated on July 2, 2021 by Shaun Snapp

Executive Summary

  • Plenty of firms perform SAP advisement, but the advice ends up being rigged due to financial incentives.
  • Large companies use advisement to provide advice that leads to other businesses.

Video Introduction: Who Wants Honest SAP Advisement and Software Selection Business?

Text Introduction (Skip if You Watched the Video)

Many consulting companies provide advice and perform anything from software selection assistance to supporting various analytical initiatives. However, none of the larger and very few small consulting firms see themselves in the decision support business. Instead, they see themselves only in the business of maximizing their profits with their advice. This nearly always means bad recommendations for their clients. Consulting firms do all of this while pretending they are independent when they have a series of corrupt partnerships with software vendors. You will learn about the financial bias of consulting firms and how the enterprise software system works and how difficult it is to promote any change.

Our References for This Article

If you want to see our references for this article and other related Brightwork articles, see this link.

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 Financial Incentives at SAP Consulting Firms

To attain and retain a leadership position at an SAP consulting firm, one must bring in roughly $2 million in revenues per year. There is no way to attain this quote by performing smaller projects, of which software selection and analytical initiatives would be examples. To achieve this yearly quota, one needs to sell implementations. Decision support projects tend to smaller, shorter, and offer less stable consulting revenue. For a company with a significant overhead (offices, support staff, large senior member compensation), smaller projects of this nature are not sustaining.

Secondly, one of the best ways to sell implementations is to position oneself as a “trusted advisor” and then sell out the client’s interests by directing them to implement the possible software. This means acting to promote SAP software, regardless of the fit with the client requirements, the cost, the application’s maturity, and another factor related to things that make the software a good match for a particular client.

The Implication of How Incentives are Structured

This means that SAP consulting companies are unreliable for providing software selection support as they have a massive financial bias. SAP consulting companies will claim major domain expertise as a reason for using them in an advisement capacity. But even the deepest domain expertise cannot overcome financial bias. In truth, the decisions are normally filtered through the senior management of the consulting company, with little freedom given to the more junior members of the organization who possess most of the domain expertise.

An SAP consulting company may take the advisement or selection project, but only as a means to gain more future work. When they report back to their other senior members, success is measured by how much further business is obtained (at KPMG, the catchphrase is “penetrate and radiate”). The concept of providing objective analysis and then rolling off the project is only measured as a failure.

Having discussed this topic with several experienced consultants, we were told that recommending solutions based on financial bias is “the way that it is.” Further, it is good because the benefits flow to the consulting firm with the strongest relationship. The trick is not to tell the client that you are doing it. And this is considered perfectly normal in the SAP consulting field.

Introduction

From an independence perspective, it concerns how much “copy and pastes” there is from consulting companies. This quotation below was off of the Infosys website. This is substantially directly lifted from SAP, and it shows the degree of copy and pastes that occur and the way that was messaging is coordinated.

“At SAPPHIRE NOW and the ASUG Annual Conference, you will have the opportunity to explore the full array of Infosys’ winning solutions based on SAP S/4HANA, SAP Ariba, SAP Fieldglass, SAP hybris, SAP SuccessFactors, Concur, and Fiori, that have given our clients the competitive edge. Attend the joint sessions with our clients to understand how to jumpstart your own digital journey.” – Infosys Website

This means that when a customer talks to Infosys, Deloitte, or any other consulting company, they are not offering their views but instead presenting SAP’s views.

Conclusion

There is no feasible way for senior members of SAP consulting firms to attain or maintain their positions without putting their own financial incentives ahead of their clients.

None of the major SAP consulting firms and exceedingly few of the smaller SAP consulting firms has a model that allows for anything but grabbing implementation business by any means possible. And one of the best means is to pretend to provide decision support, when in fact they are just redirecting the customer to use whatever software is most beneficial for the advising firm. This is why any type of advisement can never be profit-maximizing based. What is notable curious is that all of this is barely mentioned in IT media or in other commentaries. The advisors that have pointed this out, often soft-peddle the implications, for fear of losing out on partnership opportunities or “burning their bridges” with the IT major consulting firms.