Getting More Value from SCM Implementations

Companies burn through enormous mistakes by listening to bad advice given by both SAP and consulting companies like IBM, Accenture and Deloitte.

Lesson in Extreme Waste

The amount of waste in presently in supply chain IT projects is overwhelming. The major reason for this is that the vast majority of companies are following the advice of SAP and the big consulting companies. Many executives feel that that they are safe if they choose a big name consulting company because they will “guarantee” the project, and they have done it before. We urge clients to question those assumptions:

• The Project Guarantee: This word is thrown around a lot by big consulting companies, but what does it actually mean? Are big consulting companies offering to give  their client’s money back? Certainly not. Sometimes there is the implication that the company can sue IBM or Deloitte to get satisfaction. However, lawsuits are not a good use of time or resources, and the senior manager and above resources from the big consulting companies have been trained how to provide a document trail which shows that objectives were met. Finally, IBM and Deloitte’s attorneys specialize in defending IT lawsuits, so while its possible to beat them in court, its not likely or very common. The best way to get value from projects is to mange them well, not to rely on some third party to indemnify your project.
• They Have Done it Before: A lot of people done SCM implementations before. Check LinkedIn for all the qualified people out there. Secondly, if your consulting company has a business model that is intent on extracting as much money from clients as possible, the fact that they have done it before does not necessarily make their advice trustworthy.

The problem with the big consulting companies is twofold. First you pay top dollar, second the advice they give is completely self serving. Finally, they are difficult to control. When they come in the will attempt to create relationships very high in the organization and then co-opt the mid level managers into supporting their agenda and buying into their timelines. Once in, they make it politically difficult to oppose them.

Oversimplification

Many companies have come to believe that if they put all their eggs in the SAP basket that things will turn out well. There is no evidence this is true, and quite a lot of evidence to the contrary. For instance, SAP SCM has some things it does well and many areas it simply can’t address. You cannot get objective advice from the big consulting companies on where it should be used and where a third party is better because they simply want to sell you SAP resources. I have had to fight several of the large consulting companies to bring in software that was appropriate for the client because billing always takes a higher precedence over what is the right solution for the client.