Why The Big Consulting Firm Implementations Fail So Often

Lack of Incentives

Big consulting companies are built around a highly money based model that is designed to enrich the partners in the consulting firm rather than bring the client live. For instance, while all the consulting firms have measurement of serving the client in their annual reviews, these are implicit measures. The explicitly measure, the one that will cause a partner to keep, maintain or lose their position is the amount of consulting dollars sold. A second explicit measure is margin, this is the difference between the salary given to the consultants under the partner and the amount charged to the client. The margin measure gives the partner the incentive to use less experienced resources in order to increase their margin.

The Result

The outcome of the internal incentives of the big consulting companies is that successful partners tend to staff relatively inexperienced consultants for long durations (lengthening the project duration) with little emphasis on making projects successful and a major emphasis on getting a high number of billing hours and billing margin.

How I Can Help

We have worked on so many SAP and supply chain projects at this point that the majority of the big consulting company tricks are obvious to us. We can work both from the side of being a functional consultant, while offering a checking or auditing capability. This can alert you when the consulting company is veering off of a course which will not drive towards an effective go-live, and towards a course that will.

How Using History as A Guide Can Lead to Better Project Strategy

I have always attempted to use my previous project experience to provide guidance on current projects. However, it was not until I researched the history of advanced planning software projects for a book on SAP that I realized how frequently clients make decisions that can easily be demonstrated to violate the principles by which advanced planning projects have met with success in the past. It is not necessary to guess on many of these decisions because history offers a firm guide with multiple examples of both successes and failures following divergent implementation approaches and strategies.

Using history as your guide can greatly improve your odds.

Article

For details, see Shaun Snapp’s article on this key learnings from supply chain implementations at Supply Chain Innovation.