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Tips for Selecting the Right Implementation Partner

by Q&A with Susan Tan | insiderPROFILES

January 1, 2011

How can you find the best-fit service provider for your SAP ERP implementation? In this Q&A with Susan Tan, research director for the Consulting and Systems Integration services team at Gartner, Tan reveals the most important considerations when choosing your implementation partner — including size, track record, cost, and cultural fit — as well as how to cultivate and maintain a successful partner relationship.

A successful SAP ERP implementation is determined by a number of factors, and selecting the right implementation service provider is high on the list. But choosing the best-fit partner requires more than simply evaluating what services each candidate offers. 

According to a recent report from market researcher Gartner, the number of ERP projects increased in 2010 as companies in a variety of industries and geographies found budget for IT projects that had been delayed for a year or two. For implementation service providers, Gartner says, this “brought about new challenges, such as difficulty staffing projects, delays in finding professionals with the right skill sets (especially for newer SAP products) and attrition.” So clearly, a provider’s “workload vs. resources” ratio is an extremely important consideration when selecting a partner.

To find out what other factors are most important when choosing a service partner, insiderPROFILES recently talked with Susan Tan, research director for the Consulting and Systems Integration services team at Gartner and co-author of the November 2010 report Magic Quadrant for SAP ERP Implementation Service Providers, North America, which analyzed 21 different SAP ERP implementation service providers.

Q: When a company selects an implementation service partner, how should its own size relate to the size of the partner?

The size of the project matters more than the size of the company. If you are implementing a large global project, you’ll want a service partner that has the bench strength to perform multiple streams of work, and one that has the geographic coverage in the countries to which you are deploying.

The other consideration is the strategic intent of your initiative. If you are using SAP software to transform the way your company works — changing processes, business models, and so on — as opposed to merely implementing a technology project, you should look to a service partner with the breadth of capabilities to help you drive this transformation. A big service partner is more likely to have the breadth and depth of capabilities to help with business process changes, program management, risk management, and change management, in addition to implementing the software.

Typically, a smaller company should look to service partners that have a small and midsize business (SMB) focus. Although these service partners tend to be smaller, some fairly big names focus on the SMB market in the SAP space. On the other hand, many smaller firms provide SAP staff augmentation services for large companies and may not necessarily be a good fit for SMBs in need of an implementation partner that understands and can provide the full range of activities to help a small company implement and adopt a new SAP system.

A good implementation provider for SMBs will typically bring into the engagement a preconfigured, certified SAP solution with SAP best practices as well as the implementation partner’s past experience, which will cut implementation time. Again, implementing the software is only part of the battle; the other half is helping to ensure the company is ready and able to fully adopt it.

Q: What other factors are most important in selecting an implementation partner?

Experience with, and a track record for, similar implementations. Ideally, a partner will have familiarity with implementations of a similar size and scope, but also experience with the modules to be implemented. While most implementation partners are very familiar with the core modules, some have not yet implemented many newer modules or industry-specific SAP modules. Make sure the implementation partner has people on the team who have experience implementing those modules or, at the very least, have been trained on them. If the implementation partner doesn’t have people with experience on a critical module, an SAP customer should look to include experienced SAP Consulting professionals on the implementation team.

Fit for purpose. It is important to consider the reason for the implementation. If an upgrade is a purely technical one, look for a partner that has the tools and methodology to implement quickly, at a low cost, and with minimal disruption to the business. On the other hand, for an enterprise-wide instance consolidation and process harmonization initiative, look for an implementation partner with cross-functional teams that can bring business process best practices, rigorous program management discipline, organizational change management capabilities, and SAP software expertise.

Making benefits realization a central theme of the SAP initiative. Benefits realization refers to the business value that a company hopes to achieve through an implementation. Identifying the benefits and metrics to measure up front and then tracking them over the course of a project — as well as post-implementation — allows a company to gauge the project’s success and make adjustments if necessary. The best implementation partner puts part of its fees at risk, tying them to the achievement of these benefits.

Vertical expertise. Look for an implementation partner with professionals who understand the nuances of your industry and its processes, and who can craft a solution for that industry or extend the SAP solution if gaps exist.

Total cost of implementation. While companies tend to look at per-hour labor rates, the key is really the total cost of the implementation. The implementation providers that have invested in tools, prebuilt assets, and accelerators may have the same or higher per-hour rates but can provide a solution at a lower overall cost.

Cultural fit. An implementation is, after all, a people business. And an SAP implementation could take years, with consultants and internal people working side by side for extended periods of time. The fit between them makes for a successful team. In order for consultants and internal people to work as one team, they need to share the same values and work culture. A highly collaborative implementation partner may not work well within a hierarchical client culture and vice versa. Chemistry between the team members also plays a part in customer experience and should be taken into account.

Q: What can the internal IT organization do to help ensure a successful relationship with the partner?

For starters, the IT leadership should make sure key members of the project team are locked in up front with the selection of the partner. And at least some of the key members of the blueprint team need to stay for the implementation to ensure continuity and knowledge transfer to the partner.

Some implementation service providers are using innovative tools and accelerators to reduce implementation time. One interesting example is the use of visualization tools to ensure that what is built is what business users are looking for, lowering the need for rework and, hence, costs.

Also, it’s important that the internal team does not treat the SAP implementation like an IT outsourcing project and leave it solely in the hands of the partner. The project needs to be business-led, and the business needs to remain involved at all stages.

As in any relationship, it helps to be open and honest with your implementation service provider, set realistic expectations, and give candid and timely feedback. Work openly together to solve the inevitable problems that will arise, without blame. And remember to celebrate successes along the way.

Q: What were some of the more innovative trends among implementation service providers you came across in researching the Magic Quadrant report?

There is a lot of innovation among the SAP implementation partners to make the SAP deployments more affordable and bridge gaps in the SAP software. For example, many implementation service providers offer alternative pricing models that allow SAP customers to pay for their implementation costs through monthly payments, spread across several years. Also, many partners now can deploy SAP applications in a cloud environment to reduce infrastructure costs and pay only for resources used.

Some providers have developed complementary solutions that cover the white space in SAP functionality. If SAP customers select a partner that can help fill in their gaps, they can significantly lower their costs because they won’t have to custom-build products or deal with integration headaches if they use another best-of-breed solution.

Some implementation service providers are using innovative tools and accelerators to reduce implementation time. One interesting example is the use of visualization tools to ensure that what is built is what business users are looking for, lowering the need for rework and, hence, costs.

Q: What’s the long-term outlook for the SAP implementation service provider market?

Barring any serious economic jolts, this market is expected to maintain continued buoyancy. Even in the face of rapid software-as-a-service adoption, on-premise systems will dominate the SAP install base for years to come. As such, SAP customers will continually seek to derive more value from their systems by migrating more legacy systems onto SAP systems, consolidating existing systems, and adding new features such as mobility and analytics.

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