SuccessFactors and SAP HCM consulting: How the West was Won!
This past week I attended the SAPinsider HR 2014 conference in Orlando, Florida. Previously, I had read Luke Marson‘s blog “SuccessFactors and SAP HCM consulting: The Wild West of 2013” (see what I did with my blog title there? haha) as well as a similar series from Jarret Pazahanick, but I had no idea really how “bad” it was out there. Stepping out into the exhibit hall floor was like taking a trip to “West World” (old sci-fi movie reference for the win! haha)…..actually, it was more like taking a trip to “SAP Consulting World” circa 1997 or so (pre-Y2K). As the saying goes “everything old is new again!”, and our world in the post-SuccessFactors acquisition is no different.
As I walked up and down the rows of vendors on site, I could not help but notice that about every other one was for a consulting company claiming to be THE expert in SuccessFactors and SAP. But wait….they can’t all be “THE” expert, right?….but the claims did not stop there. Splashed across just about every booth were catchy “fact” blurbs like….”500+ successful projects”….”900+ projects”….”10 years experience”…”15 years experience”…”30 certified consultants”…”50+ certified consultants”…and on and on with the “one-up” claims (it kinda felt like when those guys came out with the “7 minute abs”….then shortly after another group had the “5 minute abs” and were suddenly the kings….till another group put out the “4 minute abs”…and the “5 minute abs” guys were like “oh crap!” haha) Many conference attendees were already battle weary enough from being barraged with the “SuccessFactors now!” message and trying to figure out how/when it could fit in their organization to even begin to form any intelligent thoughts on how and who to pick as a consulting partner to help them implement this new fangled (that’s old west slang…stay with me…haha) “cloud stuff”. Furthermore, keep in mind, these consulting companies were just the ones that set up for the conference!!! There are literally hundreds out there of all sizes and claims. What is a customer to do?!?!?
Now, as I said, for those of us that have been around the consulting world (and more specifically, the SAP world), this is nothing all that new. If we travel back to the pre-Y2K days….around 1996-2000…it was an “interesting” time of just about “anything goes”. This was a time when anyone that could just spell S-A-P would be given a job (seriously!!!!), maybe a book to read, paid a starting salary of around $55-65k and placed on projects as a “SAP Consultant” billing at around $250-300 an hour! If you happened to be one of the few, experienced, independent consultants in the US, a $300+ per hour rate with expenses including a $50-100/day per diem was not that uncommon. That might seem insane by today’s rates but SAP was vastly different then, did require a LOT of work to get working correctly and experience was at a premium! Due to those kind of dollars being thrown around further supported by customers’ fears of Y2K, the market was also rife with sleazy and “fly-by-night” consulting “firms”. Keeping in mind a SAP project at that time often had a lengthy timeline (2-5 years), it was not unheard of for unscrupulous types to jump from project to project working and making money just long enough before they were discovered and asked to leave. At that time, some customers got caught up with these “bad” types simply because they did not know the right questions to ask their prospective consulting partner. But then around 2001/2002, Y2K had passed with barely a whisper and the market took a dive. Customers had become smarter with their money (which they had less of due to the economy) and had learned their lessons from the pre-Y2K days. That was the end of it right? Wrong! A few years later, we had the “outsourcing” boom. Everybody who was anybody was talking “outsourcing”. It was set to be that big solution for companies “doing more with less” with their money in a rough economy. Once more, the market was ripe. Once more, you had not only established outsourcing companies but a ton of hustlers and fast talkers pushing their company as “outsourcing experts” at any chance given. And once more, how was the customer to know the difference between them? What questions should they ask about something they really had no knowledge about themselves? (hence the need for a consulting partner in the first place!) I will save you the further history lesson as we all know how the “outsourcing era” has played out now. BUT….my point (yes, there is a point to this! haha)….is that all that we are seeing now in the SuccessFactors/SAP market is really nothing new. The difference is that we can learn from the past.
Please do not get me wrong. I am not trying to sound like the world is full of bad, “sleazy”, fly-by-night consulting companies nor am I going to tell you they have been filtered out. They are out there. What I don’t want you to do is get good consulting companies confused with those bad ones….especially when the bids come in on your project. You might be shocked right now to see vast differences between bids. One might bid at $80k while another comes in around $40k for the same work. You will be scratching your head wondering how this can be. I don’t want you to make assumptions about the quality of the companies based on those numbers….ie. “is one trying to fleece me? is the other trying to lowball me to train their junior staff up so they can go get other projects?”. The reason for this range right now is the market is still “truing up” and finding the best business models for this new paradigm. Most are just trying to find their own way in this new “land” while also “keeping the lights on” as well. This comes from BOTH sides (the traditional pre-SAP, well-established SuccessFactors firms and the well-known, “old school” SAP consulting companies). Think of it this way…let’s assume you are a SAP customer looking at a hybrid solution (SAP on-premise with SucessFactors in the cloud). A traditional SuccessFactors consulting company might not have the SAP expertise/knowledge. They may approach it as a typical rollout and not factor in the complexities of SAP (integration, level of customization, interfaces, global requirements, etc). Therefore, they might come in with a lower bid. From the other side, you might have a traditional SAP firm that approach it from a traditional SAP projects approach (with all the fun SAP project-speak…executive buy in, steering committees, blueprinting, BPPs, milestones, integration testing, user training, change management, KT, functional/technical specs, etc.) which likely means longer timelines and/or more “bodies” in the proposal. Sadly, some may also be attempting to add padding or “filler” in their proposal to make up some money on the project to offset the smaller margins that come from SF projects. Therefore, their proposal might be really high by comparison.
So who is a customer to choose? What makes a “good” consulting partner? Bear with me a moment if you can and not to sound all “cheesy”….Sometimes I get all reflective and think of the relationship much like a farmer (“good” consulting firm) tending his plants (clients). The farmer wants to care for, nourish, cultivate and help their plants grow to be the best they can be. It is in his own best interest that they produce the best crops together. Should the farmer get too greedy and take too much from the plants or not care for them as needed, the plants will surely die and the farmer will have nothing to show for his efforts…and likely have to take up some other career rather than farming…possibly politics would suit them better (haha). And of course, there are always the “pests” (“bad” consultants/firms) that any ripe crops will surely attract. These “pests” just come in to feed off the plants until they have had their fill. Then they just as quickly disappear never to be seen again. Thankfully, many of these “pests” get swatted as the good farmers begin to circulate information of just who these “pests” are….and some plants are much smarter than you think. (haha) 😛
So where do you start to find that right partner?…wait, sorry…this isn’t Match.com or eHarmony……I mean the right consulting partner….because that is what it should be…a partnership. Much like the farmer in my example (seeing if you read that! haha), this is a partnership where both sides benefit most when both do their best. So start with the basics….right size, right services, right questions (actually they should have the right answers to your right questions …haha). Let’s assume we are talking about a SuccessFactors implementation and start with these 3 (although much of this applies to any project of any sort)….
First off, I would think you at least know the size/scope of your project..how much or how little you are going to implement…things like that. SuccessFactors is a bit of a different “animal” than what we might be used to. Implementing SF modules might take only 1 or 2 consultants, and even then, they might now be working 40 hours a week on your project. Keep in mind also that simply by focusing on HR/HCM, we are already looking at a “niche” of the overall SAP/SF expertise in the world. Therefore, you might not need some massive consulting company who can “throw bodies onto a project” to make sure your project succeeds. Often times, smaller is better. There are plenty of small to midsize “boutique” consulting companies or “tiger teams” who can fill this role quite well. This is not to say that a large consulting company will not work well for you. They often have access to information that other smaller companies do not (either through past experience, ongoing/current clients with similar projects and/or network of connections). One thing I will say for a consulting company of any size…if you feel that they may subcontract the actual implementation work to another company (or consultants) do not be hesitant to insist that you play a role, have a voice or at least a “vote” in the selection of those additional resources. You are not overstepping your bounds there and since your company will be writing the “big checks”, you should have some say in who is actually doing the work. But I digress…selecting the right size for you might not come so much from the implementation aspect but by the additional services offered….which leads us nicely into…
First off, we need to compare apples to apples. When selecting a consulting company, are you looking for a implementer strictly or strategic consulting (help with aligning your HR strategy with your company’s overall strategy? help with moving your HR department into a more strategic role?) or process consulting ( business process definition and/or engineering? documenting your processes? providing process expertise?) or a mix of all the above (ie. someone to help you get more strategic in “theory”, streamline your processes and also implement the tools to do all the above…end-to-end…”talk the talk and walk the walk”? haha)
Past those immediate needs, I would look at additional services offered…..on-site training/workshops, end user documentation/materials, change management, and most of all, support services. Let me say that last one again…SUPPORT SERVICES!!!! As wonderful as SAP products are, let’s just say they don’t have the best reputation for product support. (read Jelena Perfiljeva‘s recent blog Are you there, SAP? It’s me, Jelena for some airing of customer pains). For SuccessFactors, let’s just say I have been told to not expect a whole lot better. That’s nothing new for most large product companies. Level 1 or 2 support is notoriously frustrating in not only the wait for answers but the quality of answers…which almost always leads to escalation to an additional level or levels each of which requires an almost painful retelling of your issue(s). It often feels like you in a movie being interrogated for hours so the interrogators makes sure your story stays the same. I am not here to say there is no value in that support…that’s your product warranty of sorts! But I think there is a very BIG additional value in having a consulting partner that knows your unique requirements, your system, your users, etc. and often times can solve or mitigate the issues you come across in a much more timely manner.
To choose that right partner, companies need to ask the right questions. But again, what are the right questions if you have no knowledge in the area that you are looking for help in and thus seeking a consulting firm to help!?!?! Catch-22 anyone? (haha) I do not mean by any means to imply that a company will not do their own due diligence before going into a contract with a consulting partner and many of these “issues” will work themselves out, but I think a lot of time might be saved by asking the right questions when screening consulting firms up front as well as considering adding these questions to RFP’s as well.
First off, ALWAYS QUESTION THE NUMBERS!!!! Like I saw at the conference…if someone is claiming “900+ projects….20 consultants….12 years experience”, by all means, dig deeper and find out the math behind those numbers.
“X number” of projects? I found out that in the SuccessFactors world, a “project” is often counted differently than what we in the SAP world might be familiar with. A typical SAP HR project might have included PA, OM, payroll, benefits, ESS, and MSS. To us SAP folks, that is one project. In the SF world, they count each module implemented as a project….so our SAP example would have been 6 projects! So if a SuccessFactors firm claims 500 projects, you might not have any idea what is behind that. I would ask “of those 500 projects, how many were individual clients?”….and this could also lead you into “for each client, what modules did you implement?” which would show any particular areas they specialize more in than others as well. If you are a SAP customer looking at a hybrid model, I would then asked what is their specific experience with this…how many hybrid implementations? A “hybrid” implementation complicates matters a bit, so I would also be interested in their SAP experience as well (same sorts of questions…number of projects…modules implemented…etc.).
Whatever information you are given, do not hesitate to verify. It is not an insult. You are simply doing your due diligence. Ask for a number of referenceable customers from completed projects. Along with this, ask for 2-3 contacts at each (phone numbers and email). Again, you are not going to offend anyone, and a good consulting company should be more than happy to offer up this information from clients who will speak well about them (remember the farmer and his plants relation? haha).
“X number” years of experience? What/whose experience is this? Is this the number of years the company has been in the SF market or the years in SF of “acquired” resources. Especially in recent times, it is not unheard of for a consulting firm to heavily recruit and hire an established SF consultant(s) and then claim those consultant’s years in SF as their own company experience. For example, let’s pretend I own a SAP consulting company (oh yeh, I do. haha) and I want to get into the SF market. I have zero experience with SF so I higher Bob who is a super star SF consultant with 8 years of experience. Guess what? Suddenly my marketing material says “Trust my company as your SAP and SuccessFactors partner….with our 20+ years in SAP and 8 years in the SuccessFactors markets…we are your experts!”. Sound odd? It happens…..most often by established SAP consulting companies acquiring or merging with established SF companies. Does it mean that that experience isn’t there? No. But it does help to know how long a company themselves has been involved or at least how they got involved.
“X number” of consultants? Oh boy…this is a complex one! I would not so much get caught up or concerned with the sheer number of consultants a company has that are full time employees. I would, however, ask of that number…how many are SuccessFactors certified? Also, which areas they are certified in (since each area of SF has it’s own certification as well as the basic certification levels)? Finally, I would also ask to be provided copies of those certifications for the consultants that would be assigned to my project. You can/should ask for those. It is not that big of a deal since SF will require your consultant to be certified in order to be given access to “Provisioning” (kind of like SAP’s IMG in a way), but it will help in insuring the people you are told will be assigned to your project are actually the same that do the work.
Lastly, ask if their certified consultant will be doing the work alone. Sounds pretty funny? Well, it is not uncommon to have someone newly certified without project experience or even a “junior”, non-certified consultant “shadow” a consultant on the project to gain “real world” experience. If that is the case, then I don’t think it is out of line to ask for some adjustment in rate for this (as it will take longer for a consultant to do the work and “teach” another person while doing so (no matter how limited the interaction is).
So that’s about it I suppose. For as “wild” as times seem to be right now in the SuccessFactors and SAP HCM consulting world,I think it is quite easy to wrangle up and lasso in the right consulting partner for you (geeez….really reaching for those cowboy-ish references now eh? haha) by setting the right expectations and asking the right questions.
Oddly enough, it seems “great minds think alike”. As I was wrapping this blog up, proofing it a few more times, etc., I noticed that Robert Thomson posted a similar blog Finding the Right Partner for your SAP SuccessFactors Implementation about his experience and perspective from what he too saw at the HR2014 conference. In addition, I would read up on both Luke Marson‘s and Jarret Pazahanick‘s many blogs once again covering their thoughts on the consulting world with much/most of the information being still very relevant. The comments in those are a real treasure trove holding great gems of information….uh oh….I feel an Indiana Jones-like blog coming on now…I better stop! haha I hope my little perspective on the world helps others, and I will keep cranking them out as long as you keep reading. As always…till next time….