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Don’t “implement SAP.”

Since our business is implementing SAP, this may sound like odd advice, but we’re not just being provocative.  An SAP system is not a goal, it is a means of achieving a goal, and that goal is to meet a business need in the most efficient manner possible.  When companies set out to “implement SAP” they are skipping the due diligence necessary to figure out if it’s actually the right thing to buy, and they’re probably going to be disappointed with the results.

It’s no accident that even smart people in great companies make such a basic mistake so frequently.  SAP has spent a fortune on advertising to make their brand synonymous with “business solutions” in the public mind.  In every business magazine and airport on Earth, glossy broadsheets solemnly declare “The best-run businesses run SAP.”  In many cases, it’s true.  But it also (intentionally) creates an assumption that SAP is the best choice for anyone who can afford to buy it, and there are many circumstances in which that’s just plain wrong.

If you make a mistake buying SAP, it’s going to disappoint you in one of three ways.  The first is when SAP just doesn’t solve a problem.  This happens when the problem is originating from a source outside the scope of the implementation.  The second is when it solves the problem badly.  This can happen when the SAP solution is inferior to the thing it replaces, or when it requires significant customization to work.  The final case is when SAP does solve a problem, but no better than a cheaper option.  In any case, you’re suffering the risk and expense that any SAP implementation entails without any chance of optimizing your business.

Now that we understand the kind of breakdowns we’re trying to avoid, let’s look at how to identify them ahead of time.  The following factors doesn’t guarantee your SAP purchase will disappoint, but they’re definite warning signs.  Here’s a list of questions you can use to verify that SAP is right (or wrong) for you.

-How was this request generated? 

Any solution should be generated to address a specific need.  The best case is when the initiative is launched in response to a recurring set of problems that one or more business units are reporting because that indicates that a need is driving the initiative.  If it’s launched because an executive bought something on a golf course, the outlook is significantly less promising.

-Is this purchase really going to solve your problem? 

Put another way, are you sure you’ve correctly identified the source?  If the problem is originating outside the scope of your upgrade, or if your landscape can’t handle the new addition, SAP isn’t going to help.  It’s also important to make sure that poor business practices are not responsible for the problem.  If you’re treating the symptoms rather than the disease, you’re going to waste a lot of money and your condition will not improve.

-Why is SAP the best solution for this problem?

There’s no doubt that SAP is a premium product, but that doesn’t always mean it’s superior.  If it’s replacing a proprietary system that’s providing a unique advantage to your business, you’re going backwards.  Remember, industry-standard is not the same as industry-best.  On the flip side, you don’t want to be paying for functionality you aren’t using.  The main selling point of SAP is the ability to integrate business functions across a large and complex enterprise.  If your organization doesn’t need that kind of depth, you have cheaper options.

-How much customization is required? 

At this moment, my sister is expanding her garage because it’s four inches shorter than the truck she just bought.  Likewise, you should consider the amount of customization you’ll have to do before implementing SAP.  It’s hard to say what exactly is “too much”, but 25% is a good rule of thumb.  With that much customization, you no longer have an SAP product, you have an unsupported homebrew for which you paid an SAP license fee in addition to your development costs.  You’re probably better off buying a different product or developing your own from scratch.

-What feedback have you gotten from the business units this will affect? 

Change is uncomfortable for everyone involved, and business units aren’t always going to be enthusiastic about it.  However, if the team leaders and power users are telling you that a proposed SAP solution isn’t going to solve things, it’s a claim that should be taken seriously.  Doing nothing may cost money, but it’s not nearly as costly as doing the wrong thing.

SAP has been a game-changer for businesses in many circumstances.  Just make sure those circumstances apply to you.  Don’t assume it’s the best choice and therefore right for you.  Don’t implement SAP.  Do your homework, quantify exactly how each of your options will bring value to your business, and implement whichever option is best for your business.  And measure your garage before you buy a car.

Originally posted on the Big Concepts “Business Minding” blog:

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