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Introduction
Financial Planning & Analysis (FP&A) is pivotal in improving business performance.
According to research, more than 50% of SAP projects do not deliver expected results to a business. This is the same even in the case of the SAP FP&A projects that help organizations perform their enterprise planning and consolidation.
Does it mean the SAP FP&A solutions are ineffective? Definitely Not.
These are some of the robust solutions available in the market for Planning & Consolidation and SAP is also ranked as visionary in the Gartner's Magic Quadrant.
So, what is the reason for this high number of poorly performing projects?
It is mainly because of poor implementations of these solutions in organizations. It has nothing to do with the robustness of the solutions. Since these solutions cater to the planning process (core driver of business performance) of the business, an ineffective implementation leads to drastic results and may affect its performance.
That’s scary right. Especially if you are looking to implement an SAP FP&A solution for your organization.
The goal of this blog post is to help you identify the most committed mistakes in SAP FP&A solution implementations so that you don’t fall prey to them.
Let’s get started.
Mistake 1: Technology-oriented rather than process-driven.
One of the major drawbacks of many SAP FP&A solution implementations is the lack of alignment between implementation and business use cases. Simply put, the implementation is not tailor-made to the specific business planning/consolidation needs.
Most of the Enterprise Planning & Analysis solutions are looked at as a piece of technology that solves all planning needs. It is the same even in the case of SAP FP&A solutions.
SAP FP&A Solutions / Other Planning Solution ≠ Successful Enterprise Planning/Consolidation Project.
Unfortunately, many organizations focus on adopting this piece of technology and wait for results to appear. They do very little to develop effective processes to complement this technology. This does not deliver effective performance management.
Simply because no matter how advanced the technology is, with ineffective processes, it is of no impact. Processes are the real drivers of business performance. Hence only when a business is able to develop effective processes to back up its robust solutions, it will be able to experience successful projects.
SAP FP&A Solutions / Other Planning Solution + Effective processes = Successful Enterprise Planning/Consolidation Project.
Tip: Shift the focus to process definition from technology configuration.
Mistake 2: Turning a blind eye to industry best practices.
Once you get into the project, you get carried away by its timelines and needs. In this process, you tend to forget to benchmark your processes.
Following industry best practices in your process definition and solution implementation is of high importance.
For example, let us say you are an automobile dealer. You need to define your key metrics that drive your performance. Instead of going ahead with your previous metrics, do thorough research on what top players in the industry use. This will give you insights into some best practices.
However, it is not easy to find this information. Hence, select a system integrator who has prior experience and required expertise in your industry to drive successful implementations with effective processes.
This gives you the ability to outperform your competitors and be ahead of the curve.
Tip: Do thorough research on the industry before developing the processes or choose a system integrator with industry-specific expertise.
Mistake 3: Low transparency among business users
This is one of the big challenges of the SAP FP&A solution implementations or any FP&A (Financial Planning and Analysis) solution implementation for that matter.
Any system integrator you select will have a bunch of consultants. These consultants will have great knowledge and know-how about the solution. But on average, their knowledge on business aspects of the implementation like planning and consolidation process is minimal.
More often than not, this consultant team usually takes the driver's seat in the implementation with the least transparency among business users (i.e planners across the departments in the organisation).
Once the requirements are captured from business users, the consultant team handles the technical design involving coding and configuration. This is a black box for the organization as the business users are not aware of whether their requirements are accurately reflected in the technical design.
Since the consultants are technology-oriented people, there is often a mismatch between business requirements and the final technical design used to configure the solution.
This results in an ineffective SAP FP&A solution.
Tip : Involve business users throughout the implementation process and automate the code generation required for deployment
Mistake 4: Heavy dependence on System Integrator for updating the changes.
With business requirements not accurately captured in the SAP FP&A solutions, there will be high change requests from business users.
Once the system goes live, business users will point out the mismatch between the specified requirements and the configured solution. This involves the consultants re-doing the technical design based on the change requests raised. This series of events continue to arise till the solution truly reflects the business requirements.
The end result is escalated costs and stretched project timelines.
The most important point to note here is that you need to depend on the system integrator forever to update any changes in the solution. This can be quite tedious as the mismatches between requirements and end solution continue to arise due to the lack of financial expertise of the consultants.
Tip: Minimize the change requests by actively involving business users in process definition or leverage automation tools to deploy the changes in the final solution
Mistake 5: Looking at the solution adoption as a one-time activity.
Most organizations are of the impression that the solution adoption is one-time activity – just the implementation.
No, it’s not.
SAP FP&A solutions cannot deliver consistent results if their entire life cycle is not taken care of.
As the former Gartner SAP analyst Derek Prior said, “SAP is not a project – it is a life cycle stream.”
Apart from the solution implementation, there should be continuous monitoring and maintenance of the solution. These activities are often overlooked resulting in a decrease in the effectiveness of the solution.
Tip: Take care of the entire application life cycle management of the solution apart from implementation.
Conclusion
In conclusion, these are the common but big mistakes that are made in most of the SAP FP&A solution implementations. They hurt the timelines, costs and ROI of SAP FP&A projects. Hence, it is important for the organizations to take note of these mistakes before they get their hands in the SAP FP&A solution implementation.
Are there any other mistakes you believe should be added to the list? Comment your thoughts.
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