Sunday, 28 June 2009

The seconds tick away…

I’ve indicated that the company has a number of sites in this country as well as several more overseas. The original plan was that we would implement the SAP program and once it was proven to be working, it would then be rolled out to the other sites. There was a slight change to this in that we bought out a company in another country and for a while, it was required that they would be part of the project; that was cancelled, so we are back to just the original sites.

It should be highlighted that each site sells different products – yes there is a commonality, but the difference is sufficient that they use diverse processes. Now in the past, this has caused an issue – it’s been difficult to get any agreement on standardization - this is why we wanted a single ERP system.

When the project was set-up, the consultants suggested that we create a project team made up of managers to represent the key areas within the business. It was decided that our director of operations would head the team and act as project manager from our side; he would liaise with the project manager supplied from the consultants.

So far, so good - however, I queried one thing; most of the project team were from the one site, and there was only one representative for the other 3 sites. The explanation for this was that as we would all use the same processes, the one person plus a single consultant was required due to a specific area which they dealt with and that the other sites didn’t. I understand the idea of this, but I felt that this was not right.

Although we need to try to get some consistency, the nature of the differences in the way that each site works is fundamental and many of the business processes are then affected by this. I was concerned that we would see the system set-up to work one way only and that the other sites would then struggle to use a system that could not handle their particular needs.

After the blueprint phase, I was even more convinced that the one person would not be able to deal with all of the issues on his own. As we moved through the next steps, it became obvious that he was struggling to keep up. About 16 / 17 months ago, it was decided that he needed help and he has had 4 more people helping him, 2 on a temporary basis and 2 permanently. Despite this, I still felt uneasy – they were still concentrating only on certain key steps and ignoring other modules on the basis that the project team would cover those items.

Now over the past 8 / 9 months, the guys and gals from the project team have worked extremely hard to train people from the other sites. During this phase, there have been a number of questions raised by the people being trained about the way that they are to work in future. Some of these questions are not really relevant – we have been able to simplify some processes and things that they used to do are no longer necessary. But unfortunately that’s not so in each case and there are a number of key items that are absolutely required that still have yet to be set-up properly.

And now it gets worse. Our project manager went to one of the other sites 2 days ago to meet with the managers from those other sites. He showed them a PowerPoint Presentation and then ran through a demo of SAP using some data that they would recognize so that they could see that it worked. He told yesterday that the presentation went well and that these managers are now really happy with it and they all feel very positive. The presentation lasted a total of less than two hours.

I queried if these managers had actually used the software themselves – the answer was no. He sort of said that they wouldn’t be the ones to use it, so it wasn’t important that they knew the software, but that they should understand what it could do.

I have to disagree – the people concerned are the site director, who needs to be able to get sales data, the production manager, who needs to know how to schedule and manage the production, the sales support manager who will have a major task in ensuring that products are produced, packed and shipped on time, and one of the senior managers that is involved in ensuring key accounts are dealt with correctly. I know that of these guys, 2 have never logged on to SAP, the others have logged on, but neither has used it in the last 6 months.

Although he has said he is confident that they are happy with things now, that is not what I am hearing from other conversations. I really am concerned that these senior managers are now completely out of the loop – and worse, because they don’t understand, when the staff have problems, these managers will not know what to do or how to find a resolution.

At this stage, we are committed to a go-live date – the CEO has said that we will not delay any further under any circumstances. If it is not ready, it is not ready but we will just have to make do with it in the condition that it is in. (I actually believe that there is now some political pressure from somewhere being applied to force the project forward whatever the cost.) Whatever the truth, I do see that sometimes it is necessary to force the situation, but I am troubled that there are too many pitfalls and things may get ugly. Time to clean up that old fall-out shelter!

Friday, 19 June 2009

Thru a glass darkly

It occurred to me that when writing these posts, I've fallen in the same trap as a lot of people; I make assumptions that the readers will know certain things about SAP that I don't need to elaborate on. So I thought that I would clarify a few issues.

SAP is an acronym - Systems, Applications & Processing. The title was originally in German, but it works the same in English. It is both the name of the company (SAP GmbH or SAP Inc etc.) and it is also the name of the software product that the company produces. Normally, it is fairly clear which of the two is being referred to, but just occasionally, it can be a bit confusing.

The company is a global player - they operate in almost every market area of the world. Previously, due to the size, complexity and cost of implementing their product, they concentrated on selling to the larger organisations. However, some years ago, they realised that there were a lot more smaller businesses out there than larger ones and so changed their focus somewhat - they now try to sell to all sizes and type of organisations.

The software is a massive product, with many modules covering different areas within a business. It is intended to be a true Enterprise Resource Planning (ERP) product; that is, it allows data from all areas of a business to be handled and processed in order to allow a seamless transition of data and therefore much greater accuracy of processing and transparency of data for analysis. This has previously been of real importance to the larger operations, but is becoming equally important to the smaller ones that wish to compete on a equal footing.

So far, so good. However, now it starts to get a bit more complex. You see, SAP (Inc) don't actually do most of the selling of SAP (product) . Yes they have a massive marketing budget and teams of specialists that help in the selling process, but the majority of the selling is really done by other companies; and these are the ones that also (generally) do the implementation of the product. These can be smaller companies operating in a single country or larger one that operate across a global region - it could also be one the big boys such as the major consultancies. This actually also includes people such HP & IBM who are surprisingly active in this area.

Now there are people out there that will tell you that SAP (the product) can operate "out of the box". I know what they mean, but in fact that is a very simplistic statement and in reality is simply not true in the way that say Microsoft Office would work out of the box. From my experience, I can say with utter certainty that the software installation is not a just case of putting a CD / DVD in the drive (they actually supply a large box full of over 100 discs!). In order to carry out even the most basic of installations successfully, you need to know certain things about the product and your business before you start. Even then, there are a number of factors that could prevent an installation taking place at all.

In order to use the product effectively, it also needs to be set-up - SAP (the company) refer to this as "best practice". What they actually mean is that over the years, they have developed a series of modifications and changes to meet the needs of the larger businesses that they have installed the product in. They have a wide range of these based upon sector and process type; they can select which of these to install on a "mix and match" method. This requires a good knowledge of the product AND of the business - and I would suggest that this one area is responsible for many of the problems that occur during implementation.

Now it gets even murkier. In some of the consultancies, the people that work for them are employees, but many are only on short term contracts - say 18 months to 2 years. These consultancies will hire people for the specific project based upon need and skill. Unfortunately, many of the people hired are of varying quality - and in some cases, they end up working in a module area that they are not particularly skilled in. I've also seen that the consultancy can hire in a person who is in turn a private contractor, and these generally get paid by the day or week. I also understand that in some cases, the larger consultancy contracts out part of the work to a smaller firm. And of course, the smaller firm can then hire in the actual people, who might even be employed by yet another business.

You see, some of these consultancies specialize in specific areas - HR, Accounts, or groups of modules such as those that make up the manufacturing process. The concept is fairly sound - you hire in the expertise in the area that you have the need. This allows you to act as a consultant even if you don't have the required specialization.

But with all of these different people, using different employment methods and structures of reporting, you find communication problems even in the relatively simple projects. From experience, many of the individuals like to work in particular way and use specific methods or practices - in some cases, these clearly don't meet the specific requirements, and I've seen that they often go against the defined goals.

Now, for a lot of people, this will seem a strange way of working - but you have to understand that this is the SAP business model. They are NOT in the business of selling software - they actually want to sell the knowledge and experience of the consultants, either as business consultants, project management, training, education services - basically all of the additional items that are perhaps a bit harder to quantify.

Don't get me wrong, when the software is set-up properly, it seems to work well (if perhaps a bit long winded). However, I would suggest that the way that the product is sold and then managed is almost designed to lead to issues that will then require the hiring of additional outside expertise. The problem then of course is that often people get locked in to the product - no-one (especially in senior management) wants to admit that they might have made a mistake, so they act like the gambler who keeps on playing in the hope that the one big win will cover all his losses.

Our project is one of the less expensive ones - we've spent nearly $2 million so far after 2 years and based upon some of the comments and observations, I expect that we will see an annual expenditure of another $100k to $150k for the next 5 years in addition to any contracted support cost (which was hiked from the beginning of the year). I still have a copy of the original documents - they stated categorically that the total cost over the first 5 years would be $1.06 million and this covered all installation costs, support and consultancy.

In reality, we will probably have spent around 3 times as much by the time that we are finished. I did some basic numbers and to get the return that they suggested, we would have to continue to use the product for around 18-20 years, and that doesn't allow for any subsequent changes or projects. I have to be honest, I cannot see that we will ever actually get a return on our investment - it's just going be a big old money pit.

Sunday, 14 June 2009

It's a lovely day...

....for sitting in the sun, maybe move into the shade a bit later, and share some bread & wine with the family and just generally enjoy a very pleasant weekend. Maybe a barbecue on Sunday?

However, part of the time I've spent doing some SAP related work. I discovered a minor issue on one of the servers - not enough to cause a big problem, but I want to try to eliminate any of these little errors before we go live - I think that we'll have enough to do once we achieve liftoff.

Now the actual SAP global support people are pretty good for the most part - the method of reporting errors is a bit of a pain at times, but once you get someone on the case, they've shown that they can get things done. So far, they've managed to fix almost all of the issues that I've raised - the biggest problem I see is trying to identify the correct function area for the problem to be listed under and they can be a bit sharp with you if you enter the wrong data.

On this occasion, it's actually been passed through 3 different support people - as each one has looked at it, they've suggested that the problem is caused by something different. The last one has asked me to carry out yet another set of upgrades. As has been indicated, my staff and I have had very little real training and the instructions that we received were so vague that they proved to be of little value. I have however been given the email address of a guy in Germany that is prepared to help - he writes / speaks pretty good English (a good job as Ich verstehe nur ein bission Deutche!)

The information that he provided for how to download and carry out the upgrades was not perfect - however, after reading and checking the information carefully, I have been able to use it to work out the correct procedure. I've also been able to create my own training document on how to do this specific task so any of my guys could do it if I'm not available. For me it's important that we don't rely on any single person's knowledge - it's too risky and I've seen companies that suffered because they were stuck when a key employee left them.

So on Friday, I managed to get the test system upgraded to the latest relase of the kernel. I actually am quite surprised that it went so well - prevously, the work was done by one of the basis people from the consultants and we had all sorts of problems both during and after the work was done. On this occasion, the update worked so well, that I just couldn't believe it. I literally spent about an hour trying to find a problem before I was prepared to think that maybe it had completed successfully. I then carried out the upgrade on the other systems after everyone had finished for the day and by late on Friday, it was all done. Subsequently, I carried out a system transport of the use role profiles. Again, it all went quite well, so we can start Monday with a freshly patched system.

Now this may not seem like a big deal - for many people, patching and updates are a pretty simple process and one that most users don't see too much of. Within the company, we run an automated patching solution for all of the PCs and servers that takes care of the OS, the productivity suite, and most of the other software products we use and that has saved time and money over the years. It also ensures that as far as possible, we are protected against malware - an ounce of prevention is better than a pound of cure.

But for me, the ability to be able to this work without having to rely on the outside consultants is a major step forward. I don't think that I can understate just how much better that makes me feel - stupid I know, but having been thru such a long process with so many problems and so many failed areas, this is a real achievement even if it is such a small success. Now this doesn't mean that finally all is well - I wish! But at this point in time, I'm prepared to take anything positive that I can find and use.

So now, the work is done - time to relax and feel good about having finally achieved something positive. Now if we could just get the rest of it working the same way.....


BTW, I see that I have a couple more followers - welcome to you all. I hope that you enjoy reading my comments, and find them of some value. I will keep on writing as things happen; I think that we are now pretty committed to going live later this year (but more on that next time) and I will continue to detail what happens after the big event. So keep watching...

Wednesday, 10 June 2009

Another 2 cents worth..


We had another meeting yesterday - the director from the consultants arrived with a new guy in tow. Introduced as our new CRM consultant - however, we did some investigation and it turns out that he last did CRM some 5 years ago with version 4 of the product. Since then, he has acted as PM for most of the project he worked. So he seems like a really sensible choice (not).

During the meeting, the director from the consultants said that the new guy would be spending about 10-12 days on site to get an idea of what our requirements were. Excuse me.... what have they been doing for the last 2 years? Un - believable.

Now we were promised at the previous meeting I referred to, they would carry out a demonstration using a customer's system to show that the product works. (That was actually supposed to have been done about a week ago.) However, that still hasn't happened yet - and in addition, they said that they are now setting up a test system for us to see, and they want to make sure that it is OK before they do the demo so it will be another couple of weeks. Color me crazy, but I would have expected that to happen before we bought the damn product, not two years into the project and certainly not a couple of months before we are due to go live.

I have to say that I think the director from the consultants is so full of BS that he could fertilize the Sahara. If he told me that the sun rose in the East, I would want to get up at midnight to check it out for myself, before I would actually believe him. The funniest bit was his insistence that we are on target - we are now actually well over a year behind, but that doesn't seem to be an issue for him. He also tried to say that it's within budget - but not according to their documents, which I still have a copy of. We are in fact over spent by 3 times the original figure they quoted for a 5 year write off - and we had identified at the time that their figure were incorrect as they didn't include several key expenditures.

When I left the meeting, I just wanted to explode.....

The same consultants are also working on another project and occasionally, they can't get to us because they are on site with the other company. They started this project way before ours - not sure just how much longer it's been running. This other company went live back in the new year - I tried to contact them, but their IT manager wouldn't discuss the project with me (they had been told not to I think from the sound of it). Since then, one of our sales staff spoke to one of theirs - and they got the woman's number for me to call.

She's fairly new in the job as it appears they have lost quite a few sales staff because of the project - and she made it clear that she doesn't want to stay long either. She made some comments that no-one really seems to know how the system is supposed to work and they get all sorts of problems during the day which take ages to resolve (she referred to one problem that took 3 days to fix and they lost a huge sale because of this). Their sales people are really fed up with all the wasted time - and it also appears that they lost a couple of IT staff as well which has made the problem much worse.

I've also had a contact with another company (different consultants) - they have only implemented part of the SAP system so far - sales, purchasing and accounts. One of our people went to see them and talked about how they were getting on - they seemed to be doing OK, so it shows that it can happen. But they have also indicated that they are still getting issues - it appears that they had a problem with getting the invoicing correct. I'm not sure exactly what their problem was, but it sounds as if it was applying the wrong pricing. This is something that can happen to any company and I would suggest that most systems have done that at one stage or another, so it would be unfair to highlight this as if it was just SAP.

But even they said that the process had been painful and they were not entirely happy that they were getting all of the benefits that they expected. Questions have been raised about the cost of the project and it seems unlikely they will realise any actual savings for their investment.

Someone made a comment that bad news travels faster than good news - true and I accept that many big project fail somewhere along the line and I'm sure that there are some SAP projects that are models of success. But for me this has been by far the worst project I have ever been involved in by a long way - I've worked with some really astute business people in the past, and I know that they would have demanded heads to roll for a failure a bad as ours has been. I really can see the ax swinging at some stage - and I'm concerned that my guys and I will suffer as a result.

Oh well, tomorrow is another day...

Monday, 1 June 2009

Another day, another dollar

We had another meeting today, with just one question – "why are we still no closer to go live than we were before the New Year?" I put forward my list, the same one that I have kept since around last June; of the items listed, only one has actually been resolved. Their project manager spent about 15-20 minutes going thru the points, but at the end the only real answer for all the issues was “it hasn’t been done”. For what it’s worth, my list was actually one of the smallest – there are still over 300 items on the open issues register.

Now I will accept that my list is the only one that hasn’t actually been growing in the last 12 months – all the points I raised have been around since then at least. Of my colleagues, most have discovered more issues as we progress through the various parts of testing and correcting. However, about half of the items have been on the list for at least a year – we know because we recorded the date entered against the item. More than a few had been marked as fixed, only for us to find that they were not, or for other changes to have broken them again.

At the end of the meeting, we had actually achieved very little. Once again, lots of promises, but nothing to back up what they say. People were very quiet coming out of the meeting; in the past, they had grouped together to bitch about the lack of progress but this time, almost everyone just went off back to their departments without a word.

The FD was in one of his moods after the meeting. He wanted to talk to me because a decision has been made that wasn’t discussed. As I’ve indicated we have sites overseas – one of these was supposed to be going live shortly after us. To make that happen, we had planned a lot of changes to provide the infrastructure, most of which are now in place. It appears that this has all been pretty much wasted – the directors have decided that we will continue with the SAP project, but it seems unlikely that we are going to roll it out across the group for at least 3-4 years, and possibly not even then. (But this isn’t generally known just yet)

He showed me a document that detailed the consultant fees for that overseas site (not the same group that we work with, a different company) – just under $180,000. Apparently, the work they did was of no value as it didn’t match the site requirements, our group requirements or meet the needs of our consultants. It appears that we have no possibility of getting our money back – the company that these consultants worked for is in the local equivalent of chapter 11 and it seems probable that they will simply cease to exist.

Now I know that there are people that will say, “$180k is not a great deal for an SAP implementation” – true and I know of a company that spent $30 million, but we couldn’t afford to spend even a small part of that kind of money. To put it in context, our total group profits for the last 10 years was just over $30 million. We have a great product and excellent service - we retain a lot of customers for this reason. But we cannot justify spending that much money unless we get seriously improved efficiencies and I doubt we will see a return that will be even close.

What makes me really mad is that I have a small project I’m working on; it won’t get us any extra sales as such, but we can see the potential for better analysis to make us more labor efficient in one area and that might get a few more sales. The cost of the product? - $2495 plus tax, and this includes a half days training. However, I am having to again justify spending the money even tho’ I put it on my budget before the start of the financial year.

What’s really getting people pissed is the director from the consultants – he turns up having flown to the local airport, takes part in a 2 hour meeting then back to the airport for another flight. He promises much, but so far has delivered zip – everyone calls him the seagull, because he flies in, makes a loud noise, craps on everyone then flies off!

Better sign off – I’m waiting for a response from Global support.