Managing fixed price SAP projects can be challenging for both consultancy organizations and the client companies. Some of the challenges you may face include significant budget overruns, scope creep, conflict, and possibly even lawsuits.
What you want, however, is for a SAP project to be a process that you enter together to drive the organization to a higher level.
This post provides essential tips and suggestions to help consultancy organizations and client organizations navigate the complexities of fixed price projects.
Tips for Consultancy Organizations
1. Clarity and Boundaries:
Be clear on your customers’ project expectations and be firm on boundaries.
Balance assertiveness on content while maintaining empathy toward team members.
2. Client Organization Assessment:
Evaluate the client's organizational readiness. Validation of your customers’ business process maturity is especially important.
If organized, leverage their capabilities; if not, set expectations and enforce accountability. One way to push an organization into being accountable is to set deadlines for the different phases upfront and stick to them as long as possible (of course you need to be well organized yourself).
3. Fundamental Project Organization:
Rapidly define deliverables and ensure functional specifications are well-defined.
Mitigate scope creep by aligning functional specs with the client early on.
4. Change Request Procedure:
Establish a change request procedure before the project begins.
Include it in the contract to address any deviations from the initial scope promptly.
5. Senior Consultants:
Initiate projects with senior consultants to determine scope and design. Setting the scene for the final go live requires experience and conceptual thinking capabilities. Not to forget the speed you need in a fixed price contract.
Invest in a qualified enterprise architect to bring the business processes together in one overall blueprint. This will also align the different teams.
Challenge assumptions and scrutinize processes, avoiding reliance on SAP logic alone. Especially when you are moving from SAP ECC to SAP S4/HANA, this risk is present.
SAP ECC is different from S4/HANA. You could think the systems are the same but with S4/HANA different functionalities (especially with the use of Fiori) are introduced. Be aware of custom builds done in SAP ECC: the business user will assume these are standard SAP and this assumption will blur communication.
Tips for Client Organizations
1. Organizational Preparedness:
Ensure internal organization readiness; stay ahead of the consultancy’s schedule. Running these types of projects is the core business of the consultancy, while you still have operational processes to run. Make sure you have the right capacity available and that your team is ready to pick up the extra work that comes with the project.
Assign strong internal project managers to manage interactions with the consultancy. The project needs to be supported by the C-level. It is not solely an IT project - it impacts your whole organization.
2. Understanding Your Processes:
Have a clear understanding of your own current processes. It’s even better if you document them.
Have a clear understanding of your current system landscape, your interfaces, and the data flowing through those interfaces.
Document and analyze future business processes together with the consultancy to align perspectives.
3. Bringing In Knowledge:
Acquire in-depth knowledge of the new software and its capabilities. Use the overview trainings SAP offers or go the SAP learning hub.
Invite experienced consultants to support your business users in the project. This will serve as a bridge between the consultancy organization and your (key) users.
4. Ensuring Capacity:
Involve your key employees in the project, and bring in temporary workers to take over their usual tasks for the duration of the project. This will ensure you have capacity to keep the operational processes going and that you transfer the new knowledge to your internal staff.
Engage experienced and mature employees in the project. Look for individuals who understand operational details and can conceptualize process changes.
5. Addressing Organizational Impact:
Acknowledge that SAP implementation affects not only systems but also organizational processes.
Anticipate and manage resistance by addressing concerns about job roles and workload changes. Emphasize the fact, because you will see it in every company that uses SAP: after the implementation, there will only be more work than before. Although, this is counterintuitive, this is what I see happening. The aim of a SAP project is mostly to be ready for expansion and growth, and not to reduce the need for employees.
Navigating fixed price SAP projects requires a delicate balancing act and collaboration between consultancy organizations and clients. Following these tips can help both parties ensure a smoother journey through project complexities and reduce the likelihood of disputes or unexpected challenges.