Want to Sue Your ERP Vendor?
CFO magazine highlights a now well known lawsuit: Waste Management against SAP. To their credit, CFO does a well balanced analysis of the situation:
In most vendor-client disputes, both sides share some blame, experts say. Software vendors “definitely tell their customers what they want to hear,” says Charles Schley, founder of ERP Implementation Consulting Group. On the other hand, it’s naïve to assume that an enterprise application won’t need some customization. Many buyers simply don’t know what questions to ask, says Richard Ligus, president of Rockford Consulting Group, and project managers often lack the experience and political clout to keep implementations on track.
They go on to say that you’ve got to have your evaluation well managed, asking the right questions, and getting contractual committments on features and functionality. As a buyer, it is naive to assume that the vendors are not attempting to present their solutions in the best light. That “best light” is blurred by capabilities in future releases and the ability of pre-sales consultants to quickly respond well to thorny questions. These are not hard issues to uncover if you manage your evaluation well.
Are you involved in an ERP evaluation? Do you have some advice for current evaluators? What cautionary advice do you have for first time evaluators?
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4 opinions for Want to Sue Your ERP Vendor?
Alan Wilensky
Jun 14, 2008 at 8:35 am
SAP has perfected the art of obscuring what their suite of products can actually do, what they will end up costing, and what implementation will require beyond getting the software integrated with the Capital Line of Business.
Now, for megabiz with large IT internal orgs, no big deal except for the waste of money; but for the increasing number of mid-sized companies that are succumbing to the SAP advertising onslaught, this is a unmitigated dissaster.
SAP, among all other ERP vendors, has distinguished itself as the leader in misleading the small and mid sized business.
I would recommend and e-book by Doug Mitchell: http://www.scribd.com/doc/2304178/Confessions-of-an-ex-enterprise-salesperson-by-Doug-Mitchell
Bob Turek
Jun 14, 2008 at 9:28 am
Alan- thanks for your comments. What strikes me lately is the total lack of project evaluation skills that companies have. This comes out in a software sales cycle because the vendors, particularly the winning vendor, runs the show. The lack of governance/PMO structure allows this to happen. Even companies that have been to “buying school” don’t understand this. I guess that’s why there are consultants- but many of those don’t get it either.
Alan Wilensky
Jun 14, 2008 at 10:20 am
If this was not a follow-up to a comment on a blog, I might have written that:
I blame the gullible technical and pseudo technical management of these SMEs as much as I indict SAP and their ilk; for truly, they (ERP vendors) are merely mining the fertile soil that has grown around this attitude of, “there, that’ll fix it!”
Here’s a snippet from a customer that I am in mid-bid with to fix a good-sized document management and work flow system that got way out of hand and made everyone who touched it look stupid, and every process that even got on a project chart for integration with it deteriorated.
Prospect: “We paid the vendor and it did work out, it does nothing of what we specified, and is breaking things that have seemingly very tangential coupling to our other systems. We were screwed.”
Me: Did you ask the vendor or the design consultant to live benchmark for or prior to delivery as a condition of payment?
Prospect: No, we paid a big chunk up front. Hoping for the best.
Me: Did you temporarily go insane?
Prospect: Apparently - It feels like I’m in a IT based Seinfeld episode, and I’m George.
Bob Turek
Jun 14, 2008 at 11:44 pm
Alan- wow, he sounds like he knew he was getting “screwed” all along. Indications are the seemingly jovial way he responded to your inquiries. This just seems lazy. Bottom line is that most IT folks are just not businessmen. This discussion brings me back to what IT MUST be knowledgeable about, but not be responsible for creating; in other words, the company strategies that their projects will link to.
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