Part Two in the series, "High Hopes. IT Salad and the Fiascoes that Follow" by Alan Wilensky
Evil eye. Stink eye. Jaundiced eye. The SAP VAR did not like interlopers second guessing; they didn't get this far billing seven figure accounts with a 150% margin by having guys like me analyze plumbing and operational issues which they never accounted for in their wildest dreams. Not on this job, anyway.
They don't do that kind of specialized, introspective examination of processes, and why should they? They make a system that is a slightly bad to ghastly fit for 90% of the faceless installs they complete. The other 10%, they take the money and run. Client's either need an IT department with the policies and labor muscle to counter the juggernaut of an ERP worst practices program or a CIO (IT manager for the SME) who knows what strategic alignment is (is this project fulfilling a mission?).
They didn't like that I was invited; that I was there at the client's behest cut no ice whatsoever. I was like a card counter in a Vegas Casino - the house wanted to ALWAYS win, even though they make oodles. Well, tough cookies. I've been doing this for years, and in addition to my role as a contract product manager, I am an advocate for the client first, last, and always.
"What, do you guys want a speech or something?", I was introduced at a client / vendor meeting with thirty stakeholders; nothing can get done at these 'conventions'. I had to walk a tightrope - I just wanted to say what the vendor had not done.
"The SAP vendor has not done the homework, and is just ramming a solution down your throat after the least amount of no-thought design work".
Recall from the first article that the client had adequate (if somewhat dated) systems in place. I couldn't just say that the VAR was a particular kind of charlatan, they are all, in one way or another, charlatans. I had to be precise. I had to be diplomatic:
"This is messed up. Bigco systems VAR did not interview the key process people and performed no examination of the mature processes that are involved in the rapid replenishment process. Moreover, this business had been profitable for years, and has evolved systems, which are stable, and has vendors that are cooperative with the current processes. None of this was taken into account. Rather, the VAR is creating systems that have degraded work-flow, more steps, opaque rules for forecasting, and a 10X infrastructure and support costs. I might also point out the current system (Oracle, older) has a near zero support cost and 100% availability. Furthermore, Bigco VAR has not disclosed that the trading partners will have to convert, eventually, their processes, and possibly go the EDI route for a fully automated rapid forecasting replenishment end-to -end solution. No one ever told you or the suppliers that fact."
That was diplomatic, alright.
The SAP VAR responded that I was a one man operation, that I did not have the credentials to advise enterprises, and they felt they did not need to address the issues in my analysis. They pointed out that I had no college degree.
All of my points were factual and related to the case at hand. All of the vendors points were personal, and related to me.
This first meeting commenced after I audited the worthless vendor quote, client's project requirements document, and the project charts. None of these were of any help in determining the root cause of the morass. Even to a critical eye, these documents seemed to be in order. What were they missing that could have caused such heartache in the execution of cutting over the client's older, reliable systems to a SAP system? I thought I knew the score after interviewing the client's key personnel that actually manned the older systems and who made critical, real time decisions regarding replenishment of supplier upstream orders. That was the key - the people were so integral to the process (this will never change) and the old system merely reliably recorded and and reported their transactions.
The new system, as designed by the VAR, externally tried to mimic the screens of the old system, while providing automation for forecasting and automating the replenishment process using all the SAP secret sauce. But there was a big mistake made by the VAR: They never looked at the policies of the key personnel who made those critical replenishment decisions. Those people based rules were the heart of the client's process. Copying screens and messing with rules was just a way to plow the job out of the way and get the money. Then they would be long gone with a sweet contract for support and system maintenance.
I spelled out the most important complication, though: "I was invited to audit, because there is a major stop / go milestone here for a major hardware upgrade concurrent with decommissioning of the old Oracle system - which is madness. Why would you do that? To burn a bridge? So there's no going back?"
The vendor's teeth were clenched, amongst other parts of their collective anatomy, "we need the client's users to get used to the new system, without the use of a crutch."
That did it - the IT manager cum CIO stood up. He was ordinarily a meek man, cozy inside his cubicle; one of his character traits that exacerbated this debacle - but certainly not the root cause.
The IT manager sputtered, "Oh boy, we're really getting into it here".
I needed no more time to deliver my whammy, it's what I'm paid to do, put projects right, "120K in licenses and staging servers for a systems that is worse that the old one, that makes the suppliers crazy, and doesn't take into account the processes run by the expert staff? Now comes phase two with 220K and hardware, training, and I just want to know one little thing, please, before you blackmail this fine company into throwing away their near flawless inventory and vendor management system....."
The VAR boss spoke up, "Yeah, what's that?" he was really not looking forward to this question, because he knew at this point that he had been avoiding my calls to collect facts for this installation, and had bad mouthed me to the client before I even got there.
I sprung it thusly, "did anyone interview Myrna for her insight and input into the supplier processes?"
Silence. Silence. "Who's Myrna", said the VAR's client team leader". Oops, never admit in a meeting of 30 people that you are totally clueless as a team, as a vendor, and as an organization.
The vendor's myopia could best be illustrated with one sharp example - Myrna's Notes posted on a laminated Process Reference card. This humble, yellowing page, lettered in a tiny, neat script, described each supplier's special 'quirks and parameters', regarding terms of ordering and fulfillment. The whole enterprise hinged on Myrna and her able handling of supplier idiosyncrasies. Myrna had been with the company for 25 years. Actually, the client's whole process had about 12 key people in the process that we could call, "Myrna".
I knew that at least one of the executive brothers and the IT manager had directly told the SAP technical sales team that Myrna was the manager of supplier relations and was a 25 year veteran of not only the company, but of the PCB surplus equipment industry.
- Myrna was the rules base.
- Myrna knew that difference between a manufacturing supply chain and a trading based surplus supply chain.
- BIG DIFFERENCE
I knew about Myrna before meeting the client in person, and before submitting my proposal for the analysis part of my Statement of Work.
With that admission of ignorance on the part of the vendor team out of the way, I was free to expound:
"You started this re-engineering process to help mesh suppliers with your carefully and organically perfected processes. All you wanted was automation of the basic yet unique services that your key employees have been performing, and will be performing for years.
This does not require 150k in blade servers and 220k in SAP SCN, although now that you have it, the API can be leveraged. DO NOT DECOMMISSION THE LEGACY SYSTEMS."
I have nothing personal against the current vendor, with a caveat that they are treating you like a generic client - you are not generic, you have a unique business in a highly specialized vertical that needs careful study before legacy systems are displaced.
I do have recommendations that will probably require termination of the current vendor's agreements, not due to malfeasance, but rather due to an inherent inability to spend the requisite time learning and adapting to the business. This immersion requires either hiring a sector specific vendor (more suitable to the Fortune 1000), or a custom fit replenishment solution.
In this case the SAP base solution has the capacity and capabilities, but its wind up time is too long, and the vendor run up process is too fragile to account for specialized instances, like yours. This job may never get done without vast amounts of follow-on payola to the VAR. (there was no refutation of this in meetings to come).
You can read my detailed analysis in my report. I have an alternative architecture that uses a hybridization of your upgraded Oracle system, on-line SAAS, and a small amount of glue on the client side. You do not have to use me to implement this."
The SAP VAR reached around the back of the table past the other person sitting between and whispered the words, "I am going to sue your ass, Wilensky".
I responded, "What else is new, is that all you got?" "You know those new SAP commercials for the small business - it's all whitewash".
The man looked like he had indigestion. So how did it all end? Well, let me tell ya'll:
- The client gained leverage with the VAR, re-negotiated some contract items forward and backward.
- They all agreed to keep the old system in-line until 100% functional to new system.
- The VAR is looking at whether they have the time and expertise to capture the knowledge that they should have at the beginning. If the client or the VAR can't come to terms within a set time as to the state of the process redesign, the client will pay for the licenses and the VAR cuts them a credit for the labor.
- I may or may not hear from the client if they want to go the SAAS / hybrid route. I billed $8,500 for 10 days work, and I agreed to be available for phone calls for the next 30 days, no extra.
- If they want to use me for the systems re-design, my totals will come in around 75 K for the 180 day project, and my contractors will be around 100k, they will also have SAAS costs. All of this is bupkiss when compared to the ride they were taking (still? who knows the future) with Bigco VAR.
If this client pulls the trigger, I will write part three in this series. At this point, they are very happy with the analytical services that I have provided thus far, and the entire experience is extremely illustrative of the kinds of problems that Small and Medium enterprises can experience when getting into IT systems that are not aligned with their strategic purpose.