The Top 8 Reasons Why SAP Projects Fail
By: Matt Angerer
The first time I touched SAP was in 2002 at Unilever HPC. I believe it was v4.6c. It was my first job out of college as an EDI Systems Analyst and I didn’t know the difference between VA01 and VF01. If you’re an SAP professional, I’ll leave it at that. However, after 6 months working in a very supportive eBusiness Connectivity team, I could navigate my way not only through the order-to-cash cycle, but picked up a few tricks of the trade monitoring IDOCs and testing both inbound and outbound transactions from a variety of systems and partners. Looking back, we had an IT Manager who was a real stickler for details. She would closely analyze my deliverables and provide constructive advice of how I could improve next time around. MaryAnn was a firm believer in continuous improvement. Although I didn’t fully grasp the impact her leadership style would have on me at 23 years old, many years later as I faced more difficult challenges on SAP implementation projects, her impact was clear. She embodied the key characteristics of a strong leader by how she interacted with her employees and managed her projects.
Our projects ranged from on-boarding Wal-Mart on AS2 (EDI over the Internet) to redefining how the eBusiness Team handled Advanced Ship Notifications (ASNs) errors. Her approach hinged upon four key factors: timelines, affordability, objectives, and soundness of targets. She knew the importance of having an overall strategic plan that guided the eBusiness team, but also understood that inaccurate time estimates could spell disaster. By balancing these two aspects masterfully, she was able to dictate the direction of the SAP eBusiness Team.
Fast forward 15 years and I’ve had the privilege of assisting in over 10 SAP implementations (ECC, CRM, S/4 HANA) across 7 different industry sectors. Each of these projects came with certain successes and failures. However, throughout these SAP projects I’ve carefully noted the main reasons for their failures and successes. In this article, I want to provide a breakdown of reasons why I’ve seen SAP projects fail. Of course there are a myriad of other factors that can influence a project, but in my opinion these 8 reasons are why certain SAP projects fail.
1) Lack of a strategic plan. In their eagerness to launch an SAP project, many people dive into the project without developing a strategic plan. There are many hallmarks of poor planning, but here are five of the most common planning errors:
- Jumping into a project without considering results of similar, past projects
- Launching a project without involving key stakeholders
- Failure to consider costs or set budgetary parameters
- Minimizing the complexity of developing software
- Moving forward without setting up a schedule to assess progress on deliverables
It’s easy to get caught up in the whirlwind and excitement of a new project. You’re eager to move ahead and prove yourself, but you can avoid these mistakes by involving key stakeholders in your strategic planning meetings and by establishing performance measures to help gauge project progress. Finally, you should always analyze the results of past projects as you map out your strategic plan.
2) Inaccurate estimates of time required for project completion. A carefully formulated estimate of the timeframe required for a project plays a critical role in its overall success. Poor timeframe estimates can lead to lost revenue and low client-satisfaction. Below is a look at some factors that contribute to poorly configured estimates:
- Creating estimates without involving the frontline staff who will be doing the work
- Basing estimates on guesses or wishful thinking
- Offering an overly optimistic estimate in an effort to secure a client’s business
- Ignoring completion timeframes for past projects
- Failure to provide updates on time estimates as deadlines approach
Providing accurate estimates is best achieved by using proven tools and techniques such as three-point estimating. Additionally, project teams should review completion timeframes for similar projects completed in the past, providing regular updates for the client on project timeframes.
3) Poorly defined project scope. One of the key responsibilities of the SAP projects manager is to outline the scope of a proposed project. Scope refers to the amount of work required to complete a project’s objectives and deliverables. Some of the key errors related to poor scope management of a project include the following:
- A project scope that lacks clarity and definition
- Inability to define accurate budgetary parameters due to a poorly defined scope
- A project team that lacks direction due to poorly defined objectives
- Making scope changes without the input of key stakeholders
Project managers can improve the way that they define and manage a project’s scope by making sure that a project is carried out in pre-established segments with the involvement of stakeholders. Any changes to a project’s scope should be clearly conveyed to all parties involved.
4) Poor risk management. Avoiding discussion of project risks is like viewing a project through rose-colored glasses and is a recipe for project failure. Risks should be identified, assessed, and properly managed through acceptance, avoidance, or mitigation. Unfortunately, many projects are initiated with the following risk management mistakes:
- Launching a project without considering any risks or their potential impacts
- Considering only the positive ways that a risk can impact a project
- Discussing risk in a general, all-encompassing fashion
- Failure to regularly reanalyze risks as a project unfolds
Proper risk management can help eliminate barriers to success for an SAP project. Strategies to help manage risk include categorizing identified risks, involving stakeholders in risk management discussions, and periodically updating risk registers.
5) Insufficient testing. My favorite. Successful SAP implementation rarely occurs without a robust testing strategy. While it may seem intuitive to test a product prior to implementation, there are too many cases in which projects are labeled “Completed” without ensuring that design requirements are met. Below are some common examples of insufficient SAP testing:
- Testing resources are inadequate
- The individuals performing the testing lack expertise
- Poorly maintained testing documentation
- Testing is biased, or conducted by people aiming to prove the software functions properly as opposed to identifying flaws
Many of these issues can be eliminated by creating a comprehensive test plan that is reviewed with stakeholders in advance of testing. Additionally, the testing process should be overseen by an experienced test lead who emphasizes the importance of documentation.
6) Human resource challenges. A smooth SAP implementation is best achieved with the support of a well-organized, highly motivated team of professionals. SAP projects should be managed by an experienced leader who can keep a project on track and quickly address underperformance. Below are some examples of human resource issues that can impact a project:
- Ignoring conflict between team members
- Spreading resources too thin, or across multiple projects
- Failure to consider training time when preparing time and cost estimates
- Waiting to address underperformers until it is too late
Addressing human resource challenges requires project managers to quickly diagnose and address key causes of subpar performance and conflict between team members. Each project should operate according to a schedule that is designed in advance of implementation, and team members should be trained to properly cope with conflict.
7) Failure to engage stakeholders. Communicating with stakeholders is often vital to the success of a project. In addition to serving as key project advisors, stakeholders often lend financial support and expertise that can contribute to project success. Make sure to avoid the following stakeholder pitfalls:
- Seeking stakeholder involvement only after a problem develops
- Ignoring stakeholder goals and desires
- Failure to maintain documentation for meetings and risk management discussions
Transparency is the key to stakeholder engagement. Through open communication and meeting inclusion, project managers can keep stakeholders engaged in SAP projects.
8) Inadequate Project Management. Ideally, project management combines skills, expertise, resources, and strategic planning to meet or exceed project requirements. Creating a new software product is an example of a project that requires quality project management. Unfortunately, there is a host of project management errors that can impact a project’s success. A few of these errors are as follows:
- Devoting too much energy to processes as opposed to a project’s outcome
- Insufficient leadership and training
- Failure to address problems when they arise
- Short-sightedness, or the inability to focus on long-term successes
Have any questions about SAP implementations, or project management in general? Feel free to contact ResultsPositive and let our experienced consulting staff assist you with your most pressing business needs.