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5 Reasons Why SAP Projects Fail

SAP projects have struggled with their implementation success rate and SAP has seen some large clients pull the plug on their implementations citing a host of reasons. What could possibly be the reason for their failure though? Wouldn’t it be better to hand over the responsibility to a smaller and equally competent firm that would bring your enterprise a higher ROI?

Choosing an ERP system that is a perfect fit for your business is never a spontaneous decision. Opting for one of the giants, like SAP for your digital transformation is a massive investment, but is it really worth it? Let’s analyze.

#1 Some SAP projects lack of a sound strategic plan

In order for a project to succeed, there has to be in place a proper plan for the digital transformation. The technology has to align with the business plan. There has to be a clear understanding of where you’re headed as a business and make sure your system is aligned with the evolving business model. When it comes to SAP projects, oftentimes we have seen customers trying to align their business objectives with their technology and those have led to epic disasters.

At VIENNA Advantage, for example, we put an enormous amount of importance on this stage of collecting the business requirements and drawing up a blueprint document that needs to be signed off by every stakeholder in the project. This ensures everyone is aligned with the same technological vision and making sure it’s in keeping with the business requirements and goals.

#2 Miscalculated Estimate of Time

SAP implementation failures at Revlon, LIDL, Haribo, and many others show a clear pattern of an inaccurate calculation of the project completion time. The SAP implementation at LIDL for example ran for 7 years before it ended in LIDL absorbing the losses and pulling the plug on the project. Accurate time estimation is key for the organization to plan and execute its processes and manage its people. So an SAP implementation is not only a huge tug on the purse strings, it’s also a time-intensive process. On the other hand, at VIENNA Advantage, we offer a low code framework that allows us to complete implementations in a much shorter time frame. This allows our consultants to provide our clients with accurate estimates of the time taken to complete the project.

#3 Poor Risk Management

SAP implementations are infamous for their poor risk management which once again leads to the failure of several projects. In the case of Revlon for example, implementation risks were not properly documented, so when the company realized their SAP S/4 HANA system was causing them massive financial losses, Revlon’s stocks had already dropped by 7%.

At VIENNA Advantage we consider this one of the key stages in the implementation process, where, together with our clients, we understand, plan, document and quantify the risks involved and draw up a sound plan to mitigate them. Operational disruptions are a part and parcel of every digital transformation process, but they are temporary and can be easily fixed. In the absence of proper risk management, the users are caught off-guard and are ill-equipped to manage any issue that may arise at different stages post the implementation process.

#4 Inadequate People Management

One of the aspects often overlooked in the implementation process is people management. Often we see a lack of prioritization and accountability for organizational change management. Without proper preparation and training of employees before and during the implementation, users have been known to reject the changes and revert to their legacy ERP systems. This of course, directly impacts the success of the project.

At VIENNA for example, we spend an inordinate amount of time training the administrators, who will be managing the ERP system as well as the key users, who are the people actually using the system. 

#5 Insufficient Testing

Another process or the lack of it that accounts for the failure of many SAP projects is that of exhaustive testing. Not enough time is spent on testing business processes, understanding roles and responsibilities, or managing proper integration with third-party devices.

At VIENNA for example, we follow a method of User Acceptance Testing (UAT) where key users come up with their own cases based on the signed -off blueprint and accordingly test the system.

Failures of SAP projects are not widely reported and this is largely due to the company’s control over various IT media channels. The company has allegedly been censoring news of its failures for quite some time now. Whether this is true or not is debatable, however, what is not debatable is the fact that there are several other IT providers in the market who will provide your business with a robust system, at a fraction of SAP’s cost, in a shorter span of time and in turn, ensure the success of the project.

VIENNA Advantage, for example, offers its customers a more robust and efficient system than the SAP S/4 HANA and that too, at a fraction of the cost. In addition, VIENNA Advantage Enterprise ERP Solution has a high success rate because of the diligent and methodical processes followed prior to, and during the implementation as well as in managing the systems post-implementation. So who will you trust as your digital transformation partner?

5 Reasons Why SAP Projects Fail
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