OracleAppsBlog
A day in the life of an Oracle Applications Consultant

Friday, March 25, 2005

ERP Implementations and Contract Negotiations - Top 12 Tips

I came across an interesting discussion on the ITtoolbox forums the other day which contained some useful tips on negotiating SAP implementation contracts as well as general implementation advice. Despite the discussion being SAP orientated the advice given could quite easily apply to an Oracle eBS implementation or any other ERP deployment.

ITtoolbox has several good forums which one can read. Personally, I subscribe to the ERP-SELECT and ORACLE-APPS-L forums and can highly recommend them to anyone implementing ERP systems. A post the other day entitled about ERP(SAP) consultancy contracts caught my attention and in particular some comments by Bob Woitaszewski (a former SAP Implementer) caught my attention. I asked Bob whether I could post his comments on this Oracle Applications Blog and he agreed so here’s an excerpt of what he had to say:

Remember any consultancy wants to do a good job, however, they usually want to make sure that the contract will favour them in the end, not YOU. Having done 7 SAP implementations, 4 as a PM for a consulting firm using the ASAP methodology, let me pass this on: -

  1. Make sure that you work with SAP and their current methodology, what ever that is.
  2. Make sure you call out every deliverable for each phase.
  3. Make sure that you include DATES that each deliverable is due.
  4. Make sure that you specify what you are responsible for and what the consultancy is responsible for, for EACH deliverable.
  5. The consultancy is required to deliver a fully configured, PRODUCTION system, not a "prototype!"
  6. Specify that you have a customer acceptance clause.
  7. Make sure that you develop a matrix that ties each requirement to a test for each requirement.
  8. Make sure that you include a "Not to exceed" clause where you figure what the maximum is and they agree to it. It’s essentially a fixed price contract; but forces consultancy’s to bill you by hour.
  9. Always make sure that you include in the contract that the consultant PM must report hours weekly. That way you make sure that you aren’t getting "double Billed" by some rookie at the consultancy’s back office.
  10. Make sure that the consultants are on site at least Tu-W-Th. It may cost a little more but with all the local talent that exists, the travel expenses will be minimal compared to a botched implementation.
  11. Make sure that the implementation team is given sufficient time to "play" with SAP and learn the ropes. Co-locate them into a separate office section so they can make real time decisions. Bring in out-of-town key team members. Relieve them from all but the most critical job functions. 
  12. Make sure that your team is "empowered" to make change happen, and BTW, implementing is ALL About CHANGE MANAGEMENT and COMMUNICATION.

One last word of wisdom. I have found that thing will be a lot easier for your company if you reengineer your processes to match SAP processes whenever possible. Use the "default" process for 6 months and then if you must modify them I had to offer that even though as a consultant, not ONE of my clients ever heeded that pearl. And when I went back after 6 months or so, almost everyone wished they had followed that one piece of advice.

Having been involved in IT and ERP implementations for the past 9 years I can certainly agree with all of the points on Bob’s checklist and hope that posting them here will provide useful advice and ideas to readers currently implementing or planning to deploy enterprise software solutions.