ERP Failures and (More) Consulting Firm Myths

"For the sake of the client, let’s start being honest with each other"

In my previous article here at ERP.com, we addressed the following myths surrounding ERP software consultants:

Myth #1: Consultants will make us successful.

Dispelling the myths is not simply reckless "rock throwing" at consulting firms, as some may believe. The reason is everyday, somewhere in the world, a real ERP project fails because a client bought into these crazy myths and half-truths (circulating in the industry for years). It is about time someone set the record straight.

The basic problem is most vendors avoid involvement with fixed price and progress payment projects, and for good reasons. First, most consulting firms prefer not to get into the exhaustive contract wrangling required for these deals. In addition, once the project is underway there is a good chance client expectations will not be met, something most consultants do not need on their resume.

In addition, consultants know something most clients do not… consultants have little control of the key factors driving cost and progress. In other words, they refuse to assume the risk when the client does not deliver on their responsibilities.

Consultants Always Have A Way Out

Even when consultants quote a fixed price, most are not really fixed. They are fixed until further notice. The point is most firms are better than clients are at writing software-consulting contracts. No matter how well the client "dots the i’s" and "crosses the t’s" the devil is in the details, is open for interpretation, and scope creep is inevitable. The result is expensive "change orders".

When it is possible to lock a firm into a "true" fixed price, keep in mind consultants are in business to make money. The fixed price probably has plenty of fluff and the client will not get a refund if the project requires fewer consulting hours.

Furthermore, the "not to exceed" clause adds little comfort. One thing is for sure, consulting hours will "fill all available space". When this occurs, the client might have been better off going time and material.

In addition, most consultants are very good at making software function to meet the bare-bone language of any agreement. Chances are what is delivered is a lot less than the client expected.

Finally, ERP software is very unforgiving. When we rush or cut corners to meet arbitrary dates or budgets, no doubt there is a price to be paid later.

Again, this is not to say fixed price or progress payments never make sense. They are tools in the toolbox but tend to make more sense on projects of very limited scope. In no case are contracts a substitute for client project management and the need to manage consultants.

Myth #8: Consultants with a great price and fastest implementation must know something other firms do not.

Therefore, it is best to hire a vendor that delivers the required skill sets and sets realistic cost and schedule expectations. Why set yourself up for failure right out of the gate?

Myth #9: Implementation tools and templates make for better firms and individual consultants.

Typically, the intangibles of discovery, learning, decision-making, and issue resolution, represent the longest pole in the tent. Any custom software development for modifications, conversions or interfaces, are also on the project critical path. Tools and templates are not much help in addressing these tasks. The point is tools and templates are way over sold and never made a bad consultant much better.

In fact, tools and templates are often just a vendors marketing ploy. For example, if the tools are impractical to apply, full of bugs, or in the hands of consultants that do not know how to use them, they may actually delay a project or become "shelf-ware".

Myth #10: A software consultant is also a good business analyst.

In addition, the ability to redesign any business processes from scratch (software or no software) is a different (and even higher level) business analysis skill set. The average consultant usually lacks this "raw" business reengineering skill, since they are focused primarily on software.

Myth #11: Consultants will transfer software knowledge to the client.

A consultant can have software expertise, but if he or she cannot adequately explain it or present it, knowledge transfer will suffer.

A "Doer" not a Coach

Many consultants enjoy the "head down" software work and simply do not like to do knowledge transfer, or see it as a distraction or inconvenience. Others are reluctance to delegate tasks (for the sake of client learning), or rush off and complete tasks that are the client’s responsibility.

Poor documentation

There is no need to write a novel, but many consultants fail on the promise to document project deliverables or the documentation is sorely lacking.

In future articles, we continue to discuss the remaining great consulting myths…

Myth #12: More consultants are needed because the client lacks the right knowledge and skills.

Myth #13: More consultants are needed because the client cannot free up internal resources for the project.

Myth #14: Hiring new employees to fill application-consulting roles cannot be justi fied.

 Myth #15: Once the project starts, the consultants will manage themselves.

Myth #16: Consultants will be frank and honest with sr. management.

Myth #17: If the project fails, we can always blame our consultants.