SAP-driven digital transformation initiatives have created a groundswell of system integrator (SI) evaluations. As organizations begin evaluating prospective SI partners, the following are opportunities to improve your SI evaluation and selection process.
Most organizations have relationships with consulting partners capable of supporting an SAP transformation, yet despite these relationships, the SIs are initially engaged solely by Procurement, leaving the business and IT teams on the sideline. In many cases these briefings are accompanied by an incomplete articulation of the program, an unclear decision process and unrealistic timelines.
Strategy: A dual path approach comprised of executive level engagement at the outset, coupled with a well-thought-out briefing by the program team and Procurement that provides an understanding of the objectives, scope, team structure, and the evaluation process. This engagement strategy demonstrates the critical nature of the program to your organization and sets an expectation for your prospective partners to respond in kind.
The best of RFPs provides only a partial view of a transformation program and certainly not the vehicle to bring the essence of your program to life. The “typical” approach of issuing an RFP, allowing a few days for written questions and then providing written responses, is simply inadequate and a disservice to all parties involved.
Strategy: Facilitate a half-day workshop that allows the SI to engage with your business and IT teams responsible for executing on the project, ideally in-person at your facility. An RFP workshop should be viewed as a complementary step that enables collaborative engagement, a mutual assessment of talent, cultural fit, and understanding. This workshop should occur before presentation of formal proposals and oral presentations.
If your plan is to allow two to three hours per SI to present their capabilities and solution, I would respectfully submit that you’re wasting your organization’s time. Let’s profile a typical SAP digital transformation that includes an upgrade to SAP’s Digital Core (S/4 HANA), and the implementation of Ariba, SuccessFactors, and Hybris (C/4 HANA) running on SAP’s Cloud Platform.
There is simply no way for each line of business, IT applications, architecture, infrastructure, and program management teams to each get deep enough in two to three hours to make an informed decision. Customers need to adjust to the fact that SAP’s suite has grown exponentially and now affects many areas of their organization. The SI evaluation process and approach needs to be modified to account for this reality.
Strategy: Consider the following approach if your SAP transformation is similar in scope:
- Limit to three vendors. There are only so many players that will realistically be a fit with your organization – there is no need to waste your time or the time of an SI simply to create the false sense of a competitive environment.
- Dedicate the day. This does not mean you should dedicate an eight-hour day to each vendor, but rather, avoid cramming two vendors into one day. The day may also include internal preparations and debrief sessions as well.
- Conduct break-out sessions. Encourage your prospective SI’s to think creatively. During a recent SI presentation, the SI facilitated case study presentations demonstrating relevant S/4, Hybris, Ariba and SuccessFactors transformations.
- Break bread. Afford each team the time to discuss their requirements peer-to-peer with your SI’s and address their concerns in focused break-outs. A lunch session is a great way for individual line of business teams and IT teams to develop rapport and ask more targeted questions of each other.
Comparative proposal assessments
Post orals and prior to selection of a preferred vendor, a comparative analysis of SI proposals is imperative. Preferably, your process and timeline will account for the likely need for the final vendor(s) to conduct a recast of proposals based on collaborative internal and external discussions.
Strategy: This part of the process is not only critical to conducting a fair evaluation, it is crucial to the commercial negotiation. Negotiating an SI deal must be done with three dimensions in mind – scope, resources and rates. Taking the time to normalize proposals will be a prerequisite to undertaking credible commercial negotiations.
In certain cases when I have suggested these strategies, an existing or prospective client may have reacted by saying, “We don’t have time for an extended procurement process. This approach requires significant investment by IT and the business and we just need to get the project started.”
Consider these questions:
- Why don’t you consider the project as already “started”? View the SI selection process as a key component of the project. It is an opportunity to align your organization, refine your scope, pressure test your approach, evaluate different approaches, refine cost estimates and evaluate the actual people that will deliver your program versus a separate process that is led and driven by Procurement.
- If your team cannot dedicate the time, are you truly ready? On countless occasions, I have witnessed the benefits during an SI evaluation process, for example, the development of relationships, team continuity, alignment of expectations and roles. If your team is truly not ready to engage, I would strongly consider delaying commencement of any RFP process, as these experiences contribute to setting a foundation (internally and externally) that will be relied on when things get tough.
- Do you want to assess and mitigate risk and set appropriate expectations? If so, then there are certain investments that will be required to align on the scope, approach, roles, level of effort, etc., during the evaluation and selection process to align executive leadership. A balance will need to be struck between the client, SI, and SAP for these expectations to be appropriately set because of the SI selection process.
At the end of the day the partner evaluation process should serve as an enabler to the transformation, versus a procurement process. I encourage business, IT and Procurement leaders to leverage a partner evaluation process as a vehicle to address the needs of all constituencies, including a commitment to invest the time and energy necessary to set your prospective partner(s) and your organization up for success.