by Thomas Wailgum

United Nations’ SAP ERP Rollout: High Profile and High Risk

Jan 20, 20093 mins
Enterprise Applications

There are your standard-fare ERP rollouts, and then there are your ERP implementations that overshadow all conventional software rollouts—excruciating tests of executive leadership and project management, of hardware and software platforms and global networks, where cost and scale are ominous and failure seems just around every corner.

The United Nations is undertaking one such SAP ERP project that falls into the latter category.

On Monday, the UN announced that it had awarded a contract to the Walldorf, Germany-based SAP. “The awarding of the contract is subject to successful negotiations, which will start immediately and are projected to wrap up within three months,” noted a UN news release. “As of now, no contract has been awarded, and the value of any such contract is as yet undetermined.”

Early, but unconfirmed, reports from inside the UN estimate the value of the SAP contract at $300 million, which would make it one of the largest public-sector ERP deployments for SAP.

While details at this point are sketchy, I’m left in awe of the monumental task that now lies in wait for the UN’s IT staffers, user community, external contractors and SAP employees associated with the project.

Think about it: UN workers usually find themselves in war-torn, storm-ravaged or insanely-difficult-to-live regions on the globe, where high-speed bandwidth connections and top-notch IT facilities are usually not first priority. The UN announcement noted that criteria for the ERP selection included “the software’s performance in low-bandwidth locations, so as to ensure its ability to support remote peacekeeping operations.”

To me, application flexibility and ease of use seem like they would top the UN’s list of must haves. SAP’s applications, on the other hand, have been dogged for years by complaints of complexity and difficulty of use.

Large-scale SAP ERP implementations demand the very best project management, strong executive leadership and decisive decision-making. The UN, however, isn’t typically known for its quick decisions: try long, consensus-building procedures that aim to support democratic values. (Again, the UN said it projected to take three months just to “negotiate” the scope of the contract, after it has already announced that it awarded it to SAP.)

Does this sound like a good mix?

In addition, the prospects for ERP success have dropped as of late: As I wrote in a recent post, today’s ERP rollout has only a 7 percent chance of coming in on time, will probably cost more than what was estimated, and will likely deliver very unsatisfying results. And there’s a slightly better than 50 percent chance that users will want to use and, indeed, actually use the ERP application once it’s in house.

The degree of difficulty inherent in the UN’s mission and its far-flung and dangerous operations has to make those odds even worse.

Large-scale ERP software implementations that have blown up or been severely delayed have become an all too common occurrence during the last 20 years or so.

And as Forrester Research principal analyst Ray Wang recently told me, there really haven’t been any improvements as of late in ERP project management. “I don’t know if there is any change in the level of success or failure,” he says. “My guess is that companies are putting these systems in begrudgingly. And if there’s a failure, they’re going to cover it up.”

It’s not that I have a problem with the United Nations’ intent to modernize its internal systems. Nor do I mean to disparage the UN’s IT services division.

It’s just that this $300 million SAP ERP rollout may have the word disaster written all over it—and the contracts haven’t even been finalized.