by Thomas Wailgum

United Nations’ ERP Project: Is SAP the Right Choice?

Sep 09, 2009
Enterprise Applications

The world will be watching to see if the UN's SAP ERP implementation is a tech savior or a project nightmare.

Last week, Fox News released the details of a United Nations draft report on the progress and scope of the UN’s $337 million SAP ERP implementation, named “Umoja,” which is Swahili for “unity.”

George Russell of Fox News took the gloves off. He called the massive overhaul way overbudget and noted that it’s already three to four months behind schedule. Russell castigated the UN “bureaucrats” for their “sweeping generalities” when they described the project’s alleged efficiencies and cost savings. Clearly, Russell insists on being whole-heartedly pessimistic about Umoja’s chances of success. But I’m going to be a bit more diplomatic in my approach, and focus in on just one area: change management.

First, let’s look at the working environment in which this SAP ERP software (budgeted now at $16 million for licenses and maintenance fees) will be implemented. According to the UN document:

“A substantial number of its administrative processes are largely based on practices from the 1940s and 1950s and supported in many cases by technology from the 1980s and 1990s…. There are at least 1,400 [non-integrated] information systems currently in the United Nations Secretariat but in many cases they are used to support or track paper-based processes. Very often, documents are printed from these systems, signed, manually, routed, photocopied and filed with associated costs in time and money. Furthermore, paper documents are usually the source of trusted information, casting doubt on the reliability and acceptance of data existing in electronic systems. The result is that we often have several versions of ‘the truth.'”

Yikes! While that’s a scary proposition for any organization to admit to, I would bet that the UN’s environment is not atypical from a large, global company in the late 1990s or early 2000s. The report continues:

“The total time annually directed to processing travel claims is more than the fulltime equivalent (FTE) of 60 person-years. Completing the year-end closing of accounts currently involves 40,000 working hours and takes three months.”

There’s more. But that’s enough. You get the idea.

For what it’s worth, the UN draft document shows that the implementation team—which claims “substantial experience managing organizational change initiatives in both the private and public sectors, including previous ERP implementations”—is well aware of the change management challenges.

“Umoja is not just about implementing a new system; it is about implementing new and better ways of working together. To meet this challenge, Umoja must improve staff attitudes and skills, align processes, policies, and organizational structures with known leading practices and standards, and deploy a new global information management platform.”

Now here’s where I see a potentially devastating problem for the UN team, in line 87 of the document: “Please note, based on the process analysis and requirements review done to date and assuming the organization’s ability to adapt, no customizations to the core SAP code have been identified.”

While I’m no fan of widespread customization, let’s look at this logically: The UN is taking users who are accustomed to decades of manually intensive processes and asking them to use SAP’s ERP suite, a piece of enterprise software that has its own issues with complexity and non-ease-of-use. Giving it to them out-of-the-box, with little or no familiar customizations that wean them off the old software, seems foolhardy.

History tells us that the greatest odds for success with SAP ERP are at organizations that run lean, disciplined shops where change doesn’t have to involve translators or global resolutions. Even Waste Management, a CIO 100 Award Winner, had a disastrous time with SAP.

Put another way: Do you put someone who’s never driven a car before in the seat of a 180 mph Ferrari Testarossa or a base-model, automatic Toyota Camry? Think about the job and process changes a typical UN user will face. The rigorous training. The shock when she sees that screen for the first time after pushing paper her whole career.

My head is spinning.

Of course, there are lower-cost, easier-to-use alternatives to SAP and Oracle, as I’ve written about here and here and here and here and here.

There are many things to quibble over with this UN project: the dubious claims of up to $770 million in savings and efficiencies; the inflated travel expenses (an average price of $6,000 for air tickets); the $146,000 necessary for stationary and office supplies; the $564,200 for long-distance telephone calls, teleconferencing and videoconferencing.

But if there is one thing that will surely doom the project—because rest assured that the software will eventually run, whether it’s by 2013 or beyond—it will be the ill-equipped users tasked with actually changing the day-to-day of their jobs to fit the strict parameters of this foreign software.

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