System Integrator Assets and Accelerators – It is Not Just About the People Anymore

With the introduction of SAP’s S/4HANA platform and the evolution of the concept of the Clean Core for ERP, we have seen a shift in the landscape on how the large SIs are competing.  Gone are the days where the firms would compete by suggesting they have the most highly trained and experienced talent.  While these factors are clearly still important, they have been replaced at the top of the list of evaluation criteria by the assets firms bring to the table to support the automation of re-platforming, prepackaged line-of-business and industry-focused capabilities, and innovation accelerators.

These assets bring the promise of value, but also the potential of an increased level of risk if you select a firm that is not aligned with your situation.  When the SIs speak to the value proposition of their tools and methods they will focus on:

• Highlighting lower costs and consistency of delivery
• An accelerated pace and lower investment to achieve leading practices
• A reduced time-to-market for differentiating innovation

What they fail to mention are the risks with:

• The ability of the client to work at the same pace as the vendor
• The overall applicability of preconfigured systems for your industry
• The availability of talent to enable accelerated innovation

SAP Model Company and RISE

Before jumping into the assets that the major SI players bring to the table, we need to address how SAP has approached the marketplace with its own service offerings.  Let me start with SAP’s Model Company that appears to have crashed and burned.  Model Company held the promise of providing companies a standard configuration based on specific industries and lines-of-business.  SAP sold the value prop that if all companies in the same industry used common core configurations, then these companies could compete based on the processes that differentiated them.

SAP looked to monetize Model Company by making bank on the implementation fees and providing support services for the common configuration.  As you might imagine, this offering was met with lukewarm support from the SIs.  While a few marketed their certification in Model Company as a differentiator, most simply acknowledged that it existed and that they could implement.

The SIs have embraced SAP’s most recent RISE offering with a lot more enthusiasm.  The big SIs have all introduced implementation methods and offerings that complement RISE rather than compete with it.   In a nutshell, SAP RISE allows clients to enable the S/4HANA platform in a hybrid cloud environment with the economic model of a pureplay cloud environment.  This model does not threaten major revenue streams for the SI.

System Integrator Assets

As we assist clients in the evaluation of SIs and support them on their ERP transformation journeys, three things have become apparent regarding their assets and accelerators:

1. These tools and methods often reflect the company culture — both good and bad
2. It is just as critical to obtain resources from the SI that understand the assets as those that understand the SAP platform
3. Assets provide a convenient lock-in mechanism that make it particularly hard to switch

While every SI comes with a full complement of assets and service offerings, there are a few from each firm that are true differentiators.  While a blog does not afford me the opportunity to go deep into each vendor, I have taken a stab at summarizing each of their major offerings.

Evaluating Assets

An SI’s assets and methods are only one part of the overall criteria for selecting an implementation partner.  The overall level of importance will differ for each client and engagement type.  In evaluating a firm’s assets, UpperEdge recommends these four criteria be applied:

1. Relevance — Do the tool’s capabilities apply in your situation? We have seen plenty of customers select vendors based on preconfigured leading practices that were not relevant to that particular client.
2. Access and Availability — Will the client team have full access to the toolsets? How will they be trained?  Is there a cost?
3. Compatibility — Are the tools aligned with internal standards? Do the vendor’s tools work together in an integrated fashion?  Are third-party vendor’s practice tools aligned?
4. End of Life — What provisions are made for continued use after the engagement? What processes/accommodations are in place to support transfer of data following the end of the engagement?

A firm’s assets and accelerators have become more of a differentiating factor in the selection of an SI.   With the accelerated pace of change and the tight labor market, we don’t see this factor changing soon.   We recommend that clients consider these factors along with Talent, Terms, and Total Cost & Risk as measurable criteria in their selection.

Comment below, follow me on Twitter @jmbelden98 find my other UpperEdge blogs and follow UpperEdge on Twitter and LinkedIn.   Learn more about our Project Execution Advisory Services.