The sad truth is the track records of many significant IT investments and ERP system implementations are horrible. Faced with these business derailments and extreme loss of invested capital, clients all too often ask “who did this to us?” The sad truth is more often than not, that company did it to themselves.
I don’t wish to grant a free pass to the unprofessional “professional service firms” out there with far less than scrupulous business practices. These firms game the RFP system by writing scope statements and assumptions that nearly guarantee the failure (or at least the budget failure) of these initiatives. But, more often than not, organizations crafting the RFP nearly mandate this unscrupulous behavior in order to be selected as the “preferred vendor” and awarded the business.
So here’s the obvious question: why do so many companies continue the cycle and repeat past mistakes again and again?
The recent news about Select Comfort’s complete halt of the SAP implementation it was undertaking after digging themselves into a $10 million dollar hole, behind schedule and well over budget sickens me far worse than usual.
This opportunity is particularly troubling to me, because the fact of the matter is we sat side-by-side with SAP in demonstrating to Select Comfort the value of the solution and, in fact, were a significant factor in convincing them that they could be successful with the technology and implementation. At the conclusion of our efforts, in an attempt to choose the implementation firm to realize the benefits that we assured possible, Select Comfort issued another one of those RFP’s and vendor selection criteria that could only be awarded to an organization nearly incapable of delivery in SAP HR. References and experience were discarded or de-weighted in the process as unimportant to the project’s success.
Think about it. These failures and overruns have spurred a slew of new procurement processes to address the past issues. Formalized RFPs, complex weighted selection criteria, one-throat-to-choke requirements, preferred vendor programs, etc. which have done nothing to reverse the trend—in fact they have enabled these horrible decisions to be made with tremendous efficiency at alarming new speed.
As your trusted advisor, please stay tuned, in my next blog we will discuss how to solve these problems…