Why Do SAP Implementations almost always go over budget? Eric Jones, IFM Germany

In this episode I talk with Eric Jones, IFM (Germany) about why SAP always goes over budget, and some option on how to get spend under control.

Logisolve i4 Marketplace, a Logisolve Company Melinda Hyde #sap #leader #changemanagement #projects #linkedin #linked-in #podcast #logisolve #i4marketplace #it #consulting #friday

Transcript

Kelly99
And welcome to the Podcast... today is Friday on the program with us today Eric Jones from IFM  supply chain ah previously g I b third party SaP integrator or or a. What would you call yourself e a tool tool maker for a or what? What do you guys? What do you guys? Call yourselves.

00:21.20
Eric Jones
Yeah, so we're a certified a p solution partner that provides add in solutions to a to and improve and enhance the supply chain functionality within SA p

00:35.74
kelly99
Why does why does sap because I'm assuming sap has products that overlap with what you guys? do why? Why does sap you know, allow you to exist or why do you exist when. When SAP is out there building the same kind of tools.

00:53.28
Eric Jones
Sure. So yeah and in in the core saperp system whether you're looking at traditional ecc or now the S 4 platform a does provide tools to do the basic supply chain tasks around managing demand managing inventory. Ah, procurement and Mrp operations and production scheduling but all those functions in standard sap are let's say basic rudimentary. Ah, you're able to execute those tasks in a in a pretty manual non optimized way. But when. Your business is faced with the challenges of volume complexity and variability which almost every business has to a certain or large extent those those basic solutions become very challenging to work with to to create ah a truly optimized. And responsive supply chain. So that's where almost all sap customers are faced with that dilemma of what do I do to to address these challenge of challenges of volume complexity and variability within my business and can I address those challenges within. A pure ap context or do I need to to bring in external tools or do I need to take the the all too often. Um necessity of of bringing data out of sap putting it in offline spreadsheets or databases to.

02:28.14
Eric Jones
To get the necessary intelligence and and decision making that that they're lacking in in standard s ap so so yeah, so that's the challenge that most a customers face and that's why we exist is to address those challenges to really um. Automate and optimize supply chain but to do so within the context of sap so that you're not moving your data out of sap you're not asking your people to learn new software. We believe in bringing extended tools and improved tools. To where your data and your people live inside of Sa and make sa a more functional a more functional a more automated a more intuitive system.

03:11.36
kelly99
How long have you been working with SAP projects how long have you been is it been is it been 5 years or 20 years or

03:21.44
Eric Jones
Yeah, so I so so I first joined us a p in in 2005 so prior to that I was a supply chain practitioner working in industry and in manufacturing and wholesale distribution and really you know developing my my experience and knowledge within um. Many aspects of supply chain operations and then have the opportunity to to to be part of the a ecosystem in two thousand and five first with sap and then with various ap systems integrators. So so in that time I've really come to understand what are those. Broadbased supply chain challenges that most most companies face especially in the you know within the manufacturing and distribution industries and then more specifically how are those challenges addressed or not addressed within the context of sap and so um. For me I've been yeah working on and helping s a customers improve their business find tangible results and and all within the context of of of ah of supply chain operations and either helping them to maximize the use of Sap or bringing in. Add in solutions like like gib now ifm supply chain solutions to to have the right level of of automation and and sophisticated tools to to drive higher levels of profit profitability and customer satisfaction.

04:46.28
kelly99
So you've been around it a long time I've I spent a lot of time around executives who are have implemented ap in it and maybe this isn't any different than any other software.

04:50.66
Eric Jones
Um.

05:03.14
kelly99
Implementation. But it seems like almost every Ap implementation takes a lot longer and is a lot more expensive than people think on the frontend. Why do you think that? Why why do people have such a hard time implementing Sap And. And not getting into a tough situation financially and you know where the ah roi starts to be a head scratcher. Do you have a do you have an opinion on that.

05:21.69
Eric Jones
Oh absolutely. Yeah so I think the the best analogy that I heard is when you're implementing sap or or really any enterprise class yearp system. You know you're it's like you're trying to do maintenance on. Ah you know, um, a jet a jet plane while the plane is in the air. So you've got a you know a very complex system in in a ah you know you know in a large or mid-size enterprise and so you're trying to. You know make this this substantial change. Yeah why that plane is in Midyear so it is yeah in and of itself a huge challenge now when you add on top of that the challenge of people having to adopt having to change having to learn new behaviors having to learn new tools. Um. And and and all the yeah challenges around just people adopting and changing. Yeah, you've got a recipe for a very complex very delicate process. So I think you know sap always gets the. You know the bad rap of of having a huge expensive projects. But I think it's it's written large whenever you're doing ah a substantial system change that also involves people changing but there are some things that can be done this say post sap implementation that can mitigate.

06:52.86
Eric Jones
Ah, those challenges of of time and cost overruns so that any subsequent you know, let's say post phase one projects where after you've done the big lift of putting in an Erp system now. Those subsequent projects to improve and extend and enhance your business.. There's ways to do that that can be less costly less less timely and with a lot less risk.

07:20.25
kelly99
And you and you and I both know, um, the folks from Greenheck Fan um leading global manufacturer and they've been really successful in and implementing their a they use the ifm supply chain module. We. From a cost perspective I've heard their executives say that that they think it was somewhere between 50 and 70% less expensive to implement the ifm module what is it is it that the module is. Is simpler to integrate or why would why would using a third party tool be so much more cost effective. Um and is that true of many of the modules. There is a select modules. You know why? Why do people go to a third party module. Besides you met you've articulated that part about.

08:08.19
Eric Jones
Are youth.

08:13.70
kelly99
You focus on that one particular supply chain forecasting planning and so it's more detailed but is there any other reason that it's better than what SAP is bringing.

08:18.42
Eric Jones
Um, we are.

08:22.80
Eric Jones
Sure so specific to the the green heck fan example and and really our customer base writ large the the manner in which we deliver advanced supply chain functionality and advanced supply chain tools is is unique and different in. Not just in the ap space. But I think in in the overall supply chain space. So so while we are a third party tool to the ap ecosystem what makes us unique is that our our tools our software is is our developed and written to run. And live inside of that sap system and so when you deliver advanced tools where the people and the data already exists within yeah within an enterprise you've just reduced the 2 biggest. Risks and the 2 biggest time elements of of ah of a software project. So the biggest variables and the biggest challenges within any large scale it project is this data and people. So getting the the master data structured properly to fit the requirements within that new system is a very complex and time consuming task and then getting people to learn and adopt and use new tools is also a very time consuming complex task.

09:51.75
Eric Jones
So when you reduce those 2 or eliminate those 2 variables and say I'm not going to ask you know green hacker any a customer to take your data out of Sap put it in some other system or in some other cloud take your people out of Ap and teach them new software to learn ah instead. Your data stays in s a your people stay in s a but then we're going to bring in new tools inside of a and in a way that are naturally integrated with an ap to the point where the people don't even know where standard ap stops and the ifm solutions start. So now that people don't have to learn new software. They just have better tools in the landscape and in the software platform that they're already used to working in and the master data doesn't have to leave. It's already an sap. It's already structured so we don't have to adjust it modify it move. It. Let's just bring in better tools that. Know where that data is and use that data to to bring in ah better decisions to bring in better analysis and allow the people to make better decisions and to automate parts of the business that can be automated and do it all within the context of sap. So it's that approach that we take that enabled greenhack to to realize the the benefits of advanced supply chain tools with a 50 to 70% time and cost savings and which is which is typical of all of our clients that they they see those kinds of savings.

11:26.66
Eric Jones
Over and above the the other solutions in the marketplace that do run and operate external to that SAPE or p system.

11:36.26
kelly99
In green heck, of course there are one of the leaders. They are the leader in their industry and they're a big company. You do business with Valelveline Swarovski Airboss cost ah you know, big names Toyota is there any other there BS ah b asf you know.

11:47.14
Eric Jones
Are.

11:53.38
kelly99
Very well-res respectcted companies and big companies. Is there a company size that this doesn't work for as well. Like when you know is it just as effective for medium size companies as large companies and how small does it does it go.

11:57.80
Eric Jones
Are.

12:09.93
Eric Jones
Sure, yeah, absolutely this. Ah, the great thing about our solutions is that we have the the functionality and the capabilities to scale up to meet the complex global requirements of those large fortune five hundred Fortune one hundred companies but we also are able to scale down to meet the budgetary constraints of small mid-size companies but also provide them the you know the enhanced and extended capabilities that their business needs because even though you might be a smaller mid-size business. You have volume complexity and variability in your business so you need some powerful tools to really enhance and and optimize your supply chain. So as a matter of fact, while we do have some of the largest customer companies in the world that are that are clients of ours. The majority of our. Clients are in that small the mid-size category. So so we say if if if you're running ap today. You know you you are big enough to to be able to adopt and afford and and use the ifm supply chain tools to. Enhance and extend that that that base supply sap offering to achieve supply chain excellence.

13:27.96
kelly99
And you guys are ifm you make iot sensors you you kind of within the supply chain and um sap world you this is a a full scale. Solution from hardware to software right? You make the iot sensors you have the software to support the iot um in your in your forecasting and planning does that is it all 1 size fits all or are there different packages that you sell for. You know, depending on the size of the organization.

13:58.71
Eric Jones
Yeah that's right, Kelly we are at the the core business of Ifm is factory automation and then Ifm is has been as a second generation privately owned company out of Germany strong history in in factory automation in in the hardware. And and the edge computing devices to enable industry 4.0 and the the internet of things and so with the recent acquisition that im made of the the gi ib what we're talking about here the gi ib supply chain solutions that are certified. Add-ins to sap. Combination of that traditional life and business of the the hardware and and the devices on the factory floor and on the machines to to capture all that key data along with the the software tools that I ah that gib provides to utilize that data to drive new. Supply chain processes to drive new breakthroughs in in supply chain operations within sap provides ah that endto end iot solution that is that can be configured and and and personalized to fit the specific needs of. Of the end user whether that end user is ah is an oem manufacturer whether that end user is perhaps a wholesale distributor looking to improve their warehouse operations or chemical or industrial manufacturer that that's looking to improve their throughput and their overall equipment effectiveness. We've got those end-to-end tools.

15:31.31
Eric Jones
Combination of hardware and software to to deliver that that full Iot solution but also be able to ah to fit the the different budgetary requirements from small the Median to Enterprise class companies.

15:46.47
kelly99
Eric Jones Ifm thank you for your time today to our listeners. Thank you for listening have a great weekend. All you are listening to the Kelly Winland Podcast

15:55.95
Eric Jones
Thank you Kelly appreciate it.

16:01.20