February 5th, 2009
Systems integrators: The model has to change
SAP’s launch of Business Suite 7 raised a few interesting questions for systems integrators–Accenture, PriceWaterhouse, IBM. What happens if SAP’s easy upgrade pitch actually turns out to be reality? And if so why would you need a systems integrator?
Now I take SAP’s pitch with a heavy grain of salt. The only time a company will be able to upgrade to Business Suite is when it has ERP 6.0 installed with minimal customization and clean data.
Roche CIO Jennifer Allerton addressed the system integrator-SAP tug-of-war that could ensue if ERP applications suddenly get easier to implement.
Allerton pushed Roche to cut its 20 versions of SAP to one process and instance globally. For Allerton, the move to Business Suite 7 is easier. Why? The heavy lifting is done.
Also see: Is SAP really done with ’scary upgrades’ and ’sleepless night’ projects?
- SAP adds enterprise 2.0 features to latest suite; Twitter meets ERP
- SAP BusinessSuite 7: Twittery clouds?
- SAP touts modular approach; Launches Business Suite 7
- Lemons into Lemonade – Business Suite 7
If you take away the customization ERP upgrades look much easier. SAP has acknowledged as much. Allerton notes that moving to “more harmonized systems” is a “huge cultural change” that takes “business discipline and you have to learn to say no.”
This business discipline has a downside–for systems integrators. One instance of your ERP system means fewer complications. Fewer complications means you need fewer consultants. Few consultants mean that systems integrators can’t collect an infinite number of billable hours.
Allerton acknowledged that Roche will never be a $50 million to $75 million customer for any systems integrator. But she does have long-term relationships with vendors. However, there are conflicts.
For starters, Allerton is very involved with consultant selection. Roche wants only the good ones not the trainees that tag along on your dime. “The challenge is the ability to cherry pick consultants. That’s not what systems integrators want to do,” said Roche, adding that often you have one good consultant and an army of trainees.
The Roche CIO understands that integrators don’t want to send all the good consultants to one company, but there has to be a better way. But labor–and talent–are big issues. The costs of an ERP implementation largely revolves around labor. Allerton wants SAP consultants certified–a hot topic in SAP circles–to indicate that a systems integrator has some level of competency. Allerton said she’d prefer that SAP adopt a certification system modeled after Microsoft’s.
“It’s my experience that the people you get with Microsoft certifications are good in general. SAP certification is not yet indicative,” she said.
Add it up and there are many cross currents for systems integrators to navigate. The big billings are likely to fall. And if software vendors like SAP and Oracle succeed in making implementations faster there are issues for systems integrators. What does a company like Accenture do if three year implementations become three months?
“The role the systems integrator is changing. The old $50 million to $75 million implementation is dead,” said Allerton, which has used SAP consultants and others from big firms.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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