SAP implementations, upgrades, and enhancements are complex tasks that require specialized expertise. To help them with their critical SAP projects and SAP production support, companies often rely on one of the hundreds of SAP implementation partners.

However, while implementation partners can offer lasting benefits to your company, managing your relationship with those partners is critical. Proper planning and follow-through is essential to the success of any project involving an implementation partner, according to Yosh Eisbart, principal at NIMBL and author of Outsourcing SAP Operations.

“Establishing a true partnership model is something that is fundamental to everyone’s success,” he says. “If an organization is planning on working with an implementation partner, and has no plan or model or methodology in place, it could be disastrous.”

The consequences of improper management of your implementation partner can include dramatic cost overruns, delays, and even project failure. Thankfully, there are steps you can take to prevent this. Eisbart points out six warning signs that you may be headed for a disaster with your implementation partner — and more importantly, how to avoid them.

1. You Don’t Have the Right Partner or Model

Every SAP project is unique, and there are a multitude of partner types and models available from which to choose. Choose poorly and your project may never get off the ground.

The first step to ensuring a proper partnership and partnership model is to select the right partner. As a client, Eisbart says, you understand your needs and organizational dynamics better than any partner, so it is important to select a partner that you can trust to handle the aspects of the project in which you are lacking.

“It is ultimately the responsibility of the client to vet and check references and be sure they’ve chosen the right partner. There’s a host of due diligence that needs to be performed,” he says.

Ideally, you would be able to select a partner with whom you have worked before, Eisbart says. You should also consider hiring a partner with specific expertise in the application or component you have chosen to implement. Companies often make the mistake of hiring partners with “general” SAP experience but no proven history of helping other companies with the specific type of SAP project you need.

2. The Terms Are Unclear

Once you’ve found the right partner, it is important to agree on terms that specify fair and reasonable deliverables, says Eisbart. This benefits the partner as much as the client, because the partner will have a clear understanding of the deliverables and expectations.

“The proper partnership model needs to be bidirectional,” says Eisbart. “There needs to be clear definitions of the roles and responsibilities each side will be responsible for.”

This is easier in some cases than others, according to Eisbart. Some implementation partners offer services that are so well established they are essentially commoditized. In these situations, your partner may be able to promise to deliver standard project (such as an SAP Solution Manager implementation) in four weeks.

Upgrades, complex SAP business processes, and other more technically involved projects offer different challenges, and need to be considered more carefully, says Eisbart.

“The more vanilla the initiative, the more standardized the metrics,” he says. “If you’re dealing with an upgrade to SAP ERP 6.0, you need to be flexible. It’s very important to ensure that you have agreed on a set of milestones and deliverables, and that they’re fair to both sides.”

Using the analogy that nine women can’t deliver a baby in one month, Eisbart warns against hiring partners who promise more than anyone can realistically deliver.

“If you find a company willing to commit to that, they’re either lying to you or you haven’t done your research. Having a clear understanding of the work involved leads to a more successful delivery and less opportunity for disconnect,” he says.

3. You Lack Internal SAP Expertise

Companies hire implementation partners to help with projects that they cannot complete with in-house resources. However, Eisbart says, having internal SAP expertise is a critical component for managing your implementation partner.

“You need an internal advocate to keep your partner honest. Even if they’re trusted partners, they’ll look for ways to maximize profit. You need the ability to hold their feet to the fire,” he says.

Eisbart cites two ways to ensure you have enough SAP expertise on site. The first is to hire experienced professionals internally as full-time employees. The second is to hire a separate consulting group specifically to monitor the implementation partner’s actions.

“That’s typically more effective for larger initiatives. If you’re doing a major SAP implementation, it is fundamental to your success that you bring in someone who has been there and done that — and that you have a consulting partner to tell it like it is,” says Eisbart. “These types of ‘bulldog’ services can provide tremendous value.”

Eisbart has witnessed this value first hand. One large organization recently retained his firm to keep tabs on a large systems integrator.

“We ended up, on numerous occasions, saving the client hundreds of thousands of dollars,” he says.

4. You Aren’t Getting What You Expected

One of the most common pitfalls of managing an implementation partner is receiving a different level of service than you expected, says Eisbart. In some cases, implementation partners may staff a project with less experienced resources than what was implicitly promised.

“They might have a sales team that’s representative of a certain skill set. Then once delivery kicks off, they bring in lower-level resources. As a client, you need to have a clear understanding of how your partner is going to deliver. You need to put in writing, if necessary, the level of experience you need, or the amount of on-site versus off-site resources. It’s best to denote that the best resources are committed to your project,” says Eisbart.

Avoiding these issues is easier if you take proactive steps early in the process of soliciting a partner, Eisbart says. Attractive PowerPoint slides can make a technically challenging job appear much easier, he says. Having technically savvy resources on hand to review a potential service offering helps ensure that both sides understand the complete requirements necessary for the project.

5. You Have the Wrong Delivery Mechanism

Depending on your needs, your implementation partnership may include on-site resources, off-site resources, or a hybrid of both. Having the wrong delivery mechanism in place is a clear sign of poor partner management.

For example, if your project is more technical in nature such as developing custom SAP reports, Eisbart says there is a good chance you can save money by shifting more resources off site.

“The more ‘technical’ the project, the higher the probability it can be delivered off site. If it’s just ABAP development, it might be possible to deliver most or all of the project from off site,” Eisbart says.

An honest evaluation of your corporate culture is also key to avoiding issues with a delivery mechanism. You have to have what Eisbart calls a good “barometer of understanding” of your existing in-house skills before choosing an appropriate model.

6. Your Pay Model Is Broken

Some partnerships are governed by fixed bid arrangements — in which an implementation partner agrees to deliver certain results for an agreed-upon price. Other partnerships are based on time and materials (T&M) arrangements, in which your partner bills you for the work related to project — usually hourly.

A T&M arrangement needs to carefully planned before signing an agreement, says Eisbart, to avoid disagreements down the road.

“If you have an agreement with a partner that says they’re going to have 50% of their resources onsite during delivery, then less during realization, that needs to be clear. There should always be some flexibility in the spirit of partnership, but ultimately the buck stops with the client,” according to Eisbart.

In some cases, companies design pay structures based on key deliverables. This creates an incentive for implementation partners to follow through on the project, rather than abandoning it before a critical juncture.

“Think creatively,” says Eisbart. “The pay structure needs to be something that is fair, reasonable, and mutually agreed upon. Don’t give your partner any incentive to cut corners.”

Davin Wilfrid

Davin Wilfrid was a writer and editor for SAPinsider and SAP Experts. He contributed case studies and research projects aimed at helping the SAP ecosystem get the most out of their existing technology investments.

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