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the SAP Expert Witness
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Mit Lesen beginnenLänge: 257 Seiten2 Stunden
- Herausgeber:
- Lulu.com
- Freigegeben:
- Mar 11, 2017
- ISBN:
- 9781365817038
- Format:
- Buch
Beschreibung
As an “expert witness” I’ve been involved in several lawsuits involving the implementation of SAP software, including one with a statement of claim that was nearly one billion dollars. I’ve been involved on both sides, that of the plaintiff and that of the defendant. From those experiences, other cases studies, and real world experiences from my consulting career I have formulated conclusions as to the cause of ERP related lawsuits and more importantly how to avoid them by mitigating risk.
Informationen über das Buch
the SAP Expert Witness
Länge: 257 Seiten2 Stunden
Beschreibung
As an “expert witness” I’ve been involved in several lawsuits involving the implementation of SAP software, including one with a statement of claim that was nearly one billion dollars. I’ve been involved on both sides, that of the plaintiff and that of the defendant. From those experiences, other cases studies, and real world experiences from my consulting career I have formulated conclusions as to the cause of ERP related lawsuits and more importantly how to avoid them by mitigating risk.
- Herausgeber:
- Lulu.com
- Freigegeben:
- Mar 11, 2017
- ISBN:
- 9781365817038
- Format:
- Buch
Über den Autor
Bezogen auf the SAP Expert Witness
Buchvorschau
the SAP Expert Witness - Lawrence Compagna, C.P.A.
The SAP Expert Witness
Lessons Learned From Legal Cases and the Real World
By Lawrence Compagna, C.P.A.
Second edition copyright 2017 by the Candco Corporation
ISBN: 978-1-365-81703-8
Distributed by Lulu Press, Inc.
SAP® and SAP® R/3® are registered trademarks of SAP AG in Germany and in several other countries. Services related to SAP® software on this website is offering of iii Technologies and should not be confused with that of SAP America or SAP AG.
All products and services mentioned on this website are trademarks of their respective owners. SAP, mySAP, mySAP.com, SAP NetWeaver and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies.
Data contained in this document is for informational purposes only.
Preface
The SAP Enterprise Resource Planning system (ERP) is a German software package used extensively by the world's largest organizations for accounting, financial control, production control, human resources, material management planning, and many other facets of business' operation. For those readers who do not know SAP stands for Systems, Applications and Processes in data processing
. ECC stands for Enterprise Central Component
. The predecessor of the Enterprise Central Component was R/3, and before that it was R/2. The origins of the SAP ERP system date back to 1972 when it was founded as a mainframe software system. In 1992 they developed their client server based ERP program and have dominated the marketplace since then. The hallmark of SAP is the tight integration of its core business suite. This core product is based on industry best practices...
While this book focuses on SAP, much of what is written is applicable to other large ERP implementations, and to a lesser extent large IT projects in general. The cases discussed throughout this book, even those deemed hypothetical
, are a blend of real world examples that I have experienced firsthand, but none are treated exclusively at any point.
When I use the term partner, implementation partner, consultant, consulting firm, advisor, integrator, or systems integrator all of these terms should be considered synonymous. All of these terms refer to a third party firm hired to assist an organization which has a license for SAP in making changes to it or using it.
Lastly, when I use the term the business
, I am referring to any organization (both private and public sector) that is implementing, modifying, or upgrading SAP. This term will never be used to denote the implementation partner that is advising and assisting the business
with their implementation. Furthermore the term implementation
is used to denote any major SAP project (with an arbitrary budget of over $1 million). This encompasses re-implementations, enhancement projects, module deployments, end-to-end deployment of an entire new business process, and upgrades.
In all discussions, changes to the SAP ECC (SAP Enterprise Central Component) are central to the discussion as such changes tend to encompass the greatest risk (and the greatest reward) to an organization.
Background
As an expert witness
I’ve been involved in several lawsuits involving the implementation of SAP software, including one with a statement of claim that was nearly one billion dollars. I’ve been involved on both sides, that of the plaintiff and that of the defendant. From those experiences, other cases studies, and real world experiences from my consulting career I have formulated conclusions as to the cause of ERP related lawsuits and more importantly how to avoid them by mitigating risk.
Before we move on to those conclusions here is some background on SAP:
SAP’s Success
The success of the world's third largest software retailer, SAP AG, cannot be denied. As of 2012 there were 44,000 installations worldwide of its flagship software SAP Enterprise Central Component, in some of the biggest organizations: 3M, Kraft Foods, and Colgate Palmolive are but a few of the members of the Fortune 500 that run this brand of ERP. On the public sector side the Government of Canada, the US Army, and the State of California are a few examples of massive entities that run the SAP.
Thumbing through the 1,887 success stories on SAP's website you will encounter names such as Citrix, Proctor and Gamble, and the University of Kentucky. Time and time again the stories document gains in productivity, customer service, and a positive return on investment.
SAP is the most common type of ERP system that you will find in the marketplace, as indicated in this graph:
In 2000 SAP had a market share of 11%; by 2012 it had climbed to 25%. SAP has a share in the ERP market that is equal to that of its three biggest competitors.
There is no denying SAP's success. The benefits of implementing it are well documented.
SAP Enterprise Central Component
The SAP Enterprise Central Component, often abbreviated to SAP ECC is the cornerstone of SAP`s software offerings. While SAP now offers many other products that can be bolted on to the Enterprise Central Component, this component is the core.
It is also the software element that has helped SAP become the third largest software retailer in the world, and the undisputed champion of the enterprise resource planning (ERP) marketplace.
The Enterprise Central Component is a collection of modules that are all contained on the initial compact disks that are loaded on to a client`s servers. Though they are referred to as separate and distinct modules the client in fact has them all loaded and they all exist in the SAP system whether they are active or not.
Initially when the Enterprise Central Component software is loaded on to the customer`s server it does not work. None of the modules can in fact be used out of the box
, despite SAP often being referred to as an out of the box
solution. Any module desired for use has to first be activated and then configured. Only after it is activated (and configured) in the Implementation Guide can a user perform business functions.
The beauty of the SAP Enterprise Central Component lies in its real-time integration. The majority of modules pass information from one to another in real time without having to run any batch jobs (there are a few exceptions, for example the Contract Accounting module (FICA) and the Treasury and Risk Management module (TRM), require a batch job to be run to move summarized values to the General Ledger).
The Failure of IT Projects
Like any major IT project, implementing SAP amounts to a major change to an organization, especially if they've never had it before. There are many perils along the way, and sometimes those SAP projects that were not diligent, did not employ knowledgeable people, and did not follow best SAP implementation practices falter. SAP is not alone, according to Mark Jeffery and Ingmar Lelveld, who note that two thirds of IT projects fail on either budget, timeline, or when assessed against originally stated business goals.
A Survey of Major ERP Failures
Due to SAP's dominant market share in the ERP space failures involving it are proportional. According to an article published by CIO Magazine entitled 10 Famous ERP Disasters, Dustups and Disappointments
half of the examples involved SAP. On that list, the number one, three, and five spots involved SAP implementations that went awry.
According to that article order fulfillment problems with Hershey Chocolate's SAP centered project caused the stock price to dip 8%
. The Waste Management SAP project resulted in an acrimonious $100 million legal battle
.
In the case of their failed SAP project, Select Comfort's actions were indicative of extremely poor judgment by management
.
Many organizations improve their operations with SAP, but in some instances, as seen in the examples above, the implementation can turn into a disaster. In virtually all of these cases the failure lies with the organization making the switch to SAP or their implementation partner. In the words of Warren Buffett, failure results from not knowing what you are doing
. This especially holds true in the case of major SAP project failures.
Litigation
Lawsuits generally arise from poor management of risk. There are many types of risk that can be discussed when having a conversation about a large organization. There are labor management risks, there is the risk of theft, and the internal control risk carefully looked at by internal auditors. This book is not about any of those types of risks. Specifically this book is not about SAP's GRC module that helps internal auditors work with a live SAP system, nor is it about how to implement that module.
This book is about how to avert disasters involving major SAP projects; a direct reflection of personal experience as an expert witness, an SAP project manager, and an SAP consultant. Specifically this book is about how to implement SAP Enterprise Central Component with the lowest possible risk to all parties; a byproduct of risk mitigation is keeping all of the people involved out of the courtroom.
This book cannot promise that risk can be totally averted, nor does it guarantee that legal issues will not arise, but it will examine the sources of risk and recommend ways to mitigate it. It will provide cases of SAP projects that went awry (based on examples both real and hypothetical), and finally present an example of an implementation that minimized its risk from inception to post-go live.
What are the risks? Among the risks this book seeks to manage are: financial loss to any of the parties involved in an SAP implementation, the risk of missing deadlines, the avoidance of massive technical failures once the project has gone live
, and the tainting of reputation to those involved.
This book is about the specific risks involved in the execution of a large SAP project. By large we mean a new implementation of a complete SAP system, a reimplementation of a complete SAP system, or the implementation of at least one new module in a live SAP system where a team of at least half a dozen people are required to deploy it. To a lesser extent the principles set forth in this book can be applied to upgrades and support pack applications, but endeavors such as those tend to carry much less risk than the former endeavors.
Though many of the ideas in this book can be applied to other ERP systems, they are all applicable specific to the most prevalent one – SAP.
The Decision to Implement
Implementing SAP can provide a significant return on investment for the organization, make it more efficient, and more effectively move the organization towards its goals. However, implementing the system carries significant risks, many of which are specific only to the world of SAP. The purpose of this book is to help the reader avoid the pitfalls that have plagues other implementations and caused significant failures in the past. Employing the risk management strategies contained in this book will help mitigate those risks.
The hallmark of SAP is its integration. You enter information once into the system, and that information is carried through to all other modules, usually in real-time. It is however, not heavily automated. As one SAP consultant once said SAP is integrated, not automated. It requires staff to think about what is going on … not to watch the system do their job
.
There are numerous modules within SAP and within those areas there a multitude of sub-modules. The graphic below is a sampling of modules within Enterprise Central Component:
When I use the term the business
, I mean the non-technical folks of an organization that is the subject of the SAP project. For example: If SAP is being implemented in company XYZ, then the office of the comptroller is one element of the business
. Another element of the business could be the Central Stores warehouse administrative staff of company XYZ. The IT department for company XYZ is not part of the business
.
Often times an outside consulting or implementation firm is utilized to help transform a company like XYZ by leveraging SAP more efficiently and more effectively than they could themselves. In this case the consulting firm of ABC
is assisting. To further define what we mean by the business
, no one from the consulting firm of ABC is part of the business.
And one last thing about the business
: it does not matter whether the organization that is the subject of the project is for profit or non-profit. The above definition holds for both.
Now that we have that understanding we can begin to discuss risk mitigation in an SAP project.
Greenfield Implementations
In some ways a green field
implementation, one in which a new implementation of SAP is being installed, can be easier than an upgrade, the addition of new modules to the scope of an existing implementation, or embedding a new process into an existing SAP system.
This is because you can control the way a green field implementation is done. If you are working on an existing install of SAP you inherit what could be an implementation that was not done according to best practice.
Consider the case of a client that I worked on many years ago. The objective of the project was to look at the organizational hierarchies that were in place in the SAP system of this huge computer manufacturer.
Along the way I learned that so many core modifications were done to the code of this system that it could not be upgraded. They had implemented SAP many years before, and were already running on an antiquated version of the project. At the time that I did the project they only had a few years of SAP support left for their current version. It was about to expire and the organization could do nothing about it.
From the Gartner Group: CIOs Must Take Action to Address Fast-Approaching Reality of
Legacy ERP"
The likely scenario long-term would have involved a complete reimplementation
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