This part­ner insight was authored by Russ Pitzn­er, Vice Pres­i­dent of Sales – North­east, at RED Global.

Rough­ly 80% of a well-run SAP pro­gram pro­ceeds along expect­ed lines, which is what a sys­tems integrator’s con­tract is struc­tured to deliv­er. The remain­ing 20% is where most trans­for­ma­tions are won or lost. It is also the part that cus­tomers, through no fault of their own, are least pre­pared to address.

I’ve observed this pat­tern across 25 years of expe­ri­ence with SAP cus­tomers. A cus­tomer may under­take a trans­for­ma­tion of this size only a few times over the course of a career, while firms like RED Glob­al and our SI part­ners are con­tin­u­ous­ly immersed in this work. The result is a knowl­edge gap in the parts of an ini­tia­tive that are orga­ni­za­tion-spe­cif­ic, dif­fi­cult to antic­i­pate, and only ful­ly vis­i­ble once it’s underway.

SIs are excel­lent at what they are built to deliv­er. A $3 bil­lion man­u­fac­tur­ing com­pa­ny can engage an SI to size the sup­ply chain, finance, and order-to-cash func­tions against tem­plates the SI has deployed many times before. They bring method­ol­o­gy, bench depth, and a proven abil­i­ty to exe­cute against a fixed state­ment of work.

Oth­er parts of the ini­tia­tive resist that kind of tem­plat­ing. Data qual­i­ty require­ments that have not been stress-test­ed. Local­iza­tion gaps that the glob­al blue­print did not sur­face. Orga­ni­za­tion­al change. End-user train­ing. Knowl­edge trans­fer back to the inter­nal team. The process specifics that are unique to each com­pa­ny. These areas defy up-front esti­ma­tion, evade clean deliv­er­able def­i­n­i­tions, and are inher­ent­ly spe­cif­ic to each cus­tomer. The SI takes on what can be defen­si­bly con­tract­ed, and the remain­der is left to the cus­tomer to coordinate.

The SI is focused on exe­cut­ing the con­tract. The cus­tomer is focused on stand­ing up a sys­tem that will run the busi­ness for the next decade or longer. Those pri­or­i­ties can run in par­al­lel, but they do not ful­ly align. Rec­og­niz­ing that dis­tinc­tion ear­ly is what allows a CIO to assem­ble the right part­ner ecosys­tem around the pro­gram from the outset.

What the 20% Looks Like in Practice

The short­falls SIs leave behind fol­low a rec­og­niz­able shape. In some cas­es, the issue sur­faces in an unex­pect­ed process gap: an upstream user selects a default code because the sys­tem per­mits the selec­tion, cre­at­ing down­stream issues that anoth­er team must man­u­al­ly cor­rect. In oth­er cas­es, it appears as cus­tomer sce­nar­ios that occur infre­quent­ly but require spe­cial han­dling, the kind of edge case that does not sur­face in an ini­tial blueprint.

User adop­tion is the most demand­ing area. Strong end users will make a mediocre sys­tem per­form well, while frus­trat­ed users will under­mine even a well-designed sys­tem. Adop­tion readi­ness varies mean­ing­ful­ly by orga­ni­za­tion in ways that do not map clean­ly to a state­ment of work. As a result, this work is typ­i­cal­ly del­e­gat­ed to the cus­tomer, who is rarely posi­tioned to lead a seri­ous orga­ni­za­tion­al change effort across a glob­al workforce.

RED Global’s engage­ment with Teva is a use­ful illus­tra­tion. Teva’s pri­ma­ry SI ini­tial­ly attempt­ed to han­dle orga­ni­za­tion­al change and end-user train­ing as part of an ECC 6 roll­out. When that scope proved dif­fi­cult to exe­cute well with­in a tra­di­tion­al SI con­tract, Teva brought in RED Glob­al to build an OCM strat­e­gy and imple­ment a ded­i­cat­ed end-user train­ing func­tion. Over time, we expand­ed well beyond that ini­tial scope. Our team became an exten­sion of Teva’s inter­nal orga­ni­za­tion, sup­port­ing broad­er busi­ness and IT work streams as the pro­gram grew.

Across the eight years that fol­lowed, RED Glob­al deployed SAP across Europe, Latin Amer­i­ca, Cen­tral Amer­i­ca, and Asia. We trained more than 10,000 end users in mul­ti­ple lan­guages and remained engaged through the region­al roll­outs that fol­lowed each go-live. The effort suc­ceed­ed because the work was treat­ed as a dis­ci­pline in its own right, and because the team was struc­tured to grow with the customer’s evolv­ing needs.

A glob­al gener­ic phar­ma­ceu­ti­cal man­u­fac­tur­er shows how the same oper­at­ing mod­el adapts to a dif­fer­ent need. Fol­low­ing the company’s sep­a­ra­tion from its par­ent com­pa­ny, it aimed to imple­ment a new SAP envi­ron­ment quick­ly and did not have time to build a full inter­nal team first. The com­pa­ny need­ed expe­ri­enced busi­ness and IT con­sul­tants who under­stood the gener­ics man­u­fac­tur­ing mod­el and could func­tion as part of the team from day one.

We onboard­ed approx­i­mate­ly 85 con­tract-to-hire resources across Europe and India over a three-month peri­od, draw­ing in sig­nif­i­cant part from a net­work of con­sul­tants whose track records in the same indus­try and process shape we already knew. The pro­gram is ongo­ing today.

What allows RED Glob­al to show up dif­fer­ent­ly for projects like these is how we approach staffing. A large SI’s resource man­ag­er is incen­tivized to deploy the con­sul­tants cur­rent­ly between engage­ments. If a phar­ma­ceu­ti­cal roll­out requires order-to-cash spe­cial­ists and 20 are avail­able on the bench, those 20 will typ­i­cal­ly be pro­posed regard­less of whether their expe­ri­ence is in pharma.

We assem­ble the team the engage­ment actu­al­ly requires, draw­ing from the largest SAP pro­fes­sion­al net­work in the world. The val­ue of that net­work is not its scale but the access it pro­vides to con­sul­tants who have worked through the spe­cif­ic chal­lenges a cus­tomer is about to face, in their indus­try, region, and language.

Con­ti­nu­ity Across the SAP Lifecycle

Most cus­tomers cycle through mul­ti­ple SIs over the course of their SAP jour­ney. A dif­fer­ent firm often han­dles the orig­i­nal ECC ini­tia­tive than the S/4HANA migra­tion, with anoth­er respon­si­ble for the region­al roll­outs that fol­low. Each new SI arrives with its own method­ol­o­gy and play­book, exe­cutes against the state­ment of work, and rolls off when the con­tract closes.

Much of the rea­son­ing behind what was built leaves with them. The ratio­nale for a par­tic­u­lar design deci­sion, the ques­tion of whether a giv­en local­iza­tion was delib­er­ate or a workaround, the unusu­al edges of the data mod­el — this con­text resides with the peo­ple who deliv­ered the engage­ment, who, by the time the next phase begins, are work­ing elsewhere.

When the next phase begins, the cus­tomer ben­e­fits from hav­ing a part­ner already embed­ded who car­ries that insti­tu­tion­al his­to­ry. We call this the sec­ond inte­gra­tor. The SI deliv­ers against the con­tract. RED Global’s role is to sup­port the cus­tomer through the changes the pro­gram goes through over time, pro­vid­ing con­ti­nu­ity that the SI rota­tion does not.

McCormick engaged us at the start of their ECC-to‑S/4HANA jour­ney as a sole-sourced part­ner to sup­ple­ment their inter­nal team and to reduce the risks asso­ci­at­ed with rely­ing on a sin­gle inte­gra­tor. Approx­i­mate­ly 50 of our con­sul­tants col­lab­o­rat­ed along­side the pri­ma­ry SI across North Amer­i­ca, Asia, and Europe, pro­vid­ing the capac­i­ty required out­side the SI’s remit.

The orig­i­nal deploy­ment plan was three years, but it ulti­mate­ly ran longer: a year-long pause dur­ing COVID inter­rupt­ed the time­line, and a sub­se­quent change in pri­ma­ry SI prompt­ed a sub­stan­tial rework of the deploy­ment strat­e­gy. Dis­rup­tions of that scale are not unusu­al on pro­grams of this size, and absorb­ing them with­out los­ing insti­tu­tion­al knowl­edge is part of what a sec­ond inte­gra­tor makes possible.

Mar­ket dynam­ics are mak­ing that con­ti­nu­ity more valu­able now than it was even a few years ago. SAP is not pro­duc­ing new con­sul­tants at the rate the cur­rent demand curve requires. We are observ­ing an inflec­tion point in the num­ber of ini­tia­tives kick­ing off, and when demand out­paces a rel­a­tive­ly stag­nant resource pool, con­sult­ing rates rise.

Turnover in India has become one of the high­er hid­den costs in SAP trans­for­ma­tions. Con­sul­tants on the ground there are com­mon­ly jug­gling three, four, or five client engage­ments simul­ta­ne­ous­ly, which is a sub­stan­tial fac­tor in why the indus­try pushed for return-to-office in India. When dead­lines slip, deliv­er­ables are missed, or a con­sul­tant departs mid-project, the ramp-up peri­od for a replace­ment typ­i­cal­ly runs two to three months.

RED Global’s approach is to pay above mar­ket, which keeps our con­sul­tants focused on one project at a time, holds turnover sub­stan­tial­ly under the indus­try norm at sub‑5%, and reduces risk for the customer.

When the SI hands over the keys, what deter­mines the long-term suc­cess of the trans­for­ma­tion is not whether the sys­tem is oper­a­tional on day one, but whether the peo­ple run­ning the busi­ness under­stand the ratio­nale for how it was built, whether they can adapt it through the next wave of change, and whether the insti­tu­tion­al knowl­edge remains acces­si­ble when it is needed.

An ERP trans­for­ma­tion is one of the largest com­mit­ments an enter­prise will make in a decade. The val­ue a cus­tomer real­izes from that invest­ment depends on how well the 20% gets done — and that is the work we are equipped to do.

Russ Pitzn­er is Vice Pres­i­dent of Sales – North­east, at RED Global.