Marin County Walks Away from SAP Implementation, $30 Million Poorer
Having provided client-side resources for several similar projects, I read this analysis of Marin County’s decision to walk away from the $30 million it has dumped into its SAP implementation, with interest.
It is certainly not the first “failed” ERP implementation we have seen. Just this week, our CEO delivered a presentation on controlling Fixed Price engagements, which explored this very topic. But, as the author of this article suggests, it would appear that the decision to walk away from SAP seems more like a legal tactic than a business one.
This seems to be the same conclusion drawn by Mark F. O’Connor, CEO and co-founder of Monadnock Research , whom the author quotes, as saying, “[t]he Marin Information Systems and Technology group appears to have concluded that fixing the Deloitte-installed SAP application will cost nearly 25 percent more over a ten-year period than buying, modifying, implementing, and migrating data over to a new system in a protracted multi-phase project, during which time they would continue to operate the SAP environment concurrently, until going live on the respective new system modules”. That conclusion seems implausible to me.
The Marin/Deloitte project seemed to have suffered from what we see over and over when we are brought in after a project has gone significantly off track – or when a client is dissatisfied with its outsourcing provider. Too much has been outsourced. It is not plug and play in any sense of the word, and it is essential that everyone align expectations accordingly. Mr. O’Connor said it best in this article: “Responsibility without authority, … always yields outcomes similar to what we see here in complex systems projects. There are literally thousands of important decisions that need be made by client staff during an implementation—while they continue to do their day jobs.”