The hidden challenges of SAP implementations

Imagine investing millions in a cutting-edge system that promises to revolutionize your business, only to watch it unravel because your team doesn't truly understand how their own organization works.

In a recent episode of The Never-Ending Climb, we had the privilege of hearing from two industry disruptors, Alisdair Bach and @Paul , who specialize in helping organizations navigate the complexities of SAP implementations. Their combined experience and deep understanding of ERP systems have helped numerous companies get the most out of their SAP investments, transforming what often seems like an overwhelming challenge into a streamlined process. In this article, we’ll dive into some of the key insights shared during the podcast and explore how organizations can avoid common pitfalls in their SAP journeys.

SAP: Perceived Complexity vs. Reality

One of the major misconceptions about SAP implementations is that they are inherently complex. Paul, a strategic expert in ERP systems, challenges this notion. He explains that SAP, at its core, isn't as complicated as many believe—it’s the surrounding processes and decisions that create complexity. Whether you're running a small corner store or a massive enterprise like Walmart, the underlying principles of operations—inventory management, general ledger, manufacturing—are the same.

However, the complexity arises when businesses try to reinvent the wheel during implementation, or worse, over-customize the system to fit their existing (often flawed) processes. According to Paul, “The system works. It’s what you do with it that matters.” Many organizations fail because they either don’t have a clear vision of where they want to go or they over-complicate their SAP implementation with unnecessary customizations that disrupt core functionalities.

A Common Issue: Lack of Understanding at the Top

Both Alisdair and Paul highlight a recurring problem in large organizations—many senior executives fundamentally don’t understand how their own organizations operate. This disconnect becomes especially problematic when these same leaders try to push for massive changes through an SAP implementation.

As Alisdair explains, “It’s not about the technology. It’s about understanding the operating model.” SAP isn’t just a tech solution; it’s a best-in-class operating model that can revolutionize how businesses function. When executives don’t fully grasp this, they fail to provide the necessary leadership and resources for a successful implementation.

Alisdair emphasizes that many SAP failures aren’t due to the software itself but rather the lack of internal expertise and understanding within the business. Executives often underestimate the importance of having strong process owners and subject matter experts (SMEs) involved from day one, leading to issues later in the project.

The Pitfalls of Over-Customization

One of the most significant traps companies fall into during SAP implementations is over-customization. As Paul shares from his experience, “When you over-customize, you’re essentially bending the system backwards to fit outdated processes, instead of embracing the best-in-class standards SAP offers.”

SAP, particularly S/4HANA, is designed to be a ready-to-go, best-of-breed solution. Major consultancies like Bain, Boston, and McKinsey all endorse SAP’s industry-standard target operating models as world-class. Yet, many businesses still feel the need to tweak and alter these models, which often leads to unnecessary complications and long-term maintenance headaches.

Instead of spending time and money customizing SAP, organizations should focus on aligning their business processes with the industry standards embedded within SAP. By doing so, they can take advantage of the system’s full capabilities and avoid the long-term pitfalls of excessive modifications.

Leadership and Process Ownership: The Keys to Success

A successful SAP implementation isn’t just about the technology; it’s about the people and processes behind it. Both Paul and Alisdair stress the importance of leadership and process ownership throughout the project.

Alisdair mentions that organizations often don’t realize the level of commitment required from their internal teams. SAP implementations need strong leaders who understand the business processes, and SMEs who are actively involved in blueprinting, testing, and data validation. Without these key players, even the best SAP system will fail to deliver the expected results.

As Paul puts it, “You can implement SAP in a month, but without the right people and processes in place, it will never work as intended.” This is where many businesses falter—failing to bring the right leadership and expertise to the table during the critical phases of implementation.

The Way Forward: Embrace SAP as a Business Model, Not Just Technology

One of the key takeaways from the podcast is that organizations need to stop viewing SAP as just another piece of technology. As Alisdair aptly puts it, “SAP is not tech—it’s an operating model enabled by tech.” Businesses that embrace SAP as a comprehensive business model, rather than a technical solution, will be far more successful in their implementations.

Paul and Alisdair encourage organizations to adopt SAP’s best practices and industry-standard processes instead of trying to force-fit their existing methods into the system. By doing so, they can leverage SAP’s full potential, streamline operations, and maximize their return on investment.

Driving Success Through Strategic Leadership in ERP Implementation

SAP implementations can indeed be challenging, but with the right approach, businesses can unlock tremendous value. By focusing on aligning with SAP’s best practices, avoiding over-customization, and ensuring strong leadership and process ownership, organizations can navigate the complexities of ERP systems with confidence. The insights shared by Paul and Alisdair serve as a valuable guide for any business looking to get the most out of their SAP investment.

If your organization is struggling with an ERP implementation or needs expert guidance, consider reaching out to industry veterans like Paul and Alisdair, who have a proven track record of turning around even the most complex projects.