
Whenever a big project goes awry, the blame game begins. Trying to figure out who is accusing whom of what, and who is merely covering their own backsides, is a Sisyphean task.
So when a well-placed source close to the City of Joburg but unconnected with SAP told me the software company was quite correct in claiming it was not to blame for the billing mess that has thrown the municipality into a tailspin, I found myself uncharacteristically inclined to believe SAP's side of the story.
According to this source, who I cannot identify since we spoke off the record, the implementation of the billing system, known as Programme Phakama, was a success. It was successfully demonstrated not only to the customer, the City of Joburg, but also to councillors from the opposition, the Democratic Alliance. Upon completion, the project was awarded a Gold SAP Quality Award.
Then the project was handed over to the city, and the post-implementation phase of change management, involving a lot of staff training, began. At this point, SAP had no further obligation towards its former client.
Yet any time a big project like this fails, the first question is: "Was it a SAP project?" An affirmative answer tends to end that discussion with knowing grins all around. Indeed, the best way to get a pained grimace out of a SAP executive or consultant is to mention the reputation the company has for multimillion-rand project failures at blue-chip clients.
Innumerable company directors and shareholders are ever-ready with juicy quotes about the dangers of committing to expensive SAP consultants to implement costly SAP software.
The nature of the complaints has evolved over the years. In the 1990s, they involved huge rip-and-replace enterprise resource planning (ERP) projects, often in combination with business process re-engineering or some similar quality improvement initiative. From a sheer project management point of view, it was no surprise that many of these ERP projects would overrun deadlines, exceed budgets, or fail to deliver the promised benefits once all the time and money had been spent. This established the software firm's black reputation.
A decade later, the complaints were more subtle and sophisticated, in part because SAP had done a lot of work to make its software easier to implement, scale and customise to specific business needs. The challenges now were not simple project management and inflexible software, but more complex aspects such as change management, data quality, and integration.
A reputation for projects that end up as lawsuits is no better than a reputation for projects that end up as failures.
Ivo Vegter, ITWeb contributor
One monster project at De Beers, which I covered for Brainstorm magazine in December 2002, was set to cost R500 million, equal to SAP SA's entire annual turnover at the time. In discussing it with insiders at the client company, it became clear there was a great deal of disagreement about the value of embarking on an ERP project in an age when data warehousing, data integration and business intelligence software could deliver much of what was wanted at a fraction of the price.
"If you haven't gone the ERP route yet, why bother now?" was the rhetorical question internal BI specialists were posing.
The resulting story earned us a visit by the financial director of the mining giant. By the time the contract was eventually signed, R200 million had been lopped off its budget, much to the dismay of both SAP and the manager, whose days in charge of IT were numbered.
As is usual with big companies that catch a lot of flak, a great deal of internal effort goes into mitigating public perception problems. Worldwide, SAP knew it had to adapt to the complaints in the market, and developed more sophisticated, modular offerings, better project management, more flexible software, and more diligent customer requirement, demonstration and sign-off procedures. These procedures appear to have been rigorously followed in the Phakama project case.
My source explained that there could be many causes for the billing complaints. One obvious suspect is an old problem: meter-reading in many areas is a great big mess of disorganisation, laxness and outright corruption.
However, a more likely cause is the human intervention that is required in the billing process when the system determines that a bill is "unusual". If consumption turns out to be particularly high (or low), the system will put it on hold and alert human agents, who need to manually check the bill for accuracy before processing can continue. Such checks are made in at least three different points in the process.
If this human intervention fails, because operators aren't well enough trained, they are overworked, or they simply don't care, the symptoms will be exactly what residents of Johannesburg are reporting.
This explanation is certainly plausible, and would lay the blame squarely at the door of the city manager, Mavela Dlamini.
However, it does not address the problem facing SAP. Having given the project its gold stamp of approval, it now finds itself embroiled - at least as a witness - in a prospective class-action suit launched against Dlamini by an activist councillor for the opposition DA, David Dewes. He claims that having exhausted all available democratic options - including a public call for the resignation of Johannesburg executive mayor Amos Masondo - his only remaining recourse is the courts, despite the fact that this could cost him his job as a councillor.
The massive outcry, and the bold action by Dewes, does not bode well for Dlamini, against whom it is directed, but it also does not bode well for SAP's reputation.
Even if it is vindicated in court, a reputation for projects that end up as lawsuits is no better than a reputation for projects that end up as failures. Both represent financial and reputational black holes.
The implication is that while the project failure may not be SAP's fault, it is certainly SAP's problem. If the mayor can shrug off the problems as minor, while the DA blames the mayor and city manager, SAP blames the city, and the city blames everyone else, everyone's reputations will be dirtied, fairly or otherwise. When agricultural muck hits the fan, the fan does not discriminate.
SAP, and other IT companies like it, will need to think deeply about how to mitigate the risk of post-implementation problems with projects they claim to have delivered successfully. It may not have a contractual obligation to step in and help, but such legalistic explanations don't go down well with nervous prospective customers or an angry public.
Its best option now is to call all hands on deck, and volunteer to help sort out the mess as quickly as possible, even if that consumes the profit on the project. Future profit may well depend on it.
Share