Just when the war for talent couldn't get any tighter, the enterprise resource planning (ERP) marketplace has taken off like wildfire, putting increased pressure on companies, systems integrators and the ERP vendors themselves to train, recruit and retain top resources. Nearly everyone—from customer to vendor—has either adopted the traditional contractor staffing model to meet market demand or increased the size of the internal IT team. However, both present their own set of challenges that, in the worst of circumstances, can make or break a project. As a result, the market is looking for a new sourcing model that strikes a balance between pure contracting and in-house employees. Value-added sourcing (VAS) seeks to establish that balance.
ERP Sourcing Evolution
Despite the fact that ERP is well into its second decade, a time when most thought the technology would have given way to something new, its appeal remains as popular as ever —and more organizations continue to build ERP into their business operations.
In fact, many companies have created robust IT organizations and are leading their own system implementations. They have learned that the traditional system integrator model can result in higher costs and loss of control—tantamount to "turning over the keys to the kingdom." Initially, companies took the "Do it for me mentality" that was prevalent in the mid to late '90s—the technology was new, and there were few real experts available to provide the strategy and know-how to successfully implement ERP system. The organizations matured at the end of the decade, becoming more demanding and skeptical as ERP implementation failures rose and many failed to live up the projected return on investment. Today, the attitude is "Partner with me" as both clients and vendors are at near parity in terms of technical knowledge, and the demand for ROI on both sides is high.
In fact, with thousands of practitioners now entering the workforce each year, securing consultants through on-line auctions to augment your own capabilities appears to be an efficient model for supporting the demand created by ERP. Efficient, yes, but not without its challenges.
Sophisticated buyers of consulting services must spend time up front screening to distinguish between those who bring real experience and those who can write good resumes. Buyers must have good selling skills to convince the best resources to join their project.
The Contractor Mentality
Contractors arriving on site bring with them the independent contributor mindset —they are sole practitioners focused on sustaining themselves rather than becoming part of a team. Staffing a project with the best independent contractors can result in an assembly of great athletes but not a cohesive team. Even with a strong internal project manager and a well-designed project plan, the independent contractors know knowledge sharing and selfless collaboration may result in an untimely end to their assignment, so as a rule they share only what is required.
Contractors may have the requisite technical skills but may not take time to develop soft skills necessary to guide business in today's complex global environment. With an independent mindset, contractors may leave at an inopportune time if conditions including excessive project demands, travel, and long work hours become objectionable.
Value-Added Sourcing Defined
Deficiencies of the contractor mentality model that are pervasive in staff augmentation, which is intended to supplement a customer's existing work force with technical professionals, are overcome with value-added sourcing. VAS is a flexible ERP staffing and implementation model that blends the efficiencies of staff augmentation and value created from the traditional systems integrator model. Under this model, the engagement responsibilities are shared between the client and the integrator, but ownership ultimately remains with the client. The success target is not limited to resourcing but includes an on-time and on-delivery budget as well. For example, under VAS, time to value becomes a critical measure and robust on-boarding processes together with a mentorship program combine to reduce the client's burden of orienting new resources, accelerating time to value.
Depending on the nature of the engagement, formal and informal structures are developed in managing VAS. Often, existing project resources, who are motivated by consulting firm metrics, take on additional leadership roles in addition to delivering quality technical work on the engagement. Team leads are generally created to mirror the client's team lead structure and to oversee the performance of the staff. Additional management structures can be created to cover diverse program needs such as project finance, resourcing, client development, training and international coordination. This management structure is fundamental to delivering the VAS model.
How Clients Perceive VAS
A global Fortune 500 company abandoned its current staff augmentation model and awarded BearingPoint a significant, multi-year VAS contract. This company was in the process of implementing its Global SAP design across divisions worldwide and faced a number of business challenges:
- Inability of the implementation contractors to source resources in the countries where the company operates.
- Lack of a single implementation contractor. Working with a number of implementation contractors, there was no single point of contact for the consultants from different companies working on the project.
- Lack of integration between the contractors on the project and the client.
- Inability to communicate the client's values and needs to the implementation contractors without repeating the message several times.
- Difficulty of maintaining consistency of staff across the multiple implementation contractors. Different companies supplied different levels of SAP and industry knowledge.
- Inability to measure implementation contractors' performance because resources were spread over the teams.
- The lack of uniform feedback from the implementation contractors. Different companies supplied conflicting or negligible feedback to the client.
- The inability to easily shift resources from one location to another.
BearingPoint was engaged to provide value-added sourcing services to divisions worldwide over a multi-year period. BearingPoint provided seasoned SAP professionals with specific industry knowledge to work alongside the clients' experienced team members in support of their global program. The company benefited from BearingPoint's dedication to the program's objectives. The consultants' industry knowledge, technical and business knowledge, flexibility to respond to the client's needs, and ongoing commitment to providing knowledge transfer created a significant improvement to the client's Global SAP design implementation. BearingPoint was able to bring experienced SAP professionals on board at the right place, at the right price, at the right time—and used the client's template and methodology to achieve a uniform, global result.
With the VAS model, BearingPoint was able to make contributions to enhance design, configuration, business process re-engineering and end-user adoption successes. Beyond the strict definition of the project, VAS translates into valuable knowledge transfer among team members by providing thought-leadership in the form of white papers, primary research and access to internal subject matter experts. As a result, through redesigned business processes, roles, responsibilities and metrics coupled with the SAP implementation positioned the client to manage its manufacturing business worldwide.
Today, BearingPoint remains as the sole implementation contractor, giving the company a single company dedicated to the project, resulting in consistency across the project—from resource planning to the work quality of each consultant.
Measurable Results
These value-added sourcing services increase the value of the consulting relationship, improve client satisfaction, and often lead to additional project work for the consulting team.
Depending upon the complexity of the program, it can take as long as four months before new consultants reach proper levels of productivity, or even longer to become truly efficient. Value-added sourcing services provided through teamwork and collaboration encourage sharing and supporting each other. VAS increased the "time to value" of new team members significantly and, with large-scale programs involving sizable teams, clients also benefit from productivity and cost savings.
Ken Grodner and Donna Camp can be reached at ken.grodner@bearingpoint.com and donna.camp@bearingpoint.com.
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