LESSONS LEARNED FROM THE FIRST WAVE OF SAP IMPLEMENTATIONS IN CHINA

With Frederic Giron

SAP officially started its first business operations in 1995 in China. Prior to that, several Chinese end-user organizations like Shanghai Machine Tool Works Ltd. tried to implement SAP through partners based outside China.  Through discussions with CIOs who have experience in such projects, all agree that these early  SAP projects did not meet expectations. During this first decade of SAP in China (1995-2005), aka the 1st wave of SAP implementations in China, many SAP projects either failed outright or continued to fall short of expectations, primarily due to shortage of local SAP skills and cultural misalignment. China is not a unique in Asia and early adopters in Indonesia and Thailand faced similar challenges since the early 2000s.

As Chinese organizations continue to rapidly grow their activities, one of their major IT challenges is shifting from legacy to more standard information systems – and SAP solutions remain a key option in this shift. But today, experienced CIOs are also setting more realistic expectations regarding business outcomes for these SAP projects. For instance, they now consider SAP as a tool to automate some of their organization’s business processes rather than misinterpret it as a primary mechanism to drive revenue growth or improve profitability – which was a rather common misconception in the past. Chinese organizations have also modified their views on external service providers and are now much more open to leveraging these providers to bring additional value to their SAP implementation projects.

For instance, Mesnac, one of three SAP case-studies recently evaluated by Forrester (case study link), successfully leveraged third-party service providers to accelerate the SAP roll out, from advisory and implementation to application management and hosting. This discrete manufacturing company in Qingdao chose Besure Tech (acquired by Pacterain 2010), who achieved the highest scores during selection process, including advanced evaluation of provider’s capabilities in discrete manufacturing sector and interviews with most of field delivery team leaders to assess culture fit.

To help organizations in China identify the most suitable SAP supplier Forrester recently published a new report: Finding The Right SAP Service Provider In China”. In this report, we analyzed SAP service providers in China and assessed their capabilities by industry, service domain, functions and lifecycle after discussions with 15 providers and 6 clients in China. Before selecting a service provider, end-user organizations must define performance and availability requirements. During the evaluation process, they should also score the ability of service providers to provide client references from firms in the same industry and with similar maturity levels, as well as the ability to adapt to your organization’s culture.

Are you struggling with the selection of SAP service providers in China? Or do you have any suggestions/advise to other organizations for SAP implementations in China? I look forward to hearing from you.