Embarking on an SAP S/4HANA global rollout project is an enormous undertaking. Seamless deployment requires complex discussions, proper change management, access to niche technological skills and capabilities, governance, and increased involvement from software vendors at every step.

As a result, a multi-vendor sourcing approach is quickly becoming the norm for holistic and successful project delivery. But multi-vendor sourcing is not without its challenges. Having delivered a number of large transformation projects involving multi-vendor deployments, I’ve learned that successful programs share a number of key “get rights.” In this blog, I shed light on the challenges faced in multi-vendor deployment projects, and how businesses can overcome them using a well-established, proven framework and methodology.

Why adopt a multi-vendor strategy?

There are several benefits of engaging multiple partners over the lifecycle of your transformation program:

• Larger talent pool: A growing SAP S/4HANA skills shortage has been widely reported. One of the key benefits of a multi-partner strategy is expanded access to skilled consultants. This access also extends to niche skills, as multiple vendors can bring together a well-rounded skill set and truly global capabilities.
• Flexibility and reduced risks: As dependencies on a single vendor decrease, challenges encountered can be better managed and mitigated. Since there’s no single point of accountability, if a particular vendor cannot fulfill obligations, it won’t disrupt the entire project.
• Superior outcomes: Given the synergistic nature of a multi-vendor environment, vendors are continually innovating and raising the standards of their services, leading to better results.
• Better pricing: Cost efficiency is a secondary advantage of a multi-vendor approach. Competition is high, which might push certain vendors to reduce prices related to service contracts.

Key challenges in a multi-vendor strategy

Though the advantages stand out, implementing a multi-vendor approach is an important responsibility that involves handling several critical factors during the project life cycle. I’ve seen program leaders face a multitude of roadblocks when implementing multi-vendor transformation projects; below, I’ve outlined the most common:

• Vendors are incentivized on their own success: Lack of joint ownership leads to partners working in silos without a common goal. For example, I was once brought in as a new vendor into an in-flight program that lacked a strong central governance structure. This had led to silos and severe project delays. After recommending and forming a central governance structure, we were able to bring the project back to green.
• Lack of trust: It can be difficult for organizations to build and maintain good relationships with multiple vendors spread across the business. This can lead to a lack of interest among vendors in collaborating with the organization beyond their defined SOW.
• Fear-based behavior: When a situation gets tight or sensitive during a project, it’s hard to isolate the cause of the issue and hold the responsible party accountable for timely resolution. Vendors often begin to point fingers at each other, showing reluctance to take responsibility.
• Delays: Managing and coordinating between multiple vendors is a challenging job. A lack of insights, communication, and coordination between different vendors can slow down the pace of the transformation project.
• Blurry transitions and hand-off vs. handshakes: No one takes responsibility for a complete transition to the AMS team as different parts of the project are handled by different vendors -leading to a blurry transition. Also, the AMS teams lack the knowledge to transition from the project team. On one large SAP S/4HANA upgrade project, for example, a number of niche vendors were delivering integrations and customer portals in parallel to delivering the solutions. These vendors spent minimal effort transitioning to the support team to ensure ongoing customer success. The problem was that the customer had no way to effectively measure the quality of the handover, and the contractual obligations of the vendors were unclear.
• Competition for influence: A multi-vendor environment adds a competitive aspect to the process. While it helps the business with better negotiations, it can lead to vendors finding faults with each other in a bid to gain position with the client – which can quickly escalate to a culture of one-upmanship.

Framework for effective multi-vendor involvement in SAP S/4 HANA global rollout

When managed well, multi-vendor scenarios can accelerate project delivery as different project elements are on the go simultaneously. But to do this, organizations must execute the implementation in a manner that maximizes the benefits of a multi-vendor strategy while mitigating operational inefficiencies and potential delays.

Your system integrator (SI) should have a well-established, proven framework and methodology to successfully navigate the multi-vendor involvement in an SAP S/4HANA global rollout. I can’t stress enough how a lack of a proven framework can hinder a multi-vendor environment. HCLTech, however, has been executing projects in multi-vendor environments for many years with a variety of partners. Many of our existing clients will recognize the following framework as key to the successful delivery of a multi-vendor approach:

1. Define rules of engagement for SI/Partners: SI and vendors involved in the project should share a standard definition of project goals, performance metrics, the scope of work, and responsibilities. A RACI matrix helps avoid role confusion and gives the assigned vendor teams a detailed understanding of the deliverables, activities, key performance indicators (KPIs), decisions, and methodology for delivering a project component. Moreover, a unified process must be followed for conflict resolution, and all parties involved should be aware of typical scenarios faced during a large transformation project. SI/partners can leverage shared RAID (Risks, Assumptions, Issues, and Dependencies) logs and resolution plans to keep track of information and status reporting by vendors, potential risks, and actions taken. Unique protocols should be established for RAID entries made by vendors to ensure proper reporting and prevent vendor misconduct.
2. Define a cadence of engagement for collaboration: Open communication and smooth cooperation between vendor teams and the organization are crucial. Your SI must keep vendors informed of the kind of meetings, interactions, and level of information-sharing required during the project life cycle. Vendors must thoroughly clarify their full-time equivalent (FTE) commitments to ensure productivity. A dependency matrix helps vendors better connect with each other. It avoids information silos by visualizing dependencies between different project components and how certain changes will impact the project. It also highlights the activities that vendors need to do together to benefit smooth SAP S/4HANA global rollout.
3. Make SI/partner governance a core element of transformation: SI/partner governance can serve as a standard platform where the client, SI, and vendors collectively work towards the shared business objectives. Project governance can be established by setting up a dedicated new team or expanding an existing one to manage the collaboration. A third party or a full-time executive can be leveraged to address the governance. For instance, a SI partner council represented by large SI partners can be established to offer a collaborative forum for partners to share critical information, track issues, and communicate potential risks. It can build a framework and governance oversight structure for all SI partners to successfully sustain a high-performing multi-vendor team.
4. Invest in a company’s governance capability and maturity: Solid project governance ensures unbiased representation of all vendor teams, clearly defined SLAs and OLAs, and uniform standards around work processes. It also involves agreements on what SAP S/4HANA transformation-level information will be communicated to all vendors. When investing in a company’s governance capability, it’s essential to have clarity on certain factors, such as its existing expertise in corporate governance, procurement, channel management, etc.
5. Set up a knowledge academy: Knowledge retention becomes challenging as vendors begin the project handover. Establishing a knowledge academy is crucial as it enables quick and easy ramp-up of resources from vendors as the project progresses. It accelerates knowledge transfer to different business units or the partner responsible for taking over the support work post-GO-LIVE of the respective sites. This can be achieved by regularly conducting knowledge-sharing sessions as a particular vendor moves out and keeping other vendor teams informed of critical changes.

In conclusion, a multi-vendor approach during a large transformation project needs a holistic integration of data, technology, people, and processes. When appropriately implemented with a strategic framework, companies can successfully deliver the value they seek.