I posted on the conflicts of interest of consulting companies yesterday - now comes this report from the Register on ROI and large ERP installations:
Most customers surveyed had used SAP software for close to three years and 57 per cent of them said they've paid more for the code than it's worth.
The average cost for a three-year SAP deployment is $10m, with consulting accounting for $3.6m, personnel soaking up $2.5m, software licenses another $2m, and related hardware and training costs picking up the rest of the tab.
Companies surveyed saw some benefits from workers being able to manipulate data more quickly with SAP products and better company-wide access to information. "However, a positive return on the SAP investment was achieved only when there was both a sufficient number of users and sufficient frequency of use (breadth and repeatability) to reap significant productivity based gains from the solution," Nucleus writes.
Now stop and consider who is helped by this sort of thing - typically, a large consulting firm sends in tons of bodies to implement this sort of thing. Think of the billable hours behind a full installation of something like this - is it even possible for a consultancy to be objective? At least with the vendor, you know where they are coming from - they want to sell you the tools. But the consulting firms put on an air of neutrality, and then recommend paths that - surprise - would result in lots of billable hours
So when you see a recommendation from (insert consulting firm here) to migrate your Smalltalk app - you know, the one that actually works - to Java, or .NET - ask yourself who benefits. At the end of the exercise, if it succeeds, you are right where you started - you have a working app. The consulting firm, having taken you zero feet forwards, is now much wealthier - at your expense