What This Article Covers
You may have noticed that the articles and writing on this site is different than most?
- The Real Story on SAP
- Inappropriate Constructs in IT Decision Making for Companies Using SAP
- The IT Department and Consulting Company SAP Bias
- How Much Do You Know About SAP?
- Our Work With the New SAP Construct
Many times the large IT media outlets will go to a large software vendor’s press conference and repeat items verbatim that they heard at the event. This makes some these outlets nothing more than copy machines for the most powerful entities.
These types of trade publications do not follow the normal journalistic or research standards that apply to either standard media outlets much fewer research entities.
Entities like Gartner maintain a pay for play system where they move software vendors up or down based upon how much income they can extract from them.
This is the reality of the enterprise software media market, and the are very few articles or books that even describe the issue. The writers at the major IT entities are often easy to fool, as many of those that write on enterprise software have never implemented software or touch the software that they write about.
The Real Story with SAP
Our primary focus area is SAP. We have identified the fact that SAP is now a legacy system at its customers. What is a legacy system?
What is a legacy system? Well, it is a system you have relied upon historically, but which you are trying to minimize the investment into as you migrate to something more to “your liking.”
The question now is not whether to grow your SAP investment but how to shrink it.
Inappropriate Constructs in IT Decision Making for Companies Using SAP
Every SAP shop in the world is now following a faulty construct. It is a construct somewhat based upon the past, but which was always exaggerated, and it goes something like this.
SAP is a leading software vendor. We rely upon SAP’s new products to improve our IT capability. SAP’s applications are not always the best, but they connect back to the “mothership,” the ERP system. And we can trust our IT department to look out for the interests of our business. Therefore, whenever possible we will buy SAP.
This construct has been leading to bad IT software decisions at companies using SAP for over twenty years. The downsides of relying upon this construct are about to get worse. Here is why:
- Post-ERP Applications: SAP’s non-ERP applications have not been value added to companies that implemented them. And we have several decades of data points on this fact.
- S/4HANA and HANA: SAPs new ERP system S4 is not compelling and its new database, HANA is not differentiated from the competition.
- SAP Support Decline: SAP support has dramatically declined in the past ten years and is now mostly outsourced to the lowest cost countries, pushing the maintenance burden to SAP customers. SAP now expects a 90% margin on the 23% basic support that it charges customers.
- Indirect Access and Other Trickery: Lacking the ability to meet Wall Street growth demands, existing SAP investments are increasingly a liability. This is because SAP intends to use its power, size and legal muscle to use indirect access to either receive monies for ERP licenses or arm twist purchases of uncompetitive applications.
This construct that is reinforced by companies using SAP by both the IT department within the company, and by the consulting company without. In fact, as the best decision becomes to migrate or diversify away from SAP, the IT department and the IT consulting companies push in the opposite direction from this.
The IT Department and Consulting Company SAP Bias
Many IT departments place SAP above the interests of the business of the company they work for. This observation has come from many years of interacting with IT departments at companies using SAP. I have presented to numerous IT organizations over the years the problems with various SAP applications that they purchased, and I am invariably told that.
“The thing is Shaun, we are an SAP shop.”
Therefore, SAP customers should be on notice that your IT department will in most cases lack sufficient independence from SAP to represent the interest of the company they work for, and by the way, that pays their salary. How this was accomplished, at least the full story, is still a mystery to me.
- The IT Department: The IT department and IT consulting companies had somewhat of a role, will now increasingly serve as a barrier as the reduction in investment from SAP begins.
- Large IT Consultancies: As for the large IT consulting companies. They have hundreds of thousands of SAP consultants and investments in SAP and revenues from SAP. For a large IT consulting company the only advice they provide is to invest more in SAP implementation. The large IT consultancies have a business model to protect, and it will be protected. These companies are a major liability. Given this environment, what is the value of that advice exactly?
Our Work With the New SAP Construct
We are one of the few entities that focus on SAP but also tells the truth about SAP. So many entities have partnership ties or otherwise fear reprisals from SAP that almost no one will speak honestly about them. If your SAP advisor is a partner with SAP, takes money from SAP or otherwise fears SAP, they are useless to you as an advisor.
- Getting Bad SAP Advice: If you want to be provided biased information on SAP there are many choices in the market. We can recommend Deloitte, Accenture, KPMG, E&Y, Infosys, IBM and Gartner among others. However, for unbiased information on SAP, the options narrow considerably.
- Getting Objective SAP Advice: If you are interested in our advice on how to deal with SAP, and how to manage to diversify away from SAP, reach out to us. We offer a wide variety of advisement all focused around getting a better value from your SAP investment.
Reach out to us at the form at the bottom of the page if objective advice sounds good to you.