Don’t gamble with business success

I have been lucky enough to work within the SAP ecosystem for more than 30 years, first with Hewlett Packard, then Gartner, where I spent almost two decades, before joining Resulting IT last year as a non-executive director. I am utterly gobsmacked that even now, after all that time, customers are still not achieving anything like as much business value as they should be from this great technology.

Those are the worrying headline findings from Resulting’s 2018 SAP Success Report. It is high time business leaders bucked this trend, for the sake of their organisation’s future.

In case you don’t know, SAP, headquartered in Walldorf in Germany, is Europe’s solitary $100-billion technology company. The first big application it sold was enterprise resource planning or ERP which has become a buzzword within the industry for the back office of an organisation.

There is all this talk at the moment about business transformation and, while there is no question that the potential of nascent technologies such as artificial intelligence, the internet of things and machine-learning, is exciting, there is little point getting carried away if the back office is not in good order. This is where SAP and ERP come in.

It may have been around for a long time, but ERP is just as vital today as it has ever been

ERP looks after the back office, dealing with the financial elements, reporting and procurement, and often manufacturing planning as well. Most importantly, it handles key customer experience processes such as order fulfilment and billing. It may have been around for a long time, but ERP is just as vital today as it has ever been. And from what I have seen recently, many business leaders are overlooking its considerable importance, preferring instead to dwell on newer technologies.

C-suiters need to remember that having a robust back office is like having a good foundation for a house; it is impossible to scale successfully if that is not in place. Furthermore, the back and front offices need to be joined up to optimise business efficiency. We need, therefore, to go back to basics.

Traditionally, an organisation buys ERP software and then finds a big consulting firm, such as Accenture, IBM or Capgemini, to implement it. Those companies have great experience in leading clients through the processes of configuring ERP, setting it up and going live. Because integrating ERP is complicated and affects so many people, too many projects run into problems and delays you didn’t expect.

As Resulting’s research has uncovered, despite 20 years of “practice”, there is a startling lack of maturity and SAP customers are still having mixed success. The study reveals the big success levers that are the difference between triumph and failure with SAP, and identifies the elements that make the greatest impact upon plans, budgets and, most importantly, achieving the objectives in their business case.

Indeed, only around one-third said they had kept to their original SAP plan. Further, fewer than 30 per cent revealed they had come in on budget. And just under half admitted they had achieved their business objectives, which means, unbelievably, success is a 50-50 gamble. I can’t get my head around this statistic that should serve as a massive wake-up call to business leaders.

There are a small number of very smart companies out there that know how to make SAP a long-term success. Hands-on, customer-centric organisations are much more attentive and focused on client needs.

In my vast experience, it pays to engage niche companies that can show you how to optimise business processes and achieve self-sufficiency with SAP. Crucially, that attentiveness means better odds of SAP success and who doesn’t want to improve their odds of winning?

Dr Derek Prior, Resulting IT