SAP ‘not delivering on innovation’ user group claims

]SAP hasconsistently failed to deliver the innovation its customers need and pay for.

That was the blunt message of Ray Wang, enterprise strategy partner at analysthouse Altimeter, to the UK and IrelandSAP User Group conference in Manchesterthis week. 

Wang listed a series of SAP “failures,” highlighted the fact thatmany leading SAP customers are looking for software as a service alternativesto SAP, and suggested ways end users could free the funds to make the most oftheir enterprise systems.

SAP invests a significant proportion of its income on research and development,said Wang, yet achieves poor return on its investment.

The German ERP giant invested 1.6 billion Euros in R&D last year – some19.4% of revenues, yet it has been consistently late on product delivery and ispromising no new innovations until 2014, according to Wang. Oracle, SAP’sbitter rival, in contrast only invested 13.7 per cent of revenues in R&D.

Wang highlighted “Five big failures in five years amidst legal battles andpoor adoption of new products and functionality.”

Among SAP failures, according to Wang are: 

  • Netweaver
  • Duet
  • BusinessbyDesign
  • Solution manager
  • Enterprise support

He went on to say that at the minimum SAP needs to deliver on past promises.

An Altimeter survey of 73 global SAP customers revealed a list of keypriorities:

  • Reduce cost of ownership and complexity
  • Address integration with existing investments
  • Complete original and promised product road map
  • Reduce cost of maintenance or show value
  • Renewed focus on innovation (e.g. Web 2.0 and SaaS)

Wang urged SAP to unlock the considerable amount of innovation which existswithin the company, but which is often kept hidden from end users because ofinternal company politics.

He also urged end users to get involved with the SAP use group to get effectiveinput into SAP’s future product roadmap. He urged IT managers at the event touse SaaS solutions to fill any gaps they needed and to fund innovation withsystems optimisation.

Responding, Tim Noble, who became managing director for SAP UK and Ireland, in June said, “SAPhas a strong focus on innovation as a company, as well as co-innovation withboth partners and customers alike. We have a clear roadmap until 2012 that hasbeen announced publicly, and we will have more announcements next year as westated at the time of our Q3 earnings.”

“Putting the customer at the heart of our organisation is our mainobjective and listening to their innovation needs, as well as bettercommunicating our plans is critical to our plan now and moving into 2010.”

Talking to CIO sister title ComputerworldUK from the conference, SAPUK and Ireland User Group Chairman Alan Bowling also focused in oninnovation. 

“We’ve seen good collaboration with SAP this year, butas always would welcome the opportunity for more. Innovation is an area we’dlove to get involved in. As users we could play a big role in helping themdecide which innovations come out of the lab and are taken to market.”

“It would be great to get better visibility of what’s going on in the labsand help SAP more with the direction of its R&D efforts.”

He was also less critical than Wang over some of SAP’s recent productdifficulties. “SAP has admitted they didn’t get it right with the firstiteration of BusinessByDesign, but what they are doing now is reallyinteresting,” said Bowling.

“The hybrid approach where you can have some of your processes in thecloud and others still within the business is very innovative. For businessthat don’t want to put their business critical processes in the cloud as theysee it as too risky this could really work, as they can keep those in house andput less critical processes in the cloud.”

By IDG UK staff for CIO (UK).

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