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SAP State of the Nation

Earning my keep to an extent with consulting in the SAP orbit it of course is of interest to me how the no. 1 enterprise software vendor is doing in my nape of the world. And I am deliberately not talking about other regions - just mine. And yeah, I also may be wrong, but here's my take.

Starting from a look at my specialty - CRM - it appears that not a lot is going on in the SAP arena. While it is true that many companies still consider CRM as not so crucial to their business a deeper look reveals that there is no real drought. There are implementations, but apparently, in the words of my former boss Bob Stutz, then at Microsoft and now at SFDC: "We do not see SAP, the final decision is between SFDC and us". And MS Dynamics grew considerably in the past years. This indicates that there is a market. So why doesn't SAP get the implementations? Is it because of problems with the imlementation projects? They surely exist, believe me! But then other vendors suffer from them, too.

Ask Bob.

Or my wife ...

So this cannot be the only problem.

Which raises the question whether SAP's problem is more widespread than just CRM.

Some companies opt to implement systems of second and third vendors to overcome deficiencies that they see. This is more often than not for pragmatic rather than strategic reasons. The integration of these systems is either not planned for or considered easier/cheaper than extending the SAP functionality. Quoted reasons reach from not believing into SAPs capabilities to outright "I don't want SAP - and I do not care that it is more expensive" - the latter coming from an executive of a company with an "SAP first" strategy. Yet another company, pre the hybris acquisition by SAP, decided against WCEM as there wasn't any in-country reference implementation. Wrong reason, right decision. Still, implementing it into the SAP infrastructure was a piece of work. Another customer replaced the existing SAP web loyalty implementation with Intershop, going full ecommerce. MDM, data cleansing - a natural first look would be into Business Objects, yet given options customers went for Experian instead. Or they choose Retalix over SAP for a loyalty implementation.

So I asked some colleagues how they see the current SAP consulting market in ANZ. The answers ranged from "a bit slow" to "I believe they had a tough year". A look into job posting on the web seems to confirm this. Not many SAP implementations seem to go on and every position is posted via recruiters galore - which indicates another problem.

What does this tell us, or rather how do I interpret this?

Well, for a starter it seems like SAP is struggling to sell her existing products, yep products, not solutions - and either also doesn't sell the brave new world of cloud products or is implementing them herself. The latter is a real possibility, which deprives SAP of some multipliers.

But then why does the competition claim to hardly see SAP in competitive bids? So no projects going on or sales into the existing customer base only? Both bad. I tend to think that SAP started to neglect her customers by a strong focus on the new generation of products without offering a clear, manageable, and affordable upgrade/migration path. SAP also seemingly does not reach new customers or doesn't convince them of the advantages the new products offer.

The existing business suite is apparently no more future proof.

May this be because of talking too much talking about HANA (technology) and not enough of business solutions to real problems?  Do the new products offer enough functional breadth and depth to be acceptable to the markets while the existing ones are perceived legacy?

Looking into the existing solutions: In 2015 SAP failed to win the NZ IRD project, a multi billion dollar reimplementation project. The product didn't convince and rumour says that the presentation didn't impress, too. Other government implementations struggle; evaluating bodies see that and say "too hard, too expensive".

What is the strategy? I asked some Walldorf colleagues and they replied: "You answer me! You are meeting the customers". Others are saying that one better waits a few more years before one ventures into S/4. Well, maybe S/4 Finance is already there.

Hhmm.

At the same time you make it hard to partner with you. It is difficult to get hard official, and reliable information instead of the marketing messages.

So here my conclusions and recommendations:

I am sure there is a strategy but somehow it doesn't convince companies to invest (more) into SAP. Get this straight and communicated! Also to your own employees. And to partners and independent consultants, including analysts and influencers. Why should they recommend SAP over, say Workday, or Nimble, or Insyte, or Experian, or, ...? The big consultancies are carrying on multiple shoulders, anyways, the smaller ones do their research. All of us influence.

Your existing customers hear re-implementation instead of migration and do not see a conclusive roadmap from their current implementations to the brave new world. You better provide one! In the upcoming world of as-a-service you else run the risk of being commoditise and subsequentially sidelined. A strong infrastructure- and platform play may help here but that is not enough as APIs and interfaces become increasingly more important. The world will be one of connected platforms and meta platforms.

Existing customers also see expensive support that doesn't provide a lot of value. So why shouldn't they stop subsidising your new products with the very funds they will need to migrate into your new world? Be vary of third party support.

Prospects do not seem to see the value of your offering. I am sure it is there, so again: get the messaging straight and a decent functionality implemented where it is lacking. Else they continue to look somewhere else, which particularly seems to happen in the CRM market. But maybe this is not an important market as your Bernd Leukert told the attendants of the CRM2014 Conference that "SAP will become a supply chain company" in the opening key note ...

Embrace partners and independent consultants, analysts. Your CRM clout with analysts left you together with Bob Stutz. Do not only talk about embracing partners, walk the talk. Partners are influencers and you need them. Yes, I know SDN, which is a good source. But you make it really hard and expensive to partner with you. Maybe it is a good idea to help consultants help you. They are multipliers. Else they might turn their back to you.

Food for thought. What do you think?

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