SAP is having problems

IBD put out a very interesting article about SAP today relating to problems the software giant is having.

As they state, customers are unhappy, Oracle (SAP’s predominate DB platform) is unhappy, I2 is now unhappy with them, investors are unhappy and the company is now doing something which has never occurred.  It is promoting a Salesman to the CEO slot.  Prior to this the CEO always had a software engineering background, keeping the software company very technical.

A sales person at the helm may do the company good, and give a much needed appreciation in the ranks for the plight of their customers.  SAP is known for its multi-year implementations.  In my opinion is due in part because most companies do have a handle on their processes and sometimes make them needlessly complex, but also because the software tries to be everything to everyone through heavy customization.

This customization is at the core of the BusinessByDesign product’s problems which has been starting in fits for years now.  The concept is great and would allow smaller companies to leverage the power of the software, but small businesses cannot deal with bugs like larger companies.

Having been in the IT industry for years, I know people who both swear by SAP software and those who swear at it.  Those who love it, like the orderliness of data and interfaces.  Those who do not, struggle with their own processes and the time and money it takes to implement the product.

By its very nature, SAP is a traditional consultants dream.  Not only is there money in the process documentation aspect, but the process reorder, the software customization, the vendor integration, the data mining, the training and the implementation.  All of these add up to a large quantity of billable hours.

But like most software, don’t be a sap about SAP.  Do not just put SAP into your company just because it is the biggest in the industry or because their demonstration is so nice.  There are many players out there.  If your company has SAP, I do know some people who can help you short circuit the implementation time.  Of course, they will need your permission to shake some things up in your company.  Some of the best people you need are not SAP converts but software agnostic people who know not only software, but also proper process.

If you are going to put SAP into a company, do it because after you are finished, you will have a product that matches your business process.  You will have invested in a very solid way, in business process models that sustain your current and future process.  Yes, you will need to maintain these processes and the interface to the software, but you will know that these processes are being achieved with reduced management.

Is there real money to be had by seeing your process from end to end… yes.  But SAP is not the only ERP solution in the marketplace.  Sometimes, companies don’t need ERP as much as they need transparent processes.

Sometimes you need to just scrap “the way we always have done it” for the better way.  Sometimes you need to change the staff to find people who are not as interested in keeping that Excel bookkeeping because they might lose their job if they do, for someone who are a team player.

Bottom line, right now, I would stay clear of SAP.  They are a bit distracted right now, and any phrase like “substantial recurring maintenance services revenue” which IBD commented about SAP should raise some red flags about what kind of recurring maintenance services are needed for this software we are considering.