SAP plays it safe, with some positive signs ahead

SAP-logo With the ever-closing barriers between ERP strategy and BPO – which we discussed at length back in August, it's important to understand enterprises' activities with their ERP maturity in order to get a solid picture of future potential outsourcingactivity.  The performances of both SAP and Oracle are now a sure-bell-weather for the IT and outsourcing industries at large.

Bruce Richardson, AMR's Chief Research Officer, offers some keen insight into SAP adoption in his recently launched blog "First Thing Monday", which is an extension of his popular e-newsletter that hits the wires at the beginning of every week.

Bruce points out some key indicators of what we can expect in the coming months:

  • Many SAP customers he is talking to are continuing to expand their footprint at present and are still planning for further upgrades;

  • SAP is not planning any labor reductions, despite heavy growth in recent years, and will reduce costs with a hiring freeze and travel restrictions;

  • SAP is likely to push new programs in the short-term to encourage mid-size business to move into SAP environments.

While we're clearly moving into a difficult economic climate, it's encouraging that many enterprises are continuing to invest in their ERP backbones.  I anticipate that as we see more companies seeking cost-containment outsourcing avenues, many will be able to benefit from upgraded (or new) ERP platforms as they evaluate their options.  Common ERP standards ultimately support more scalable and lower-cost outsourcing strategies.

Bookmark the permalink | Leave a trackback: Trackback URL

2 Comments

  1. Posted November 8, 2008 at 6:57 pm | Permalink

    I believe 2008 is almost over. Still waiting for report cards, but I believe, business was impacted pretty significantly as the uncertainty delayed sales closings throughout the year. Will SAP be significantly investing more in masterminding this platform based BPO move by global corporations? and if so, how? In fact who will do it for SAP?

  2. Posted November 9, 2008 at 1:10 pm | Permalink

    Hi Amit,

    SAP has been instrumental in the software business to recognize the opportunities that BPO brings to them. BPO providers can only develop real utility across multiple clients if they can underpin common processes with common technology standards. To this end, SAP has built up a market development group of around 100 staff over the last 4 years under the leadership of Christian Baader:

    http://fersht.typepad.com/the_outsourcing_bloghorse/2007/05/why_technology_.html

    And the marketing / relationship skills of Gianni Giacomelli:

    http://fersht.typepad.com/the_outsourcing_bloghorse/2007/06/why_a_good_bpo_.html

    Oracle is following suit with a similar strategy, but SAP has been instrumental in recognizing the potential of BPO as a standardization opportunity for their platform.

    Yes – these are tough times for the software business at large – as discretionary spend is thrown out the window, but there are encouraging signs that it isn’t going to be as bad as we fear for the leading ERP providers. Turmoil, M&A, consolidation and divestitutres ultimately drive new investments in IT services, BPO and ERP backbones to support those dynamics, so we can expect to see investments in some areas,

    Phil

Post a Comment

Your email is never published nor shared.