How to Understand the Scope of SAP’s Sprawl

Executive Summary

  • SAP was initially sold on reducing sprawl, however, SAP now has enormous sprawl in every dimension.
  • This topic is rarely discussed among SAP resources.
  • The impact of this sprawl is a very high cost and lack of sustainability.

Introduction to SAP’s Sprawl

SAP began as a company that offered an ERP system, but its financial success led it to sprawl into an unmanagable company. In this article, we will cover the issues with SAP’s sprawl.

SAP to Replace Sprawl

One of the arguments used to sell SAP ERP was that it would eliminate the sprawl of mostly homegrown systems within companies. SAP sales reps often told customers that if they purchased SAP, it would be the only system they would ever need. This type of thinking is illuminated in the following quote from the book SAP Nation 2.0.

“SAP’s runaway success in the 90s came about because its R/3 product dramatically reduced enterprise sprawl. As Paul Melchiorre one of its most successful salespeople had noted in SAP Nation: “It was a truly transformation time for the technology industry. We replaced thousands of departmental and mainframe systems. We put MSA, M&D, and others out of business. We didn’t really have much competition. In deals it would be SAP v. SAP v. SAP — that is, SAP/Accenture, v. SAP/KPMG v. SAP/PwC.””

This quote came from a salesperson (so should be viewed with skepticism), but looking at SAP’s product list what does one see but sprawl? Seen this way it is apparent that SAP had no interest in reducing sprawl, but wanted to replace their customer’s “legacy” sprawl with SAP product sprawl.

But did SAP, in fact, reduce sprawl?

“According to Panaya, a tool vendor,”More than 50% of SAP shops have 40+ satellite applications. Of these less than 10 are SAP applications.“”

It certainly does not appear so.

SAP’s Current Sprawl

This sprawl is further explained by the following quotation also from SAP Nation 2.0.

“Broadly, Rogow is pointing out that we do not have many independent thinkers in IT, especially considering how complex IT has become. The challenge is particularly acute in the SAP Universe with its fragmentation and sprawl. Many consulting and customer staff have spent their entire careers on SAP projects — in particular on older SAP products. They to the same SAP events year after year and repeat what SAP shows them.”

“At SAPPHIRE NOW, in May 2015, SAP Digital announced a new set of products including a CRM solution at $29 per user per month. SAP Claims to now have 17 million Jam users and 2,000 HANA start ups. The executives responsible for such SAP initiatives proudly brag about them, even though they contribute merely 1 to 2 percent of SAP revenues and they keep adding to the sprawl.”

Conclusion

The only people who say that SAP reduced sprawl are those that either work in sales or SAP project management. Right after SAP sold their ERP system on the basis of reducing sprawl, it was found that SAP’s claims regarding sprawl reduction were false, and SAP began aggressively increasingly sprawl, as it desired to sell ever more products into companies. This undermined the entire argument of the initial ERP sale, that the ERP system was the only system that any customer would ever need.

Financial Disclosure

Financial Bias Disclosure

This article and no other article on the Brightwork website is paid for by a software vendor, including Oracle and SAP. Brightwork does offer competitive intelligence work to vendors as part of its business, but no published research or articles are written with any financial consideration. As part of Brightwork’s commitment to publishing independent, unbiased research, the company’s business model is driven by consulting services; no paid media placements are accepted.

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References

*https://www.amazon.com/SAP-Nation-2-0-empire-disarray-ebook/dp/B013F5BKJQ

The Real Story on ERP

ERPThe Real Story Behind ERP: Separating Fiction From Reality

How This Book is Structured

This book combines a meta-analysis of all of the academic research on the benefits of ERP, coupled with on project experience.

ERP has had a remarkable impact on most companies that implemented it. Unplanned expenses for customization, failed implementations, integration, and applications to meet the business requirements that ERP could not–have added up to a higher Total Cost of Ownership for ERP were all unexpected, and account control, on the part of ERP vendors — is now a significant issue affecting IT performance.

Break the Bank for ERP?

Many companies that have broken the bank to implement ERP projects have seen their KPIs go down— but the question is why this is the case. Major consulting companies are some of the largest promoters of ERP systems, but given the massive profits they make on ERP implementations — can they be trusted to provide the real story on ERP? Probably not, however, written by the Managing Editor of SCM Focus, Shaun Snapp — an author with many years of experience with ERP system. A supply chain software expert and well known for providing authentic information on the topics he covers, you can trust this book to provide all the detail that no consulting firm will.

By reading this book you will:

  • Examine the high failure rates of ERP implementations.
  • Demystify the convincing arguments ERP vendors use to sell ERP.
  • See how ERP vendors take control of client accounts with ERP.
  • Understand why single-instance ERP is not typically feasible.
  • Calculate the total cost of ownership and return on investment for your ERP implementation.
  • Understand the alternatives to ERP.

Chapters

  • Chapter 1: Introduction to ERP Software
  • Chapter 2: The History of ERP
  • Chapter 3: Logical Fallacies and the Logics Used to Sell ERP
  • Chapter 4: The Best Practice Logic for ERP
  • Chapter 5: The Integration Benefits Logic for ERP
  • Chapter 6: Analyzing The Logic Used to Sell ERP
  • Chapter 7: The High TCO and Low ROI of ERP
  • Chapter 8: ERP and the Problem with Institutional Decision Making
  • Chapter 9: How ERP Creates Redundant Systems
  • Chapter 10: How ERP Distracts Companies from Implementing Better Functionality
  • Chapter 11: Alternatives to ERP or Adjusting the Current ERP System
  • Chapter 12: Conclusion

Who is the Most Accurate Source on SAP?

Want to find out? See... A Study into The Accuracy of SAP