SAP's Accuracy

How Accurate Was SAP on ERP Being the Last System a Customer Would Purchase?

Executive Summary

  • For years SAP has stated that ERP would be the last system a customer would have to purchase.
  • In this article, we review the accuracy of this claim. 

What SAP Said About SAP ERP Being the Last System a Customer Would Purchase

What is now mostly forgotten, one of the ways that SAP marketed its ERP system was that it would be the last system that a customer would need to purchase. Presented beginning back in the 1980s, the concept was that companies that had mostly custom developed their systems could lower their maintenance and integration overhead by using a “single system,” which would be the ERP system. SAP proposed that all functionality the prospect would never need was baked into SAP, and all current systems in the prospect could be decommissioned.

See our references for this article and related articles at this link.

SAP ERP Reduced Sprawl?

The proposal was that SAP ERP significantly reduced sprawl. This is explained in the following quotation from 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 is a quotation from a salesperson who made a lot of money promoting this assumption, but as the quote is from a salesperson, it is highly suspect. Let us look at a related quotation.

“According to Panaya, a tool vendor “more than 50% of SAP shops have 40+ satellite applications. Of these less than 10 are SAP applications. CAST Research Labs has analyzed customizations at several major SAP customers and found most of the customizations were sizable, with many of them high-risk, according to its benchmarks.”

Is this reducing sprawl? Why does SAP have so many applications connected to it if it were the last application a company would buy, as claimed in an uncountable number of sales presentations?

The Truth About SAP ERP Being the Last System a Customer Would Purchase?

As covered in the book The Real Story Behind ERP: Separating Fiction from Reality, ERP was not the “last system a company would have to purchase. After SAP had sold in a vast number of accounts in the 1990s, they began developing other applications to connect back to the ERP system. If one looks at a solution architectural Visio diagram, they are more complicated than they were back in the 1980s, which ERP systems were supposed to eliminate.

Conclusion and Calculation

SAP receives a 0% accuracy rating for the SAP ERP Being the Last System a Customer Would Purchase.

Link to the Parent Article

This is one of many research articles on a specific topic, that support a larger research calculation. For the overview of the research calculation for all of the SAP topics that were part of the study, see the following primary research A Study into SAP’s Accuracy.