Is SAP too big, too expensive, too complex with long implementation times?

Over the years many criticisms have been levelled at SAP, something that is unavoidable for any large successful organisation – there is always someone who will find something to criticise. There are, however, 4 criticisms that are worth addressing carefully, namely that SAP is too big for my company, that SAP is too expensive, SAP is too complex, and SAP takes too long to implement.

Instead of hiding from these, I have included some food for consideration that I derived from SAP which I hope you find helpful, I certainly did find them useful and would welcome your comments.

Too BIG
For many years, the perception of SAP as providing software for the world’s largest companies has been driven by the fact that this is the truth – but only because it was big companies that first recognized the benefits that such solutions could deliver, and because big companies did not have to wait until more cost effective ways of benefiting from the software were available.  

If we draw an analogy with air travel, the first users of aircraft were military because they did not have to develop the infrastructure needed to fly, maintain and operate aircraft. They had their own. And it was quite a long time from the early “passenger” flights for a few wealthy travellers to the worldwide adoption of air travel by the masses. We needed airports with major facilities, airlines, travel agents and many other service providers, before we reached the point where you or I could buy a ticket to the other side of the world without needing to buy our own airplane and recruit our own staff. 

SAP applications have been built around the knowledge gained through thousands of implementations, inheriting an understanding about how business processes really work. Generally smaller businesses don’t need different processes, they just do less volume, with less people than their larger counterparts. If anything, smaller companies need more sophisticated software to help them keep costly “workarounds” to a minimum.  A company may be small today, but having software that can cope with the demands placed on it as the company grows is vital to the success and growth prospects.
  

Is SAP too expensive?
“Too expensive” is a criticism that has been levelled at SAP in the past. The truth is, when you look at the cost of SAP software it is actually good value, even when it is deployed as a “point” solution to address areas like CRM or PLM. However, all stories are based on some degree of fact. Yes, SAP projects have historically been expensive. In the 1990’s, a major paradigm shift occurred in business development with the launch of Michael Hamer’s book “Reengineering the Business”. This book became the bible for many consulting firms who looked at the whole “Business Process Reengineering” (BPR) concept as a great opportunity to generate new revenue streams by helping their customers undertake such projects. The only software available at the time that could cope with the massive changes in business process layout was SAP R/3. Thus, SAP became associated with the entire project cost for the business re-design – not just the software implementation – and with that developed SAP’s reputation for having a hefty price tag.

The truth, as we know, is that SAP solutions can be installed in days and have ROI in weeks if this is what the customer needs. 

Through better packaging of the overall solution using mySAP All-in-One we are seeing significant cost reductions and implementation methodology is also being refined to reduce costs in this area.

Is SAP too Complex?
Complexity is a relative term.   SAP has a range of solutions that will address any company’s needs regardless of their size and requirements. Complexity is often a result of the particular functionality required or the project management required or the time constraints.   When you look at the processes in a midsized business, they are very similar to those in a large company operating in the same sector. It is through this complexity that small businesses often gain their competitive advantage.

For example, a small company is far more likely to create unique pricing structures for each customer/product combination; a large organization is more likely to use a standardized pricelist. This same flexibility is often found throughout an SME: a midsized enterprise or business will be responsive to market pressure, whereas a large multinational will always try to simplify – sometimes to the detriment of their customer service.  SAP solutions provide small and midsized enterprises with the opportunity to use this kind of complexity to their advantage, by enabling them to respond quickly to the needs of a changing market.  

Does SAP take too long to implement?
The length of implementation is often not directly related to the software itself, but to the change management the implementation is associated with. Although many projects using SAP applications have been lengthy, this is more because of the tremendous amount of pre-work required in designing new business processes.   In the mid-market, customers either have a very clear view of what they want and why they want it, or, more typically, want help to define the processes they need. In either case, the project time is much reduced. However, it is also important to be realistic. Given the increasing popularity of the use of Best Practices in mySAP All-in-One , customers ask for the delivery of working solutions, but the bottleneck becomes their ability to learn and adopt the solution being offered. 

Let the debate begin … Can I have your comments?