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In reading through a post on the CIO Magazine blogs (“ERP Costs: 3 Signs Companies Are Wasting Less Money” [FN1]) on Panorama’s comparison of Saas with tranditional ERP it would appear that Saas is not all it is cracked up to be.  SAP has completely missed the boat here on not capitalizing on the GENUINE shortcomings of Saas ERP compared to on-premise ERP solutions like SAP.

 

Saas ERP is implemented over 35% quicker (11.6 mo v. 18.4), but cost only 10% less to implement (6.2 v. 6.9 ann. rev), and even though CEOs may be slightly more satisfied (< 3% difference, may be margin of error?), business is more disappointed (23.5 sat v. 42.9) and Saas is more often over budget (70.6% vs. 59%).  If this were a head to head comparison by the SAME measures on premise ERP applications have been measured by this would be considered an utter failure and an unmitigated disaster.  But the technology trade publications tend to be eerily silent on this.  Where is SAP’s market leadership in pointing this out?  And on top of that, what about the security issues involved as well?

 

  • It is implemented over 35% faster but only costs 10% less?
  • CEO satisfaction difference is marginal so that unless the sampling size is massive (which is doubtful) it falls within a margin of error.
  • Businesses are about HALF as satisfied with Saas solutions as they are with on-premise solutions?
  • Saas blows the budget about 17% – 20% MORE often than on-premise ERP?  (The % difference between 59% and 70.6% as a proportion of the 59% on-premise budget score).
  • Off site (off premise) access and security troubles plague Saas and “Cloud computing” models.
  • Another layer and level of contracts and service level agreements which must be correctly navigated.

 

When you look at the facts and strip away the hype on-premise ERP solutions win hands down.  Even with the on-premise ERP results, by comparison to Saas they look wonderful.

 

And SAP has done nothing to address this in the marketplace.  SAP has also done little to really address the usability of their software other than to provide a technical toolkit (GUI XT) to allow customers to create their own front ends.  MUCH more could be done. I’ve written about some fairly “easy” ways SAP could innovate their application environment with little cost or difficulty as well.  That article, entitled “Opportunities for INNOVATION SAP, HELLO?” provides insight from what I believe is a customer perspective on application usability and simplification. 

 

SAP could today “apple-ize” their user interface and end user experience to be more intuitive and more responsive to end users.  I’m not referring to an IPod, or IPad touch interface, but more of an intuitive look and feel that would make a user’s daily tasks simpler and less confusing.

 

What Does the Future of SAP Look Like?

 

  • SAP will need to define and articulate to the marketplace a clearer message about its value proposition and its differences. 
  • SAP should focus on end-user experience and a more intuitive user interface to help reduce the change management, adoption, and transition pain.
  • SAP should refocus its application landscape messages, its sales messages, and its strengths on business solutions rather than package solutions.[FN2]  Too much time and attention is spent on application features by the SAP literature and sales force and not enough on what those features mean to business.
  • SAP MUST develop an internal reference database of EVERY consultant who has ever taken a course, or been certified with them.  For far too long the company has allowed fakes, frauds, and cons to lie about certifications or training and SAP has not provided any way to verify these claims.  It is long past time for SAP to provide a “transcript” of courses and certifications for end-customer use when a potential employee or contractor comes to them.

 

This last issue of having some type of transcript or other reference service for consultants who claim to have taken SAP training can not be underestimated.  Because of the widespread fraud in the marketplace and the constant claims of “certification” or training classes by those with fake resumes the value of the training has been all but destroyed.  The value of the credentials are meaningless, and because of the number of fakes in the marketplace the value of the consulting services has been damaged. 

 

These and many other straight forward solutions would help to generate marketplace buzz about SAP’s enterprise application suite and provide customers reasons for a purchase or upgrade.

[FN1]  http://www.cio.com/article/531863/ERP_Costs_3_Signs_Companies_Are_Wasting_Less_Money

[FN2]  Over the years I have heard so many SAP sales reps and sales presentations that focus on this or that SAP application rather than addressing a business need or actual business requirements.  This is a classic sales No, No.  All these sales people do is describe features rather than explaining to the business what these features mean to the business in terms of benefit.  For way too long many in the SAP sales force have relied on the SAP name.

 

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  1. Edward Pelyavskyy
    A 100% ‘yes’ to your “…develop an internal reference database of EVERY consultant…”.

    And every ABAP consultant should have a page with a sample of his/her work too. 😉

    I have my ‘S’-number and the certificate number. Is there no SAP email where my employer can send a request to verify the info? I guess this is a question to SAP folks here…

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    1. Bill Wood
      The short answer to your question is that I have never found any way to verify SAP “certification” claims.  And as a project manager, having reviewed DOZENS (if not a few HUNDRED) resumes over the years the idea of “certification” on a resume is WORTHLESS!!!  Without exaggerating at LEAST 3 out of 4 resumes I’ve seen that claim “certification” were complete fabrications.  I’ve even seen claims of “certification” for things that SAP doesn’t certify for like pieces of modules.  For example “SAP Transportation Planning Certification.”  Not training, but claims of certification.  And customers don’t know any better.  For that matter even a lot of the consulting companies are completely clueless.

      I don’t know why this has been done and it has been one of my big beefs for a while.  Because SAP has not provided an easy way to verify education and certification claims the value of training and certification has been destroyed.  Claims of education and certification are meaningless.

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        1. Bill Wood
          I’ve looked at it, and it still does not address any method to deal with the fakes.  It just provides another job board but sponsored by SAP now.

          For even a single 3 day SAP on site class, the price, including expenses, can easily approach (or exceed) $5,000 USD.  The whole certification track, 20 – 30 days of training, plus the test, can easily reach $30,000 + expenses USD. 

          The fact that there is no transcript, or other method to verify training and certification is unbelievable from a company like SAP.  This lack of a simple verification mechanism has virtually destroyed the value of the training.  SAP could also even have a formalized training partnership program with certain requirements and still record those who were trained or certified in authorized centers.

          There are also a LOT of fake “certification” centers who set up shop, bring in the unsuspecting, give them a couple days “training” and then hand them a certificate and tell them they are now “certified”.  They provide fake resumes, and even take phone screens for them.  The marketplace is FILLED with fraud and some of it is easily preventable.  That is my frustration.  And the fraud is destroying SAP’s value as well.

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      1. Edward Pelyavskyy
        Here is a thought: use SCN (SDN) for “verification”. It should be a standard interview question: what is your involvement with SCN (SDN)?

        I think over years you have developed your own network of SAP professionals you hire over and over again… Probably when you go outside of your network you see the meaningless of the certification claims?

        Are you at the point where you can say that seeing an SAP certification logo on a resume raises a red flag for you? My resume does have the logo and now I’m wondering if it may be a deterrent…

        To your other point: I still think that SAP is the best ERP software out there (not only because I develop for it ;-). However, corporations like SAP should have reality checks once in a while. Look at what is happening with Toyota. Far too long Toyota thought that the name they once earned will keep selling on its own.

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        1. Bill Wood
          I appreciate the replies about SCN, however that still does not address the certification and training verification. 

          ~~~~~~~~~~~~

          On your question of certification or training, I’ve seen SO many fakes that anyone who really emphasizes it makes me suspicious.  I mention it in passing in my resume intro but I include my classes / training / certification info at the very end of my resume.  I lead with the experience and it works.

          The training and certification listings have become almost meaningless.

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  2. Gretchen Lindquist
    Bill,
    I agree, the risks of cloud computing including SaaS could use more exposure so that potential buyers can assess them in light of their organization’s risk appetite, and I agree that it could be a business opportunity for SAP and other traditional sellers. Risks including loss of control, data integrity, privacy and availability concerns, compliance and security risks at several levels are among the issues. I recently read an article in the Vol 6 June 2009 issue of the ISACA Journal which discusses the risks from an auditor’s perspective. and I suggest it to those interested in learning more.

    Gretchen

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    1. Bill Wood
      Excellent suggestion and insight.  But then again SAP as the market leader should be pushing this more in the marketplace.  In my mind (and I may be wrong) Saas is nothing but ASP models  (Application Service Provider) with a new name.
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