SAP Watch

Aug 6 2009   1:06PM GMT

Outliers: Some SAP customers not focusing on quick projects, quick SAP ROI

CourtneyBjorlin Courtney Bjorlin Profile: CourtneyBjorlin

SAP held a roundtable in Boston yesterday afternoon, which featured a good sampling of industries and a who’s who of some of SAP’s biggest, and soon to be biggest, customers – Raytheon, Day & Zimmermann, Boston University, and GT Solar.

With the exception of Boston University, which is about to embark on a massive SAP rollout, all of the panelists indicated that their IT budgets would remain flat over the year and for some, through 2010.

We’ve heard over and over again that to meet economic challenges, customers are choosing quick projects with near immediate ROI. And that’s the case at the majority of companies. But it was interesting to hear a different perspective yesterday from companies that aren’t focusing on immediate gratification at all.

At Raytheon, they’ve been on a very long path to integrate their business processes, said Lesley Dickie, director of corporate IT. Raytheon’s working toward one financial instance of SAP, which now handles 78% of that business, and one manufacturing instance, which now handles 65%.

“We’re continuing that path. I don’t see Raytheon — although it’s very hard and we have to constantly align people — I don’t see us going after wedge solutions, wedge apps,” Dickie said. “We want to stick with our strategy.  I get the pressure to get it faster, get it more affordable. But we’re trying not to have spin-offs and run-offs. ”

SAP North American president Rob Enslin, in describing the buying behavior of customers, acknowledged that the immediate ROI rush been a challenge for SAP too.  Many business people are selecting solutions that have immediate returns, and “it’s sometimes out of panic, sometimes out of necessity, sometimes because they need to make certain they can do what the market expects in a short period of time,” he said, then posed an interesting question.

“What’s going to happen two to three years down the road when all of these wedge applications have to go back to an integrated solution? Are we going to go back to the same situation we had a couple of years (ago) where the efficiency of IT is challenged once again?”

SAP’s responding to the “best-of-breed” rush with its own software.   SAP too has been selling a lot of what North American CEO Rob Enslin dubbed “wedge applications,” a strategy that’s evident in the “Best Run Now,” packages and will further manifest itself in SAP’s on-demand strategy.

Are you facing a challenge of integrating more best-of-breed apps into your SAP environment because of the current economic environment? How are you handling it?

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