Blog Nomen Nescio

SCM, CRM, and SAP’s Strengths

Instead of concentrating on its strengths, SAP desperately yearns to become a company for cloud solutions. Everyone knows this plan will fail, as SAP's strengths lie elsewhere.

SAP was able to prevent the Successfactors disaster at the very last second. This was, however, proof that SAP has not yet mastered cloud computing. Whenever an SAP customer began an extensive task in the SuccessFactors cloud, a familiar hourglass was all the other cloud users could see.

SAP focused on the HCM functions and neglected infrastructure management. The focus was on the transition from a tried and tested on-prem HR solution to an HCM system in the cloud. The starting point for this transformation was the acquisition of SuccessFactors, an HCM software. The implementation plan was not to every SAP customer’s liking, but functionally, it made sense for the most part—SAP just hadn’t mastered the business model in the cloud.

SAP appears to have learned little from their past mistakes. Based on the on-prem APO solution (Advanced Planner and Optimizer), which had been successful for many years, IBP (Integrated Business Planning) was created in the cloud. Supply-chain experts are mostly convinced of the range of functions and the end-to-end thinking of IBP. SAP was praised effusively for the development of this software. But IPS is available only as a cloud offering—an unbearable situation for us. Why?

IBP comes as a cloud solution, which means supply-chain planning would then be dependent on SAP’s release planning and maintenance schedule. An industrial company like my employer, with a world-wide supply chain, can be dependent on SCM (supply chain management) but not on maintenance windows and infrastructure providers like SAP.

As the group CIO, I have enough to discuss when it comes to the applications of professional hyperscalers who use the cloud as their business model. SAP’s business model is standard business management software. In the field of cloud computing, everything speaks against SAP—too little experience, to little infrastructure, too little scaling. Even with shadow contracts with the US provider Cloudflare, SAP cannot succeed in building satisfactory cloud architecture for IBP.

Since many supply chain and APO experts at our company are quite convinced about IBP, I want to clearly state my point once more: Integrated Business Planning in the cloud is a huge cluster risk. I now run my own data centers according to a verified cloud pattern because in many fields, cloud functionality is the logical development of virtualization—but in the supply chain we must maintain autonomy and the ability to determine maintenance schedules ourselves.

Another example on the topic of function versus infrastructure: at the beginning of the year, a portion of the company employees requested a new CRM system. The one responsible for the request, the sales director, was in my office and mentioned he’d heard Salesforce would harmonize well with our SAP system. Without having even begun any kind of business-oriented, organizational, technical, or licensing research, I promised to thoroughly investigate the matter, also because I myself was not up to date with the current state of SAP’s CRM.

Over the summer I assigned three interns with the evaluation and selection of CRM products, with the main focus being on SAP and Salesforce. Surprise, surprise: in almost all disciplines SAP performed better than Salesforce. SAP CRM makes a significantly more consistent impression. It is more of a coherent application and less of an Excel-like, overgrown CRM system. I was quite surprised by what SAP had managed to develop in the previous years since the pompous cancellation of SAP C/4 during SAP’s signature Sapphire event in Orlando, United States—an event still held by Bill McDermott and Hasso Plattner at the time. Next year my coworker in sales will be the proud recipient of a CRM program from the house of SAP!

What I want to establish is: SAP is still proficient in essential business management software. SAP’s central competencies do exist, and they are in the business management and organizational areas, not in cloud computing.

E-3 Magazine February 2023 (German)

About the author

N. N. (Nomen Nescio)

Nomen nescio, abbreviated to N.N., is used to signify an anonymous or unnamed person.

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