Friday Rant: SAP and the Internal Technology Battle

In a post from yesterday, I thought Gregg Brandyberry did an excellent job highlighting the gap between organizations that get the current technology transformation versus those that do not. He puts it best when he notes: "while many Procurement organizations have adopted 10 year old technology, few are making real inroads toward leveraging the rapidly changing technology landscape. In most cases there is a real 'thinking gap' between the current decision makers and the generation driving the information technology change. The real forward thinkers are going to figure this out and act accordingly."

What's extremely curious to me about this statement is its applicability not only to companies, but the providers that sell technology to them. The conflict -- or gap -- that exists in the corporate world also exists within providers. SAP is a perfect example of a company with just the same gaps. Consider how a significant part of the organization focused on procurement has spent the better part of the past four years developing an eProcurement-focused product (SRM 7.0) that does a decent job approximating much of the technology that's been around from best of breed providers for at least seven or eight years. While it is not quite there, it's still a solid effort. But nothing about it is market leading nor is the solution in the least bit creative (even Microsoft integration through Duet, which promised a novel new workflow interface, is now being downplayed). And it took them four years to bring it to market since their last release. Which is remarkable and scary at the same time.

Yet other areas of SAP seem to embrace the new technology world as Gregg defines it. Members of another team have done quite a nifty job coming up with a supply risk solution that combines internal and external data elements. And they brought it to market in approximately 90 days.

Traditionally, 90 days in the SAP product development lifecycle was a rounding error -- or the time to conduct a single customer focus group. In contrast, nimble teams within SAP are now embracing internal and external collaboration to make things happen fast. The creativity, excitement and potential among those who contributed to the new risk solution became extremely apparent in only a 20-minute demonstration. Yet the bulk of SAP where much of the planned revenue and focus remains in procurement is plodding along at traditional enterprise software speed, calling Gregg's non-expert 411 when they need to look something up.

SAP, like their customers, has come to possess a "thinking gap" that exists throughout so many procurement and operations organizations today. Whether they are left behind or not -- and whether we read about them as a footnote in overall technology history like a Wang or DEC in a few decades time -- is still left to be decided. Personally, I think this internal gap will become even more exaggerated as SAP continues to rely more on solutions like their rapidly prototyped supply risk toolset and their new On Demand platforms (E-Sourcing, CLM, etc.) to drive growth. The question I have for you is: will they ever bridge the development and cultural gap between the internal organizations -- and if they can't, what will it mean for customers?

Jason Busch

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