Consulting group Nucleus Research has just announced the results of a new study of users of SAP’s Enterprise Resource Planning Software. The report found that 57 percent of SAP customers interviewed believed they had not achieved a positive return on investment (ROI) from their SAP deployment.
Nucleus studied 21 SAP clients with an average implementation cost of $5.4 million on license fees and deployment consulting costs. One ROI value destruction mechanism was ‘excessive customization’ along with consulting costs averaging over $3.6 million per implementation. For deployments in which consulting amounts to more than twice the cost of software, a positive ROI is unlikely. Customers with less customization and consulting requirements were more likely to obtain a positive ROI. Where customers did derive benefits, they came from increased productivity, reduced headcount, improved operations management, and improved information organization and access for decision making. Nucleus notes that despite such misgivings, SAP has posted tremendous growth and diversified its monolithic solution into discrete bundles of business applications.
Nucleus VP Rebecca Wettemann said, “Among the companies we have studied, SAP emerges as an anomaly with unimpressive ROI trends. However the prognosis isn’t as bleak as it is for other vendors’ enterprise software. Most of SAP’s customers expected a lengthy implementation. Companies that can manage this process without purchasing software that is beyond their business and functional needs, and without excessive customization of the solution and its interfaces, will be poised for significant benefits.” More from www.nucleus.com.
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