SAP Strengths and Weaknesses
SAP’s competitive positioning in the payroll (and wider HR) software market can be summarized by highlighting the following strengths and weaknesses:
- Put simply, brand -- the SAP name is hard to ignore, given that it’s backed by 40+ years of operation and a 25% global market share.
- Unlike some similar-sized vendors (such as Oracle) SAP fields a refreshing honesty in respect of its mistakes or missteps, coupled with a genuine desire to listen to critical feedback and use it to improve its offerings. (The SAP Mentor network is a case in point, acting as a sounding board for dissenting opinions as well as a welcome resource for implementation and troubleshooting advice.)
- Pricing is largely based on named users (not based on modules), which grants access to all or most modules and functionality—a feature that can deliver specific value to those customers who look to upgrade to SAP's ERP and/or financial applications.
- The SuccessFactors acquisition seems to be bringing some much-needed cloud functionality into the SAP HCM product portfolio.
- SAP offers hugely robust analytics and data visualization functionality, capable of handling a wide variety of business intelligence tasks.
- Currently, SAP ERP HCM involves significant up-front capital investment and a lengthy implementation period (impacting on both ROI and TCO); however, if SAP’s global payroll is heading for the cloud and a true SaaS deployment then this pricing issue will inevitably change.
- Many existing (and past) SAP ERP clients have complained that SAP solutions require too much SAP-insider knowledge when it comes to software configuration or customization.
- Gartner research has suggested that (outside of larger mid-market organizations) SAP solutions net higher "efforts and costs" when clients turn to customization/enhancements. This view is anecdotally confirmed by complaints from Business Suite customers that extra functionality available through the SAP solution is not worth the added complexity and expense.
- SAP HCM software solution is legacy, client-server technology and so may require a third party bandwidth aid (such as Citrix, MS Terminal services or other VPN software solution) if used in a distributed or hosted environment in order to achieve acceptable online performance.
- The acquisition of SuccessFactors has highlighted the level of “technical debt” for SAP - the company now has at least five human capital management (HCM) software architectures currently running.
- Some observers note that SAP hasn’t delivered a market leading product since the delivery of SAP R/2 in 1979 and the follow-on delivery of SAP R/3 in 1992 – a worrying failure to innovate that the company is working hard to turn around.
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