Why Most SAP Customers Say They Won't Buy SAP Products Again
Date: 13/09/2016

By Marco Meisert

When SAP recently launched their new marketing slogan – ‘Run Simple’ – they made a bold statement:

‘If we simplify everything, we can do anything. SAP helps you streamline your processes, so you have the agility to create new growth opportunities for your business with the world’s most innovative platform.’

SAP has been slow to transition to the cloud, and their new focus on simplicity marks a major departure from the traditionally held view of SAP products. So how well does this claim stand up to scrutiny? Let’s find out.

At Cornerstone, we decided to evaluate SAP’s offerings across three key business areas – Analytics, ERP and CRM. The results were startling, leading us to believe SAP’s ‘Run Simple’  tagline is wildly optimistic in light of the issues experienced by numerous dissatisfied customers.

Most existing SAP clients expressed frustration with the delivered solutions, and were generally reluctant to adopt SAP’s most recent applications. The majority say they would not consider buying from SAP again, and do not plan to invest in S/4HANA in the future, preferring instead to evaluate alternative market opportunities.

Analytics

In October 2015, SAP launched Cloud for Analytics, but the lack of reference customers makes it difficult to reach a conclusion on the product’s effectiveness. SAP has been unsuccessful in gaining traction in the cloud analytics market, and of the analytics customers we interviewed none were using SAP’s cloud solution.

A common complaint was that customers spend too much time on SAP maintenance, due to the age of the product, and the fact that transferring data from SAP’s out-dated BusinessObjects takes much longer than expected. Those customers still using BusinessObjects were anxious about their continued reliance on the product, since it drains resources that could be better deployed elsewhere.

So although SAP does have a viable cloud-based analytics solution, their on-premise solution remains dominant in the marketplace, and continues to consume the resources of SAP’s customers. SAP would be advised to better assist its on-premise customers to migrate to the cloud. Until this happens, customers will continue to waste time and money on excessive maintenance and inefficient data utilisation.

Enterprise Resource Planning

At the recent SAP Sapphire 2016 event, the company discussed its upgrade path to S/4HANA, and their enhancements to the HANA cloud platform. However, a large majority of customers expressed no desire to transition to S/4HANA. And the few clients who did plan to remain with SAP indicated that they would only do so due to high sunk costs and resignation, rather than a positive experience with the solution.

Most SAP reference customers reported substantial technical issues during implementation, as well as critical support disputes when problems surfaced after cutover. Although clients did understand that some deployment difficulties are inevitable, the challenges encountered with SAP installations were unprecedented. The difficulties in bringing SAP ERP solutions to operational status made most customers reluctant to repeat the process.

One particular concern was the lack of support provided. One customer commented that there was no support at all, and they were left feeling as if they’d been shoved under a rug once SAP was awarded the account. So although SAP may be able to sell S/4HANA to new clients, those with prior SAP ERP experience are less interested in suffering through another complicated and painful migration.

Customer Relationship Management

SAP has an established on-premise CRM platform, but once again the company has been slow to release a cloud-based solution, meaning few reference customers are available. Nevertheless, our analysis of SAP Cloud for Sales and SAP Cloud for Marketing indicates that SAP continues to lag the marketplace.

A quarter of SAP Cloud for Sales customers have already moved off the platform, or are considering doing so. Several have jumped ship from SAP CRM to a competitor, and few consider SAP to be a real contender in the CRM space. The only customers to have independently chosen SAP for CRM were those who already had an established SAP ERP investment.

Overall, SAP customers said implementations were lengthy, unpredictable, costly, and didn’t work as expected. Many were still trying to bring their solutions into production, with blame partly attributed to SAP’s third party implementation partners.

Conclusion

SAP is relying heavily on its cloud initiatives and the success of HANA. But there is a clear disparity between SAP’s marketing message and the actuality experienced by customers. The slogan ‘Run Simple’  does not appear to align with reality.

Most customers say they wouldn’t purchase the same SAP platform again, knowing then what they know now, and they don’t regard SAP’s strategy as compelling enough to warrant further consideration.

The lack of interest in S/4HANA is partly due to past negative experience, as well as the perceived unpredictability and risk of future SAP deployments. There is also an assumption that alternative solutions from competing vendors are in the pipeline.

In general, SAP has much work to do if the company wants to satisfy clients that their business will truly ‘Run Simple’  with SAP.