Original URL: http://www.theregister.co.uk/2003/03/31/sap_costs_too_much_customers/

SAP costs too much – customers

ROI challenged

By Ashlee Vance

Posted in Data Centre, 31st March 2003 23:02 GMT

Every now and then, an analyst firm gathers up its collective courage and issues an ROI study which contradicts everything a vendor's marketing department would have you believe.

So hats off to Nucleus Research for firing a salvo at SAP for causing customers to shell out millions on software with little more than added worker productivity in return.

The force of the criticism is weakened somewhat by the small data sample from which Nucleus draws its conclusions: the US analyst firm interviewed 21 customers only. But they are reference sites, so, small as the sample may be, it seems safe to say that many SAP users are a tad concerned about mounting bills and questionable ROI.

Most customers surveyed had used SAP software for close to three years and 57 per cent of them said they've paid more for the code than it's worth.

The average cost for a three-year SAP deployment is $10m, with consulting accounting for $3.6m, personnel soaking up $2.5m, software licenses another $2m, and related hardware and training costs picking up the rest of the tab.

Companies surveyed saw some benefits from workers being able to manipulate data more quickly with SAP products and better company-wide access to information. "However, a positive return on the SAP investment was achieved only when there was both a sufficient number of users and sufficient frequency of use (breadth and repeatability) to reap significant productivity based gains from the solution," Nucleus writes.

Beyond these few cases of positive return, SAP users feel let down by their romp in the world of customer relationship management, business automation and the like. ®

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