SCM, CRM and SAP core competence

SAP was able to prevent the SuccessFactor disaster at the very last second. But it was proof that SAP does not know cloud computing. Whenever an existing SAP customer started a comprehensive job in the SuccessFactor cloud, many other cloud users only saw the familiar hourglass on the screen.

SAP focused on HCM functions and neglected infrastructure management. The focus was on the transition from a decades-old on-prem HR solution to an HCM system in the cloud. The starting point for this transformation was the acquired SuccessFactor. The roadmap was not to the liking of all SAP's existing customers, but functionally it made sense on the whole - it was only the operating model in the cloud that SAP did not master.

SAP seems to have learned little from its mistakes: IBP, Integrated Business Planning, was created in the cloud on the basis of the on-prem APO solution (Advanced Planner and Optimizer) that had been successful for years. Supply chain experts are predominantly convinced by the functional scope and end-to-end concept of Integrated Business Planning. SAP is strongly praised for this software development. But IBP is only available as a cloud offering - an intolerable situation for us. Why?

IBP comes in-house as a cloud solution and thus supply chain planning would be dependent on SAP's release planning and maintenance times. However, an industrial group like my employer with global supply chains cannot make itself dependent on maintenance windows and infrastructure providers like SAP with SCM.

As a Group CIO, I already have enough need to discuss applications from professional hyperscalers, whose business model is the cloud. SAP's business model is standard business software. In the area of cloud computing, everything speaks against SAP - too little experience, too little infrastructure, too little scaling. Even with shadow contracts to the US provider Cloudflare, SAP cannot succeed in building a satisfactory cloud architecture for global IBP.

Because many supply chain and APO experts here in the house are really convinced of IBP, I want to argue it clearly again: Integrated Business Planning in the cloud is too much of a cluster risk! Of course, I now run my own data centers on a verified cloud pattern, because in many areas cloud functionality is the logical evolution of virtualization - but in the supply chain we need to retain autonomy and be able to determine maintenance windows ourselves.

Another example from the area of function versus infrastructure: At the beginning of this year, a subdivision of the group asked me for a new CRM system. The sales manager in charge came to my office and said that he had heard that Salesforce would harmonize quite well with our SAP system. Without initiating a business, organizational, technical and licensing lecture, I promised to look into the matter sympathetically - also because I myself was not up to date with SAP's CRM.

Over the summer, I commissioned three interns to evaluate and select CRM products, with the main focus on SAP and Salesforce. Surprise: In almost all disciplines, SAP performed much better than Salesforce. SAP CRM makes a much more consistent impression. It is more of a coherent application than an Excel-like, grown CRM system. I was very surprised at the amount of development SAP has created in the past few years since the full-bodied announcement of C/4 at a Sapphire in Orlando - at the time by Bill McDermott and Hasso Plattner. The sales colleague will get a CRM from SAP next year!

What I wanted to prove with my last column for this year: SAP still masters the essential business algorithms. SAP's core competence exists and is business management and organization, not cloud computing.