SAP: The Road Beyond ERP

German multinational corporation SAP SE may be best known as an enterprise resource planning (ERP) software firm but senior executives insist that it has successfully moved beyond ERP to providing cloud computing and digital solutions as well.

“The growth has been easy for SAP in India when it came to the top 100 enterprises and then another 300-odd large companies, but the joy ride ends now,” said Sanchit Vir Gogia, Chief Analyst and CEO of Greyhound Research. He pointed out that Indian firms are wary about data residing in a foreign country.

Gogia added that SAP has not found many takers for its “expensive” HANA. Though some enterprises have “technically bought HANA licences”, there are only a few implementations in the country, as not all ERP modules are ready yet on HANA. “Another reason for the lukewarm response to HANA is the lack of skill sets on HANA in India,” Gogia noted.

The upcoming goods and services tax (GST) regime, which would need ERP to be modified or upgraded for compliance, could also pose a challenge for SAP, Gogia said. “While SAP is mandating its clients to buy S/4HANA licences if they want to migrate their existing SAP solution to a GST-compatible version, other vendors are offering to supply the GST patch for free,” Gogia noted, warning that firms may shift their custom to other vendors as they embrace GST.

[LiveMint]

2 comments

  1. Great insights indeed. SAP has to look at selling “innovations” ( read non ERP ) to lead to a “digital transformation” rather than “additional user licenses”. It must also help customers deploy these innovations to ensure that customers use & benefit out of these tools.. data sovereignty in the cloud would remain a challenge unless data Centres reside in india. . Challenges in the growths segement like Emerging business and public Sector will arise due to the above .

    1. Thanks Mathew for your comment, much appreciated. Until now, the journey for most ISVs including SAP has been easy – with limited feet on street and fewer complications in implementation, the journey has been smooth. In your words, selling incremental licences has been the focus but unfortunately cannot stay as that any longer. Clients have worthy options to consider and business outcome expectations are the new normal – this clearly is the struggle for those at SAP and other ISVs.

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