SAP profitability claims miss IT exec radar

16.03.2006
SAP claims users are 30 percent more profitable when running SAP branded software but new research claims SAP users are 30 percent less profitable. Australian IT managers have ignored both claims and state no platform is more profitable than another, it depends on how the system is used.

SAP ran advertisements last year claiming companies running SAP software are 32 percent more profitable than those who don't run SAP branded software.

The figure was based on a survey conducted by research firm Stratascope which analyzed 587 companies using SAP tools listed on the NASDAQ and NYSE earning more than A$50 million (US$37 million) over the last four quarters set against 2769 non-SAP customers.

However, Nucleus Research has released a study reporting SAP customers have an average return on equity (ROE) of only 12.6 percent, compared to an industry average of 15.7 per cent.

The research, which wasn't commissioned by a vendor, noted the three areas of focus for SAP, CRM, ERP and supply chain management (SCM) had customers who fared quite poorly, with CRM users achieving profitability 18 percent lower than those using competitors' offerings; ERP customers achieving profitability 32 percent lower and SCM customers achieving profitability 40 percent lower.

Stephen Watts, marketing and business development director for SAP Australia, said the primary motivation of Nucleus Research is self promotion rather than providing insightful research.