SAP 2009 Spend Trend Trifecta
Part Two
By Sam Sliman
President, Optimal Solutions Integration, Inc.
According to a recent report by financial analyst firm UBS, spending on SAP will increase this year in stark contrast to the cutback in spending predicted with other leading tech vendors. In this three-part article, we share our best bets on what the top three SAP spending trends might be in 2009. Our first pick -- SAP upgrades -- was covered in Part One. We've spread our second wager among cost-reducing, efficiency-driving SAP projects in the areas of consolidation, GRC and BI.
In today's turbulent economy, CIOs, perhaps more than ever before, are under tremendous pressure to reduce costs, demonstrate clear business value and contribute to their company's bottom line. SAP represents a significant investment, and realizing the full, often untapped, business value of their SAP applications will surely be at the top of every CIO's list for 2009.
SAP Consolidation
In conjunction with SAP upgrades, there will be numerous smaller, highly strategic and focused upgrade-related SAP projects executed in 2009, with consolidation perhaps leading the pack. The vast majority of SAP R3 customers have multiple instances of SAP deployed across their global operations. By some estimates, 80 percent of SAP-related IT budgets goes toward the maintenance and overhead of these deployments, making consolidation and standardization on SAP 6.0 across the enterprise an imperative that cannot be ignored by any cost-conscious company.
A selection of skills needed for SAP consolidation initiatives includes mastery of data archiving, master data management, proficiency with virtualization tools and best practices, systems integration, and business process optimization. You can bet that the smart SAP customers will be consolidating in 2009, and spending on SAP consultants with the proven skills and experience needed to get the job done.
SAP Governance, Risk and Compliance
As if the regulatory pressure of Sarbanes-Oxley and Basel II were not enough, today's crisis in the financial services industry has driven governance, risk and compliance (GRC) to the forefront of most C- and board-level discussions. Add to this Standard & Poor's (S&P) pending requirement that non-financial companies exhibit proof of a formal and effective risk-management program in order to secure a positive credit rating, and the heightened importance and urgency surrounding GRC initiatives today becomes crystal clear.
In addition to compliance mandates such as Sarbanes-Oxley in the U.S., the Turnbull Report in the U.K, and Japan's JSOX regulations, among others, risks posed to organizations -- particularly those with global operations -- by a dynamic array of regional, environmental, legal and political events make GRC spending a must, which is perhaps why Gartner predicts GRC spending to be strong through 2009 en route to topping $1.3 billion by 2011.
SAP Business Intelligence
Why BI in 2009? Spend a moment with this prediction recently made by Gartner: "Between now and 2012, more than 35 percent of the largest 5,000 companies will regularly fail to make insightful decisions about significant changes in their business and markets." And this will happen despite Gartner's observation that BI has been the number one technology for the last three years running. Clearly, there's much BI work still to be done in 2009.
The vital connection between accurate, real-time information and intelligent, timely business decisions is certainly not a difficult concept to grasp. In past practice, however, what has proven difficult was effectively leveraging technology to establish this connection.
Those days are behind us. The current SAP/Business Objects co-offering of mature, fully integrated BI, Enterprise Performance Management, Financial Performance Management and Governance, Risk and Compliance solutions -- all of which make up SAP's version of what should constitute Corporate Performance Management -- gives SAP customers an unprecedented holistic view of performance across the entire organization and the ability to quickly identify and address financial and operational challenges and opportunities.
Worldwide BI revenue is forecast to grow at a compound annual growth rate (CAGR) of 8.1 percent through 2012, to reach $7.7 billion in 2012, according to Gartner. Gartner also predicts that CPM will remain hot over the next several years, sustaining a CAGR of 14.4% through 2011, at which time the market will top $3 billion.
Gartner recently positioned Business Objects in the leader's quadrant the "Magic Quadrant for Corporate Performance Management Suites, underscoring the importance of integrating BI with CPM solutions. As the lone large vendor with an integrated proven and mature portfolio of BI, EPM, FPM and GRC solutions, SAP and SAP customers stand to gain much from the BI uptake in 2009.
