5 ms·

Again, as I noted elsewhere in the thread, I worked in R&D at SAP for 4 years (16 years ago), but I have no deep love for it. But I do have some understanding

by wheels 4y ago

Again, as I noted elsewhere in the thread, I worked in R&D at SAP for 4 years (16 years ago), but I have no deep love for it. But I do have some understanding of where it fits in the landscape. What you've said is absolutely true, but it's mostly a feature, not a bug. Once you get big enough to need SAP, it's actually useful to put your business processes on a standardized platform. It's painful, always mind bendingly expensive and often fails. But few companies want to be innovative in their business processes. It's actually better to move to "the standard" since it makes processes more understandable across different ginormacorps, which is useful for the upper management sorts that tend to move between them. There's virtually no competitive advantage to having unique business processes. There are many folks that even will say that that's the advantage of moving to SAP is it makes the internal mechanics of the company work a lot like every other giant company.

tut-urut-utut 4y ago
I have to disagree here strongly. You are just saying, that a company that became big enough, so it can afford SAP, should drop their way of doing business, drop the processes that made it big in the first place and go through a painful and expensive process where it will become just another SAP shop, with zero competitive advantage. Telling that losing your uniqueness and being like “everyone else” will actually become your competitive advantage is something that only SAP can come up with. If you already grew big, you won't grow bigger by adopting SAP. You can stagnate at best, as shown a million times in the real world. Companies that still want to grow just don't use SAP. Period.
- wheels 4y ago
  Sorry, but that's just not borne out by data: almost all of the Fortune 500 companies use SAP (something like 80-90%; probably the rest use Oracle, which isn't significantly less painful to move to).
  - primax 4y ago
    The average age of companies on the S&P is 18. That's just about long enough to start being killed by SAP
  - hansel_der 4y ago
    what percentage of those would you say has stagnated?
- rocqua 4y ago
  Is it the business processes that make a company successful, or is it the product, employees and business culture that make a company successful? If its the former, than conforming to SAP is giving up what made you good. But if its the latter, then conforming to SAP is just making the basics more standard and easier to maintain.
- taway19920706 4y ago
  Not the OP, but my feeling is that you use standardised processes when they are not your core. For example, if you produce a widget using various raw materials, is the way you pay your staff delivering any competitive advantage? Or the MRP process you use to re-order engineering spares? Probably not - standardise those. Implement unique processes where they differentiate you from your competition. Standardise everything else.
- gotstad 4y ago
  That needs some nuances. There are some processes that are just well-known by research to be standardized - like supply-chain, regardless if JIT-style or forecasted stockkeeping. SAP does not need to touch the "unique" detailed processes that makes a company great, nor it's culture. But if you e.g. manufacture a product, the design process can still be relatively unique to your company, but most often, the manufacturing processes should follow the high-level blueprint of manufacturing companies.
- Aeolun 4y ago
  How weird. If you are considering adopting SAP, then clearly your existing solution isn’t working. No executive wakes up and things ‘this is a great day to pour 500M down the drain’.
- tomnipotent 4y ago
  > drop the processes that made it big in the first place This is pretty much never the case, and more often than not the company is successful despite those process, not because of. Many processes evolve on an ad-hoc and as-needed basis, with some tweaks here and there over time as the company grows and staff turns. You eventually reach a point when no one can remember how a process came to be, or why Sarah has to export four files from three web interfaces and copy/paste data across two Excel files to send to John over in accounting that was just trained last week on how to use this file to true up actuals. There's only so many ways a company can track inventory, or manage purchase orders, or calculate product costs, or represent sales order and invoices. An ERP acknowledges that a vast majority of businesses operate with the same set of industry-specific operational primitives, and businesses have learned that it's both more time-and-cost effective to adapt your business to the expectations of the ERP than the other way around. In the rare case you're doing something novel, you can still build your bespoke solution on top of those existing ERP primitives without having to re-invent how the numbers come together so your company can spit out the three financial statements.
- wahern 4y ago
  A company I once worked at was taken private by a private equity firm. One of the first initiatives this firm kicks off upon closing an acquisition is moving the company to Oracle for ERP. It can take years and many millions of dollars (as it did in this case--the company was built around an in-house sales and order system), but it's part of their playbook. I have no idea if it's truly worth the cost, but that equity firm surely believes so.
  - PeterisP 4y ago
    If you postpone the transfer, then it simply costs more, as you've put more effort on the in-house system that you'll throw away.
- jon_adler 4y ago
  Successful companies are rarely leading their industry because they have competitive advantages across their HR or Accounting or CRM or Inventory or manufacturing (etc etc) processes. Large company requirements are typically the same or very similar across industries for these standard business processes. It makes sense to standardise on your ERP for these. The typical problems come when companies think they are special and start to customise. Standardise the mundane (with an ERP, with minimal customisation) business processes so your company can focus on innovating where they have true competitive advantage. This is the recipe for a successful ERP implementation.
shp0ngle 4y ago
I mean, Lidl is a big company that knows what they are doing. Either is SAP though so, who knows.
- pavlov 4y ago
  Lidl is a private and entirely family-owned business. They tend to have more idiosyncratic business processes compared to public companies. That might partially explain why they struggled with SAP so much.
mdip 4y ago
I understand where you're coming from but ... > There's virtually no competitive advantage to having unique business processes. I'm not intending to take this sentence out of the context of the rest of your post (on its own, I don't think you agree with that[0]), but I think even in context of "specific to resource planning" there are many competitive advantages that companies pursue. Take "Time Accounting" for example. I'm not referring to tracking hourly employee hours for payroll, I'm referring to tracking salary employee "project time." Every past salaried position I've had at a company with more than 90 employees had its own custom time tracking software[1]. The first company to do this was a multi-national telecom that I worked for. It was done so that each project could be broken out into its stages and the portion of the employees' salary could be itemized among "Capital Expenses" and "Operational Expenses". This was so important to the company that it warranted a massive development effort along with a corporate initiative to get 100% of time reporting in "on time." They did this as you'd expect a huge company would -- fail to hand in a time sheet on time a few weeks in a row and you'd get dinged more for that mistake than anything else. The second and third companies ended up "accidentally developing time tracking software" specifically because there was competitive advantages to improving "Resource Planning". It was most helpful to my last employer. Their businesses was creating new products (often hardware/software combinations) for companies. This involved hiring a large number of people specialized in things that had limited cross-over. Resource Planning was predicting when what skills at what level would be available. This, necessarily, involved tracking what time was spent on projects in the past to improve those predictions and ultimately ballooned into a full time management and accounting application for the business (they sold "our time" to customers at the end of the day so it helped them to plan what to charge). I'm curious -- from your perspective, is it that the competitive advantage is lost "because the tools that everyone is stuck with won't work" if you stray too far from "standardized" or is there another advantage to this standardization? [0] Unique business processes and marketing are frequently the difference between the #1 and #2 company in a given space. [1] In one case (about 250 employee global company), the company wrote it as a concept for a future product but once it was available, the existing solution was tossed primarily because the business side really liked the flexibility. In another it grew out of a pet project and became entrenched. At the remaining two, a decision was made to develop something from the ground up.

by wheels 4y ago

tut-urut-utut 4y ago

I have to disagree here strongly. You are just saying, that a company that became big enough, so it can afford SAP, should drop their way of doing business, drop the processes that made it big in the first place and go through a painful and expensive process where it will become just another SAP shop, with zero competitive advantage. Telling that losing your uniqueness and being like “everyone else” will actually become your competitive advantage is something that only SAP can come up with. If you already grew big, you won't grow bigger by adopting SAP. You can stagnate at best, as shown a million times in the real world. Companies that still want to grow just don't use SAP. Period.

wheels 4y ago
Sorry, but that's just not borne out by data: almost all of the Fortune 500 companies use SAP (something like 80-90%; probably the rest use Oracle, which isn't significantly less painful to move to).
- primax 4y ago
  The average age of companies on the S&P is 18. That's just about long enough to start being killed by SAP
- hansel_der 4y ago
  what percentage of those would you say has stagnated?
rocqua 4y ago
Is it the business processes that make a company successful, or is it the product, employees and business culture that make a company successful? If its the former, than conforming to SAP is giving up what made you good. But if its the latter, then conforming to SAP is just making the basics more standard and easier to maintain.
taway19920706 4y ago
Not the OP, but my feeling is that you use standardised processes when they are not your core. For example, if you produce a widget using various raw materials, is the way you pay your staff delivering any competitive advantage? Or the MRP process you use to re-order engineering spares? Probably not - standardise those. Implement unique processes where they differentiate you from your competition. Standardise everything else.
gotstad 4y ago
That needs some nuances. There are some processes that are just well-known by research to be standardized - like supply-chain, regardless if JIT-style or forecasted stockkeeping. SAP does not need to touch the "unique" detailed processes that makes a company great, nor it's culture. But if you e.g. manufacture a product, the design process can still be relatively unique to your company, but most often, the manufacturing processes should follow the high-level blueprint of manufacturing companies.
Aeolun 4y ago
How weird. If you are considering adopting SAP, then clearly your existing solution isn’t working. No executive wakes up and things ‘this is a great day to pour 500M down the drain’.
tomnipotent 4y ago
> drop the processes that made it big in the first place This is pretty much never the case, and more often than not the company is successful despite those process, not because of. Many processes evolve on an ad-hoc and as-needed basis, with some tweaks here and there over time as the company grows and staff turns. You eventually reach a point when no one can remember how a process came to be, or why Sarah has to export four files from three web interfaces and copy/paste data across two Excel files to send to John over in accounting that was just trained last week on how to use this file to true up actuals. There's only so many ways a company can track inventory, or manage purchase orders, or calculate product costs, or represent sales order and invoices. An ERP acknowledges that a vast majority of businesses operate with the same set of industry-specific operational primitives, and businesses have learned that it's both more time-and-cost effective to adapt your business to the expectations of the ERP than the other way around. In the rare case you're doing something novel, you can still build your bespoke solution on top of those existing ERP primitives without having to re-invent how the numbers come together so your company can spit out the three financial statements.
wahern 4y ago
A company I once worked at was taken private by a private equity firm. One of the first initiatives this firm kicks off upon closing an acquisition is moving the company to Oracle for ERP. It can take years and many millions of dollars (as it did in this case--the company was built around an in-house sales and order system), but it's part of their playbook. I have no idea if it's truly worth the cost, but that equity firm surely believes so.
- PeterisP 4y ago
  If you postpone the transfer, then it simply costs more, as you've put more effort on the in-house system that you'll throw away.
jon_adler 4y ago
Successful companies are rarely leading their industry because they have competitive advantages across their HR or Accounting or CRM or Inventory or manufacturing (etc etc) processes. Large company requirements are typically the same or very similar across industries for these standard business processes. It makes sense to standardise on your ERP for these. The typical problems come when companies think they are special and start to customise. Standardise the mundane (with an ERP, with minimal customisation) business processes so your company can focus on innovating where they have true competitive advantage. This is the recipe for a successful ERP implementation.

shp0ngle 4y ago

I mean, Lidl is a big company that knows what they are doing. Either is SAP though so, who knows.

pavlov 4y ago
Lidl is a private and entirely family-owned business. They tend to have more idiosyncratic business processes compared to public companies. That might partially explain why they struggled with SAP so much.

mdip 4y ago

I understand where you're coming from but ... > There's virtually no competitive advantage to having unique business processes. I'm not intending to take this sentence out of the context of the rest of your post (on its own, I don't think you agree with that[0]), but I think even in context of "specific to resource planning" there are many competitive advantages that companies pursue. Take "Time Accounting" for example. I'm not referring to tracking hourly employee hours for payroll, I'm referring to tracking salary employee "project time." Every past salaried position I've had at a company with more than 90 employees had its own custom time tracking software[1]. The first company to do this was a multi-national telecom that I worked for. It was done so that each project could be broken out into its stages and the portion of the employees' salary could be itemized among "Capital Expenses" and "Operational Expenses". This was so important to the company that it warranted a massive development effort along with a corporate initiative to get 100% of time reporting in "on time." They did this as you'd expect a huge company would -- fail to hand in a time sheet on time a few weeks in a row and you'd get dinged more for that mistake than anything else. The second and third companies ended up "accidentally developing time tracking software" specifically because there was competitive advantages to improving "Resource Planning". It was most helpful to my last employer. Their businesses was creating new products (often hardware/software combinations) for companies. This involved hiring a large number of people specialized in things that had limited cross-over. Resource Planning was predicting when what skills at what level would be available. This, necessarily, involved tracking what time was spent on projects in the past to improve those predictions and ultimately ballooned into a full time management and accounting application for the business (they sold "our time" to customers at the end of the day so it helped them to plan what to charge). I'm curious -- from your perspective, is it that the competitive advantage is lost "because the tools that everyone is stuck with won't work" if you stray too far from "standardized" or is there another advantage to this standardization? [0] Unique business processes and marketing are frequently the difference between the #1 and #2 company in a given space. [1] In one case (about 250 employee global company), the company wrote it as a concept for a future product but once it was available, the existing solution was tossed primarily because the business side really liked the flexibility. In another it grew out of a pet project and became entrenched. At the remaining two, a decision was made to develop something from the ground up.