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SAP ERP Payroll and HR Software Review


SAP Company Viability Review

In a sense, SAP’s viability would appear to be indisputable. It’s size, market share, four decade history, a client base of 102K or more, and a new executive team that comprises one of the industry's archetypes for leadership. SAP would certainly appear to be a dynamic (and unrivalled) mix of talent, drive, and vision.

On the other hand, this software giant is no more immune to setbacks or missteps than any other vendor. Indeed, revenues, operating margins and the workforce all took a hit in the latest market downturn. Furthermore, a series of miscalculations have cost the company dearly in terms of customer churn and goodwill – fueled in large part by executive turnover, maintenance fee escalations (which the company retracted, or at least delayed), a late-to-market SaaS initiative, and a growing discontent across the payroll/HR software landscape with the Total Cost of Ownership (TCO) for on-premises solutions.

However, size will tell, and with a 2011 upswing in revenue ($4.7B represented a 10% boost to the company's operating profit) SAP continues to be one of the most financially-secure enterprise software vendors within either the ERP or HCM software space. Indeed, this performance is in stark contrast to rival Oracle’s figures, prompting Gartner’s Donald Feinberg to observe, "[SAP is] benefiting from Oracle's customer base being upset about the prices and contract negotiations and…it's finally coming out".

The first key factor behind this success (possible Oracle customer defections aside) is the recent $3.4B acquisition of SaaS HR software company, SuccessFactors which has prompted the above-mentioned “accelerated cloud strategy” and massive investment in solutions relating to payroll/HR, financials, sales and supplier management. Secondly, the company’s HANA technology (which uses in-memory analytics to allow for instant and simultaneous analysis and database recording) has seen a sizeable increase in demand and SAP are hoping that it will replace the mainly Oracle databases currently in place with the 15K businesses using SAP's Business Warehouse solution – a substantial untapped market.

Finally, with the future and other untapped markets in mind, the acquisition of Crossgate AG (a premier B2B networking provider) and a new $2B billion plan to take the number 1 provider position in China are signs that not only is SAP doing well, but it's also refusing to rest on its laurels.

Next - SAP Payroll Strengths and Weaknesses >>

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