SAP is positioning itself to show how it can add value to companies through IT, as more businesses globally want greater visibility.
Jos'e Duarte, president of the Europe, Middle East and African region, says companies are seeking greater transparency, both in terms of their business and economic conditions ahead. “The world has changed dramatically... no one is buying air tickets any more.”
Just over a year ago, the recession hit what was probably its height, when US bank Lehman Brothers filed for bankruptcy; the largest ever such filing in the US. Because of the dramatic changes to the global economy, companies can no longer see what is ahead, and they have no idea how businesses will perform.
As a result, says Duarte, it is becoming important for companies to have full visibility, and SAP has seen a second round of ERP implementations. The first round was in the 1990s.
Budget fight
However, Duarte adds, competition for IT spend is no longer limited to between IT companies; it now has to fight for spend along with other capital items such as fleets. “It is a capital expense and competes with every other capital item.”
As a result, SAP is focused on showing companies the value of IT, and taking business cases to the table to prove how IT can trim costs and add value. In addition, Duarte says, a good system can trim some of the costs of keeping the lights on, opening up budgets for innovation.
About 80% of IT spend is on keeping systems running, with the balance earmarked for innovation. However, many companies have frozen additional spending during the recession, he says.
Duarte was in SA on a three-day trip to speak with customers. He says the needs of local companies match those of their international counterparts. “The IT market has, with the crisis, the best opportunity ever to show up in boardrooms around the world.”
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