Software probe questions SAP's value

9 April 2003
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10 April 2003 | Robin Parker

SAP is the latest software vendor to face allegations that some of its highest-profile customers are not getting value for money.

According to a survey of 21 of the 93 firms identified as "reference customers" by SAP, 57 per cent had not seen a positive return on investment (ROI) up to three years after implementing its software.

The Nucleus Research report calculated that SAP's average consulting fees over three years were $3.6 million, double the software price and more than a third of costs.

Additional charges against the company included excessive customisation and expensive large-scale projects without a clear idea of their future use.

"The risk with monolithic deployments is that companies either spend more on customisation than expected or have to undertake a business process re-engineering project they hadn't anticipated," the report said.

The claims follow a Nucleus analysis of i2's software that claimed more than two-thirds of the vendor's biggest customers' projects take three times longer than planned.

Both firms have criticised Nucleus for using what they claimed was an unrepresentative sample. SAP dismissed the analysis as "unscientific", but Nucleus said it was valid to analyse those firms trumpeted as success stories.

In a separate report, Nucleus said 80 per cent of supply chain management software firm Manugistics' customers had achieved a positive ROI in an average of 16 months.

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