By KC Sahu, SVP-SAP Practice, Wise Men Consultants
CIOs are under tremendous amount of pressure to reduce costs, achieve high operational efficiency as well as automate their IT environment. SAP has been the top choice for most CIOs as it supports execution activities, streamline back-office and lower costs. However times are changing and it is crucial to understand how technology fits can create revenue and increase profitability. I would also like to point out here that Technology is not voodoo.“Implementing SAP technology solution acts as a catalyst to enhance and improve existing processes and programs and to increase revenues for most organizations” Corporations implement large projects in SAP or any other ERP to gain advantages like revenue growth, higher profit margins, new customer acquisition, customer retention, product line profitability, incentive programs and monitoring, market penetration/market share, time to market and many others. Even though companies expect these from their ERP or SAP implementation/upgrade, they rarely achieve these goals because they don’t view technology in the right light. Companies invest millions in SAP based on the underlying assumption that technology will CAUSE an increase in revenue and profits but in the real world technology provides KEY INSIGHTS to help businesses to increase revenue and profits. After an SAP/ERP implementation, many companies see a lowering of costs due to smoother workflow, and an integration of operational and accounting functions. Using SAP to drive revenue and profitability requires building another layer of data collection, data analysis, tools and processes on top of the operational layer. A focus on process improvement, business process automation, efficiency gains, cycle-time reductions and other business process management related issues is not enough. For technology to work correctly business operations must be built on well-defined programs and strategies that are then converted into processes with clear performance metrics and KPIs. To ensure success, ERP, SAP, CRM, APO, BI, and other tools must be driven by business needs and to provide key information relevant to business decisions and processes. For example, no amount of technology is going to make the sales people sell more if they are paid on salary, without commissions, and do not have objective sales targets and other performance measures.