Earlier this year I told you the story of a business executive who told us how critical is that business — not IT — drive process improvement initiatives. Here is another interesting case my colleague VP and Principal Analyst John Rymer and I have just witnessed.
It is the story of a business organization that developed an IT strategy based on three best practices:
The core business processes would be implemented on a single modern, flexible platform.
The platform would be service-oriented to ensure clear accountabilities and flexibility for future needs.
The platform development and operations would be outsourced to a shared services provider.
We reviewed the strategy 10 years after it was conceived to find out that it has not yet achieved its top strategic goal. More disturbing:
The development investment has been far greater than expected at the outset.
The annual cost of IT operations doubled versus the base line.
The reliability of the processes converted to the new environment went down.
As announced in April, SAP told us this week that it formally completed the acquisition of its longtime partner TechniData — a 500-employee company headquartered in Germany with a presence in both Asia and the United States. TechniData provides sustainability solutions in three areas: 1) health and safety; 2) product safety; and 3) environmental compliance — for example, process consulting, software services, information on regulatory content, and managed services for EU’s REACH regulation.
Forrester Senior Analyst Holger Kisker and I had the opportunity to talk recently with Jürgen Schwab, the former chairman and CEO of TechniData; Marty Etzel, SAP’s VP of Sustainability Solutions; and Dieter Hässlein, SAP’s VP of Solutions Management for Environmental Health & Safety (EH&S). They told us that SAP has created a sustainability consulting hub accommodating more than 100 consultants, including the former TechniData staff, to support SAP’s sustainability strategy. They also explained the reasons for the acquisition: 1) focusing on content as an integral part of SAP’s sustainability strategy; 2) expanding and refining SAP’s expertise and customer base both beyond the chemicals industry and geographically, as well, in particular in Asia; and 3) improving the capabilities of SAP’s current preconfigured sustainability-related solutions.