By Suren
Sometime back I had posted an article “The Business Model that worked“, in which I explained how SAP’s business model reaches out to clients far and wide from their backyard Germany.
With the increase in SAP Consulting partners and the lucrative market for senior level SAP Consultants, everyone wants a piece of the pie and hence SAP Vendors kept popping up all over the place.
I am sure SAP has a tough screening process where vendors need to submit a business plan before they are accredited as a SAP Channel Partner, however with the latest developments you just begin to think maybe SAP needs to keep a close eye on the resources deployed on large projects of their SAP Channel Partners.
Only recently Deloitte was being sued by the California's Marin County with a $30M lawsuit over an ERP project with them, which they state was substantially worse than legacy system it was meant to replace and accuses Deloitte of misrepresenting its skills and capabilities when originally pitching for the project in 2004.
Not so long ago we saw one of the largest ERP lawsuits which was for $61M. This was in December, when an Alabama jury awarded pet food manufacturer Sunshine Mills $61 million in connection with a suit it had filed against ERP vendor Ross Systems, a subsidiary of CDC Software.
On another note, if you have been following my article updates, very recently SAP itself was successfully sued by ORACLE over the TomorrowNow saga. The final verdict was that SAP was ordered to pay 1.3 billion dollars in damages in a record-setting copyright infringement award, and now ORACLE wants SAP to pay a further $211M for interest. Oh Larry!!
However it’s important we don’t get carried away by these, since given the number of ERP projects out there, there is always a chance that some could topple over also keep in mind that there are over 1000’s of successful ERP projects rolling out every month.
All this makes you wonder, is it the channel partners or is it the business model, since there are ERP Companies out there who setup their own local offices in every region and market that they enter. This way the top tier management of the actual ERP Company have a direct influence over the large projects, well we can’t expect these from all ERPs since some of them are just too big to maintain control at a project level.
Being aware of these developments in the industry helps you stay on your toes in whatever you do !!
Hope you enjoyed this post.
Have a nice day!!
ssurenlk@msn.com
