I read yesterday’s article in Silicon’s online magazine entitled “SAP sales drop as credit crunch looms large” with interest. It is clear from the article that the current economic climate is hitting the 600lb Gorillas hard. SAP shares are down 16% (the biggest drop for 12 years) and Oracle are down 7.6%. Shares in Microsoft, Cisco and EMC are also reportedly down.
The article reports that Henning Kagermann, SAP co-chief executive, said of the third quarter: “The market developments of the past several weeks have been dramatic and worrying to many businesses. These concerns triggered a very sudden and unexpected drop in business activity at the end of the quarter.”
My experience is that there is a tendency to increase spending on IT during times of economic downturn. This is because smart business leaders see it as an opportunity to streamline and position for the future. The Businesses that “get it right” are those businesses that ride the recession and come through it stronger and better placed to handle the up-turn.
So, if the major Hi-Tech firms are seeing a downturn, where is this investment going?
I would hope that firms are looking towards pure play Business Process Management technologies like Lombardi, PegaSystems, K2.net, Global360, Appian and Savvion because coupled with a strong iterative approach they can provide quick wins and give business visibility and ownership to make a difference in the current fiscal year. If a major SAP deployment goes wrong it can very easily become a job loss/annual report write down issue. Through fast, agile BPM projects, the lessons learnt in the initial deployments can lay the foundations for larger “Building the Future” projects that deliver significant longer term benefits.