2008 kind to SAP NZ, but 'slippage' hits in 2009

Boards challenge ICT project business cases to ensure value

New Zealand was a standout performer in the SAP world in 2008, SAP’s local managing director Graeme Riley told Computerworld, after reporting 20 percent year on year sales growth last month.

He says growth was driven by new customer wins at companies such as Ballance Agri-Nutrients and Contact Energy, and also through SAP’s buyout of business development software vendor Business Objects.

The global financial crisis had a minimal effect in the last quarter of 2008, he says, but increased project “slippage” is evident in 2009.

“In 2009 it has had a bigger impact,” he says. “We’ve particularly seen project slippage as boards challenge business cases more, to be certain of their value.”

Riley says there is more risk aversion in the market this year.

“Things are coming back two or three times to be reexamined,” he says.

SAP New Zealand’s sales for the year ended December 2008 grew nearly 20 percent over 2007, up from $47 million to $56.2 million, according to accounts lodged with the Companies Office in October.

SAP New Zealand’s gross profit grew from $14.6 million to $18.8 million. Net profit before tax rose from $6 million to $9.4 million. After tax profit was $6.5 million.

Riley, who took the helm at SAP New Zealand in the last quarter of 2008, says there is always a good revenue underpinning SAP’s local performance, whether that be maintenance or services revenue.

Business Objects has added a new dimension to that, he says.

“In difficult times people really want to understand their businesses.”

He cites new customer wins for Business Objects at Carter Holt Harvey, Telecom and Fonterra. As well, there have been five or six good pieces of Business Objects business from within SAP’s existing customer base, while the software allows SAP to engage with others who may not be familiar with the company’s core products.

A further driver of business has been SAP’s “value engineering” concept, he says. Under this programme, the company works with businesses to benchmark their performance, identify where they would find value and help them build a business case for investment. SAP also provides tools to measure the return on investment.

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