Johannesburg, 10 Oct 2003
Business software solutions company SAP says it will focus on decreasing customers' IT spend by up to 30% in the next two to three years.
"Organisations focusing their IT spending on cost reduction at the expense of innovation are endangering their medium- to longer-term chances of success," says SAP CEO Henning Kagermann.
He says typically IT spending is directed at consolidation of existing systems to reduce costs, leaving only a small amount for investing in innovations that could ensure longer-term sustainability.
Kagermann says SAP advocates investment in innovative IT solutions that free up funds by cutting costs and streamlining business processes. "It's all about the difference between surviving to the next quarter and being a thriving business in five years' time."
Kagermann told delegates at the recent Saphila African user group conference at Sun City that Siemens AG had reduced its IT spend by 25% by cutting daily operations costs through using SAP technology. He said this cost saving had given Siemens the ability to invest an additional 25% of its IT budget into ongoing innovation.
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