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Unraveling SAP Underperformance Risks

In a recent feature by HelloNation, Business Strategy Expert Martin Rowan from Naperville, Illinois, delves deep into the often-overlooked risks related to SAP underperformance. He poses an intriguing question: why do many executives fail to acknowledge these risks until they have already caused significant financial damage?

The article sheds light on a common misconception among organizations: the belief that investing in SAP guarantees transparent visibility into performance, risk mitigation, and execution practices. However, this perception can be dangerously misleading. As detailed by Rowan, even when SAP dashboards indicate a 'green' status, serious operational issues can exist beneath the surface.

This phenomenon, termed 'execution drift,' is highlighted as a prime factor in SAP underperformance. Execution drift occurs when there is a gradual divergence between the planned processes and the actual execution of tasks. Issues such as manual workarounds, skipped approvals, or informal decisions made outside of the SAP framework can go unnoticed, exacerbating the gap between intention and reality. This expansion of the gap increases business risk, resulting in higher costs, slower decision-making, and compromised inventory management.

One significant aspect emphasized in the article is operational trust. Organizations often place too much faith in SAP to represent reality accurately. They may not recognize that not all critical tasks influencing outcomes are logged in the system. When trust in the data provided by SAP wanes, executives may only become aware of existing concerns when they start witnessing detrimental impacts on business metrics — such as profit margins or service levels.

Martin Rowan, who serves as the Managing Partner at Reveal USA, Inc., argues that SAP functions not just as a tool for planning but as a vital mechanism for governance. Companies that utilize SAP solely for reporting purposes, rather than for active execution and oversight, risk losing the necessary control to minimize delays in decision-making and safeguard their profitability.

Rowan advocates for a proactive approach where executives ensure alignment between SAP-driven processes and the real-world operational environment. Without such discipline, inventory control weakens, and execution becomes increasingly erratic. This inconsistency can lead to a slow yet steady erosion of overall performance — a decline that goes unnoticed until it manifests in alarming financial consequences over time.

Furthermore, the article warns against the increase in decision latency that can occur when teams start to question the reliability of SAP's recommendations. When guidance from the system is disregarded or ignored, processes can slow down significantly, leading to critical decisions being delayed. This adds layers of complexity to governance and raises the stakes for business risk.

The findings presented by HelloNation underscore the critical reality: the root cause of SAP underperformance may not lie within the system itself but rather in the way organizations leverage it. Executives must redefine their relationship with SAP — transitioning it from merely an analytical tool to the central point of execution — to effectively minimize hidden risks, bolster operational trust, and ensure favorable business outcomes.