SAP denies it is cutting spending on IT

SAP is trying to counter blogger reports earlier this week that it is cutting back on its own internal spending on IT.

On Tuesday, Ben Worthen at the Wall Street Journal posted portions of an internal SAP email in which co-CEOs Henning Kagermann and Leo Apotheker appeared to be ordering SAP employees to cut back on IT spending. I followed up with a quick blog entry calling attention to Worthen's post. A number of other tech bloggers did the same.

The excerpt from SAP's internal email seemed clear enough:

We will review all planned investments in IT equipment, hardware, software, facilities, and company cars, as well as internal IT projects....Do not order any new equipment at this time.

But today SAP wrote Worthen, to deny that it is cutting IT spending. Worthen today reports:

On Thursday, Herbert Heitmann, the head of SAP’s global communications, wrote us to let us know that our post “suggests an inaccurate portrait of our management decisions about cost savings while maintaining strategic investments into our own IT.” SAP is not halting its own tech spending, he wrote. Instead, the company “continues to make strategic investments in IT projects that directly impact our ability to grow our business globally and that assure we can provide world-class services to our customers,” Heitmann wrote. Furthermore, “we expect our customers and prospects to continue strategic IT spending over the next months, while somewhat narrowing their focus more to IT projects that deliver quick returns.”

Cutting costs in non-customer facing areas, he wrote “is what management is expected to do in times of uncertainty. Our call on employees to stop ordering “new equipment” for standard IT infrastructure like cell phones, photo copies, printers, laptops, etc. as well as an appropriate review of all planned investments and projects is a prudent and necessary step.

“We’ve even asked our CIO to identify strategic IT projects that would help us to optimize SAP’s business processes.”

So which is it? If this were not a tech company, the answer wouldn't be a big deal. But the last thing SAP wants to do is, by its own actions, encourage the idea that IT spending should be cut.

Unfortunately, that's what seems to be happening. Our survey now running at Computer Economics shows a significant percentage of IT organizations deferring the start of new projects in light of current economic conditions.

If you have insights, post a comment below.

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