SAP: A scandalous choice

Having trouble with the financial regulators? Got a history of suspect accounting practices? Need to restore your tarnished reputation? Then you need squeaky-clean accounts by SAP.

The German software maker has become the must-have application for those trying to dig themselves out of fraudulent accounting scandals. The latest to sign up: management software maker Computer Associates, which joins a line of shamed businesses that view an SAP implementation as a way of purging themselves of previous transgressions.

"MySAP ERP will allow CA to achieve unprecedented levels of financial transparency," says CA's CIO, Kevin Kern. It also helps CA meet some of its obligations to the US Department of Justice, with respect to its on-going financial reporting.

CA admitted improper accounting practices in its 2000 fiscal year. Several high-level former executives have pleaded guilty to criminal charges, while former CEO Sanjay Kumar has been indicted for securities fraud, conspiracy, obstruction of justice and lying to law enforcement officials – although in November 2004, his trial date was delayed indefinitely. He could face a jail sentence of up to 100 years if found guilty.

But CA is not alone. Back in January 2003, MCI – previously WorldCom – bought a business platform from SAP. Leo Apotheker, president of global fields operations at SAP told IDG News Service: WorldCom is a good example of a company "looking for a quick solution to address a number of pain points."

However, a note of caution might be necessary: SAP is not a total panacea. Energy conglomerate Enron was in the middle of a $150 million global SAP roll-out when the regulators caught up with its executives. Despite its $20 million annual running costs, the system could not bring order to Enron's accounts. By early 2001, most of the SAP modules had been rolled out, but that was too late to help the firm avoid the maelstrom that hit later in the year.

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics