Are we talking about SAP?
The new mantra is low cost of ownership, ease of use, plus small & mid-market offerings
By Sidney Hill, Jr., executive editor -- Manufacturing Business Technology, 8/1/2002 12:00:00 AM
Low cost of ownership and ease of use are not the first thoughts that typically come to mind when one thinks about business applications from SAP, Walldorf, Germany. But Hasso Plattner, SAP's co-chairman and CEO, says those phrases represent his company's new mantra.
Standing before an auditorium full of customers at Sapphire, SAP's annual user's conference, which took place in Orlando in early June, Plattner said SAP is on a mission to deal with issues that have dogged the company for several years.
Despite those issues, which include now-legendary stories of companies investing millions of dollars in SAP solutions without ever being able to get them working properly, SAP has managed to maintain its position as the world's leading seller of enterprise software. It has even gained market share in some key expanding markets such as supply chain management (SCM) and customer relationship management (CRM) over the past year, despite the general slowdown in corporate information technology spending.
Still, Plattner is correct in saying that SAP must confront its demons if it hopes to maintain its market-leading status over the long term. He said SAP took a big step toward resolving cost of ownership issues when it announced its new technology framework in November 2001. The two central pieces of that framework are an exchange infrastructure and an enterprise portal framework.
Plattner said SAP customers are using the exchange platform to create and execute new business processes. He also said many customers have found that the exchange allows them to deploy multiple versions of SAP—or other vendors' applications—at different facilities around the globe, while still being able to easily consolidate financial data into a central system at corporate headquarters.
"What is really more important to your company?" Plattner asked. "The instant consolidation of all information, or the reliability of certain information within specific areas of the business?"
Plattner said the exchange infrastructure addresses cost of ownership by serving as a platform for companies that wish to extend CRM and SRM functionality to their R/3 system, which is SAP's client/server-based enterprise resources planning (ERP) application. The CRM and SRM applications are part of mySAP.com, which is a Web-based enterprise software suite.
New product announcements at Sapphire included the release of mySAP CRM 3.1, which Plattner said represents the "first true competition for Siebel [Systems, San Mateo, Calif.] in the CRM market." SAP also announced tighter links between its portal infrastructure and its SCM applications, as well as the addition of supply chain event management (SCEM) capabilities.
On the ease-of-use front, Plattner said SAP is rewriting all of its user interfaces to make them easier to navigate.
The new, simpler user interfaces are part of a broader SAP initiative, also announced at Sapphire, to capture more business among small and medium-size business. SAP actually is taking separate approaches to these markets. It has developed a set of solutions—called mySAP All-in-One—for medium-size enterprises, which SAP defines as companies with fairly complex manufacturing operations, but less than 250 total potential mySAP users. Allen Brault, senior vice president of SAP's small and medium-size business unit, describes these solutions as pre-configured, scaled-down versions of the mySAP.com suite, with functionality geared to specific vertical industries.
Several customers present at Sapphire told MSI they planned to investigate whether mySAP All-in-One would work at some of their smaller plants that were not running mySAP.com, even though it had been designated as a corporate standard system. They said mySAP.com was too complex for those smaller operations.
Plattner said conversations with some of those customers led to the development of mySAP All-in-One. "We have had customers say, 'You didn't tell us that installing 300 mySAP.com systems around the world would be so expensive," Plattner said. "We needed to address that issue."
Also new from SAP is its Business One Product. The solution is a renamed version of the software package that SAP acquired when it purchased an Israeli company called Top Manage. SAP Business One contains basic financial and human resources capabilities that can be used by virtually any small business. It contains only light manufacturing capabilities.
"This product is for companies that are just moving off an application like Peachtree or QuickBooks," said Brault, who also admitted that SAP's success in this depends on its ability to recruit strong channel partners. "We can't sell direct in this market," he said. "The overhead is too high."
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