SAP upbeat at user conference
The message from SAP AG to users at this year's Sapphire conference was concise and straightforward: "Keep it simple and keep it SAP." To that end, the Walldorf, Germany-based company made a plethora of announcements around integration, and expanded its portfolio of applications down to the SME market. Victoria Furness writes
In addition, there was the now mandatory set of customer case studies based around ROI, but unlike most user conferences this year, which have featured little in the way of new product announcements, SAP took the opportunity to use Sapphire as the launchpad for announcing enhancements across its cross applications (xApps), product lifecycle management (PLM), supply chain management (SCM), and CRM application suites.
In total, there were 11 announcements at Sapphire, all framed around what co-chairman and CEO called the 'mySAP house'. With 8,500 attendees at the conference - more than last year - SAP's Plattner was in bullish mood: "We are on the right track and customers appreciate that," he told members of the press in Florida.
In terms of integration, the main announcement was focused on the delivery of SAP's open, standards-based mySAP Technology platform, which was first announced at the TechEd conference in November last year. This is based on its Web Application Server, the exchange infrastructure originally developed by SAP Markets in conjunction with Commerce One, and SAP's Business Information Warehouse and Enterprise Portal.
Together, these deliver the web services, enable users to collaborate online, and allow the systems to talk to each other. In addition, SAP announced Web Dynpro at Sapphire, which is the presentation layer to allow developers to model and create browser-based user interfaces.
In a break from previous practice at SAP, the enterprise applications provider is making the portal and exchange infrastructure mandatory components of its software systems. "You won't see any system from SAP anymore without a portal on top," Plattner told delegates. "People recognize the implications of a portal to make life easier." For a company that was criticized for missing the internet boat, SAP has established a comprehensive internet-based architecture in a relatively short space of time.
Continuing on the theme of integration, SAP announced tighter integration between its CRM and SCM applications to enable companies to better respond to changing market conditions and effectively bring demand and supply in closer alignment. Integration occurs at the data level and at the business process level to provide synchronization of supply chain resources.
Following on from SAP's acquisition of Israeli applications provider TopManage in March, the European software giant announced its rebranded and expanded portfolio of applications to target the SME sector. SAP previously had two types of application in this area, but this has now expanded to three different strands.
The first, called "sophisticated", was largely the SME strategy SAP had in place before, which provided a higher degree of individual and industry-specific customization based on mySAP.com technology. This has now been rebranded SAP All-In-One and the vendor additionally announced the release of 11 vertical-specific versions of All-In-One.
The second strand, which was previously called "advanced", was a simpler version and relied wholly on technology from TopManage across the areas of finance, CRM, e-procurement and sourcing, logistics, product trees, and analytics. This has now been branded SAP Business One and SAP plans to roll this out in Germany in the third quarter before expanding into the US during the fourth quarter. This will primarily be sold through indirect channels, unless it is being purchased by multinationals to roll out through their divisions or subsidiaries.
Given that the SME market has contributed very little in the way of sales to SAP's overall revenue, this is clearly an area that the vendor is keen to boost and has been relatively late to join. But even Plattner seemed amazed by the level of response Business One had generated among delegates: "Surprisingly SAP Business One has really caught on," he told the audience. "Every second customer of SAP has said that they're interested in it."
Plattner also admitted that SAP's SME strategy would take it into the path of its partner Microsoft, but said that he was unfazed by the competition. "We knew about Great Plains [the wholly owned Microsoft subsidiary for targeting the SME market] and we were not bothered because they compete in a different market," he said. "Even when they came to Europe they were still not a problem despite going down much lower."
Outside the SME market, Microsoft is not the only competitive threat SAP faces. In attempting to conquer the CRM and SCM markets, SAP is up against formidable niche competition. In terms of CRM, SAP faces CRM champion Siebel Systems, but the vendor claims that more than 1,500 customers have selected mySAP CRM and produced a plethora of case studies at Sapphire to highlight the ROI its CRM application suite has brought customers such as Brother International, Canada Post and Tyrolit Group.
Likewise in the SCM space, SAP claimed to be the number one vendor and struck a blow at SCM specialist i2 Technologies Inc by flaunting the deployment of its Apparel and Footwear Solution at Nike's North American operations. Last year, Nike publicly blamed i2 for missing fiscal expectations after a lengthy and problematic installation of its SCM software.
Other announcements at Sapphire centered on enhancements to its applications. In particular, SAP formally launched its xApps and announced that the first to be shipped would be Resource and Program Management in the fourth quarter of 2002. This particular application enables organizations to collaborate on a portfolio of projects using applications from SAP such as mySAP PLM, and third-party applications such as Microsoft Project and Oracle eBusiness Suite.
The other interesting product announcement from SAP focused on its mySAP SCM application suite. In an effort to move away from the traditional, linear-based model of the supply chain, SAP is touting its version of an adaptive supply chain network and at Sapphire the vendor took the opportunity to announce enhancements to its visibility application within its suite. This enables the system to alert network participants to deviations from scheduled processes and measure performance against pre-defined parameters to identify root causes of problems and proactively correct them.
Building on this idea, SAP also announced the release of its agent technology and radio frequency identification (RFID) technology for the supply chain. Agent technology consists of small software packages that analyze information being collected and intelligently route it across the planning and execution network. This type of technology works in unison with electronic tags based on RFID technology, which allow for the unique identification of every physical object.
Although the technology is still at a relatively immature state and SAP is working alongside other organizations to create industry standards and encourage take-up of the technologies, this announcement puts SAP ahead of its SCM rivals. Whether it will be able to execute on the technology remains to be seen, but signs from Sapphire are so far encouraging.