'Collaborative Commerce': ERP, CRM, e-Proc, and SCM Unite! A Series Study: SAP AG
In the early 90's, ERP came of age. Everyone had to have the functionality
ERP packages promised. Since then, as Web and Internet technologies have
matured, CRM on the front end, and e-Procurement and Supply Chain Management
on the back end, these packages have come into their own.
in 2001, the catchphrase is "Collaborative Commerce," where we unite all
of the above elements into one coherent system within and between organizations.
This is the Big Kahuna, the zero latency, fully transparent, 360 degree
exposure that is the stuff systems integrators dream of. Is it here? Are
the technologies mature enough? Simple enough?
the fourth in a series of articles on Collaborative Commerce (C-Commerce),
takes a look at the fresh, new efforts of SAP AG, as they expand
their software footprint and welcome outside help and inter-application
in the series was an examination of Collaborative Commerce.
was a look at J.D. Edwards.
was a look at Baan and Invensys.
SAP has long been the kingpin in the ERP world. With probably the most
broad set of features, a large marketing machine, and a subsequent reputation
as "the big solution for the big players," SAP has dominated in the ERP
space for large corporations. Rightfully so based on technology. Their
downside has always been their approachability, cost, long implementation
and training times, and less-than-simple product upgrades.
Crosses the Chasm
to determine just when, and even why, the major power players at SAP decided
to almost turn the company on its head by opening itself up to alliances,
absorbing other companies' technologies through acquisitions, and even
opening up its software to work friendlier with other, non-SAP software
components, is difficult to pin down. But that is just what it has done.
SAP's new tagline is "mySAP.com: Solutions for the New, New Economy -
The Integrated E-Business Platform for Any Industry." This is the SAP,
for all its warts and thorns, that we have grown to know and love? No.
They have crossed a strategic chasm, embracing the Internet while embracing
partners and competitors alike, and there seems to be no turning back.
Witness just some of their actions:
2000 - SAP AG and Microsoft announce the intention to bring mySAP.com
functionality to Microsoft's Pocket PC platform. "SAP is
furthering mySAP.com to empower people working on customer relationships
with key information they need on mobile devices, including the Pocket
PC," said Peter Zencke, member of the executive board, SAP AG.
2000 - SAP announces a strategic alliance with Nortel Networks
to develop and integrate industry-specific customer interaction solutions
that will extend the scope of collaborative customer relationship management
(CRM). With the agreement, SAP would embed Clarify's eFrontOffice
CRM functionality into its mySAP.com offering. In a statement coinciding
with the agreement, Peter Zencke, comments: "Enabling collaborative virtual
communities of companies to present one face to their joint customers,
SAP and Nortel Networks will deliver a new quality in customer relationship
management." The agreement would enable mySAP.com to present customers
with multi-channel (Web, phone, fax) access to a company's Customer Interaction
Center (CIC). The agreement would also bolster a company's ability to
share information amongst and between it's employees, customers, suppliers,
and partners with tie-ins to SAP's Supply Chain Management (SCM) functionality
to create "a holistic circle of commerce."
2000 - SAP and Nokia jointly announce development agreements to
WAP (Wireless Access Protocol)-enable mySAP.com components, so that information
can be viewed on any WAP-enabled device, such as certain high-end cell
phones from Nokia and other cell phone manufacturers.
2000 - At the company's yearly international conference, SAPPHIRE, the
company announced that they were going to establish an integration center
in the United States , to be opened in late 2000, to build "preintegrated,
preassembled, SAP-certified, SAP-supported, multi-vendor functionality
that fuses mySAP.com and leading third-party applications into an overall
solution that best meets customer needs."
2000 - The announcement of mySAP.com Dynamic Procurement, a pro-active
system that automates the procurement process for direct materials and
includes strategic sourcing and contract management. SAP claimed the system
is able to dynamically match supply to demand via real-time processing
across the Internet.
2000 - SAP enters the online marketplace arena with mySAP Marketplaces,
an Internet-based solution designed to integrate front- and back-office
systems of all participants in marketplaces, maintaining data integrity
with so-called end-to-end integration with participating companies' internal
systems. Interpreted, this solution is the equivalent of providing to
companies not only an XML platform, but also the definition of the words
in the language, for two databases to communicate, and it also intends
to build the integration between the two pieces, something other marketplaces,
or inter-company communication technologies, do not do. And they plan
to do this on a grand scale.
2000 - Introduction of the Internet-Business Framework to support
open integration strategies. Under the plan, mySAP.com's Workplace
enterprise portal would be the common, web-browser-based interface
between disparate systems. Beneath the covers, the systems would be linked
at the application layer through XML, SAP's own Business Application
Programming Interfaces (BAPI's), XML Common Business Library (xCBL),
as well as support for Biztalk and RosettaNet XML standard
30, 2001 - SAP announced its intent to purchase Top Tier, a portal
2001 - SAP announces a far-reaching alliance with Yahoo! to build
state-of-the-art enterprise portal solutions, with the common vision of
providing employees - as well as the extended business community of customers,
partners, suppliers and other stakeholders - with convenient access to
the resources they need to manage the flow of business information, processes
May 2001 - SAP snared former Siebel Systems General Manager Michael
S. Park to lead the mySAP CRM efforts, something of a coup and a sign
of the strength and scope of SAP's vision.
July 2001, in something of a coup-de-ett, SAP surprised the enterprise
software world by announcing that Baan, long one of its fiercest
competitors, was going to embed technology from SAP Portals within the
iBaan Portal solution, and that Baan was joining the advisory
board of SAP Portals.
month, SAP announced the release of its latest version of its mySAP CRM
more detailed information on the 2001 Sapphire announcement see SAP
- A Humble Giant From the Reality Land.
Pieces in Place Today
Here's a short overview of all the technology pieces offered by SAP today:
Workplace - Enterprise portal solution, including application integration,
personalized view for employees, customers, partners, and suppliers.
Supply Chain Management - Typical Supply Chain Management functionality,
with the advanced functionality of Dynamic Procurement (see above), and
the ability to link to and understand customer demand via mySAP Customer
Relationship Management and out to the supplier and collaborate on product
development via mySAP Product Lifecycle Management.
Customer Relationship Management - Formerly based around Nortel Networks'
Clarify eFrontOffice, and since written and re-written several times,
the new my SAP CRM supplies a significantly complete CRM package, with
functionality in all key areas, including "Customer Engagement" (Marketing
and Sales), "Business Transaction" (product and pricing configurator,
electronic order processing, telesales, andfield sales), "Order Fulfillment"
(real time Available-To-Promise checks, and contract, billing, and financials
management), and "Customer Service" (Call Center, web self-service, RMA
handling, and field service).
E-Procurement - Powered by Commerce One solutions.
Product Lifecycle Management - Integrating all players in the product
Business Intelligence - Includes datawarehousing capabilities, knowledge
management, and business intelligence analysis tools.
Financials - One of SAP's longstanding core strengths.
Human Resources - One of SAP's longstanding core strengths.
Mobile Business - Palm, Pocket OS, and WAP-enabling the mobile user.
Marketplace by SAPMarkets - virtual marketplaces bringing together
buyers and suppliers in an online business exchange.
Hosted Solutions - Application Service Provider (ASP) capabilities
through certified providers.
does all this Mean?
It has been reported that a total of over 4 million users are using some
part of the mySAP constellation of software technologies. SAP has announced
50% sales growth in its CRM business since the beginning of the year,
bringing the current number of mySAP CRM customers to more than 850 worldwide.
SAP Portals, Inc., reports more than 6 million individual users
and 2,000 corporate customers.
with vital companies such as Accenture, IBM, and Yahoo!
bolster its image as open and progressive. It reaches out to the mobile
worker with Palm and Pocket PC and WAP enablement; it covers extended
demand and supply chain with CRM on the front end, dynamic collaboration
within SCM, and dynamic procurement with intelligent agents toward the
back end, and Product Lifecycle Management to collaborate on product development
at the supplier end; it maintains its core strengths in Financials and
Human Resources; it trumps a rival (Baan) as it forges new and best-of-breed
technologies in the Internet Portals and Marketplaces arenas; and finally,
it boldly plans to establish an integration center to pre-integrate and
pre-assemble both SAP and non-SAP software solutions to adapt to specific
vertical marketplace requirements. What is not to love about the new SAP?
What You Might Not Love
Looking strictly at the technology aspects of the myCRP spectrum, knowing
that SAP dumped Clarify's CRM solution and wrote and re-wrote their own
package gives us pause concerning the stability and usability of the CRM
components; it just needs more burn-in time before we're completely comfortable
with it. We also see weakness in its Business Intelligence offerings.
How powerful are the Extraction, Transformation, and Loading tools for
its data warehouse? How powerful are its front-end tools? Do they include
OLAP capability? Customized reports? The ability to send the reports to
any web page or any email box?
a business standpoint, you need to be asking the following questions:
- How ready
for prime time is their CRM suite?
- How does
SAP plan to move its existing, non-web-enabled, client-server-based
SAP R/3 user base to the new model?
- How does
SAP plan to sell the story that customers can truly compartmentalize
their purchases, swallow small pieces of the mySAP pie, and enable the
buyer to deliver some form of return on investment in 90 days or less?
SAP be able to sell the story that integration between parts is already
seamless and relatively easy?
- Can SAP
convince the world that C-Commerce IS the future, that they are the
leader, and that everyone needs to be moving there? This is the common
challenge for all the C-Commerce contenders: is the marketplace ready
for the breadth of what the vendors are talking about?
SAP be able to convince the burgeoning small- and medium-size business
market that it should even be a contender in their enterprise software
solutions evaluations, given its historic large-company focus?
- And finally,
costs. SAP software has never been cheap. Nor are its implementations,
both in terms of costs and time. Will it be able to convince companies,
both large and small, to swallow the whole picture and plan on feeding
the SAP coffers for years to come as it implements, interconnects, and
inevitably re-implements SAP's technologies as the technologies and
corporate directives shift in the blowing sand of the Internet Age?
We make recommendations about SAP's Collaborative Commerce capabilities
and reasonableness to three distinct sets of customers:
You will need to bang hard on SAP to give you a straight story about
the migration path between what you have today, the legacy R/3 system,
and mySAP. What are the implications to your databases and hardware
infrastructure? How fast and how much for planning and implementation?
What about employee retraining? How fast? How much money? How hard?
These are tough questions. Generally, if you've been a SAP customer
for more than a few years, you might as well consider yourself a new
customer that is thinking about migrating to a brand new platform. The
only plus is that you'd be dealing with the same company you've always
been dealing with, and SAP shouldn't be intending to proverbially bite
the dogs that have been feeding it. But question, question, question.
And then ask for proof. Have others done what you need to do to migrate?
Can you talk to them to find out how it went? Due diligence is the duty
of the day.
SAP has a great vision. We give them an 'A-' for vision and scope. But
we score them a 'B-' for execution and delivery. If you've got the intestinal
fortitude - plus a stockpile of money and a cadre of well-qualified
IT people, this is the one stop for you. If not, consider and carefully
study the componentized-application message that SAP is trying to forge,
consider striking down your worst business pain with one of SAP's point
solutions, and see how it goes. Test the waters. Let SAP prove that
you should go all the way.
"SAP? Are we crazy? Huge costs, long implementations not in this day
and age! We're fast, we're nimble, and we need software tools that are
as flexible as we are." This is what you're saying, right? Well, you're
not about to eat the whole enchilada. Maybe nibble at SAP's outsourced
ASP offerings and see if they've got the goods. Or, again, maybe opt
for a small point solution, comparing that solution against similar
point solutions from smaller companies that are solely focused on that
area. What level of service can you expect? Implementation times? Response
to bug reports or enhancement requests? User friendliness? Make SAP
prove that they represent themselves as small and local while they're
huge and multi-national.
We have to say that SAP has shown us the most compelling and promising
C-Commerce vision to-date. We especially like their moves in the portal
space (acquisition of Top Tier; partnership with Yahoo!) and the marketplace
- two ideal enablers of C-Commerce. But for SAP, there's plenty of proving
to do. They need to show the world they can integrate and deliver, and
satisfy the small and medium-size customer with quick implementations
and nimble responses to problems, just as they state. If they can, the
C-Commerce world is theirs for the taking.
for future articles in this series on IFS, Oracle, and PeopleSoft.