SAP - A Humble Giant From The Reality Land? Part 2: Expanding Functionality

Event Summary 

During its international e-business conference, SAPPHIRE, on June 12--15, SAP AG (NYSE: SAP), the leading provider of business software solutions, released a spate of upbeat announcements in its effort to portray itself as a reformed vendor of choice for all aspects of e-Business, including planning and collaboration. As an illustration thereof, SAP cited that its flagship mySAP.com suite has met with remarkable success in the market. SAP reached a major milestone in 2000 when the number of licensed users of its mySAP.com platform reached 1 million. Since then, more than 3 million additional users have reportedly licensed mySAP.com.

About This Note: This is a five-part note covering the announcements at the SAPPHIRE conference, the market impact of those announcements, the challenges SAP faces, and user recommendations. Part Five will contain links to the previous parts.

Expanding Functionality 

Another tune that SAP tried to beat during the conference was its expansion from the realm of traditional ERP. SAP touts a multi-pronged answer to prevailing heterogeneous IT environments. The company is staking its future on five pillars - exchanges, portals and the three extended-ERP applications: customer relationship management (CRM), supply chain management (SCM), and product life-cycle management (PLM). To that end, at SAPPHIRE, SAP tried to demonstrate open integration and depth and breadth of functionality with its latest mySAP CRM release. SAP also demonstrated continued market adoption of mySAP CRM by announcing 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.

CRM

The newest version of mySAP CRM, scheduled for general availability in the third quarter of 2001, reportedly offers businesses the wide number of deployment options available to best suit their needs, providing flexibility for executing their business strategies regardless of their organizational structures or business systems.

One option is to deploy mySAP CRM independent of other SAP products. This option enables non-SAP customers to benefit from mySAP CRM. The solution can be accessed through multiple channels - face-to-face, contact centers, the Web and mobile devices. In addition, mySAP CRM now features a billing engine that enables order-to-cash processing directly within the solution.

A second deployment option is to integrate mySAP CRM with supply chain management (SCM) solutions from SAP and other vendors, allowing customer demand to drive the supply chain. Order management capabilities within mySAP CRM enable companies to commit to customers' needs in real time and to deliver on their promise.

A third option is to run one central mySAP CRM solution servicing multiple business units, whether they are running different SAP or non-SAP back-end enterprise resource planning (ERP) systems. This scenario enables companies to consolidate customer data and information from various systems, geographies, partners and so forth into one information hub, allowing all employees to strategically and consistently manage relationships with their customers. In addition, mySAP CRM is the enabler for the marketplace order management system within public and private exchanges offered by SAPMarkets, Inc.

SCM 

SAP announced the enhancement of mySAP SCM to manage adaptive supply chain networks through use of new intelligent agent technology. Adaptive supply networks are supposedly an evolution of supply chains and will combine global visibility, event management, adaptive planning and execution, and dynamic collaboration. An adaptive supply network will provide business partner integration and dynamic collaboration through portals and exchanges.

The new SAP Event Management - a component of mySAP SCM - enables global visibility through real-time event coordination and management across a network. In response to these events, intelligent agents will automatically trigger a variety of problem resolution techniques resulting in the optimization of the adaptive supply network. SAP believes intelligent agents are the next stage of adaptive planning and execution. SAP and BiosGroup, Inc. will team to define and create these adaptive Intelligent Agents. BiosGroup is a consulting and software group that uses complexity science and agent-based concepts to provide technology to create adaptive supply networks. SAP intends to release the first version of intelligent agents during the second quarter of 2002. Event Management and intelligent agents should monitor and coordinate the whole spectrum of supply network activities from sourcing components, to assembly and manufacture of products, to final delivery in order to satisfy customer expectations.

PLM 

SAP announced significant new functional enhancements to the mySAP PLM solution, enabling companies to more fully collaborate throughout the product creation process. SAP touts that a customer-centric view helps to ensure that market requirements are captured as early as possible so that the right product gets to the customer at the right cost and at the right time, which companies should now be able to attain through new functionality within mySAP PLM.

Product Design functionality should enable designers to capture product requirements in a flexible and structured way, developing alternatives, evaluating alternatives against product requirements and completing the creation of the product structure.

Consumer products and process industries should benefit from the new Recipe Management functionality, which focuses on reducing time and cost to market for recipe-driven products. Specification, formula and label management, combined with flexible management of composition, nutrition and material lists, provide process support for the development of new products.

Virtual teams need support as they work on projects and documents. cFolders facilitate collaboration, including the integration of synchronous collaboration tools such as WebEx Interactive Services from WebEx Communications, Inc. (NASDAQ: WEBX), to enable real-time sharing of documents and applications.

Based on SAP Portals' technology, mySAP PLM provides iViews that should enable design engineers, maintenance managers, project and quality managers, and business partners to have instant access to all of the information, applications and services needed to perform their jobs in a sensible manner.

Ensuring data consistency through Product Data Replication is an additional product enhancement of mySAP PLM. This capability enables the controlled distribution of product information from a central mySAP PLM system into operational systems.

New Audit Management processes support quality audits performed throughout the life span of a project or product development, resulting in higher product quality.

Portals 

SAP Portals, Inc., a provider of open-enterprise portal and business intelligence (BI) products and a wholly owned subsidiary of SAP, unveiled its business strategy and open partnership model. SAP Portals has 700 employees, more than 6 million users and more than 2,000 customers. In addition, it is actively forming comprehensive partnerships with content partners, OEM partners, technology partners and system integrator partners.

Since SAP announced the formation of SAP Portals in April, the company has been working closely with CorporateYahoo! to develop joint enterprise portal solutions. The solutions should enable global enterprises to improve productivity and create efficiencies by providing employees, customers and partners with a single place from which to access all the information, applications and services they need from both internal and external sources. In addition, the joint solution should supposedly leverage role-based personalization so people can view information that is important and relevant to them anywhere as the solution can be accessed via both standard Web browsers and mobile devices.

SAP Portals has developed an open partnership model that fosters a broad technology and content ecosystem and has OEM licensing arrangements with several leading companies. As mentioned in Part One, IBM will license and embed a Java version of SAP Portals' iViewServer into its IBM WebSphere Portal Server. This alliance will reportedly enable customers to integrate information from key enterprise business applications from SAP, PeopleSoft, Baan, Siebel Systems, and Oracle into portals solutions using IBM's WebSphere Portal Server.

SAP Portals' OEM partnership with Baan offers customers the ability to strengthen the integration of disparate software applications throughout their enterprise. Technology from SAP Portals is deeply embedded within Baan's Portal product. SAP Portals' OEM partnership with Microsoft Corp. is designed to make it easy for corporations to integrate information from enterprise applications such as those from SAP, Siebel, PeopleSoft and Baan into the Microsoft SharePoint Portal Server. SAP Portals' iViewServer Developer Edition is included within the Microsoft Digital Dashboard Resource Kit 3.0 and will enable developers to design, download and customize iViews to access data from enterprise applications and syndicated media sources.

Because of the company's open partnership model, SAP Portals believes its iView technology is emerging as the industry standard for integrated enterprise portal content. SAP Portals now offers iViews for mySAP.com, SAP R/3, Siebel eBusiness 2000, Oracle Application Server, PeopleSoft HRMS, WebEx, e-Room, Clarify, Lotus Notes, Microsoft Exchange and Documentum. SAP Portals iViews provide users with personalization, security and single sign-on features as well as extensibility. iViews operate in all compatible enterprise portal platforms, including those provided by SAP and SAP Portals, iBaan Portal, IBM WebSphere Portal Server, and Microsoft SharePoint Portal Server.

This concludes Part Two of a five-part note on recent developments covered by the SAPPHIRE e-business conference. Part One covered Alliances and Partnerships. Part Three will cover the Market Impact.