SAP's 'Big, Big Year'

SAP expects a big payoff from its new approach to ERP for the mid-market.
SAP (Quote) is repackaging its well-known ERP (define) platform in the hopes of making it more digestible for mid-market companies.

The Walldorf, Germany-based software vendor today introduced enhancements to its All-in-One application suite that will help mid-size companies implement versions of the mySAP ERP 2005 platform that are tailored for their specific industries.

Some of these enhancements are intended to make its applications more easily accessible to a greater number of users, particularly those who are not trained on SAP software, which, while powerful, is famously difficult to use. To that end, SAP recently hired design expert Dan Rosenberg to improve upon and develop a single, cross-platform user interface. The company also did extensive user testing of the final design. While these two moves may seem obvious, SAP executives acknowledged they were uncharacteristic for the company.

The new user interface, Netweaver Business Client, is a wrapper for SAP's underlying platform, which is based on SOA(define). Web services is another differentiator that SAP hopes to sell into the mid-market.

SAP also moved to make its product more relevant to mid-size companies by creating tools that channel partners and internal sales can use to create more roles-based navigation.

Greg McStravick, senior vice president for small and mid-size enterprise solutions at SAP Americas, said that it has created a dedicated sales force and go-to-market organization for the mid-market.

"2007 is a big, big year for us in the mid-market," he told internetnews.com.

He admitted that SAP has been hurt by the perception, particularly among mid-sized companies, that its products take a long time to implement, are difficult to use and end up costing a lot to install and support.

"To a certain extent, we've been cursed by our capabilities," he said.

SAP products, which are renowned for having very rich feature sets, can end up offering more possibilities than are practical in the kind of timeframes in which most companies operate.

One of the main goals of All-in-One is to package the most common scenarios by industry and to prescribe them as the best ways to implement an SAP installation. It has already created 14 pre-defined roles as part of its new UI.

"We can get them working with that initial set and then expose more of the richness of SAP," noted Doug Merritt, executive vice president of SAP's global application management group.

In the end, he admitted, it might take just as long for a company to implement a fuller feature set, but they can get started more quickly and avoid scope creep.

"All the functionality is there for them, but this is a way for them to reduce their risk. We can work with [customers] to create a refined and reduced user exposure for the initial implementation and then over time increase the scope. We can take away that one variable that scared [mid-sized companies] the most -- uncontrolled implementation," he told internetnews.com.

SAP also introduced tools that will make it easier for its channel partners to build new applications based on the mySAP platform.

Merritt said SAP will certify channel partners who develop extensions for vertical markets.

"All the tools and methodologies in All-in-One are extended to our partners," he said.

There are more than 600,000 potential U.S.-based customers in the mid-market alone, which SAP defines as between $100 million and $1 billion in annual revenues. "There's no way from a sales coverage and delivery perspective that we could cover them all," Merritt said.

Josh Greenbaum, principal analyst with Enterprise Applications Consulting, said that SAP has been building its partner community for the past 12 months.

"It's a key strategic differentiator for SAP and one they've been pushing across the board," he told internetnews.com.

Greenbaum noted that SAP's approach is likely to resonate in the mid-market, where there is strong demand for Web services and other applications, such as compliance software.

"It's a mistake to think SOA is too sophisticated for the mid-market to absorb -- quite the contrary. They understand it and want it. The trick is to productize it in a way that is cost-effective and meets specific needs," he said.

Building on All-In-One

To that end, SAP is adding other products to the All-in-One offering, including a pair of recent successful product launches -- Duet and Governance, Risk & Compliance (GRC).

Duet, which SAP is marketing jointly with Microsoft (Quote), allows customers to access data buried in SAP systems via more familiar applications like Outlook and Excel. The companies plan to ship a new value pack next month that will allow customers do download demand plans from the SAP supply chain module, work in Excel, and then feed the new numbers back into the SAP system of record.

Chris Warren, general manager of office business applications at Microsoft, told internetnews.com that initial demand for Duet has been "unprecedented" in the history of the company at this stage of a new product introduction.

Udo Waibel, senior vice president of emerging solutions at SAP, noted that Duet has helped SAP reach new users in companies where it already had a presence. Duet has sold more than 200,000 new licenses in the three months since it was introduced.

"There were situations where customers had deployed Office to all their employees and had deployed SAP to a subset of employees but they bought Duet for every Office user they have," Waibel told internetnews.com.

SAP has also successfully introduced GRC into an environment where compliance is on the tip of every tongue. But rather than framing it as a purely reactive move, SAP has introduced GRC as a way for customers to use risk management as a strategic weapon.

"Thinking about risk increases the likelihood of success. It doesn't mean you don't do something -- you define risk and accept risk as a better business judgment," noted Amit Chatterjee, senior vice president of the GRC business unit.

This article was first published on InternetNews.com. To read the full article, click here.






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