SAP looks to regain user confidence at conference

SAP AG has no shortage of challenges to contend with as it comes face to face with users of its applications this week.

Following a tough first quarter and the announcement two weeks ago of management changes at its U.S. subsidiary, SAP will try to pick up some momentum with customers at its Sapphire ’02 user conference in Orlando. The company said it plans to announce enhancements to some of the key applications in its Web-enabled suite.

The rollouts will include upgrades of SAP’s customer relationship management (CRM) and supply chain management software, according to a spokesman at SAP America Inc. in Newtown Square, Pa. The spokesman, who said the company will also announce some new customer contracts at Sapphire, declined to disclose details about the functionality being added to the products.

In addition, he said that new worldwide sales chief Leo Apotheker is expected to outline his plans and goals for the U.S. market at Sapphire. Apotheker last month was given responsibility for global field operations and named acting head of SAP America. Wolfgang Kemna, who had been CEO of the U.S. unit, was shifted to a new job as executive vice president of global initiatives within SAP.

Those changes followed a year-to-year decline of 28 percent in software license revenue at SAP America during the first quarter. As a whole, SAP reported a 40 percent drop in net profit for the quarter, to US$56.6 million, although total revenue increased by 9 percent to $1.6 billion.

“It would be great to see some more stability in the management team here in the U.S.,” said Dave Bent, CIO at Acterna Corp., a Germantown, Md.-based communications test equipment maker. Acterna uses SAP’s R/3 enterprise resource planning applications and CRM software.

“I just hope they don’t change too much at once,” Bent added. “They have people who have established strong customer relationships, which need to be preserved.”

SAP hasn’t measured up to its own expectations in the U.S. market, said David Dobrin, an analyst at Cambridge, Mass.-based consulting firm B2B Analysts. “SAP is facing a number of serious operational issues, not least of which is an inability to meet sales targets in the U.S.,” Dobrin said.

On the CRM front, SAP wants to challenge rivals such as San Mateo, Calif.-based market leader Siebel Systems Inc. But SAP still has yet to have much success at selling its CRM software outside the R/3 installed base, said Erin Kinikin, an analyst at Giga Information Group Inc. in Cambridge, Mass.

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