ERP for profit and fun?

What’s it all about when you sort it out, Alfie?

Are we meant to take more than we give

Or are we meant to be kind?

Industry dinosaurs may remember Dionne Warwick’s sappy hit song Alfie from 1967, when IBM salesmen (yes, men) wore blue suits, Y2K was so far away it didn’t matter, and Systemanalyse und Programmentwicklung (later, mercifully, SAP) was just a twinkle in Hasso Plattner’s eye.

It just might be a good time to dig out that old eight track tape and listen to Ms. Warwick’s words of wisdom. (If you’re under 40, look it up on the Internet — it’s a lot quicker anyway.)

At its annual SAPPHIRE conference in Philadelphia, SAP unveiled a “kinder, gentler” SAP that tries to transport the R/3 battleship onto the choppy seas of the Internet to reach that mysterious island paradise called e-commerce.

It all starts with the colours. The gunmetal grey background that helps you spot an SAP screen from across the room can now be replaced with vibrant colours. Buckets of colours! Take a look at their new portal site, This newspaper does not have the resources to properly render the logo, with every letter in a different hue.

It’s all part of a huge image makeover. Carol Burch, senior vice-president of SAP Americas and general manager for SAP Canada, said: “We’re going from being the world’s leader of integrated business software to being the e-business leader for companies who want to have one stop, lifelong business solutions. What we’ve brought to individual companies is what we’re going to bring to communities of interest.

“Community” isn’t a word that trips lightly off the tongues of ERP vendors, who have generally sold the hard-nosed advantages of intra-company integration and streamlined business processes.

Through the portal

How will they re-invent SAP? One sign came from the emphasis at SAPPHIRE on partnerships. SAP co-founder and co-chairman Hasso Plattner himself admitted that SAP “learned the lesson that one solution doesn’t suit everybody.” So they’ve created a Web site to bring us all together.

The idea may be good, but the Web site sure needs work. Viewed with a version of Netscape that handles most other sites just fine, runs like a herd of turtles – and sometimes it simply hangs. It’s better when viewed with Microsoft Internet Explorer, but still fraught with frustrations. Attempting to fill out the form to “register your company” produced only the exclamation “The field must not be empty!” even though every single field was filled in. Of course, there wasn’t the slightest indication of what it was complaining about, so I gave up. And, sloppy, sloppy, they’ve left in two dummy companies, “SAP Test Buyer” and “SAP Test Supplier” with addresses in Palo Alto, Calif. Not the kind of attention to detail that inspires confidence. My report card for so far: concept: A-. Implementation: D+.

Putting aside these teething problems, it’s clear that SAP does have a powerhouse idea here. If they can succeed in getting companies to really do business-to-business e-commerce there are all sorts of gains to be made. This may even help SAP push its way down the food chain into companies that would never have considered installing its flagship R/3 product. They certainly want and need to move in that direction, and the goal is within reach. A recently-released study by the Aberdeen Group evaluated 15 projects in small and medium sized organizations (up to US$500 million annual revenue, though most were under US$100 million) that used SAP’s Accelerated Solutions, a model that’s pre-configured for a specific industry. The study found an average implementation time of 20 weeks, with more than half of the projects completed on time or ahead of schedule, some in as little as 25 days.

As SAP’s Burch pointed out, companies may now want to get together to conduct joint business operations, using R/3 of course.

“Maybe there’s a group of 20 like companies which each have 10 to 50 employees of their own,” she said. “That organization might be more effective if those companies banded together to do their purchasing, as opposed to each one having somebody responsible for doing that. That’s just one very small example of how smaller companies might wish to group together in order to be more competitive with their larger counterparts.”

In a document called “The SAP Internet Strategy: Turning Internet Promises into Profit,” SAP predicts a “personal, collaborative business solution.” They envision a single secure sign-on, Web sites that cross company boundaries with XML, and even “role-based pricing,” a concept that caught a lot of attention at SAPPHIRE but that hasn’t been fully defined by SAP yet. Essentially, it extends Plattner’s “one size doesn’t fit all” comment to recognize that there are people who sit at an SAP screen all day, while others might use it once or twice a week. The per seat pricing can now vary accordingly.

on-line flood

Let’s assume that we do make it to that E-commerce Utopia where an ordinary corporate desk jockey can procure a dozen pencils with a single mouse click. A world where road warriors can rebook their flights from a Palm Pilot on the way to the airport. One where your inventory system seamlessly interconnects with your courier service to tell you exactly where that darned shipment is. (FedEx’s parent company had one of the biggest booths at SAPPHIRE.) How is all the work going to get done? Are we going to move from a once a month stationary order to a zillion hourly transactions each worth fifty cents?

SAP’s mega-thinker Plattner told us not to worry. “Yes, we will get more traffic, through the Internet,” he said. “We will get smaller orders because it’s so easy, you just take your palmtop and boom, you order, when you’re at a gasoline station and you need something it’s like a phone. You don’t wait until the end of the week and then you work your books and batch submit a whole list of orders. So we will get more transactions. But we’ll put more computers to work, have more computers working in parallel. That’s the beauty of a multi-tier architecture. So I don’t think that this will be the bottleneck of systems.”

If SAP is ready for the Internet, is the Internet community ready for SAP? In a “frequently asked questions” handout SAP tackled the question “Is SAP late in delivering an Internet solution?” by claiming that they “arrived right on time with a complete and integrated Internet solution.” With a large installed base, and a reputation for solid transaction processing, they do occupy a unique and enviable position. Then again, Internet economics turns conventional business practices upside down. Dionne Warwick may have anticipated the world of portals and give-aways and capturing eyeballs three decades ago when she wondered:

And if life belongs only to the strong, Alfie,

what will you lend on an old golden rule?

The future success of SAP, and the other ERP vendors, may well depend on how they “do unto others” in the next few months.

Dr. Keenan, ISP, is dean of the Faculty of Continuing Education at the University of Calgary, and an Adjunct Professor in the Department of Computer Science in Calgary and at the Asian Institute of Technology in Bangkok.

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