SAP moves away from ERP vendor image

BOSTON – SAP AG doesn’t want to be known as solely an enterprise resource planning (ERP) technology vendor anymore. Its broadened focus is on helping organizations create a flexible network of on-demand tools and connected business processes in a world that has proven itself highly connected, said a company exec.

John Schwarz, SAP executive board member, said the reality is that large enterprises are a difficult market right now and the company is starting to focus on selling specialized on-demand and analytical offerings besides ERP.

SAP will still continue to serve its traditional ERP customer as before, as well as meet the varied needs of other types of companies, said Schwarz. ERP offerings have been modularized into easily consumed segments for customers who need that, and hybrid applications can be deployed on-premise or on-demand.

Schwarz spoke during the half-day of keynotes at the SAP Influencer Summit 2009. The theme of this year’s event is clarity to reflect the new business environment and reality in which SAP, its customers and partners toil in today.

While SAP has been all about three-letter acronyms like ERP, CRM (Customer Relationship Management), SCM (supply chain management), that doesn’t mean much for the end user who just wants end-to-end processes, said Jim Hagemann Snabe, SAP executive board member, told the audience. The three-letter acronym will disappear, said Snabe.

SAP’s Business Suite 7, launched earlier this year, was designed precisely to take away the pain of integrating three-letter acronyms, by lowering the total cost of ownership and allowing application enhancements without forcing an upgrade, said Snabe.

SAP will invest heavily in providing tools for end users to interact with back-end standardized processes and get the information they need while also being collaborative on social networking platforms, said Snabe. “That interaction point between structured and unstructured is a huge opportunity for SAP,” he said.

SAP has identified three technology trends driving its offerings: in-memory analytics, mobile and on-demand. With in-memory analytic technology the company can build applications to do on-the-fly calculations that are markedly different from the traditional applications seen yet. Building on-demand technologies with narrow industry focus atop SAP’s Business Suite will give users a seamless experience. Mobile device integration with SAP tools will allow business efficiency because users don’t have to change underlying application.

The company also said it is taking an agile approach to development with earlier customer involvement.

Austin, Texas-based clinical research organization ResearchPoint is in the process of implementing SAP BusinessByDesign, having run for five months concurrently with legacy systems. Chief financial officer Patti Charlton, said people are often surprised that a company of ResearchPoint’s size, with just a single IT staff, is running SAP. Charlton thinks SAP is making a good move by taking steps to change its image from solely an ERP implementer.

SAP’s decision to build offerings as per technology trends like on-demand definitely caters to ResearchPoint’s needs, said Charlton. “On-demand is a remarkable thing,” she said. “It allows companies of our size to get that big company functionality.”

IdaRose Sylvester, founder of analyst firm Silicon Valley Link, said while SAP referred to this year as a “milestone year” the real milestone years lie ahead for the company as it starts to enable new customers including SMEs, exploit new channels and move towards higher volume. “These changes are revolutionary and will require major changes in customer strategy, success metrics, and of course, SAP’s own internal processes,” said Sylvester.

Follow Kathleen Lau on Twitter: @KathleenLau

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