It would appear that SAP needs to rethink its product and customer strategies following the announcement of the mySAP.com portal, which is attractive in concept but shallow in content.
Henning Kagermann and Hasso Plattner, the application resource planning application vendor's co-chairmen, were at pains to stress that SAP is changing focus to try and reflect user requirements more closely pains at the firm's Sapphire user conference in Nice this week.
But their new message of "putting the customer at the centre" opens up the question of why SAP has not seen this as a priority in the past.
The company's problems are many and varied, but principally stem from the fact that business requirements have changed in a world where complexity is the norm, but it is not getting its new products to market quickly enough.
Last year saw the death of business process reengineering (BPR) as the main reason for buying into SAP's R/3 suite of applications - a situation that has been made worse by the dramatic rise in competitive offerings from the customer relationship management (CRM) and supply chain optimisation (SCO) vendors.
SAP is seeing the likes of SCO supplier, i2, and CRM vendor, Siebel Systems, biting hard into its enterprise markets and it is struggling to respond.
Its Advanced Planner and Optimiser (APO) product is only one of a range of possible offerings that have traditionally been sold into the SCO market, but according to Bruce Richardson, research director at Boston based AMR Research, APO is: "At least two years behind that available from the specialist vendors."
This is causing problems in the customer base. Margit Bauer, director of applications at Robert Bosch, says: "I was persuaded by Hasso to abandon an inhouse supply chain development, but it is still not clear whether APO will be right. We looked at other products that are functionally richer, but feel the integration with R/3 is more important to us."
In Bosch's case, APO is being rolled out in 67 locations in an attempt to harmonise the firm's enterprise wide business processes. Because this has extensive implications for integration, it is understandable that Bauer does not wish to be exposed to risk.
However, analysts no longer believe that the current R/3 suite provides users with competitive advantage. As Steve Coles, analyst with Forrester Research says: "You should put R/3 backbone applications down a hole and concrete them over, then look for the applications that take you forward."
But not everyone is ready to do that, and there are doubts whether Internet based applications that tackle front office automation are really appropriate at this time.
Barclays Bank, for example, believes that CRM applications are immature, which means that pausing while it completes other parts of its R/3 implementation will not make a significant difference to its business strategy.
"We're not sure how all this will look in 10 years time and we're taking the view that investments have to be for the long term," the bank says.
This is the kind of thinking that plays well to SAP because it allows the company time to get its products to market.
Paradoxically, however, it is exactly the opposite of what the SCO and CRM applications vendors are saying when they claim that speed is the major driver. But even if one takes a half way view, SAP's story still looks ropy.
Claus Heinrich, SAP executive board member in charge of supply chain initiatives says: "No one offers a complete solution, but we can make a strong integration story. After four months of being in release, we now have 140 APO installations."
But Peter Pagé, former executive with Software AG retorts: "When you give it away, of course you can demonstrate success, but it is bad for innovation in the business."
Getting beneath the covers of SAP's CRM strategy is more difficult, however, and at present, there is a lot of talk and little to show. SAP has done the mobile component work for the offering and is introducing a product configurator in the next couple of months.
While these are important aspects of an overall CRM strategy, such projects indicate a disorganised approach where the priority would appear to be getting products out of the door rather than determining whether they provide a logical pathway to introducing CRM systems into enterprises.
SAP has also said nothing with regards to any progress it has with entering the SFO market, following its K&V acquisition last year, despite the threat posed by Siebel, which has made spectacular progress in the last year.
So does this mean that SAP has lost the plot? A lot depends on what you believe.
Financial analyst house Lehman Brothers says SAP is trying to focus primarily on the Internet, but is concerned at the lack of detail on its plans and the silence over market penetration or likely revenue targets.
Plattner says:"First we create the market," but seems unsure of how big it will be or what shape it will take.
Mairi Johnson, researcher at Lehman's, says: "Either it's really bad at forecasting or it really don't know. Either way, it's not so good."
As part of its Internet plans, SAP has just introduced its new mySAP.com portal in an attempt to woo partners that provide SAP based products and services.
It has already signed Aspect Development, Requisite Technology, and Grainger to provide electronic catalogs that work with SAP B2B Procurement, Microsoft and IBM for technology, FedEx for distribution, and Quicken for consumer finances.
But, according to AMR's Richardson, the offering is similar to Peoplesoft equivalent Peoplesoft Business Network.
"In the highly competitive world of ERP, imitation is not always the sincerest form of flattery. We can guarantee that Peoplesoft is not flattered by the similarities between PSBN and mySAP.com," he says.
"But SAP, with 20,000 sites and 10 million seats, possesses one of the largest customer bases and business alliance ecosystems in the world. Its base should attract a staggering amount of content," he adds.
And this is what SAP is certain to be banking upon. If, as seems likely, it attracts significant partner support, then mySAP.com will develop a life of its own. In this sense, it might make no difference that SAP's CRM and SCO strategy looks vague because as Richardson quips: "Why let the facts get in the way of a good story?"
Even training partners are not concerned. Simon Brock, director of SAP training at Team 121, says: "Oracle will grab some mindshare in the short term, but if you look at SAP's momentum, it is hard to see them relinquishing the lead for too long."
He believes SAP's thoroughness will win the day, effectively marginalising other players.
Whether that happens or not remains to be seen. What is clear though is that new product announcements will not be enough.
Last year, SAP's Kagermann clearly signaled that the difficulties of bolting new applications onto R/3 were not going to go away when he said that efforts to break it into components beyond the financials and human resources modules were over.
Developers have access to SAP's Business application programming interfaces (APIs) for integration purposes and Heinrich insists this remains the main way that SAP will add functionality to the applications suite, particularly for SCO applications.
That is hard to believe, however.
SAP itself integrates its packages at a much deeper level than the API level, so protecting its attractive integration story. To do otherwise would give away its crown jewels - something it is not about to do, even though it makes development a painful process.
But customers want the option of new applications now and vendors are becoming more vulnerable to fears that Internet technology will open the door for enterprises to rethink the way they do business or enable new entrants like Amazon.com and E*trade to come from nowhere.
While MySAP.com is an interesting initiative, SAP has to put some meat on the bones soon or the momentum that has seen it become the Microsoft of enterprise applications may evaporate. Such moves have happened before and SAP knows it is not immune to the chill wind of change.
The company is coming up against a technology sea change, but needs to deliver quickly on its customer centric promises. As one Sapphire attendee said: "Customers need to know that SAP cares and rhetoric alone will not do that. At present, they feel stranded."
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