SAP to release cost-benefit calculator

SAP AG is scheduled to announce Tuesday a new free online interactive tool designed to give potential enterprise customers specific cost saving projections that could be obtained by using the company's supply chain management solutions.

The new tool, called the mySAP Supply Chain Management (SCM) Value Calculator, requires users to provide basic data about their company, such as annual revenue and cost of capital. It then provides a report -- based on a benchmarking database of best-of-class supply chain processes by industry -- detailing the strength of the company's current e-business operations and predicting the bottom-line benefits that an SCM product could bring to the organization.

The SCM tool is the first step in a new SAP initiative to communicate to potential customers the value proposition of its various e-business solutions, said C. Eward Brice, vice president of global SCM solutions marketing. The company plans to launch a similar tool for its customer relationship management solutions in mid-October and one for its product lifecycle management software later this year.

"We are really focused on communicating the business benefits of our solutions," Brice said. "It's no longer making investments in technology for the sake of technology. Tools like this ... actually help the customers make a business case."

The calculator analyzes the data provided by the user and map's the user's enterprise to one of four stages in its evolution toward complete supply chain integration, beginning with a collection of disconnected systems and moving toward a fully collaborative e-business. In addition to estimating the total vale the user's company could realize in a 12-month period by using an integrated SAP SCM solution, the tool also provides comparative case studies of companies already using the solution that have realized similar benefits.

The results, which do not take into account the cost of the solution or the implementation, are based on benchmarks from The Performance Measurement Group, a subsidiary of PRTM, an IT management consultancy.

"The benchmarking standard is an aggregate ... of various supply chain benchmarks," Brice said. "If you're a small company, you're comparing yourself to best in class supply chain processes."

It is especially critical in the current economy that executives focus on increasing their supply chain performance levels while carefully assessing their return on effort, said Jakub Wawszczak, a principal of PRTM. The SAP calculator is the only supply chain tool on the market that actually asks questions and correlates responses to industry-standard benchmarks to allow an executive to easily conduct a fact-based diagnosis of the company's overall supply chain capability, he added.

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