Despite SAP's foggy market, users are buying

Analysts note that it appears SAP AG is better at writing the code than marketing the e-business platform that the company has been rolling out over the past year.

Nevertheless, despite a slow start and a cloudy sales message, the number of users has grown by 3 million during the past year, bringing the number of user seats to 4 million, SAP said last week at the Sapphire 2001 user conference in Orlando. The e-business platform includes, among other things, traditional enterprise resource planning functions and customer relationship management (CRM), product design and supply chain management modules. SAP will also be converting its ERP flagship product, SAP R/3, into the platform, as R/3 Enterprise Server.

At last year's conference, a number of users were hesitant to commit to the product line and there was some confusion about what it was. One user found a pilgrimage to SAP's headquarters necessary for enlightenment.

"I am not sure I had a clue [about], or that SAP could define it to me well at all until we went to SAP headquarters in Walldorf, Germany," said Ladd Nichols, director of global strategic information systems at Kimberly-Clark Corp., an Irving, Texas-based maker of consumer products. "Then we saw and understood the vision."

Kimberly-Clark plans to go live next month with the CRM module to handle online customers. "Probably, we have developed a better vision on our own, based on hearing it over and over again from many presentations. I feel I do get it now," Nichols said.

But if users are confused, they are in good company. SAP itself is still learning how to sell, implement and exploit, said Bruce Richardson, an analyst at Boston-based AMR Research Inc. SAP needs intensive internal sales training not just in how to sell the product, but also in to whom to sell it, he said. As the number of modules and functions increases, potential customers will cut across a wider range of business departments, he noted. For instance, the mySAP CRM module is for not just sales and marketing departments; it also involves supply chain personnel.

"What about the product life cycle management module?" Richardson asked, referring to an application that lets companies do collaborative design work. "Where do you start sales and marketing? There's no vice president of product life cycle management."

"I think they need to go back and publish a framework that everyone can see, including SAP employees," said Mike Schiff, an analyst at Current Analysis Inc., a Sterling, Va.-based consultancy.'s function has been a moving target all along, he said. "They've got to have a consistent message and stick with it." Last year, when SAP began to offer details on, it appeared to be a Web portal product that would let users access pieces of R/3, Schiff said. Now it appears that it will be a role-based platform that will let users access ERP applications, CRM and data-warehousing modules, depending on the user's individual job needs.

Those features are what appeal to Acterna LLC, a Germantown, Md., maker of testing and management products for cable and optical transport networks. Acterna CIO David Bent said he understands how some companies might be confused over the concept of But the application's role-based function was clear enough to him that he launched a $40 million rollout of SAP throughout the company's global enterprise. He said allows people in certain functions to get access to appropriate applications and data. A buyer, for example, is assigned a Web-based role, a salesperson another, and so on.

Acterna last week announced it was in the process of migrating data from the company's legacy systems, after which it will be virtually 100 percent SAP under the covers. Acterna plans to purchase CRM, supply chain management, business intelligence and other modules, among other products.

The biggest problem isn't the marketing message or the technology, but the business process change that will be required, said Bent. "The challenges are organizational and change management related," he said. "The technology is the easy piece."

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about ActernaAMR ResearchKimberly-Clark AustraliamySAP.comSAP Australia

Show Comments