SAP faces challenge to establish dotcom image

Enterprise software vendor SAP is manoeuvring to shake off a trying 1999 with a new strategy, new partnerships and a new name.

But one analyst has warned that of the major enterprise resource planning (ERP) vendors, SAP faces the biggest challenge reinventing itself.

Anthony Harris, local CEO and executive vice president of SAP, said the company plans to reinvent itself as a live e-procurement provider, shifting its focus toward the development of its e-commerce offerings.

By bundling business-to-business e-procurement and interface software with integration and installation costs, SAP will attempt to reshape its market positioning as an Internet commerce application suite provider.

The package will contain supply chain management, customer relationship and enterprise resource planning (ERP) and business intelligence applications, Harris said.

The company's new image will be accompanied by a change of name, from SAP to, as well as a global advertising campaign worth more than $US30 million, Harris said.

SAP has also announced partnerships with two Internet-based suppliers: Corporate Express, an office products and hardware direct sales company, and Blackwoods, an engineering tools and materials supplier, both of which will use the suite to manage B2B transactions.

But Neil McMurchy, research director at Gartner, warned SAP will need more than a new branding effort to position itself as a key player in the ‘e' space; re-architecting its products to operate in an open and collaborative environment will be a greater challenge, he told Computerworld.

"Of the major ERP vendors, SAP has had the biggest cultural hurdle to overcome [to reinvent itself] because it believes it invented the market," McMurchy said.

"SAP's market position has been ‘you need to get everything from one vendor and we're it'."

He indicated this strategy had impacted SAP's time-to-market schedule for products and added the vendor may be forced to consider reselling other vendor's applications if the approach of developing everything internally continued to result in delays.

SAP's strategy revamp comes in the wake of a dismal year for ERP vendors. SAP just managed to make its yearly targets for fiscal 1999 courtesy of strong sales in the fourth quarter. Previously the company, like many of its competitors, had endured several quarters of slow software sales that led to massive profit slides.

Harris attributed last year's diminished sales and share price slide to customer fears induced by Y2K, which he described as "the greatest furphy of all time", and analyst predictions in early 1999 that Internet commerce would bring the kiss of death to enterprise resource planning vendors such as SAP.

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