All,
A very interesting article on SAP:
________
August 25, 1997
Special News Report
Surviving SAP
What you need to know to master the technology and manage the process
By Michael Parsons
As more and more companies deploy enterprise resource planning (ERP) software such as SAP AG's R/3, IS managers everywhere are finding themselves involved in tough projects that can produce huge productivity benefits for their business, or turn into a swampy mess.
The good news is that SAP's Accelerated SAP methodology, or ASAP -- which provides tools, templates, and examples of best practices in speeding up the deployment of R/3 -- seems to be paying off.
In February, SAP announced the first customers -- midsize companies -- to have pulled off significant R/3 deployments within six months. ASAP has been so successful that the company will announce this week at its Sapphire user conference in Orlando, Fla., that ASAP will become part of R/3, Version 4.0.
SAP has imposed a coherent methodology on R/3 deployment, so organizations are no longer at the mercy of their consultants. The SAP suite has increased the number of modules so organizations don't have to write as many interfaces between R/3 and other applications. Finally, SAP is using its TeamSAP consulting program to ensure that someone from SAP is involved with every national account, which is SAP jargon for U.S. companies with revenues in the $200 million to $2.5 billion range.
"In my market space, there's SAP involvement in every project now," said Bob Salvucci, SAP's vice president of national accounts, in Wayne, Pa.
However, organizations buying SAP's R/3 need to understand the level of commitment required for a successful ERP deployment, including senior-management support, strong project management, close cooperation between IS and the rest of the business, and intensive training.
"IT people are often new to the company they're doing business in. You can't just leave it to IS. You need strong end-user votes," said Tom Nicholas, a sales-development manager at Monier Lifetile, in Irvine, Calif., which used ASAP to go live in six months.
"It's not an IT project; it's a business project," said Helge Rasmussen, director of IT at Cultor Food Science, in New York, which also deployed R/3 in six months using ASAP.
When configuring R/3, people have to figure out how they do business. These processes then need to be represented in R/3 tables using the tools provided within ASAP and with the guidance of experienced consultants.
Configuration requires a deep understanding of business processes, which involves pulling a lot of key people away from their normal work. You'll know you've got the right people for the R/3 project team when their bosses insist that they can't be spared.
"We lost all of our best people for months," Nicholas admitted.
The organization also needs to commit to understanding R/3 technically; the consultants will be only too happy to move in permanently.
"If you hope to implement R/3 and not learn it -- like you [do] Excel, where you throw it on people's computers and they blunder around in it -- you're kidding yourself," said John Burns, SAP project manager and director of materials at PSC, in Webster, N.Y., which implemented eight SAP modules in nine months.
Training is also an ongoing task. People who may be great at their jobs but distrustful of technology need to understand how to get what they want out of R/3.
"The up-front stuff is a no-win. It's too much cramming. You will do a certain amount of retraining on the spot on a just-in-time basis," Burns said.
Monier's experience
Automation has profound effects on a company. Take Monier, for example, which is a private tile manufacturer with revenues of about $150 million. Unlike SAP's star accounts, including Microsoft, Intel, and Cisco, Monier is not a high-tech business. Machines in plants all around the country mix concrete, plop it on to conveyer belts, press it into tiles, cut them, cool the tiles, and then truck them off.
After SAP's R/3, the truck drivers who move Monier products can no longer mislead their managers about how long they spent picking up their tiles, because R/3 spits out a record of the time spent loading and unloading. The accounting department no longer spends two weeks closing each month's general ledger; it only takes five days and requires one less person. And everyone is more accountable for his or her actions after R/3, because its audit trails can record every keystroke.
"Before, everyone had amnesia," Nicholas said.
SAP: A commanding lead
SAP dominates the market for client/server ERP software and now has a unique hold on the market, in part because of its tight links to the consulting community.
"There are 25,000 consultants trained on SAP. Nobody else comes close. SAP realized early on that owning the integrators was key," said Bruce Richardson, vice president of business strategy at Advanced Manufacturing Research, a consultancy in Boston.
Because the number of billion-dollar ERP customers is finite, SAP has ambitious plans for expanding its market share within large accounts and making itself more attractive to smaller companies by providing more customized, pre-configured vertical-market-specific versions of R/3.
However, R/3 has its limitations. ERP software is so closely tied to the business that small changes can cause glitches in the software and disrupt an important business process.
Monier discovered R/3's limitations the hard way when a particular R/3 feature called Available to Promise was changed during an upgrade, forcing the company to install a time-consuming work-around.
SAP is also trying to provide a system that meets most people's needs without becoming so complex that it confuses its customers. This means lots of choices.
"One of the biggest problems with SAP is the huge number of options SAP provides you. If you don't know who you are and what you are trying to achieve, it should be no surprise that you get lost," Burns said.
R/3 builds on the heritage of the manufacturing-software industry and is only just beginning to embrace open standards, object orientation, and the Web. However, its competitors face similar challenges.
"The systems are all based on stuff that was first created 25 years ago," Richardson said.
R/3 also faces perennial complaints about documentation and its clunky Cobol-like programming language, ABAP/4. Yet many users dismiss these issues as nit-picking.
"Have you ever heard of anyone being happy with their software documentation? ABAP is a quirky language, it's clunky, [but] it gets the job done," Burns said.
Whatever technical challenges R/3 brings to the IT department, SAP's market momentum is bringing the technology into senior management's radar. More and more CEOs are finding that their golf partners are installing R/3 and hearing of the compelling business benefits. For example, previously it took Monier two to four weeks to send customers their bills. Now it takes one day.
This senior-management interest means that more IS departments will find themselves being told: Thou shalt deploy R/3.
"If corporate decides that is what's going to happen to your site, then get out of the way," Richardson said. "They are going to win. I've always found that resisters get shot."
Ibexx |
