Given the complexities of today's globally dispersed businesses, an all-SAP software environment may be nearly impossible to have. Even so, large SAP shops are often willing to forgo the specialized functionality of "best of breed" products because of the cost and complexity of software integration.
At Harman, a Stamford, Conn., manufacturer of consumer-grade and professional electronics, the decision to use SAP or not boils down to which approach best meets the business need.
The company has SAP as its ERP, manufacturing and logistics backbone but employs products from Oracle, Ariba and others to handle everything from CRM to e-commerce, according to Arun Kumar, Harman's director of enterprise architecture and compliance. While integration used to be a major obstacle, Kumar said current SAP offerings, including the NetWeaver Process Orchestration middleware, have simplified things. In fact, integration complexity no longer counts as a factor in evaluating tradeoffs between products.
"Five or six years ago, integration was a major headache, but these days, there are various types of out-of-the-box integration, and, as the products mature, integration becomes much easier," he said.
Defining the challenge
There's no doubting the heterogeneous nature of the modern IT landscape. Mergers and acquisitions have left companies saddled with an array of enterprise systems. And, increasingly, line-of-business or regional divisions are actively directing their own IT decisions, choosing nonstandard human resources or customer relationship management (CRM)platforms better suited to their needs.
Despite the influx of non-SAP software into SAP-dominated shops, the added functionality of a third-party product does not always outweigh the hassles it brings with it, according to Joshua Greenbaum, president of Enterprise Applications Consulting, based in Berkeley, Calif.
"Integrating SAP and non-SAP systems is [no small challenge] given the configurations and customizations, and, depending on the industry, the additional, nonstandard components to the data model," Greenbaum said.
As a result, companies often opt for their primary vendor when extending enterprise functionality to areas like CRM, supply chain management, talent management and even business intelligence. That's because they don't want to bear the burden of a different user experience, a different data model and a complex integration challenge when the SAP option meets the bulk of their requirements.
"Every IT decision for or against an IT vendor has a cost equation, and the big question is how much will SAP meet the needs of my company and industry out of the box," Greenbaum said.
The aches of integration
One of the biggest advantages of sticking with an all-SAP approach is having the right set of skills and IT resources in-house or at the ready as a result of an existing system integration, according to Sascha Wenninger, an SAP integration architect who is setting up a new SAP consultancy.
While SAP CRM is a different animal from SAP ERP, the underlying application server is the same, the user interface building blocks are consistent and many architectural components -- from NetWeaver to the IDoc (Intermediate Document) format -- span the portfolio of core SAP applications, Wenninger added.
"I don't want to give the impression that an SAP guy knows how to do everything with SAP, but there can be 80% overlap [between an SAP ERP and CRM specialist], whereas if you go with Salesforce.com or [Microsoft] Dynamics, there is zero overlap," he said.
Wenninger cited a recent client project to integrate SAP ERP with Salesforce.com to illustrate his point. The client, which had integrated SAP CRM and ERP using the standard CRM middleware, wanted to extend the environment, keeping CRM as the system of record but doing things like creating invoices via Salesforce in the cloud.
"This literally turned into a multimillion-dollar project that took well over a year just to get some basic integration that didn't even approach the standard SAP integration with CRM," Wenninger said. "There were also two totally different ecosystems -- you have the SAP guys and the [Salesforce] guys, and neither has experience in the other's environment, which makes things difficult."
The beauty of one
Having a single point of contact for support and integration assistance is another benefit of sticking with a primary vendor, as is the possibility of negotiating better licensing terms. Simplicity of the IT environment itself should be factored in when deciding between SAP and a third-party vendor, according to Luke Marson, talent management architect at Denmark-based Gavdi Group, a consulting company specializing in human capital management. "When you are running fewer systems, you're not duplicating data across multiple systems, which is good for data integrity, security and authorizations," Marson said.
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Theoretically, with an all-SAP platform, SAP owns the integration burden, having committed to delivering a certain amount of integration between systems using a mix of direct connections, application programming interfaces and integration technologies. But industry observers caution that just because a product comes from SAP doesn't mean integration is seamless, especially if it has come into the family through an acquisition.
"Even if it says SAP on the tin, it doesn't mean it nicely integrates with existing stuff," Wenninger said. "Under the covers, it's a totally different product."
An SAP-only club? Probably not
With so many advantages in a soup-to-nuts SAP deployment, why should companies risk going with a niche, third-party product and bear the pain of more complex integration? There's a range of compelling reasons, from having prior on-staff knowledge of a particular application to enlisting multiple suppliers to prevent vendor lock-in -- which can mean less negotiating power on price and being at the vendor's mercy when it comes to upgrade cycles and functionality.
Perhaps the most compelling reason is the need for a specific set of features -- possibly industry-related capabilities -- or because the SAP offering just doesn't stack up.
This was first published in April 2013