SAP is making a push to improve its presence in the banking industry, but industry executives said it won't be an easy job for SAP because many banks are too entrenched in multiple systems and complicated ledgers as a result of industry consolidation.
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SAP has a weak market presence in the banking, insurance and retail industries, according to Werner Brandt, chief financial officer and a member of SAP's executive board. The company plans to improve functionality, broaden its sales pitch and partner with other vendors to improve market share, Brandt told a group of executives at a European conference recently.
Many banks are simplifying their financial systems first, said Catherine Parkhurst, SAP program manager with the Wells Fargo's Properties Group. Seeing growth in its real estate portfolio, executives chose to install SAP's Real Estate Management software in 1999.
Parkhurst said she has her hands full on a business warehousing project. The bank doesn't have any plans for a broad rollout of SAP in the near future, she said.
"There's not a lot of breath in consulting and support services out there in this specific area," said Parkhurst, who spoke to users last month at SAP's Sapphire user conference. "In many cases our business processes needed a jolt of transformation."
The trend is the same at other banks, where market consolidation has ballooned ledgers, complicated transactional systems and made major enterprise resource planning implementation projects too complicated to consider at the moment. The retail industry has had similar issues as IT executives figure out how to meld mostly legacy systems when retailers merge.
But SAP sees industry consolidation as an opportunity and points to recent market wins as a sign it can improve its presence in the industry.
SAP also recently released the results of its own sponsored survey of 600 global senior level banking executives. The survey, conducted by the Economist Intelligence Unit, a division of The Economist magazine, determined that many executives are rethinking their IT strategy.
The executives said increased competition from mergers and acquisitions is expected. More than 70% of executives said investments are being made in customer service and product development over the next five years, according to the survey.
In many ways JPMorgan Chase & Co., which is currently melding the SAP applications it acquired through its BankOne merger, is reflective of the survey. JPMorgan Chase has decided to shift its whole U.S. division onto mySAP ERP.
Thomas Koester, an SAP manager with the BankOne division of JPMorgan Chase is currently working to streamline more than 20 separate ledgers, as a result of industry consolidation and the merger of BankOne and Chase banks.
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The project includes integrating SAP Financials software used by BankOne with Ledgers used by JPMorgan Chase in the U.S. The BankOne division is currently running SAP 4.7 Enterprise.
The job is not easy, Koester said. Complicated and sometimes archaic infrastructures, coupled with multiple instances of legacy and homegrown applications, make upgrading and streamlining financial systems a very intricate and drawn-out process.
Puneet Suppal, an SAP manager at Kansas City, Mo.-based UMB Financial Corp., couldn't agree more. Suppal said executives at UMB believe that streamlining systems and making investments will help the company gain a competitive edge.
UMB uses mySAP Enterprise Portal in addition to Siebel Systems for CRM functionality and IBM's WebSphere integration and application platform.
"As we move forward, we will be using NetWeaver," Suppal said. "We see a tremendous potential to free up the burden on IT and put more capabilities in the hands of users."