Whether or not the recession is over, organizations are likely to be pursuing some new SAP projects. But which...
ones will help them stay competitive?
According to Bruce Richardson, chief research officer at Boston-based AMR Research, the top-five SAP projects should all focus on business intelligence (BI).
Invest in business intelligence
"If you want to get an audience with a CIO, all you have to do is talk about BI," Richardson said. "That is, what is the best way to leverage the information you already have in your SAP system? And what tools does SAP have that will help you to get better information on your sales pipeline, financial operations, and the supply chain."
For Kathy Gates, CIO at the University of Mississippi, BI technology is definitely on the radar.
"It's about doing more with less, strategic planning, how to have data that lets you know, for example, what your building utilization looks like and how to maximize capacity as we're planning for enrollment," Gates said. "We run a year or more behind the private sector in terms of feeling the economy, so last year we had moderate budget cuts, but this year and possibly next year are supposed to be dire for us. Most of our work is still focused on making the enterprise more efficient."
"These customers have to make sure they have a good sense of the information they have," said Ray Wang, partner at San Mateo, Calif.-based Altimeter Group LLC. "This is an area where SAP with Business Objects has done a good job of trying to figure out how to leverage some of these components and how to get the data out, since it's complicated to integrate [the various] components."
Gates began running SAP in 2000, starting with R/3 and upgrading to NetWeaver in 2003. The university was one of four pilot sites for SAP's student system, which includes grades, records, student accounting, and graduation modules. Her plans now include implementing modules for admissions and enrollment to analyze risk factors.
"Retention is huge for universities right now," she said. But while they've experienced an enrollment increase, keeping those students actively enrolled is a challenge. "We need to recognize the risk factors and intervene and react so that we can keep students once we get them here."
Integrate SAP ERP with Microsoft SharePoint
Although he agrees about BI's importance, Wang puts Microsoft SharePoint integration at the top for SAP ERP projects.
"A lot of people have [invested] in SAP, so now what they're trying to do is expand access to the system," he said. "The SAP ERP UI is not unified; it's hard to manage and maintain."
Wang suggests SharePoint integration as a viable knowledge management portal. "Many CIOs are deploying SharePoint to get access to this information," he said. "It's easily integrated, and most already have enterprise licenses with Microsoft, so there's no further cost involved."
Richardson agrees that the UI is not up to par but says that SAP has taken steps toward improvement. "The 20 years I've been tracking SAP, it's always been known for its functionality but would never win any beauty prizes," he said. "It was designed to be functionally rich, but how the user engaged with the system was an afterthought. But now it's a much better-looking product."
Upgrade to Business Suite 7
The next consideration on Wang's list is ERP upgrades to Business Suite 7.
"Customers are deciding this at the same time as they think about support costs. Many are holding off on upgrades and thinking about what their support costs are going to look like in the long term," he said. "Most people are trying to determine how to reduce their costs of running SAP. So doing the upgrade doesn't necessarily reduce the cost of ownership right away."
Cut costs with third-party maintenance of SAP ERP
Then there's third-party maintenance. "People are thinking about the instances where they're relying on self support, and they're thinking about cutting down the maintenance costs," Wang said. "If you can slash your cost of SAP maintenance from 18% to 8%, for some customers that can mean millions of dollars of savings."
The cost escalation was a bit of a shock for Gates.
"We were alarmed at first because of the high increases each year for several straight years [8% for three to four years]," she said. "But to their credit, SAP re-evaluated and slowed down the increases. Generally, with our university budget cycles, we need advance warning and time to plan and react."
Prepare for SaaS integration
Wang also suggests software as a service (SaaS) integration as one of the top-five projects to consider.
"You need to set up a system to be able to support both hybrid and on-premise deployment," he said. "Because a lot of the areas where customers are looking for innovation are not provided by SAP today -- such as compensation, talent management, strategic HCM, and pricing -- those are being put into SaaS products. These customers are looking at how best to effectively integrate these products into SAP."
Invest in supply chain software
There's still a lot of interest in supply chain applications, according to Richardson.
"Even though it's still kind of a weak economy, you want to improve your position relative to your competition, so I think people will continue to invest in things that will improve their operational efficiency, and that usually involves the supply chain," he said. "You could be looking at new ways of forecasting demand or continuing to figure out how lean you can make your inventory levels, so we are seeing people still invest in supply chain software."
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