SAP AG said Wednesday it would open a research and development center in Budapest, Hungary, to focus on advancing supply chain management applications.
SAP received about $546,000 in state support from Hungary to open the lab in the country. The center is expected to start out with a staff of 50 and expand to about 300 developers and executives by 2006.
Over the past decade, SAP has focused on radio frequency identification technology (RFID) and other applications to better manage the supply chain. SAP was among the first to develop a complete RFID software package from its AutoID research center in Palo Alto, Calif.
Last year, SAP unveiled its Auto-ID infrastructure software, which integrates RFID data with other enterprise applications data. SAP also launched event management software, which tracks and alerts users to supply chain management problems. The software is intended to run on SAP's Web Application Server.
But some SAP customers are having a difficult time using SAP's products to conduct extended supply chain processes, according to research conducted by Boston-based Yankee Group.
SAP Advanced Planner and Optimizer works fine for less intensive supply chain management, said Mike Dominy, a senior analyst with The Yankee Group. Enterprises are developing their own applications or turning to best-of-breed vendors, such as i2 Technologies or Manugistics, to better manage the extended supply chain, Dominy said.
"APO is a very good application to do traditional or classic demand planning, but difficult to do things like collaborative planning and forecasting," Dominy said. "Companies that have much more leading-edge processes and distributed supply chain functions look to something that they can build on NetWeaver, BEA or Oracle, or they could buy a best-of-breed application."
SAP has 10 labs for research and development. The Budapest lab will be the third European research and development center. Other labs are located in Walldorf, Germany; Bangalore, India; Tokyo; Sophia Antipolis, France; Sofia, Bulgaria; Montreal; Tel Aviv, Israel; and Shanghai, China.
"SAP Labs Budapest will be a key driver in expanding the capabilities of our SCM applications to power tomorrow's adaptive business networks for our customers, their business partners and their customers," said Claus Heinrich, a member of SAP's executive board, in a statement.
SAP has had a strong presence in the Hungarian IT market. SAP said it provides software to about 60% of Hungarian enterprises. SAP Hungary, a company employing about 140 people, sells consulting and education services to companies there.