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Companies deliberate mySAP ERP upgrades

As SAP rolls out the latest version of mySAP ERP, some customers are mulling over a myriad of reasons to upgrade in the face of competitive pressures.

Jason Mausberg, president of IDS Scheer's Canadian division, doesn't need to put on sophisticated presentations for customers or woo company executives with expensive dinners to sell his services and mySAP ERP licenses.

We've been talking about doing a bunch of things that are 'nice to haves' and 'wish we hads' and we just couldn't do them without NetWeaver.
Gary Tamming,
chief financial officerContract Pharmaceuticals

In fact, Mausberg said, most of his clients have sought out his firm and have intentions to upgrade to SAP's latest ERP version as part of their extensive IT projects.

"It's difficult to create demand with prospective clients," Mausberg said. "Many are in extremely competitive market environments and are already looking to reduce overall costs and increase efficiencies."

Companies still grappling with the decision to upgrade to SAP R/3 Enterprise or move completely to mySAP ERP are taking another look at SAP's latest offering, which was rolled out last week, a month ahead of schedule.

While many companies aren't immediately upgrading to SAP's latest ERP suite, those eliminating outdated legacy applications or looking to integrate third-party software with existing SAP applications may be lured by NetWeaver, SAP's development and integration platform.

"We bit the bullet and bought the licensing," said Gary Tamming, chief financial officer at Ontario, Canada-based Contract Pharmaceuticals. "We've been talking about doing a bunch of things that are 'nice to haves' and 'wish we hads' and we just couldn't do them without NetWeaver."

Still, some company chief information officers (CIOs) aren't ready to make the move, according to Colin Masson, a research director at Boston-based AMR research. Masson leads a chemical and process research team covering IT developments in the chemical industry.

In a recent advisory to clients, Masson said company CIOs won't be convinced to upgrade until SAP does a better job of explaining the latest features and functionality that can be leveraged from mySAP ERP and NetWeaver.

"SAP must also prove that an integrated system from a single vendor is better and less expensive than R/3 with best-of-breed, third-party extensions," according to Masson's AMR Alert to clients, "CIO Dilemma, part 1, Harvest Value of SAP R/3 or Upgrade to mySAP ERP?"

Ignoring NetWeaver puts customers at risk for getting left behind as development around Web services technology accelerates, said Ian Kimbell, vice president for solution strategy and business development for mySAP ERP.

Kimbell, who is based at the company's headquarters in Walldorf, Germany, said the latest suite includes several additions that should result in most enterprises choosing to move from SAP R/3 to mySAP ERP.

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SAP Enterprise Portal, which displays employee specific information through a single console, introduces the concept of roles in the workplace. When an employee logs into the system in the morning, information will be displayed based on that individual's role in the company, Kimbell said. The roles can be configured as general as manager or employee, or as specific as an analyst or HR professional.

Customers choosing mySAP ERP also can extend the functional footprint of their ERP system by integrating sales, supply chain and other business processes, Kimbell said.

SAP's Auto-ID software, which adds radio frequency identification (RFID) technology into the suite is part of the package and comes with tools to begin using the technology in the company warehouse.

In addition, SAP is adding collaboration room functionality into the suite, providing a virtual room for project teams to interact and conduct business in real time.

The SAP Business Information Warehouse and Strategic Enterprise Management (SEM) provides the repository for analytical features and adds embedded analytics functionality to the application suite. SEM sits on top of the Business Information Warehouse and allows upper managers to set key performance indicators at the corporate level.

"It's about having and developing an entire enterprise services architecture," Kimbell said. "It's our strategy and it's the foundation of NetWeaver."

Companies are able to use some or all of the components in the NetWeaver stack. NetWeaver is SAP's integration and application development platform, which is similar to IBM's WebSphere and BEA Systems Inc.'s WebLogic platform.

Some of the components in the stack include SAP XI, the exchange infrastructure that integrates information between third-party applications and SAP's Web application server, a Web development and run-time infrastructure for all business applications.

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