Operating in a highly regulated industry, executives at Nova Chemicals saw composite applications as a way to eliminate costly delays and improve worker productivity in meeting strict safety, environmental and security regulations. But the composite application market is still emerging, and analysts say some issues need to be addressed before widespread adoption takes hold.
"We wanted to very much reduce our cycle time, because the time and effort to produce reports was enormous," Douglas said. "It took us six months to a year to report some data for regulatory compliance."
And regulatory delays add up to costly government fees, she said.
To address these and other complex industry issues, SAP has established industry-specific business units that are working on co-development and marketing of composite applications with independent software vendors. SAP executives say that companies could meet specific business problems by tapping into data across various applications already in place, through the use of SAP xApps, the branded composite applications produced by SAP and its vendor partners.
But the composite application market is still very much emerging, and ongoing support and maintenance continues to be unclear, according to Collin Mason, a research director at Cambridge, Mass.-based AMR Research Inc. Companies such as Nova Chemicals are working with third-party vendors to test and maintain composite applications, Mason said -- an unexpected twist for CIOs who have been investing in standardizing on SAP.
"A lot of people bought into a vision of an integrated solution, so they didn't expect to still be dealing with best-of-breed solutions," Mason said. "This is an opportunity for SAP to take a leadership position and work through some of the teething problems in this kind of new software model."
Nova Chemicals manufactures and distributes polyethylene, a chemical plastic used to manufacture food and beverage containers, selected a compliance software vendor. The company needed a system to conduct complex calculations to meet government regulations, Douglas said, adding that executives also wanted to use this data to conduct extensive modeling and forecasting.
"We wanted something that we could implement globally," Douglas said. "In the future, we want to be able to report electronically to eliminate the paperwork and manual processes."
Nova started a pilot project in 2004 with Wilmington, Del.-based Technidata America. With Technidata, Nova tested version 1.0 of the xApp for Emissions Management (SAP xEM) and went live with version 2.0 at the end of 2005.
Douglas said that by being an early adopter, Nova was able to influence improvements to the xEM application.
"We put a lot into the project and contributed a lot of hours to get it to the spot we were comfortable to go live," she said.
The result, Douglas said, has been the ability to pull emissions data into a single source that end users could easily tap into to conduct complex analysis and ultimately meet government regulations. Cycle time improved, reducing costly government fees, and the audit time was sharply reduced, resulting in further cost savings, she said.
"As soon as we had xEM in place, people were using that system almost entirely and stopped using Excel spreadsheets to conduct calculations," Douglas said. "Our people felt very comfortable."