CHICAGO -- SAP is dramatically changing its business strategies and core R/3 product as its strives to become the safest enterprise resource planning bet in dangerous economic times, AMR Research Inc. senior vice president Jim Shepherd yesterday told hundreds of SAP professionals at the SearchSAP.com conference.
Kicking off a three-day event dedicated to SAP decision-makers, Shepherd outlined SAP's plans, and its new products, in a morning address titled: "SAP 2003: Your Technology and Business Road Map.''
In what many attendees said was a refreshingly clear-cut analysis of SAP, Shepherd got some laughs at the company's expense, delivered some serious praise for SAP's efforts to simplify and optimize its offerings and delved into the company's psyche.
"SAP wants to be perceived as the safe choice," Shepherd said. "They have been beaten up in the market over the last three years or so, by the hot start-up vendors. Now they are getting their revenge," he said, referring to SAP's healthy financial condition, represented by $6.5 billion in 2001 revenues.
In the past, SAP has shied away from competing with its service partners. Not any more, Shepherd said. SAP wants to have a much bigger presence in the lives of its clients, he said.
"Now, this is not altruism. They recognize this is the way they get you to buy more things," Shepherd said. "Nonetheless, it is the right motivation. This is what you want from a key vendor."
The company is also shifting its successful strategy of developing vertical solutions, branching into specialty areas such as transportation or pharmaceuticals. Instead, SAP is scaling down into systems, Shepherd said, trying to provide more components and solutions to existing customers.
Conference attendee Ilene Schuss, solutions manager for East Meadow, N.Y.-based Lufthansa Systems SAP, said the insight into SAP, its past and future, was the type of information she needed. "He helped simplify things," Schuss said.
"I'm required to know what's going on with the SAP life cycle," said Schuss, who has been investigating the Web-based technology in the R/3 Enterprise, trying to determine the benefits it will have for her human resources group.
On the technology front, Shepherd said, the SAP R/3 Enterprise architecture is a huge departure from its long-standing strategy. "SAP has separated the notion of enhancements from the core product," he said. "They heard from all of you that it was a nightmare to go in and upgrade all of R/3 in order to take advantage of enhancements or peripheral applications."
"It represents a dramatic change in the structure of software products and can have profound implications on what your upgrade strategy might be," Shepherd said. The R/3 Enterprise promises more flexibility, he said.
Shepherd suggested that SAP clients consider SAP's Web application server, with J2EE support, as a potential replacement for third-party application servers, and said advancements in the SAP portal make it a sensible solution for SAP clients.
But it was Shepherd's skepticism for xApps, SAP's new integration concept and technology, that connected him to the crowd. "Nobody knows what this thing is," Shepherd said of xApps.
He compared xApps to "BAPIs on steroids" and said the concept was "classic Shai Agassi" confusion, referring to SAP's executive board member. In the SAP community, where some of the company's biggest fans are also its hugest critics, Shepherd's straightforwardness was apparently appreciated.
"I was enthralled," said Richard Prestine, senior systems analyst at Madison, Wis.-based Rayovac Corp. "I'm a techie, so it's great for me to hear what is happening from a business perspective."
"Back in 1997, we shook hands on a PeopleSoft deal," Prestine said. SAP, though, wanted the business in Wisconsin, where so many businesses decide on PeopleSoft. So SAP flew someone to Rayovac to close the deal, promising to match any competitor's offering.
Prestine said he's getting his money's worth from his SAP upgrade to 4.6, and it's a big change from R/3 3.1. "The 3.1 looks so DOS, " he said, shaking his head. "The GUIs were horrible. Right off the bat with 4.6, we found it very intuitive."
Gary Goldsboro, who is contracted by the Oklahoma City public school district as the team leader for its SAP warehouse management project, said he had to take notes, then go home to try to sell the "powers that be" on the idea of continued SAP education and the concept of looking at an SAP project like one that never ends.
"One of our big shortfalls was change management," said Goldsboro, rather glumly. The $17 million project was the first public school effort to implement SAP, he said.
For Goldsboro, learning the nuts and bolts of the R/3 Enterprise was the highlight of his first day at the SearchSAP.com conference. He was also looking forward to a Thursday session on the top 10 mistakes made during SAP implementations.
"I've got a bet with my buddy that we made all 10," Goldsboro said. "He says six. I say 10. We'll have to go find out."
FOR MORE INFORMATION:Exclusive coverage of the SearchSAP.com conference