Next-gen news: SAP bets modular approach to Business Suite 7 will appeal in times of economic crisis
Amid what SAP executives concede is a global economic crisis, top executives for the enterprise software vendor introduced a new-generation suite of its ERP and other applications at a press conference Feb. 4, 2009, at its offices in New York City.
While acknowledging that corporate IT budgets are tight, SAP leaders say that its more modular software with one “enhancement pack” strategy for all applications will appeal to users looking to trim IT costs by eliminating upgrade pains, and quickly gaining crucial functionality.
“We are living in challenging times,” says Co-CEO Leo Apotheker. “But there are very good reasons why people should invest in IT. There are investment opportunities in IT that will bring fast return, and help companies manage their businesses better in these hard times.”
The launching pad for migration to Business Suite 7 is being on ERP 6.0, SAP’s prior ERP version. The Business Suite 7 also brings with it a synchronized release strategy for all of SAP’s extended applications in areas such as product life-cycle management (PLM); supply chain management (SCM); and customer relationship management (CRM). But rather than new versions under those application umbrellas, the next generation of these applications are folded into Business Suite 7 via the enhancement pack strategy.
For users, the envisioned benefit is that rather than having to configure, test, and deploy large application sets just to support specific, high-value business processes, they can deploy only the functionality they need in what SAP calls a “step-wise” fashion. Functionality is organized along pre-modeled “value scenarios” such as “integrated product development” for discrete manufacturers, or “collaborative demand and supply planning” for consumer goods and high-tech.
Speaking at the press conference, Ed Toben, senior VP of global IT for Colgate-Palmolive, a New York-based consumer goods manufacturer, said it is testing SAP Business Suite 7, and is encouraged by the ability to quickly arrive at needed functionality. “The enhancement pack concept of turning on pieces should help us move faster,” Toben says.
In an interview with Manufacturing Business Technology, Toben explained that the first functions being tested target “product ideation.” This consists mostly of PLM functions used to speed up new product launches, says Toben, but also dips into SCM functions and data. In the days before a central enhancement pack, says Toben, deploying even smaller pieces of PLM or SCM functionality would mean deploying the entire application sets, which slows down implementation and adds to deployment costs.
SAP Business Suite 7 will be generally available in May 2009, after field tests at customer sites wrap up (there are 190 active projects underway). Currently, there are 13,000 SAP customers on SAP’s previous ERP 6.0 version. The enhancement pack concept began with this previous ERP generation, but is now extended via one pack across all SAP applications. Business Suite 7’s value scenarios also incorporate business intelligence functionality gained from SAP’s Business Objects acquisition a year ago.
Bruce Richardson, chief research officer with Boston-based AMR Research, calls SAP Business Suite 7 an interesting approach that builds off of the success of the ERP enhancement packs. “They had vowed a couple of years ago not to force customers to go through gigantic ERP upgrades—because those things cause so much pain,” he says. “They had proved they could do the enhancement packs.”
Richardson believes the smaller chunks of functionality in Business Suite 7 will cut down on the design and testing needed for deployment. Whether this will be compelling enough to drive strong sales for SAP in the face of what’s likely to be a tough economy this year is difficult to assess until SAP puts a couple of quarters under its belt after general release in May. “That is the question that nobody knows the answer to right now,” says Richardson of the likely market uptake for the suite.