SAP ERP software has sparked off more than a vituperative debate, not only for its intrinsic advantages/shortcomings, but also on a broader theme, its transition from application maker to a software provider.
As one Gartner analyst suggested in his much coveted report on August 2012, SAP-ERP is no longer confined to its predefined norms of being a quick fix solution to the perennial challenges faced by software companies and their clients (through the prism of a vendor).
It has expanded its horizons to include relevant contours like IM (Information Management), cloud, business analytics, and of course, mobility.
To give one such real example, the software’s ability to encompass information management in a way that it does allow it to play a major role in offering high-value applications while competing with other contemporary solutions. Similarly, their robust portfolios of cloud based applications are already creating a ripple in the market.
These include but are not restricted toSales on Demand, Business by Design, and Success Factors BizX Suite, among others.
So what is it that makes SAP tick? What are its strategic pros and cons in addition to its functional advantages? Let’s try and find out.
A resilient company
SAP is one of the few resilient companies that have withstood the rigors of time and market uncertainty with such aplomb.
From its humble commencement in the year 1972 when it was founded by just five ex-IBMers, it has come a long way to become a company that reaches almost 200 countries.
SAP-ERP is being increasingly used as one of the prime solution, which is a testimony to its reliability and efficiency.
Key Strategic Advantages
Global reach
SAP-ERP is a global solution in the truest sense. It supports worldwide reach by enabling 45-odd country versions in addition to as many as 8 add-on versions to accommodate a wide variety of applications.
Centralized system
The scope of the SAP Business Suite is immense; it accommodates wide variety of enterprise-level requirements put forward by the Multi-national companies.
It ensures that they are provided with streamlined business processes and greater accessibility of information without any technical hurdles.
Enhanced integrity
SAP-ERP can also integrate well with various types of businesses, including HR, Financial Products, Material Procurementand several others, irrespective of their size and scope.
Flexibility
SAP business applications are also known for their flexibility because they can accommodate features such as CRM or SCM.
In other words, their customers can depend upon SAP Business Suite to integrate almost all of their business processes, if not all. Similarly, the financial applications can be operated stand-alone or as a part of a broader suite.
Integration with BI
The SAP BI feature offers an array of functionalities like customizable dashboards, reports, data warehousing as well as cloud computing.
Some of its popular tools include Business Objects Web Intelligence, Crystal Reports, and Business Objects Xcelsius Enterprise among others.
Focus on Mobility
SAP has been a visionary in its approach towards mobility, something that was evident in its purchase of Sybase in the year 2010.
Unlike many others, SAP recognizes the growing importance of mobility not just for customers, but also across company drawing boards. It has after all emerged from a conventional desktop.
Community base
Idea sharing, problem resolution, technical snag updates and new features are regularly discussed all through the forums. This in turn triggers the feeling of customer satisfaction.
Challenges:There are still few challenges faced by SAP-ERP which includes:
Pricing system
Many believe SAP pricing system to be a bit intricate and difficult to understand for new customers. Some of the solutions have been difficult to obtain/scale because of the lack of understanding of the actual acquisition prices.
Then there are the usual predicaments of customers having to frequently bundle and unbundled their licensing programs and deal with adverse shelf-ware policies.
The company is doing its best to get around this and has also been successful to some extent.
Deployment risk
ERP customers oftentimes assert that there is an intrinsic risk in deploying such broad and intricate software that could have far reaching ramifications.
They also feel that the costly and cumbersome deployment of the product poses a challenge in implementing timely and on-budget applications.
Competition
This is one of the arenas where SAP ERP needs to tighten a few loose bolts and gear up to face the growing threat from players like Microsoft, Oracle and Salesforce, who has emerged as one of the most popular companies in the same domain.
Then there are firms like NetSuite who are on an edge of signing a deal with spree. Thankfully, the fundamentals of SAP are intact, which should hold it firm.
Stagnated growth opportunities
SAP ERP recognizes the fact that it needs to identify new market opportunities to achieve sustained growth in evolving fields like cloud.
While it has been doing very well in this regard, its focus on select domains could lead a situation of saturation, the signs of which are imminent.
Conclusion
In a nutshell, there is no denying the fact that SAP is more than a force to reckon with when it comes to mid-market ERP domain, thanks to its strategic placement of Enterprise solutions.
However, it realizes that it needs to make frequent technological updates and usher in creative reforms in licensing/pricing structure to stay way ahead of competition.
Once it streamlines its investment solutions like Business All-in-One, it is likely to compete more effectively with market leaders like Microsoft andOracle.