August 2002 | Commentary | Supply Chain Technology

For SAP, Size No Longer Matters

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In this era of business change, even the biggest supply chain technology providers are reaching out to small- and mid-sized companies, creating new products, and making it easier for companies to respond to their offerings. Much of their focus is also targeted toward easier implementation.

Industry stalwart SAP has responded to these changes in business practices with a new approach to market—mySAP Supply Chain Management (SCM), a solution that can be tailored to the needs of small- and mid-sized companies. Customers can buy as much, or as little, of the SCM solution as they think they need.

This robust offering provides an end-to-end supply chain solution with across-the-board visibility. mySAP SCM offers "role-based views" to all parties across the supply network. It couples event management with planning, scheduling, and execution, while integrating SCM with a host of other capabilities such as product lifecycle management (PLM) and customer relationship management (CRM).

mySAP SCM does not stand in isolation; it is part of a group of solutions within the mySAP.com e-business platform that can transform a sequential and linear supply chain into an adaptive network. This network allows partners to collaborate, share data, plan, and coordinate.

By creating an adaptive supply chain network, the solution enhances business visibility and further enables dynamic collaboration through all supply chain processes. This ranges from sourcing materials, forecasting demand, and production scheduling to warehouse management and fulfillment of transportation requirements.

At the core of the network is shared information that is built upon the capabilities and strengths of trading partners along the entire supply chain.

One Solution Fits All

"In order to stay competitive, mid-market enterprises need a software solution that integrates their business, is easy to install and use, and will help them work more efficiently," says Gregory Mekjian, SAP vice president of SCM and PLM.

SAP feels confident entering the small to mid-market arena because nearly half its worldwide installations are at enterprises with revenues less than $200 million. SAP sees this existing customer base as a great opportunity to grow into new markets.

"The strategy makes sense because SAP provides mid-market companies with the powerful solutions that large enterprises have been using for decades," says Mekjian.

The development is more a recognition of the needs and limitations of smaller companies than an expression of SAP's growth, according to Mekjian.

"The Internet has leveled the playing field for small- and mid-sized businesses," he says. "Online, smaller companies can reach new markets, collaborate with suppliers and customers, and take part in industry exchanges. They can take advantage of growth opportunities that in the past were available only to the largest corporations. That's why a growing number of these companies are implementing mySAP solutions."

SAP brings these sophisticated solutions—"not scaled-down applications," Mekjian notes—to small and mid-sized companies, providing quick implementation in a cost-effective, low-risk, prepackaged form.

"Smaller companies can enjoy the benefits of powerful e-business solutions—including industry-specific, best-in-class functions and business processes," he says. "Prepackaged, out-of-the-box functionality enables companies to quickly and easily implement these solutions and manage financials, human resources, supply chain, customer relationships, and other key business processes."

They Guarantee It

mySAP SCM offers service guarantees that "depend entirely on how the contract or deal is structured," Mekjian says. "SAP is committed to partnering with its customers to understand their needs and support them in the long term to ensure that they receive maximum benefit from mySAP SCM.

"In the event of a problem, SAP takes full responsibility for any software problems while the partner responds to issues related to service. However, specifics regarding each customer depend on the model, contract, and service provider," he adds.

Part of the development of mySAP SCM is linking to existing content partner networks through an open interface. Through this methodology, SAP can speed implementations by making use of in-place content partners, such as Celarix, a transportation content service provider. Together SAP and Celarix can provide data aggregation, normalization, and capabilities for data quality management.

Celarix's structure and service make it a strong partner for SAP in transportation and supply chain functions, Mekjian says. "It is important to note that nothing is being outsourced. Rather, the relationship is more a partnership that leverages SAP's technology and Celarix's ability to deliver connectivity and content. Specifically, Celarix offers data cleansing services that filter data, and provide accurate information that customers can rely on. Celarix can also access a full network of transportation partners."

My column next month will explore mySAP's detailed functionality. Until then, visit www.sap.com for more information.

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