The conventional wisdom is that SAP has been particularly successful selling into heavy industries. After all, it got its start in the 1970s developing accounting and production management applications for the likes of Dow Chemical, John Deere and other stalwarts in oil and gas and industrial equipment.
Things have changed considerably through the years. At a show of its ability and unique value proposition in serving services industries – along with its formidable presence in chemicals, manufacturing and other asset-intensive verticals – SAP is taking the conventional wisdom to task.
By aligning its newly developed and acquired technologies with the needs of different industries, SAP is seeking to change public perceptions while reaffirming its commitment to creating highly-differentiated solutions for their specific functions.
At a recent full-day analyst briefing, SAP detailed its latest industry strategy and future roadmap covering dozens of upcoming products including real-time risk reporting for banks, electronic medical record systems accessible from mobile devices for health practitioners, and demand planning and warehouse analytics for retailers. The event underscored SAP’s unwavering support for industry-specific solutions that harness new and existing technologies to deliver results in a fairly unconventional manner.
Challenging the widely-held assumptions that its implementations are long and costly, SAP is instituting rapid deployment options that result in fixed price and fixed scope projects due for completion in a matter of weeks. Since September 2010 SAP has built 40 of these Rapid Deployment Solutions with signing of more than 200 contracts including many that are based on industry-specific requirements such as manufacturing integration and intelligence for batch manufacturing.
And if customers prefer not to implement these systems in-house, SAP is positioning its on-demand offerings – namely SAP Business ByDesign – to meet the Cloud-based requirements of its target audience across different industries. For example, 45% of Business ByDesign customers and prospects can be found in the professional services vertical with the ease of on-demand delivery as one of their biggest reasons selecting and evaluating the new software from SAP.
HANA, Mobile, Analytics Permeate Industry Solutions
SAP’s industry focus has been bolstered by the additions of its new assets. SAP HANA, which takes advantage of tumbling hardware costs and the latest compression technology that facilitates in-memory computing, aims at boosting price performance of its applications while rendering the use of local databases obsolete.
Similarly SAP is making good use of advanced mobile technologies that it acquired from Sybase to shore up its offerings in such areas as mobile banking, EMR and couponing redemption at check-out stands.
In addition SAP is wrapping business analytics – led by major new releases such as SAP BusinessObjects Business Intelligence 4.0 and Enterprise Information Management 4.0 – around industry-specific solutions. For example, SAP applications for the telecommunications industry are designed to offer relevant data and strategic insights to users by role with ready access to network performance, cost and profitability analysis, and customer sentiment and monitoring dashboard.
None of these new products, or SAP’s renewed industry efforts, matter if its field operations and partners fail to draw collective strengths from each other in order to achieve win-win outcome for both. And SAP is quick to acknowledge the steep learning curve involved for its salespeople, or its fledging on-demand ecosystem for that matter. Once again SAP is relying on an unconventional approach to make its industry strategy a resounding success.
To that end, SAP has appointed two executives to assume joint responsibility of its industry solution portfolio, which now amounts to nearly half of its revenues.
By pairing up product guru Kerstin Geiger, a 14-year company veteran steeped in manufacturing processes and solution development, with customer advocate Jeff Harvey, who has held a number of sales and customer care management positions since joining SAP in 2002, the vendor is replicating its dual-CEO structure at the go-to-market level in order to strike the right balance between product innovation and widespread customer acceptance.
As its executives reiterate SAP’s industry value that bridges enterprise applications and vertical solutions to drive user benefits, the gating factor is whether the unconventional approach is capable of not just confounding the skeptics, but also exceeding general expectations by winning customers even in certain services industries where SAP traditionally has not been considered a serious contender.