We Blog CRM

Who’s happy to be making a few more rubles in the post-Cold War age of 21st century capitalism? SAP, that’s who. The solutions provider closed its calendar year with a couple of announcements coming out of Mother Russia representing some nice kale for the firm.

Just after Christmas, the Second Generating Company of the Electric Power Wholesale Market announced the completion of its enterprise management system based on mySAP ERP at its Surgutskaya branch. In fact, the company (a.k.a. OGK-2) will now be basing its future IT strategy on the SAP solution. Said strategy will be focused on automation of key business processes.

The implementation was undertaken by OXS. The complete automated management system is planned for full implementation by November 2007. OGK-2 is also building a corporate portal and a data warehouse based on SAP software.

Meanwhile, Russian blue collar is going high-tech with mySAP elsewhere in the big country. IBS, a leading IT and consulting services provider in Russia, and Metalloinvest Management Company announced the launch of the implementation stage in the project to create an integrated control system based on mySAP ERP at the Uralskaya Stal (or “Ural Steel”) iron- and steelworks.

The Ural Steel project is said to be the largest attempted by IBS and for mySAP ERP in the metallurgy sector. The integrated management system project started in April with an open tender. The “Conceptual Design” phase, in which guidelines for building the ICS and automating the enterprise business practices were planned, was recently completed. Total project design solutions numbered 217.

Within the framework of the Ural Steel project, IBS consultants are to build a full-scale ERP automated system for accounting and tax practices; expenditure tracking; procurement and sales control; and equipment maintenance and repairs.

The estimated number of automated workplaces to be available by the end of the first stage of implementation is 400. The first stage is expected to be completed in summer 2007.

Ural Steel is an integrated Russian steel manufacturer and a leading domestic producer of strips, pipe, tubing, and bridge steel. The company’s annual production capacities exceed 4 million tons of steel. Ural Steel has clientele in Russia, Germany, UK, Italy, Spain, Belgium, Norway, Denmark, Turkey, Iran, China, Korea, Vietnam, Taiwan and Thailand.

ISS Consulting Solutions Bhd has announced the successful implementation of its mySAP ERP at Indonesian plantation company PT Socfin Indonesia. The Socfin project took six months to complete, and ISS reckons completion proves the firm has “the expertise to implement mySAP solutions for customers in the agriculture industry.”

Socfin produces oil palm and rubber products, employing approximately 12,000. ISS said the ERP solution streamlined Socfindo’s business processes to increase operational efficiencies, gain better visibility of the business and drive better decision-making among executives.

Socfindo IT head Mong Ke Sim concurred, stating that the solution had enabled Socfindo to transform its business operation management from time-consuming and inflexible to real-time and adaptable while various business functions were all reconciled: “Being empowered with real-time information means that we can identify inefficiencies, avoid loss, increase productivity. In the near future, we look forward to exploit[ing] SAP’s analytics capability in providing reliable executive information for even better decision making.”

Intelligroup Inc. a consulting, business optimization and outsourcing company, announced that it received a cool $1.5 million contract from Gulf Petrochemical Industries Company, a manufacturer of petrochemical products in the Middle East, to implement the latest version of mySAP ERP 2005 to update and enhance GPIC’s current IT infrastructure.

The mySAP ERP 2005 implementation will be completed over an eight month period of time and include modules for financial accounting, controlling, materials management, quality management, production planning, plant maintenance, sales and distribution, project systems, environment, health and safety and HR. Under terms of the contract, Intelligroup will provide post production support for three months upon completion of the project.

Intelligroup is currently making a big push for business in the Middle East, including recent work in the Saudi International Petrochemical Company (a.k.a. SIPCHEM), the Amiantit Group in Saudi Arabia; Alghanim Industries in Kuwait; the Gulf Institute for Science and Technology in Kuwait; and the Al Batha Group in United Arab Emirates.

UAE conglomerate ETA & Star Group has announced the completion of a massive implementation of SAP’s mySAP Business Suite across over 70 companies in a nine-month, US $7 million project. mySAP ERP and mySAP Customer Relationship Management were rolled out across the conglomerate “in a bid to unify its business processes, improve performance across its operations in twelve industries and support its expansion plans.” Now that’s heavy labor.

Arif Rahman, ETA & Star Group director of finance, sounds sold on the deal, reporting to IT Weekly that “Before we were not able to conduct very effective treasury operations. We have over 100 bank accounts and treasury operations were very complex and not real-time. With SAP, everything becomes real-time.”

According to IT Weekly, “The initial SAP rollout included full implementation of all ERP modules at three of ETA’s companies while the financial and human capital management modules were implemented across all 70 companies during a nine-month project carried out by one of SAP’s global implementation service partner, Larsen and Toubro.”

On those expansion plans, Abid Junaid, executive director of ETA Star Property Developers, stated that they’d soon be jumping further from the lands of the UAE: “We are not just expanding internally, we are also looking at overseas expansion. If we have systems in place then rollout will be easier in other regions.”

ePages Software GmbH, a provider of online shop software, announced its conquering of Norway. Norway-based e-business software and consulting firm BITS has been named exclusive distributor of ePages solutions to the SAP Business One market in good old Norge. Seriously, this deal looks to corner a huge slice of the market there.

ePages has chosen BITS to exclusively distribute ePages’ SAP certified integration to SAP Business One to meet the specific needs of Norwegian companies. The BITS package includes pre-configured Norwegian tax settings and logistics tracking systems; Norwegian online payment integrations; standard terms and conditions for online selling; and Norwegian currency and language cartridges.

Read the press statement: “[BITS and ePages’] joint activities will enable the rapid expansion of sales for the robust, competitively priced and market-leading ePages Shop Solution for SAP Business One in the Scandinavian market.”

ePages provides e-commerce solutions for mid-sized companies and hosting providers. ePages powers some 30,000 online shops. Among hosting and internet service provider clientele are Deutsche Telekom, British Telecom, Strato, Lycos, T-Online, and Host Europe. ePages has offices in Hamburg, Jena, San Francisco, London and Barcelona. BITS is an eBusiness software and consulting company serving SMEs in Norway solutions in segments including eCommerce, eMarketing, CMS, CRM and ERP. BITS is also an eBusiness ISP, infrastructure and hardware provider. The company is based in Bergen on Norway’s west coast.

IBM has thrown Dell the gauntlet over small-business users today by launching a System i server configured for customers with 100 seats or fewer of SAP’s business management software.

To attract those users, announced IBM, the IBM System i 520 Solution Edition is attempting to out-customize Dell’s PowerEdge server, offering more security, virus protection, database and storage. IBM aims to attract small businesses with the product, pitching the idea of managing the entire company’s data in a single spot, whether accounting, supply chain, CRM, e-mail or disaster recovery.

Theoretically, IBM’s move also marks a win for SAP in the competition for those same users against Oracle’s J.D. Edwards ERP software.

In July, IBM started selling a nearly identical product for Oracle applications called the System i 520 Solution Edition for Oracle’s J.D. Edwards EnterpriseOne. That platform was a critical bit of Oracle’s campaign to keep the 5,000 PeopleSoft users, users form a company Oracle swallowed in January.

Industry pundits see Now Oracle must share IBM’s fast hardware and aggressive pricing with its bitter rival. Says online industry journal “CIO Tech Informer," “The two companies are locked in a public war of words and product launches. In July, SAP said it had explicitly designed its pending Safe Passage 2.0 migration program to win over Oracle users. And Oracle sells a product called ‘OFF SAP,’ which includes credit incentives for switching from SAP.”

IBM plans to release the i 520 Solution Edition in October for US $35,000.

SAP AG is no Europhobe. To prove it, SAP representatives have announced it will provide enhancements to mySAP ERP to assist businesses and banks worldwide in “reap[ing] the benefits of the upcoming Single Euro Payments Area (SEPA) to increase the efficiency of cross-border electronic payments within Europe.”

According to those fantastic folks at Wikipedia, the SEPA initiative “involves the creation of a zone for the Euro in which all electronic payments are considered domestic, and where a difference between national and international payments does not exist. … This will replace the complex and costly national infrastructures that are currently in operation in each domestic market, thus reducing the overall cost to the European economy of moving capital around the region (estimated today as 2.5%-3% of total GDP).”

(If you ask Das Chump, a denizen of the EU himself, it sounds like quite a bit of bureaucratic hell but, hey, technological advancement doesn’t care, does it?)

The European Payments Council is currently putting finishing touches on the legal framework for payment systems. In 2008, says current EU law, pan-European payment options for credit transfers and personal debit transactions must be in place for EU member states plus Iceland, Liechtenstein, Norway and Switzerland. By 2011, EU guidelines call for “all present national payment infrastructures and payment processors [to] be in full competition to increase efficiency through consolidation and economies of scale.”

Back to Europe then (well sort of), SAP has also established that its brain trust are no dummies: There’s some good Euros to be made in this business in the short term, pardner!

SAP plans to make the package available in mid-2007 for existing SAP customers that are current on SAP maintenance contracts and running SAP’s enterprise resource planning application, SAP R/3 Enterprise or higher. SAP also promised support in the future to customers coming under the regime of the SEPA initiative, with additional functionality to mySAP ERP 2005, namely SAP Bank Relationship Management, an application to increase payment-flow transparency and compliance of corporate payment transactions.

Oddly enough, the announcement was made from Sydney, Australia.

Reportedly the world’s largest customer-run community of SAP professionals, the Americas’ SAP Users’ Group (carrying the unharmonious acronym ASUG), has announced its Customer Relationship Management Forum for October 22-25 at the JW Marriott Starr Pass Resort in Tucson, Arizona.

The CRM Forum seeks to feature customer-driven education and insights into how SAP customers are leveraging mySAP CRM to do all those classic things businesses really want: develop customer-centric organizations, maximize sales potential, and achieve profitable growth.

Promises ASUG: Business process leaders, sales and marketing executives, and customer relationship management teams from leading companies will share best practices and lessons learned in implementing SAP CRM on-demand, channel management, e-commerce, partner relationship management, sales force automation and more.

Speakers will include bigwigs from Colgate-Palmolive, Lincoln Electric, and Yaskawa Electric America. Conference keynotes include a motivational session with World Cup skiing champion Cary Mullen (!) and an ROI-focused session with mySAP CRM solution management vice president David Glessner.

For complete conference information and / or registration information, visit ASUG.

SAP kicks off the week this week comfortable in the knowledge that they’ve sold China’s Wumart Group on their product.

Friday had SAP inking a deal with Wumart Group, one of the largest and fastest-growing private supermarket chains in China, to employ mySAP ERP and SAP for Retail to upgrade company information systems. SAP claims Wumart now holds the distinction of first Chinese supermarket chain to implement an international enterprise resource planning and retail package “from a top global enterprise software provider.” Usage of selective modifiers aside, Wumart’s implementation is symbolic of the changing face of Chinese IT infrastructure.

Like Western firms that The Chump hears about every day that finally make the jump to CRM, Wumart saw geographic growth, which in turn made the legacy IT system insufficient, which in turn messed with the company’s development, etc.

Unlike most Western firms, Wumart began a process typical of huge Chinese firms. After forming a selection team in November 2005, chairman of the board Dr. Zhang Wenzhong brought them to 20 international companies that had successfully implemented ERP systems in China, France, Switzerland, Canada, the United Kingdom and the United States. Most companies like to pump themselves up in PR by announcing they won such and such a bid over their fierce competitors. SAP’s got some serious bragging rights here.

Post-installation, Wumart expects to roll out an ERP and retail system connecting headquarters with its over 500 outlets in areas such as category management, internal supply chain management, commodity planning and chain store management.

The first phase of the project includes SAP for Retail at the Wumart headquarters and Tianjin branch; a logistics system for the distribution centers in Beijing; an interface to Wumart’s point-of-sale system; and the SAP retail outlet system. SAP China Consulting will provide the implementation on this project, and the overall implementation has been given a timeframe of approximately one year.

Founded 12 years ago, Wumart has become a dominant retailer in China with more than 700 hypermarket, supermarket and convenience store outlets; last year, annual sales were posted at approximately US $2.52 billion. This year, Wumart has gone Oracle in China, acquiring several fourth-largest and fifth-largest Beijing supermarket chains Chaoshifa and MerryMart; northwestern China retailer Xinhua Stores; and eastern China retailer Times Supermarkets.

If SAP product and technology group president Shai Agassi doesn’t watch out, he might gain the notoriety of a Benioff in industry media: Silicon.com, ZDNetAsia and BusinessWeek all reported yesterday on Agassi’s new “third way” philosophy.

Agassi and SAP’s “third way” dogma is basically a middle-ground strategy between a completely software dependent operation and a 100 percent on-demand solution. It’s natural for SAP to be pushing such a party line, as their plan centers on the service-oriented architecture. With a more succinct explanation featuring “gear box” as the key simile for SAP product, this could catch on.

As Agassi sees it, the business of the future will use a "stable core [of software that] drives the ability to innovate at your pace.” The key will be enhancement packages. As Agassi told Silicon.com: "So think of SOA as a gearbox. We’ll allow the customer to choose which gear they want… by choosing which pack and which enhancement they want."

Agassi’s recent comments all go back to his earlier eye-popping headline-making announcement that SAP software would be receiving no major updates until 2010. “…through 2010,” said Agassi at that time, “new functional enhancements to [mySAP] will be made available as extensions in a series of optional enhancement packages. …this application will continue to provide a stable yet evolutionary business process platform as companies move into the era of enterprise SOA.”

Agassi stated that SAP would instead release optional enhancement packages to mySAP ERP 2005 until the major upgrade four years from now. Under the current business schema, SAP plans to have its business suite 100 percent service-enabled by 2007. Until then, SAP executives will urge customers to use the software vendor’s NetWeaver platform to begin piecing together a service-oriented architecture.

Common wisdom regarding the tacks SAP is taking now are generally figure to be answering to the intensifying competition with Oracle Corporation. Were there any doubt of this assumption, referring to any of the links above will contain price gems served up by Agassi. Here’s a sound bite: “We don’t believe in buying customers.” Ouch!