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Fill it up with R/3

SAP is planning on tweaking its popular R/3 system to fit the needs of certain industries, specifically the oil and gas industry.

SAP is teaching its R/3 software new tricks.

The German software giant announced today that it is planning on tweaking its popular R/3 system's advanced planning and optimization and retail management to fit the needs of certain industries, specifically the oil and gas industry.

SAP is tuning new planning and optimization software to allow traders and schedulers to respond to market changes. Retail industry software is being retooled to handle the requirements of service stations such as stock tracking, procurement, credit card handling, and other functions.

The Trader's and Scheduler's Workbench uses much of the technology in SAP's advanced planning and optimization software system which is currently in development. The planner uses complex algorithms and historical data to predict supply and demand needs.

For the oil and gas industry, the planner will allow traders "to monitor inventory, market conditions, and contract information; arrange exchanges; and schedule transportation to move products quickly to where they are needed to meet market demand," SAP stated in a prepared statement. It will also inform users of the most cost efficient means of transportation, capacities, and proposed routes for getting the products to their destinations.

"Trader's and Scheduler's Workbench was deemed in 1998 a top priority by the SAP Oil & Gas Global Council because there was no standard industry tool to support this intricate, vital process of huge contract networks, hedges and exchange agreements integrated with scheduling of energy movements," said Dieter Rafalsky, vice president of SAP's oil and gas unit. The council is a 10-member advisory group of SAP customers in the industry.

Among the pilot customers of the new product are Citgo Petroleum. The software is to be available in late 1999 as a standalone component.

For service stations, SAP is retooling its product for the retail industry. Because gas stations are now grocery markets, car washes, and even fast-food outlets, they need software systems similar to those used by a department store or other retailers.

The new software package handles procurement through SAP's new business-to-business procurement software, stock tracking, pricing, billing, credit card handling, cash flow, and accounting transactions.

"The service station business is becoming more competitive and more complex," said Joe Ciaramella, director of information services at Sunoco, a SAP customer awaiting the new service station retail software. "Operators need to stock, sell, and manage an inventory of nonfuel consumer goods, plus operate such auto-related services as car washes."

SAP is expecting to have the retail software system available in the second half of next year.

SAP last month hooked up with PriceWaterhouseCoopers to develop other applications for the oil and gas industry, one of a handful of vertical markets that are becoming increasingly competitive. Oracle has also been sipping Texas tea with a version of its software system targeting oil companies.