SAP takes prepackaged route

The German firm says it has sewn together a program of software, services, and implementation methods for the consumer goods industry.

3 min read
SAP has a prepackaged version of its business process software for the prepackaged industry.

The German software giant announced it has sewn together a program of software, services, and quick implementation methods for the consumer packaged goods industry.

The industry includes food and beverage organizations like Coca-Cola and Pepsi, health and beauty care product makers like Colgate-Palmolive and Johnson and Johnson, and durable consumer goods makers like Stanley Tools and Black and Decker. It is a fierce battleground for many software vendors who are fighting to gain a share of the huge multibillion dollar market.

For its part, SAP has cooked up for its customers a bundled package of old and new applications mixed with some industry specific functionality and then blended with preconfigured templates to meet about 80 percent of the business processes of a company in this industry.

Much of the program and product has been developed from experience and advice of Fortune 500 giants who have spent the past five years implementing SAP's software in their organizations. SAP executives said the lessons learned from these early adopters, like Coca-Cola and Colgate, were compiled and structured into this program for quick and much simpler implementations at smaller, midsize companies who can't afford a $10 million project.

"We have more of a market presence than most people realize," said Paul Criscuolo, who heads up the division for SAP Americas. "We are telling midsize companies that everything the bigger companies learned their lessons on, we now have all for you under one package."

The package includes financial, human resources, and manufacturing management applications, new sales force automation, advanced planning and optimization applications, and SAP's new R/3 native data warehouse with syndicated data functionality for promotion and point of sale data analysis. It also includes a module for deduction management, a consumer goods specific products that lets manufacturers manage deductions customers make from shipping prices.

For the most part, SAP is taking its normal build-it-itself approach to the industry while competitors like Oracle have taken the partnering tactic.

To meet the needs of its consumer goods customer's, Oracle sewed together and then takes full responsibility for the package of its own financial and manufacturing management system, supply chain software from Manugistics in Rockville, Maryland; demand chain management software from Industri-Matematik International in Tarrytown, New York; maintenance and asset management software from Indus International in San Francisco; and point-of-sale software from Information Resources in Chicago.

That's not to say SAP isn't supplementing where needed. SAP executives said for customers wanting more advanced supply chain management or warehouse management functionality than SAP can offer at this time, SAP is still pointing customers toward partners who specialize in the areas and have links to R/3.

"We have gaps. We know we have gaps and we plan to fill those gaps ourselves when we can but in the meantime, we have partners," said Mark Louis Smith, director of SAP's consumer products division. Smith said less than 10 percent of SAP's current lineup would need to be supplemented with outside software.

Most of the package including the templates and the core R/3 modules are available now. The data warehouse will be available in the third quarter of this year and the sales force automation and advanced planning and optimization applications will be available by year's end.