WHY SAP?

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T.R.
MARMARA UNIVERSITY
Institute of Pure and Applied Sciences
Engineering Faculty
AS AN ENTERPRISE RESOURCE PLANNING SYSTEM
WHY SAP?
Mehmet Burak GÖÇER
Asst. Prof Dr. Serdar YÖRÜK
Supervisor
January 2016

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TABLE OF CONTENTS
1) WHAT IS ERP?.............................................................................................................................3
1.1) HISTORY OF ERP SYSTEMS.............................................................................................3
1.2) FUNCTIONALAREASOFERP SYSTEMS..........................................................................6
1.3) ROLE OF ERP SYSTEMS IN BUSINESS PROCESS..............................................................7
1.3.1) Basic ConceptsandDefinitions...........................................................................8
1.3.2) BenefitsandImportance....................................................................................9
1.3.3) Value of ERP Systems.......................................................................................11
1.3.3.1) IT Value of ERPSystems......................................................................11
1.3.3.2) BusinessValue of ERPSystems...........................................................11
1.3.3.3) BusinessProcessIntegration...............................................................12
1.3.4) ERP SystemUse inOrganizations......................................................................14
1.3.5) Future Impacts to IndustryandOrganizations.................................................14
2) WHAT IS SAP?........................................................................................................................15
2.1) HISTORY OF SAP............................................................................................................15
2.2) FUNCTIONALAREASOFSAP......................................................................................... 27
2.3) ROLE OF SAPIN BUSINESSPROCESS.............................................................................29
3) WHY SAP?..............................................................................................................................30
3.1) COMPARISON BETWEEN SAPANDOTHERS...................................................................31
3.2) ADVANTAGESANDBENEFITSOF SAP............................................................................ 51
3.3) DISADVANTAGESOFSAP...............................................................................................52
3.4 )INDUSTRIESANDSOLUTIONSIN WHICH SAPISLEADER...............................................54
3.5) FUTURE OF SAPANDOTHERS.......................................................................................58
4) CONCLUSION...........................................................................................................................59
5) REFERENCES.............................................................................................................................61

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1) WHAT IS ERP?
ERP isshort for enterpriseresourceplanning.
Enterprise resource planning (ERP) isa categoryof business-managementsoftware—typicallyasuite
of integrated applications—thatanorganizationcanuse tocollect,store,manage andinterpretdata
frommany business activities,including:
 productplanning,cost
 manufacturingorservice delivery
 marketingandsales
 inventorymanagement
 shippingandpayment
ERP providesanintegratedviewof core businessprocesses,ofteninreal-time,using
commondatabases maintainedbyadatabase managementsystem.ERPsystemstrackbusiness
resources—cash, rawmaterials,productioncapacity—andthe statusof businesscommitments:
orders, purchase orders,andpayroll.The applicationsthatmake upthe systemshare dataacross
variousdepartments(manufacturing,purchasing,sales,accounting,etc.) thatprovide the data. ERP
facilitatesinformationflow betweenall businessfunctions,andmanagesconnectionsto
outside stakeholders.
1.1) HISTORY OF ERP SYSTEMS
The unprecedentedgrowthof informationandcommunicationtechnologies(ICT) drivenby
microelectronics,computerhardware andsoftware systemshasinfluencedall facetsof computing
applicationsacross organizations.Simultaneouslythe businessenvironmentisbecomingincreasingly
complex withfunctional unitsrequiringmore andmore inter-functional dataflow fordecision
making,timelyandefficientprocurementof productparts,managementof inventory,accounting,
humanresourcesanddistributionof goodsandservices.Inthiscontext,managementof
organizationsneedsefficientinformationsystemstoimprove competitivenessbycostreductionand
betterlogistics.Itisuniversallyrecognizedbylarge andsmall-tomedium-size enterprises(SME) that
the capabilityof providingthe rightinformationatthe righttime bringstremendousrewardsto
organizationsinaglobal competitiveworldof complex businesspractices.
Startinginthe late 1980s and the beginningof the 1990s new software systemsknowninthe
industryasenterprise resource planning(ERP) systemshave surfacedinthe markettargetingmainly
large complex businessorganizations.These complex,expensive,powerful,proprietarysystemsare
off the-shelfsolutionsrequiringconsultantstotailorandimplementthembasedonthe company’s
requirements.Inmanycasestheyforce companiestoreengineertheirbusinessprocessesto
accommodate the logicof the software modulesforstreamliningdataflow throughoutthe
organization.These software solutions,unlike the old,traditional in-house-designedcompany
specificsystems,are integratedmulti-modulecommercialpackagessuitable fortailoringandadding

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“add-ons”as and whenrequired.The phenomenal growthof computingpowerandthe Internetis
bringingevermore challengesforthe ERPvendorsandthe customersto redesignERPproducts,
breakingthe barrierof proprietorshipandcustomization,andembracingthe collaborative business
overthe intranet,extranetandthe Internetinaseamlessmanner.The vendorsalreadypromise
many“add-on”modules,some of whichare alreadyinthe marketas a signof acceptance of these
challengesbythe ERPvendors.Itisa never-endingprocessof reengineeringanddevelopment
bringingnewproductsandsolutionstothe ERPmarket.ERP vendorsandcustomershave recognized
the needforpackagesthat followopenarchitecture,provide interchangeable modulesandallow
easycustomizationanduserinterfacing.
Enterprise resource planningsystemsorenterprisesystemsare software systemsforbusiness
management,encompassingmodulessupportingfunctional areassuchasplanning,manufacturing,
sales,marketing,distribution,accounting,financial,humanresource management,project
management,inventorymanagement,service andmaintenance,transportationande-business.The
architecture of the software facilitatestransparentintegrationof modules,providingflow of
informationbetweenall functionswithinthe enterpriseinaconsistentlyvisiblemanner.Corporate
computingwithERPsallowscompaniestoimplementasingle integratedsystembyreplacingorre-
engineeringtheirmostlyincompatible legacyinformationsystems.AmericanProductionand
InventoryControl Society(2001) hasdefinedERPsystemsas“a methodforthe effective planning
and controllingof all the resourcesneededtotake,make,shipandaccountforcustomerordersin a
manufacturing,distributionorservice company.”Let’s quote several definitionsfromthe published
literature tofurtherexplainthe concept:“ERP(enterprise resource planningsystems) comprisesof a
commercial software package thatpromisesthe seamlessintegrationof all the informationflowing
throughthe company–financial,accounting,humanresources,supplychainandcustomer
information”(Davenport,1998).“ERP systemsare configurable informationsystemspackagesthat
integrate informationandinformation-basedprocesseswithinandacrossfunctional areasinan
organization”(Kumar&Van Hillsgersberg,2000).“One database,one applicationandaunified
interface acrossthe entire enterprise”(Tadjer,1998).“ERP systemsare computer-basedsystems
designedtoprocessanorganization’stransactionsandfacilitate integratedandreal-time planning,
production,andcustomerresponse”(O’Leary,2001).
The evolutionof ERPsystemscloselyfollowedthe spectaculardevelopmentsinthe fieldof computer
hardware and software systems.Duringthe 1960s mostorganizationsdesigned,developed and
implementedcentralizedcomputingsystems,mostlyautomatingtheirinventorycontrol systems
usinginventorycontrol packages(IC).Thesewere legacysystemsbasedonprogramminglanguages
such as COBOL,ALGOL and FORTRAN.Material requirementsplanning(MRP) systemswere
developedinthe 1970s whichinvolvedmainlyplanningthe productorparts requirementsaccording
to the masterproductionschedule.Followingthisroute new softwaresystemscalledmanufacturing
resourcesplanning(MRPII) were introducedinthe 1980s withan emphasisonoptimizing
manufacturingprocessesbysynchronizingthe materialswithproductionrequirements.MRPII
includedareassuchas shopflooranddistributionmanagement,projectmanagement,finance,
humanresource and engineering.ERPsystemsfirstappearedinthe late 1980s and the beginningof

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the 1990s withthe powerof enterprise-wide inter-functional coordinationandintegration.Basedon
the technological foundationsof MRPand MRP II, ERP systemsintegrate business processesincluding
manufacturing,distribution,accounting,financial,humanresource management,project
management,inventorymanagement,service andmaintenance,andtransportation,providing
accessibility,visibilityandconsistencyacrossthe enterprise.
Duringthe 1990s ERP vendorsaddedmore modulesandfunctionsas“add-ons”tothe core modules
givingbirthtothe “extendedERPs.”These ERPextensionsincludeadvancedplanningandscheduling
(APS),e-businesssolutionssuchascustomerrelationship management(CRM) andsupplychain
management(SCM).
DominatingERPsoftware suppliersare SAP,Oracle,MicrosoftDynamics, Infor, PeopleSoft,Baanand
J.D.Edwards.Togethertheycontrol more than 80% of the multibilliondollarglobal market.Each
vendor, due tohistoricreasons,hasa specialtyinone particularmodule areasuchas Baan in
manufacturing,PeopleSoftinhumanresourcesmanagement,SAPinlogisticsandOracle infinancials.
There are alsoabout50 establishedandafew more newlyemergingsmallerandmidsize ERP
vendorsincludingthird-partydeveloperscompetingforthe ERPmarket.The resultisstiff
competitionandfeature-overlappingproductsdifficulttodifferentiate.Due tokeencompetitionfor
control of the lucrative ERPmarketshare, the vendorsare continuouslyupdatingtheirproductsand
addingnewtechnology-basedfeatures.Long-termvision,commitmenttoservice andsupport,
module features,specialty,experience andfinancial strengthforR&Dare consideredthe major
vendorqualitiesforproductselectionandturnkeyimplementation.
The proliferationof the Internethasshowntremendousimpactoneveryaspectof the IT sector
includingERP systemsbecomingmore andmore “Internet-enabled”.Thisenvironmentof accessing
systemsresourcesfromanywhereanytimehashelpedERPvendorsextendtheirlegacyERPsystems
to integrate withnewerexternalbusinessmodulessuchassupplychainmanagement,customer
relationshipmanagement,salesforce automation(SFA),advancedplanningandscheduling(APS),
businessintelligence(BI),ande-businesscapabilities.InfactERP isbecomingthe e-business
backbone fororganizationsdoingonline businesstransactionsoverthe Internet.Internet-based
solutionsare destinedtoimprove customersatisfaction,increase marketingandsalesopportunities,
expanddistributionchannels,andprovidemore cost-effective billingandpaymentmethods.The
extensiontoSCMand CRMenableseffective tri-partybusinessrelationshipsbetweenthe
organization,suppliersandthe customers.A supplychainmanagementhassub-modulesfor
procurementof materials,transformationof the materialsintoproductsanddistributionof products
to customers.“Successful supplychainmanagementallowsanenterprise toanticipate demandand
deliverthe rightproducttothe right place at the righttime at the lowestpossiblecosttosatisfyits
customers.Dramaticsavingscan be achievedininventoryreduction,transportationcostsand
reducedspoilage bymatchingsupplywithactual demand”.Withthe deploymentof aCRM,
organizationsare able togatherknowledge abouttheircustomers,openingopportunitiestoassess
customerneeds,valuesandcoststhroughoutthe businesslife cycle forbetterunderstandingand
investmentdecisions. The sub-modulesfoundintypical CRMpackagesare marketing,sales,
customerservice andsupportsystemsusingInternetandotheraccessfacilitieswiththe intentionof

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increasingcustomerloyaltythroughimprovedcustomersatisfaction.E-commerce isthe conductof
businesstransactionsamongorganizationswiththe supportof networkedinformationand
communicationtechnologies,especiallyutilizingInternetapplicationssuchasthe Weband email,
effectivelyreachingglobalcustomers.Adoptionof e-commerce ande-businesssolutions,especially
business-to-business(B2B) solutions,are seenbymanyasthe wave of current and future extensions
of traditional ERPsystemsof mostsmall,mediumandlarge vendors.The front-endWeb-based
Internet-businessapplicationsare integratedwiththe back-office ERP-basedapplications,enabling
businesstransactionssuchasorderplacement,purchasing,inventoryupdates,employeebenefits,
etc.to take place betweenthe customers,suppliersandthe enterprise basedonreliable,relevant
data and applicationsinstantlyinaborder-lessdomain.The legacyERPsystemsdesignedtointegrate
enterprise functionswithinthe fourwallsof the enterprisehave introducedsoftware solutionswitha
Web-interface essentiallyextending toInternet-enabledCRM,SCMand otherInternet-business
models.
1.2) FUNCTIONALAREAS OF ERP SYSTEMS
ERP vendors,mostlyexperiencedfromthe MRPand financial software servicesfields,realizedthe
limitationsof the oldlegacyinformationsystems usedin large enterprisesof the 1970s and 1980s.
Some of these oldsystems were developedin-house whileothersweredevelopedbydifferent
vendors usingseveral differentdatabase managementsystems,languagesandpackages, creating
islandsof noncompatible solutionsunfitforseamlessdataflow betweenthem.Itwasdifficultto
increase the capacityof such systemsorthe userswere unable toupgrade themwiththe
organization’sbusinesschanges,strategicgoalsandnew informationtechnologies.
An ERP systemis requiredtohave the followingcharacteristics:
• Modulardesigncomprisingmanydistinctbusinessmodulessuchas financial,manufacturing,
accounting,distribution,etc.
• Use centralizedcommondatabase managementsystem(DBMS)
• The modulesare integratedandprovide seamlessdataflow amongthe modules,increasing
operational transparencythroughstandardinterfaces
• Theyare generallycomplexsystemsinvolvinghighcost
• Theyare flexible andofferbestbusinesspractices
• Theyrequire time-consumingtailoringandconfigurationsetupsfor integratingwiththe company’s
businessfunctions
• The modulesworkinreal time withonlineandbatchprocessing capabilities
• Theyare or soontheywill be Internet-enabled
DifferentERPvendorsprovideERPsystemswithsome degree of specialtybutthe core modulesare
almostthe same for all of them.Some of the core ERP modulesfoundinthe successful ERPsystems
are the following:
• Accountingmanagement

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• Financial management
• Manufacturingmanagement
• Productionmanagement
• Transportationmanagement
• Sales&distributionmanagement
• Humanresourcesmanagement
• Supplychainmanagement
• Customerrelationshipmanagement
• E-Business
The modulesof an ERP systemcaneitherworkas stand-alone unitsorseveral modulescanbe
combinedtogethertoformanintegratedsystem.The systemsare usuallydesignedtooperate under
several operatingplatforms suchasUNIX,MS WindowsNT,Windows2000, IBM AIX,andHP-UX
systems.
Enterprise systemsemploythinclient/server(C/S) technologyorclient/fatserver(C/FS) architecture,
creatinga decentralizedcomputingenvironment. InaC/S systemanumberof clientdevices
operatedbyenduserssuch as desktopPCsrequestservicesfromapplication servers,whichinturn
getthe requestedservice-relatedinformationfromthe database servers.The requestsmaybe
simple datafiles,datavalues,communicationservices,transaction processingormasterfile updates.
To run ERP systemsrelativelypowerful PCs(clients) and powerful serversare requiredwhere most of
the hundredsof thousandsof operationsare performed.The client/serversystemfunctionsare
performed followingthree layersof logic:
• PresentationLayer:Graphical userinterface (GUI) orbrowserfordata entryor accessingsystem
functions
• ApplicationLayer:Businessrules,functions,logic,andprograms actingondata
received/transferredfrom/tothe database servers
• Database Layer:Managementof the organization’soperational or transactional dataincluding
metadata;mostlyemploysindustrystandard RDBMSwithstructuredquerylanguage (SQL)
provisions.
Thislogical arrangementhelpsthe ERPuserinterface torunon the clients,the processingmodulesto
run on the middle-tierapplicationservers, andthe database systemtorunon the database servers.
1.3) ROLE OF ERP SYSTEMS IN BUSINESSPROCESS
ERP systemshave revolutionizedbusinessesaroundthe globe. Processesare leanerandmore
efficient,costsare minimized, positive customerserviceis more prevalent,andgovernment
compliance ispresent.Companieshave savedsignificantamountsof money,sometimeseveninthe
millions,whentheiroperationsare runby an ERP system.The ERPsystemnotonly affectsthe
companyitself,but alsothe supplychainincludingexternal entities,bothcustomersandsuppliers.

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Throughoutthischapter,youwill see the importance andimpactthatERP systemsmake onindustry
and organizations.
1.3.1) Basic Concepts and Definitions
There are several keytermsthatcan helptounderstandthe importance andimpactof ERP systems
withinindustriesandorganizations.Thisisnota comprehensivelistof terms;however,itwillprovide
a foundation.
Businessintelligence isacomputer-basedtechniquetohelpwithdecision makingbyanalyzingdata.
Businessprocessis a logicallyrelatedactivityorgroupof activitiesthattakesinput,processesitto
increase value,andprovidesoutput(Harrington,1991).
Businessprocessintegration isthe assimilationof businessprocessestogetherinacentral system.
Cloudcomputing ishavinga thirdparty host the software andsystemsabusinessneedsasaservice
throughthe use of the Internet.
Data redundancy iswhenthe same data isstoredin multiple separate locations.
Data repositoryis a locationto store data.
Informationsystem referstointeractionbetweeninformationtechnology,businessprocesses,and
data for decisionmaking.
Informationtechnologyin the broadestsense referstoboththe hardware andsoftware usedto
store,retrieve,andmanipulate informationusingcomputersystemsandapplications.
Key performance indicators knownasKPI,provide baseline metricsthatcompaniesuse tomeasure
howwell the systemandprocessesare performing.
Legacy system iswhena newsystemisidentifiedforreplacement;the oldersystemisreferredtoas
the legacy.
Lifecycle referstothe structure fromwhichsoftware applicationssuchasERP evolvesandis
integratedwithinbusinessprocesses.
ERP systemsbringcorporate businessprocessesanddataaccesstogetherinan integratedwaythat
significantlychangeshowtheydobusiness.The ERPsystemimplementation,anenormouscapital
expenditure,consumesmanycorporate resourcesassociatedwithahighlevel of riskand
uncertainty.ERPsystemsare an obviouschoice forcompaniesoperatingwithdisparate legacy
systemsthatdo notcommunicate well witheachother.These systemsprovide significantinter-
relatedinformation,greaterinformationvisibility,andaccuracyon a commondatabase.Withinthe
ERP systemsare a standardizedprocesstoperformthe majorityof businessprocessesusingindustry
bestpractices.ERP systemsare sowidelydiffusedthattheyare commonlydescribedasthe de facto
standardfor replacementof legacysystemsinmediumandlarge sizedorganizations.If today’s
companyCIOswere askedaboutthe importance andimpactof ERP systemsonindustriesand
organizations,more likelythannot,theywouldsayitisimpossibletoworkwithoutanERP system.
1.3.2) Benefitsand Importance
There are manybenefitstohavinganERP systemwithinthe organization.Informationisreadily
available forthe properusers,all dataiskeptina central repository,dataredundancyisminimized,
and there isa greaterunderstandingof the overall businesspicture.
If a companydoesnothave an ERP systemand employsseparate standalonesystemsforfunctional
areas of a business,the companywill notbe runningat itsfull potential.

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Data may be compromisedbecause itisstored inmultiple Whenacustomercallstoinquire aboutan
order,the customerlocations.Howwouldauserknow whichinformationismostmaybe bounced
aroundto numerousdepartmentswithinthe current?Whendataischanged,isthere a guarantee
that itwill companybecause the customerservice representative doesnotbe updatedinall storage
locations?Are processestakinglongerhave all the answersathisor herfingertips.Here isan
illustrationto startandfinishthannecessary?of thistype of scenario producedbyHammerand
Company.
Withthisillustration,the cycle hascome full circle;backtothe original startingpoint.How much
easierwouldithave beenforthe customerif the customerservice representative hadthe answersto
everyquestionthat the customerasked?One of the most significantfeaturesof anERPsystemis
that all of the informationkeptbyacompany,includingwithinfunctionalareas,isretainedinone
central data repository,orinotherwords,the informationissavedinasingle database.Byhaving
the informationinone locationwithauthoritylevelsforaccessinplace,acustomer service
representative wouldhave beenable toanswerall the questionsposedbythe customerinsteadof
havingto transferthe customerfromdepartmenttodepartment.Allof the informationisshifted
fromfunctional areastothe front-line,orinotherwords,tothe personthe customerwill first
contact whencommunicatingwiththe company.Fromthe above illustration,the importance of the
correct employeeshavingthe correctinformation(inthiscase the customerservice representative),
iscrucial to deliveringexceptional customerservice,andinturnservingthe customerinthe most
valuable way.
The central repositoryof informationwill allow authorizeduserstoaccessthe same informationin
one locationusinganERP system.Thisfeature allowsforone versionof informationtobe used.With
the central data repositorycomesthe declineof data redundancy.The datais keptinone location
where all authorizedusershave access.Dataredundancyoccurswhenthe same data isplacedintwo
or more separate systems(Shelly,Cashman,&Rosenblatt,2005).For example,referringbacktoour

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illustration before,the customerneededtochange the shiptoaddress.If the companymaintained
separate functional areasystems,the customer’sship-toaddresswouldhave hadtobe updatedinall
the placesit wasstored.Potential forhumanerrorbecomesafactor at thispoint.The employee
couldmissa locationwhere the customer’sship-toaddressneededtobe changed,orthe employee
couldhave mistypedthe correctinformationinanyone of the change points.Havingone central
place for the informationtobe storedreducesthe likelihoodof humanerrorand notusingthe
correct informationforfuture transactions.RanganathanandBrown(2006) suggestthatthe use of a
centralizeddatarepositoryinanERPsystemwill result“inanintegrateddatabase formultiple
functionsandbusinessunits,providingmanagementwithdirectaccesstoreal-time informationat
the businessprocess,businessdivision,andenterprise levels”(p.146).
An ERP systemallowsusersandthe companytoformulate abetterunderstandingof the overall
businesspicture.Withaccesstomultiplefunctional areasinone system, andthe abilitytogenerate
any reportnecessary,the benefitsof anERPsystemare endless.Managementandexecutivescan
formulate betterbusinessdecisionsbecause of all the datareadilyavailable withinthe system.
Businessperformancecanimprove since the ERPsystemintegratesbusinessprocesses,thattraverse
multiple businessfunctions,divisions,andgeographicallocations(Ranganathanetal.,2006). Another
benefitof ERPsystemsistheirabilitytomanage potential growthwithinthe companyandfuture e-
commerce ande-supplychaininvestments.ITcostscan be significantlyreducedwhenimplementing
an ERP system(Fuβ, Gmeiner,Schiereck,&Strahringer,2007). For the bankingindustry,merging
bankscan shortenpost-mergerintegrationtimeby12 to 18 months,witha cost savingsof
potentially$60 to $80 million.Also,ERPsystemscanassistbankswiththe continuousindustry-
specificpressures,suchasgovernmental regulationsandglobalization,facedbythe bankingindustry.
ERP systemscanhelpa global bankrun smoothlyandadhere tocompliance.The construction
industryfacestheirownchallengeswhenimplementingERP(Chung,Skibniewski,Lucas&Kwak,
2008). Theirindustryprocessesare lessstandardizedwhencomparedtomanufacturing.For
example,eachconstructionprojecthasa unique owner,projectteam, andspecifications.Whenan
ERP systemisimplementedsuccessfullyinthe constructionindustry,Chunget al.,(2008) report
benefitsof improvedefficiency,andevidentwaste elimination.
Fuβ etal.,(2007) have researchedmultiple articlesanddevelopedalistof anticipatedbenefitsof ERP
systems.The listincludesthe followingbenefits(p.159) :
• Improved security and availability
• Increase in organizational flexibility
• Cost reduction
• Fast amortization of investment
• More efficient business processes
• Higher quality of business processes
• Improved integrability
• Reduced complexity and better harmonization of IT infrastructure
• Better information transparency and quality
• Better and faster compliance with legal requirements and frameworks
1.3.3) Value of ERP Systems
Gettingthe mostout of IT isnot a one-shoteffort,butratheracontinuousandevolvingprocess.
Includedisnotjustthe IT investment,butalsohow acompanyapproachesimprovement

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opportunitiesinsupportof itsbusinessstrategyandobjectives,businessprocesses,andvalue
assessments.
KPIis a tool that can be usedtomeasure the ERP systemsand processperformance.Once an
organizationhasdefineditsoperational andstrategicgoals,progresscanbe measured.The value of
KPIsisa quantifiable measurementthatreflectscritical successfactorsof anorganization.KPIsare
establishedpriortothe ERP implementationandwill differdependingonthe organization.For
example,aKPIcouldbe definedtomeasure a) percentageof payable invoicesthatdonot match a
purchase order,b) accuracy of purchase ordersthat are receivedwithoutdefect,complete,andon
time,orc) elapsedtime fororderapproval.
1.3.3.1) IT Value of ERP Systems
Whenexaminingthe valueof ERPsystems,investingintechnologyisonlyhalf of whatisneededto
realize itsbenefit.AccordingtoSAPExecutive Agenda,“investment inITwithoutanalogous
improvementsinthe managementpracticesaroundITwill leadonlytoa slightincrease in
productivity”.ItissuggestedthatcompaniesthatinvestinITwhile enhancingmanagementpractices
and governanceshave experiencedsustainable resultsinincreasedvalue andimprovedproductivity,
insome instancesasmuch as a 20% boost(Dorgan & Dowdy,2004).
Researchhasdemonstratedacircularcycle where one ITsuccessgivesrise toyetanotherIT success
more favorable thanthe first(sometimesreferredtoasthe “virtuouscycle”).The cycle typicallygets
startedwithan investmentincore ERP systemssoftware generatingthe landscape to facilitate a
homogeneousintegratedplatform.Once the core ERP software demonstratessoundoperational
performance,investmentstoextendandaddvalue toprocessessuchas customerrelationship
management(CRM),supplychainmanagement(SCM),andbusinessanalyticscomponentsare
examined.
1.3.3.2) BusinessValue of ERP Systems
Notonlyis IT value prevalentinERPsystems,butthere issoundbusinessvalue aswell.Forexample,
an ERP humancapital management(HCM) systemcanhelpaligna company’sbusinessstrategy.This
providesintegratedprocessesandreporting,the managingof workforce toplace the rightpeople in
the right jobs,developandrewardtopperformers,retainkeytalentforthe longterm, andincrease
efficiencyandoperatingperformance throughoutthe entire organization.AnHCMERP provides
substantial benefittoa companywhile deliveringablueprintfortransformingacompany’shuman
resource operations.Thesetypesof ERPsystemsmake itpossibletorapidlyexperience returnon
investmentthroughreducedoperationcostsandincreasedefficiency.The HCMERP systemconnects
employeesandmanagementtodeliverbusinessprocessesandautomate commonadministrative
tasks,while leveragingindustrybestpractices.
Anotherimportantbusinessfunctional areawhere ERPsystemsprovide significantalignmentfora
company’sfiscal accountabilityisfinancial operations.The financial ERPsystemassistsacompany
withthe control,accountingstandards,financial reporting,andcompliance toimprove performance
and confidence inthisareaof operations.Financial ERPsystemscantypicallyprovide module
applicationsthatletcustomerstailorsolutionstotheirspecificbusinessneedsinoperations.
Companiesuse the Financial ERPtoenable flexibilitywithfinancialandmanagerial reportingacross
theirorganizational structures.Thisprovides areal-time view of the businesstoquicklyread,
evaluate,andrespondtochangingbusinessconditionswithaccurate,reconciled,andtimelyfinancial
data.

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For a company’sfinancial supplychain,potential valuecanbe gainedforimprovedcashflow,
transparentandreal-time businessintelligence,andreducedinventorylevels,leadingtoshorter
cash-to-cashcycle times,andincreasedinventoryturnsacrossthe networkthatcan loweroverall
costs.Companiescanpotentiallymake significantgainstoreduce overall finance costs,enabling
greatercollaborationwithcustomersorsuppliers,andstreamliningoperationstoreduce costsand
resource demands(adaptedfromSAP,Inc.).
Companiescantake advantage of an ERP financial system’sabilitytoprovide dynamicbudgeting,
forecasting,andplanningtoreduce overall financial costs.FinancialERPsoffercompaniesthe ability
to streamline accounting,consolidation,processscheduling,workflow,andcollaboration.By
integratingbudget,cost,andperformance,companiescancapitalize onopportunitiestoreallocate
moneytoprograms withprovenimpact;realigningresourceswhere theyare mostuseful to
maximize valuetothe organization.
TreasuryservicesinanERP systemcan helpa companymake smarterdecisionsbyhavingthe
capabilitytoproactivelymonitorandadjustcurrencyandinterestrate exposure acrossthe entire
enterprise whilecomplyingwithinternal riskpolicies.Additionally,visibilitytoreal-time dataenables
a companyto make informedinvestingandborrowingdecisionsonatimelierbasis.Othertreasury
operationscanbe automatedto simplifydealingwith administrationfordebt,investments,foreign
exchange,equities,andderivativeswhile performingstraightthroughprocessingtoenforce security
and limitcontrols(adaptedfromSAP,Inc.).
Oftentimes,companiesoperate sharedserviceswiththeirsubsidiaryoperationsorcentralized
organizationfunctions.ERPsystemsprovidesharedservicescapabilitiesthatcan reduce a company‘s
costs byautomating,centralizing,andstandardizingglobal transactional processes.Inaddition,ERP
systemsprovide the abilitytocentralizeliquidityandactas an in-house banktosubsidiaries,
administerinter-companyloans,andoptimize excessfundsacross the enterprise.
Differentareasof the companyreceive businessvalue fromthe implementationof ERPsystems.For
inboundlogistics,ERPsystemsprovideimprovedcommunicationandintegrationwithsuppliers,
enhancedrawmaterial management,andvalue-addedmanagementof accountspayable
(Davenport,Harris,&Cantrell,2002). The systemcreatestransparencyacrossa company’sentire
purchasingprocess,includingbettertrackingof raw materials,improvedinventorymanagement,lot
size planningintegration, andmatchingprocessdocumentation(Matolcsy,Booth,&Wieder,2005).
Accountspayable have automationtoolstoprocessvendorpaymentsmore quicklybywayof ERP
systems.Marketing,sales,anddistributionfunctional areasbenefitandvalue fromERPsystemsby
the promotionandadvertisingactivitiesintegratediniteminventorylevelsandproduction
schedules.Theseareasbenefitbecausethere isabetterideaof whatcan be promisedtothe
customer.
1.3.3.3) BusinessProcess Integration
Companiesrealize the businessvalue of ERPsystemswiththe abilitytoobtainbusinessprocess
integration.Businessprocessintegrationallowsprocesseswithinacompanytobe incorporated
togetherinone centralizedsystem.The value of encompassingprocessintegration permits
companiestogainefficienciesinoverall andindividual processes.Additionally,potential process
improvementsmaybecome visible.
Companiesthatadaptorganizationprocessestoincrease informationflowacrossbusiness
organizationsachievegreatersuccesswithITinvestmentsthanif theyhadlaunchedthe ERP
software alone.Bychangingbusiness pointfromthe vendor,the financial accountingsegmentof the

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businessisintegratedintothe overallprocess,withaccountsreceivable andaccountspayable due.
Anotherprocesscouldhave beenincludedintothisscenariohadthe companybeenamanufacturing
company.Atthe availabilitycheckpoint,inplace of purchasingthe item, the itemmayhave been
produced.The procurementprocessmayhave played arole inthe productionprocessaswell,hada
raw material orcomponentpartnot beenavailable tocompletethe productionof the item.Inthis
illustratedexample,all threeprocessesof sales,procurement,andaccountingare integratedto
complete the overall processof the cash-to-cashcycle.Thisisaprime case of businessprocess
integration.
Processestoalignwiththe newERPsystem, a companycan dramaticallychange the value derived
fromthe technologyandscale operationsprofitability.The ERP systemusuallyconsistsof several
functional modulesthatare deployedandintegratedgenerallybybusinessprocess.The ERP
implementationcreatescross-module integration,datastandardization,andindustrybestpractices,
whichare all combinedintoa timelineinvolvingalarge numberof resources.
The businessprocess“as-is”state andinformationflowsbetweenvariousbusinessoperationsare
examinedforscope of the implementation.The “as-is”processmodel isdevelopedbyexaminingthe
layersof the “as-is”process,and focusesonthe mostimportantor majorareas of concern (Ridgman,
1996). Oftenprocessesevolve tosolve animmediate customerissue,operational problem,orsome
otherconcernthat addressesthe waya companyconductsits business (Okrent&Vokurka,2004). An
understandingof whyaprocessisperformedina particularwayhelpstoidentifythe non-value
addedworkfor simplificationof the processandimprovedtaskworkflow.
An example of an“as-is”processwouldbe how topay a vendorinvoice.A companytypicallyissuesa
purchase orderfor goodsor servicestoa vendor.A copy of the purchase orderissentto the
accounts payable departmentandthe vendor.Once the itemsorservicesare completed,the vendor
submitsaninvoice electronically(emailorEDI),or possiblybypostal mail,tothe companyfor
payment.The accountspayable departmentmatchesthe purchase orderagainstthe invoice,the
receivingdocument(if itemsreceived),andthe invoice.If theymatch,the accountspayable
departmentissuespayment.
The “to-be”designandmappingof legacybusinessprocessesare developedaccordingtothe
company’sbusinessmodel.The “to-be”designwill generallyinclude companyoperatingbusiness
rules,dataconversion,reporting,and organizational hierarchyrequirements.Zhang(2000) suggests
the firstthingthat mustbe done isto evaluate whatprocessesare critical tothe business.Several
iterationsanddiscussionstake place betweenstakeholders,users,andthe implementationteam, to
ensure thatall businessprocessesstrengthenthe processintegration.Generally,the process
examinesthe “to-be”model asthe ideal workflow withoutconstraint,alongwithconsiderationsfor
future growthand IT investments.The vendorpayment“to-be”process,forexample.The purchase
orderis enteredintothe ERPsystemcommondatabase.A copyof the purchase orderis
electronicallysent Due tothe characteristicnature of ERP systemcross-module integrationfeatures,
the more modulesselectedfor implementation,the greaterthe integrationbenefits.However,with
the increasedbenefitscomesincreasedcomplexityandcare to ensure minimumrisktomap
correctlya company’sbusinessprocesstothe ERPsystemprocesses.Implementingthe processes
incorrectlycanleadto poor integrationbetweenmodulesinthe system,leadingtosignificant
operational deficiency.Additionally,there existsconsiderable riskinchangingmultipleprocessesata
time (Subramoniam, Tounsi,&Krishnankutty, 2009).The risk is certaintoincrease if a fallbackplanis
non-existent.Anindustrybestpractice of streamliningandsimplifyingbusinessprocessesaheadof
time maymitigate the risk.Priorresearchhasconcludedthatthe highera company’sprocess

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complexity,the higherthe radicalnessof itsERPimplementationtoenable fundamental andradical
change in the company’soperational performance(Karimi,Somers,&Bhattacherjee,2007).
1.3.4) ERP SystemUse in Organizations
ERP systemsare widelyusedinmanyFortune 500 companies.Here are several examplesof ERP
systemsinreal-worldscenariosdemonstratingbusinessvalue.These companiesspanabreadthof
industryandERP businessneeds.
AegisLogistics,one of USleadingoil andgas logisticsservice providershascompletedProject
Bluewater,wheretheyrolledoutamajor ERP implementation(AegisLogisticsgoes live withSAPERP,
2010). The projectisconsideredtobe the single mostimportantITinitiative inthe company’s
history.Aegisexperiencedseveral inefficiencieswithbackendoperationsthatusedolddisparate
systemswithoutanyintegration,lackedautomationacrosskeybusinessprocesses,anddidnothave
a consolidatedviewof all operations.Overthe years,theirlegacysystemsledtoissuessuchas
inconsistentworkflows,unavailabilityof timelyandaccurate data, duplicationof work,andother
operational challenges.Justalittle overtwoyearsafterthe implementation,Aegisrealizedthe value
and benefitof itsERPsolution.The ERPsystembrought disciplinetotheirbusinessprocesses,
eliminatedduplicationof work,andcapturedall crucial operational datatofacilitate aseamless
informationexchange.
Software ParadigmsInternational (SPI) isalarge Atlanta,Georgiabasedcompanywhose business
leveragesonandoffshore businessmodelstodeliverqualityITandBusinessProcessOutsourcing
(BPO) solutions(Fasterconsolidationof financialsandaccounts,2010). The companyoffersBPO
servicesinmedical andbilling,legal coding,accountingfinanceBPO,dataentryand validation,and
image processing.Theirmainneedforasystemwasto helpconsolidate financialsandimprove
customerservice acrosslinesof business.SPIwasoperatingwithtwodistinctaccountingsystems,
one for US operations, andthe otherforIndiaoperations.Theirprojectjobcostingprocessmost
oftenledtoa lot of inconsistentdatabeinggeneratedfortrackingof employee actual time on
projects,whichledtoinaccuracyin estimatingthe price of projectworkandsubsequentProfit&Loss
statements.A huge issue forSPIwasto properlyhandle multiple currenciessincetheiroperations
were global.SPIchose anERP solutionthatwasnot an exactmatch to all of theirrequirements;
however,the solutionhadthe capabilitytogetthe desiredresults.LeveragingBItoolsandexpert
consultingservicesalongwiththe neededmodules,SPIwentlivewithanERPimplementation.SPI
successfullycompletedtwoyearsof ERPoperational use withoutanydisruptionsince implementing
in2008. NowSPI can transact and processpaymentsorreceiptsinanycurrency.The companyhas a
betterviewof itsfinancialsandexpensedatathaninthe past.The ERP systemhasprovidedSPIwith
the abilitytobettermanage theircustomersandincrease profits.
1.3.5) Future Impacts to Industry and Organizations
ERP systemscontinue tobe impactful towardsindustryandorganizations.Somanyinnovationshave
beendevelopedandimplementedjustinthe lastfive totenyears.More focushas beenmade
towardssupplychainmanagementandcustomerrelationshipmanagement.ManyERPvendorshave
incorporatedthese modulesintotheirsystemstohelpbetterserve customers.Vendorsrealize the
needforthe companiestheyserve tocontinue tobe scalable,flexible, andhave the abilityto
compete intheirrespectiveindustries.
One future impacton the horizonisthe amalgamationof cloudcomputing.Cloudcomputingisgoing
to allowcompaniestofree upresources,because the companywill have athirdpartyhostingthe
systemandsoftware neededtodobusinessoverthe Internet. ERPsystemscouldbe includedinthis

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opportunity.More companieswill be servedwiththisnew capability.The companywill notbe
requiredtomanage the hardware andsoftware used.Companieswillbe allowedtopayas theyuse
the service,insteadof makingacapital investment(Ford,2010).Cloudcomputingwill alsomake an
impacton rapidlychangingflexible areasof the company.Collaborationandcommunication
includinge-mail andfile sharingwillbe positivelyaffected.Transactionsandworkflowsoutside of the
company,sourcing,procurement,trade finance,andsupplychains,are suitedforcloudcomputing.
“Thistype of flexibletechnologyopensthe doortoa new wayof conductingagile businesswithout
beinglimitedbytechnologyinfrastructure.”(Ford,2010, p.58)
Businessintelligence (BI) isanotherhottopicmakingan impacton future industryandorganizations.
BI isthe abilitytoanalyze datafordecisionmakingpurposesusingcomputer-basedtechniques.ERP
systemshave abuiltinBI component tohelpthe data miningprocess.BIisalsoofferedasa SaaS or
softwareas-a-service.Itisexpectedthatthe SaasBI marketwill have triple growthandcompounding
annual growthat a rate of 22.4 percentthrough2013 (Kanaracus,2010). SaaS BI can assist
frontoffice workersmore efficiently.Withthe BIcomponentof anERP system, the Publicsectorhas
foundthe importance of thisfeature incritical areassuchas publicsafety,bordermanagement,and
tax collection(EffectiveinformationmanagementiskeytoBI success,2010). The impactof BI on the
company’sbottomline issosignificantthatemployersare requestingmore andmore graduates
have BI experience.
2) WHAT IS SAP?
SAP (Systems,Applications&ProductsinData Processing) isa
Germanmultinational software corporationthatmakes enterprise software tomanage business
operationsandcustomerrelations.SAPisheadquarteredin Walldorf, Baden-
Württemberg,Germany,withregional officesin130 countries. The companyhasover293,500
customersin190 countries. The companyisa componentof the Euro Stoxx 50 stock marketindex.
2.1) HISTORY OF SAP
 1972
Foundation:Five formerIBMemployeesstartacompanytheycall SAPSystemanalyse und
Programmentwicklung("SystemAnalysisandProgramDevelopment").
Vision:Standardapplicationsoftware forreal-timedataprocessingisdeveloped.
Associations:Takingthe initial formof a private partnershipunderthe GermanCivil Code,the
companyestablishesitsheadquartersinWeinheim,Germany,andopensanoffice innearby
Mannheim.However,SAP'sfive foundersspendmostof theirtime inthe datacentersof their
firstcustomers,whichinclude the Germanbranchof Imperial Chemical Industriesin
Östringen.
Night owls:Developmentof the fledglingcompany'sfirstprogramstakesplace mainlyatnight
and on weekends.
Initial success: Atthe endof itsfirstyear inbusiness,SAPemploysninepeople andgenerates
DM 620,000 in revenue.
 1973
Modularity:SAP completesitsfirstfinancial accountingsystem –RF.This systemservesasthe
cornerstone inthe ongoingdevelopmentof othersoftware modulesof the systemthatwill
eventuallybearthe name SAPR/1.

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Newcustomers: More clientsinsouthwestGermanyare runningSAPsoftware,includingthe
tobacco companyRothändle inLahrand the pharmaceutical firmKnoll inLudwigshafen.
Meanwhile,SAPitselfisusingIBMserversandthe DOS operatingsystem.
 1974
Flexible:SAPdemonstratesitsflexibilityforthe firsttime,convertingitsRFsystemfromthe
DOS operatingsystemtoOSoveran eight-weekperiod.
Customerbase: Still justtwoanda half yearsinexistence, SAPhasa listof 40 reference
customers.
 1975
Integration:Companiescannowhandle theirpurchasing,inventorymanagement,andinvoice
verificationwithSAP'sRMsystem.
Trademark: AnSAPtrademarkbeginstoemerge – the integrationof all of the company's
applications.Materialsmanagementdataflowsdirectlyintofinancial accountingonavalue
basis,while invoice verificationandpostingcanbe completedinone step.
 1976
Legal transition:The limited-liabilitycompanySAPGmbHSysteme,Anwendungen und
Produkte inderDatenverarbeitung("Systems,Applications,andProductsinData Processing")
isfoundedasa salesandsupportsubsidiary.Fiveyearslater,the private partnershipis
dissolvedanditsrightsare passedonto SAPGmbH.
Continuedbusinesssuccess:SAPandits 25 employeesgenerate DM3.81 millioninrevenue.
 1977
Relocation:SAPmovesitsheadquartersfromWeinheimtonearbyWalldorf.
First stepsabroad: The companybeginsinstallingitssystemforcustomersoutside of
Germanyfor the firsttime.TwocompaniesinAustriadecide toimplementSAPsoftware.
Sales:SAP'sreorganizationstrengthensitsactive sales.
 1978
Branching out: SAP completesthe module AssetAccountingandacorresponding
implementationprojectata pilotcompany.
SAP parle français: The farm equipmentmanufacturerJohnDeere demonstratesSAP's
international viabilitybydevelopingaFrench-language versionof the company'saccounting
software inan in-house project.
 1979
Centralization:SAPbeginsoperationsonits ownserver,Siemens7738, for the firsttime.Up
until thispoint,itsemployees'developmentactivitieshave beendistributedacrossthe data
centersof regional customerssuchasICI,Thermal,Knoll,Grünzweig+Hartmann,and
Freudenberg.
A home of its own: SAP'sfirstdata centeris still locatedinleasedspace,butthe companyhas
alreadybrokengroundonthe initial constructionof itsownfacility.
Technological shift:An in-depthexaminationof IBM'sdatabase and dialogcontrol system
causesSAPto rethinkitssoftware,pavingthe wayforSAPR/2.

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 1980
Consolidation:SAPmovesintoitsfirstfacilityonMax-Planck-Strasse inthe Walldorf industrial
park. Itsdevelopmentarea –now 50 computerscreensstrong – isfinallyunifiedunderone
roof.
Upgrade:SAP augmentsitsdata-processinginfrastructure bypairingitsexistingSiemens7738
withan IBM/370-148, whichthe companythenreplacesinthe same yearwitha more
powerful IBM4341. Thismodel boasts4MB of memory.
Further expansion:SAPexpandsitsproductportfoliowithRV,acustomdevelopmentforsales
and distribution.
 1981
Debut: SAPmakesitsfirsteventappearance atthe IT trade show SystemsinMunich,
Germany.
Stabile:SAPR/2 achieveshighlevelof stability.
Performance drivingsales: The growingpowerof mainframe serversisenablingSAPto
expanditscustomerbase toapproximately200companies.
Joint development:Withthe helpof itscustomers,SAPexpandsitsrange of productswitha
productionmanagementmodule.
 1982
SAP turns 10: The companycelebrates10yearsin business.More than250 companiesin
Germany,Austria,andSwitzerlandnow workwithSAPsoftware.Havingalreadyoutgrownits
ownfacilities,SAPconstructsanexpansioninrecordtime.
Growth by the numbers: SAPgeneratesDM24 millioninrevenueandreachesthe 100-
employeemilestone.Approximately96% of itscustomersuse SAPsoftware tomanage
businessprocesses.
Taking leave:One of SAP'scofounders,ClausWellenreuther,departsthe company.
 1983
Expansionin all areas: A thirdconstructionprojectisnecessarytocreate space for the
company'sworkforce,whichcontinuestogrow at a rapidpace.
Key figures:Bymidyear,SAPemploy125 people,andgeneratesDM41 millionbythe endof
the fiscal year.
Trendsetter:Heraeusof Hanau, Germany,becomesthe firstcustomertoinstall SAP'sRM-PPS
module forproductionplanningandcontrol.
 1984
Human resources:SAPhires48 newemployees,inparticulartomeetitssignificantpersonnel
needsindevelopingthe newmodules RK,PPS,andRP.
Alpine outpost:SAP(International)AGisfoundedinBiel,Switzerland,asthe startingpointfor
SAP'seffortsinmarketsabroad.
Numbercrunching: SAPand its163 employeesgenerate revenuesof aroundDM48 million.
 1985
Tools for the job:SAP'sdata centernow boaststhree IBMserversandone Siemensserver.
Employeescanaccessa total of 64MB of mainmemoryindevelopingandenhancingthe
company'ssoftware.
International business:Aroundmidyear,fiveSAPemployeesfromWalldorf move intothe

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newoffice inSwitzerlandandbeginsupportingthe company'sinternational efforts.Atthe end
of 1985, more than 250 people workatSAP,generatingDM61 millionforthe year.
Increasingquality: A newqualityassurance committee isestablishedtohelpincrease the
stabilityof SAPsoftware.
 1986
More businessabroad: SAPopensitsfirstinternationalsubsidiaryinAustria.Italso
strengthensitspresenceinwesternGermany'sRhine-Ruhrregion,openingitsfirstbranch
office inRatingen(nearDüsseldorf).
Organization: SAPsignificantlyincreasesitscapital stocktoDM5 million,anincrease of DM
4.5 million.The company'sworkforce hasalsogrowntoa pointwhere its300 employeesnow
require smallerorganizational unitsledbydepartmentmanagers.
Revenue:Thanksto newlegislationrequiringgoverningbalance sheets,100 new ordersfor
SAP'sAssetAccountingmodulesare received.SAP'srevenuesreachthe DM100 million –
enablingSAPtoreachthismilestone soonerthanexpected.
Development:Afterthree yearsindevelopment,SAP'ssoftwareforhumanresources
managementismade availabletocustomers.
Presentation:The companyshowcasesitself atthe world'slargestcomputertrade show CeBIT
inHanover,Germany,forthe firsttime.
 1987
Underconstruction: SAPbreaksgroundon itsnew trainingcenterinthe Walldorf industrial
area.Constructionalsocontinuesatthe company'smainfacilityonMax-Planck-Strasse –now
inthe fifthphase of expansion.
More businessabroad: Followingthe foundationof itsfirstnon-German-speakingsubsidiary
inthe Netherlands,SAPmakesthe leaptoopenofficesinFrance,Spain,andGreatBritainin
the same year.Meanwhile,customersinnorthernGermanyreceivesupportfromthe
company'snewoffice inHamburg,andthose inthe southfromitsMunich branch.At the end
of the year,SAPhas grownto employmore than500 employeesandgeneratedDM152
millioninrevenue.
Userconference:SAPholdsitsfirstsoftware conference inKarlsruhe,Germany,toestablisha
platformthatenablescurrentandpotential userstoshare experiences.
Branching out: IBM's newgenerationof serversmakesSAP'ssoftware available tomidsize
customers,generatingbetweenDM30 millionandDM200 million.SAPestablishesSAP
Consultingtosupportnewcustomers.
The nextgeneration:Early attemptsatestablishingnormsinsoftware productionare akey
reasonwhySAPbeginsdevelopingitsnextsoftwaregeneration:SAPR/3.
 1988
Transformation, going public:SAPtransformsfroma private,limited-liabilitycompanyinto
the publiclytradedSAPAG.Intwo increments,the companyincreasesitscapital stockfrom
DM 5 milliontoDM60 million.SAPthenissuesitsinitial publicofferinginOctober1988 at a
share price of DM 750. The 1.2 millionsharesissuedinthe namesof theirrespective owners
are listedatthe Germanstock exchangesinFrankfurtandStuttgart.
Ongoingexpansion:SAPcontinuestobolsteritsglobal businessbyopeninginternational
subsidiariesinDenmark,Sweden,Italy,andthe UnitedStates.BackinWalldorf,the company
alsoopensitsInternational TrainingCenter,whichincludesanadjacentfitnessareaforthe
SAPworkforce – now940-strong and generatingannual revenuesof DM245 million.
Customermilestone:DowChemicalsbecomesSAP's1,000th customer.Meanwhile,SAP
beginsdevelopingRIVA –a billingandadministrationsystemforutilitycompanies –to meet
the requirementsof selectindustries.

19
 1989
Easier to use:SAP introducesitsnew,more user-friendly interface forSAPR/2.The company
alsokicksoff variousdevelopmentprojects –inproductionandotherareas – withnew tools,
such as the ABAP/4programmingenvironment.
Growth demandsinvestment:SAPR/3 isalsobeginningtotake shape.A total of four UNIX
systemsfromdifferentmanufacturersare incorporatedintothe company'sdevelopment
efforts.Atthispoint,SAPisinvestingaroundDM85 million –approximately33% of its
revenue –inresearchand developmentalone.
A bigger datacenter:SAP'sdata centernow containsserversfromIBM,Siemens,DEC,and
Hewlett-Packard–providingatotal memorycapacityof 1,224MB.
International business:SAP(International) AGinSwitzerlandcontrols12international
subsidiariesinCanada,Singapore,Australia,andothercountries.Withofficesin15 countries,
SAP's1,400 employeesgenerate DM370 millioninrevenue.
Financial markets: In itsveryfirstfull yearon the stockexchange,SAPisnamed"Companyof
the Year" by Manager magazine.
 1990
Research and development:Byissuingpreference shares,SAPAGincreasesitscapital stockto
DM 85 million.Theseadditional fundsenable the companytofinance itsrisinginvestments.
SAPinvestsDM110 millioninresearchanddevelopmenttofurtherdevelopSAPR/2and the
newSAPR/3 system.Initial prototypesof the financialaccountingandmaterialsmanagement
modulesare alreadycomplete.
Holdingsand acquisitions:SAPincreasesitsfocusonmidsize companiesbyacquiringa50%
holdinginthe Germansoftware company Steebandtakingoverthe software firmCAS
outright.
Reunificationand expansion:The reunificationof WestandEast Germanybringsthe nations'
economiesandcurrenciestogether –givingSAPthe chance to expandtothe latterregionas it
foundsthe jointventure SRSinDresdenalongwithSiemensNixdorf andRobotron.The
companyalsoopensa branch office of itsowninBerlin.
Newand ongoingconstruction: Havingexhaustedthe real estate onMax-Planck-Strasse in
Walldorf,SAPbeginsbuildingasales anddevelopmentcenternexttoitstrainingcenter.The
companyinvestsDM135 millionintothisnew constructionproject.Meanwhile,its1,700
employeeshelpsurpassDM500 millioninrevenue.
 1991
Sneak preview:SAPpresentsthe firstapplicationsinitsSAPR/3systemat CeBITinHanover,
where the response ishighlypositive.Withitsclient-serverconcept,uniformgraphical
interface,dedicateduse of relational databases,andsupportforserversfromvarious
manufacturers,SAPissetto tap intonew marketpotential:midsize companies,aswell asthe
branch officesandsubsidiariesof largercorporate groups.
Looking east: SAPrespondstothe fall of the "Iron Curtain"withnumerousactivitiesineastern
Europe.It concludesacooperative agreementwiththe largestRussiansoftwarecompanyZPS
and beginsdevelopingaRussianversionof SAPR/2.
Trendingupward: SAP'srevenue andemployeenumberscontinue theirrapidascent,reaching
DM 707.1 millionandnearly2,700 members,respectively.The companynow has14
international subsidiariesandmore than2,200 customersin31 differentcountriesusingits
software.
 1992

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The nextgenerationarrives: Followingsuccessful installationswithselectpilotcustomers,SAP
bringsSAPR/3 to the general publicand entersanew level of growth.
Ten twice over: Notabout to letits20th birthdaypasswithoutapropercelebration,SAP
marks the occasionby openingitsnew salesanddevelopmentcenter.ErwinTeufel,Minister
Presidentof the state of Baden-Württemberg, isamongthe guests.The companynow
managesits15 international subsidiariesfromWalldorf tomake betteruse of itsexisting
infrastructure.
Increasinglyinternational:Of its DM 831 millionintotal revenue,SAPisnow generating
nearly50% of itoutside of Germany.Meanwhile,itsglobal workforce growsto3,157
employeesbythe endof the year.
Preparations: To readyitself forpotentialacquisitionsandholdings,SAPaddsanotherDM15
milliontoitscapital stock,bringingittoa total of DM 100 million.
Joint success:ExpectinghighdemandforSAPR/3,SAPaugmentsitspartnerstrategy.
Independentconsultingfirms,whichSAPreferstoas "logopartners,"supportcustomersin
implementingthe newsystem.
 1993
Partnerships:SAPbeginsworkingwith Microsoft,the world'slargestsoftware maker,toport
SAPR/3 tothe WindowsNToperatingsystem.SAPalsobeginsparticipatinginthe IXOS
project,a jointundertakinginvolvingthe developmentandmarketingof anelectronic
archivingsystemfororiginal documents.
International expansion:The constructionof a developmentcenterinFosterCity,California,
givesSAPa presence nearSiliconValley.Meanwhile,the companyestablishesits18th
international subsidiaryinthe CzechRepublic.
Technology:SAP deliversaversionof SAPR/3withsupportfor kanji charactersto the
Japanese market.SAPR/3is alsobeingportedtoSUN hardware,enablingittorun on all
relevantRISCplatforms.
By the numbers:SAP reachesthe 10-figure markfor the firsttime,generatingDM1.1 billionin
revenue withaworkforce of more than3,600.
 1994
SAP R/3 and Microsoft:The SAP R/3 systemisreleasedforWindowsNT.One monthlater,a
Swisscompanybecomesthe firstcustomertogolive withthisnew version.
Reinforcingretail:SAPbolstersitseffortsindevelopingaretail solutionforSAPR/3 by
acquiringa 52% holdinginDACOSSoftware GmbH.
In faraway lands: SAPkicksoff itsmarketingactivitiesinthe Chinesemarketwith
presentationsinBeijing,Shanghai,andTianjin.Italsoopensits19th internationalsubsidiaryin
MexicoCity.
Partners and customers: The IBM corporation,a longstandingSAPpartner,isnow usingSAP
R/3 to manage its global businessprocesses.The correspondingcontractisthe largestinSAP's
23-year history.
Key figures:SAP'srevenueshave growntoDM1.8 billion,of whichthe UnitedStatesaccounts
for 34.3%. At year'send,the companyis employing5,229 people.
 1995
A midmarket push: SAPbeginstofocusmore marketingeffortsonmidsizecompanieswith
the helpof systemresellers.
Customertrust: The U.S. companyBurger King,Inc.,becomesthe 1,000th customerto
implementSAP'ssoftware forhumanresourcesmanagement.Meanwhile,Microsoftjoinsthe
ranks of high-techcompaniesoptingforSAPR/3.Deutsche TelekomAGsetsanew record as

21
the largestof SAP's contractsto date with30,000 SAPR/3 workstationsandcollaborateswith
SAPon a solutionforthe telecommunicationsindustry.
Success inthe capital market: SAP'sshare price soarsfollowingitsadditiontoGermany'sDAX
stock index andthe transitiontoa minimumparvalue of DM5. Shortly
thereafter, ManagermagazineonceagainnamesSAP"Companyof the Year."Now nearly
7,000 strong,SAP'sworkforce generatesDM2.7 billioninrevenue.
 1996
SAP goesonline:SAPintroducesitsjointInternetstrategywithMicrosoft.Throughopen
interfaces,customerscannowconnectonline applicationstotheirSAPR/3systems.Theycan
alsotake advantage of IBM's newAS/400 platform.
Accolades:SAPis named"Companyof the Year" bythe EuropeanBusinessJournalists
Associationandforthe thirdtime by Managermagazine.
More renownedcustomers:Coca-Cola,the world'slargestmanufacturerof softdrinks,
decidestoimplementSAPR/3.
Ubiquitous:SAPraisesthe bar withitsnumerouscustomerevents,welcoming4,300 guests
interestedinthe company'sproductsandstrategytothe EuropeanSAPPHIREeventinVienna.
Meanwhile,over8,000 attendeesflocktothe correspondingeventinthe U.S.,andmore than
5,000 are on hand forthe firstSAPPHIREeventinJapan.
Key figures:SAP'srevenuesclimbtoDM3.7 billion,anditsemployeesnumber9,202 by year's
end.
 1997
A quarter-century:SAP celebratesits25yearsin existenceinMannheim.GermanChancellor
Dr. HelmutKohl isamongthe guestsat the festivities.
An outstanding year: SAPseesitsfinancial resultsbeforetaxesreachthe billionsforthe first
time (DM1.6 billion).The company'srevenuesgrew by62% to DM 6.02 billion,81% of which
comesfromoutside of Germany.SAP'sworkforce alsoexpandedtonearly13,000 employees –
a 40% increase.
SAP R/3 still resonating: High-profile customers,suchasDeutsche PostAG,Daimler-Benz,and
General Motors,implementSAPR/3.More than twomillionusersworkwith SAPsolutions.
Righton schedule,SAPcompletesrelease 4.0of SAPR/3 and deliversittopilotusersat the
endof the year.
Further internationalization:SAPresolvestoenterthe New YorkStockExchange (NYSE) inQ3
1998. Indoingso, itmainlyaimsto raise itsprofile andpresence inthe world'sbiggestand
mostimportantmarketfor informationtechnologyandstrengthenitsrelationshipswith
shareholders.
 1998
Changingof the guard: DietmarHopp and KlausTschira,twoof SAP'scofounders,announcein
Februarytheirdecisiontoresignfromthe company'sExecutiveBoard.Bothmake the
transitiontothe SAPSupervisoryBoardinMay, where Hopptakesoveras chairman.
Meanwhile,the SupervisoryBoardnamesHenningKagermannco-CEOof the company
alongside cofounderHassoPlattner.
SAP takes NewYork: On August3, 1998, the letters"SAP"appearforthe firsttime onthe big
board at the NewYork StockExchange,the world'slargesttradingfloor.SAPco-CEOHasso
Plattnercallsthe company'sdebutonWall Streeta necessaryandmomentousmilestone in
SAP'shistory.
EnjoySAP:More than15,000 customers,partners,andotherinterestedindividualsdescend
uponLos Angeles,California,forSAP's10th SAPPHIREevent –breakingthe previous

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attendance record.The eventfocusesonanew strategy,EnjoySAP,whichplacesitsfocus
squarelyonSAPusers.SAPplanstomake its software easiertolearn,fastertoworkwith,and
simplertocustomize tocustomers'needs.
Helpwanted: SAPplotsa course for furthersuccess, whichwill continue torequire motivated,
qualifiedemployees.Ithires6,500 new employeesin1998 – a 50% increase thatexpandsthe
company'sworkforce toover19,000 by year's end.SAP'sfiscal yearrevenuescome to€4.3
billion.
 1999
The mySAP.com revolution:InMay, SAPco-CEO HassoPlattnerannouncesanew strategy
that completelyrealignsthe companyanditsproductportfolio:mySAP.com.This
reorientationwill combine e-commerce solutionswithSAP'sexistingERPapplicationsonthe
basisof cutting-edge Webtechnology.
ExcellingwithEnjoy: The EnjoySAPinitiative servesasthe foundationformySAP.com's
success.Studiescarriedoutinthe summerof 1999 by MannheimUniversityclearlyshow how
much time customerscansave intrainingand everyday use withmySAP.com.
A new self-perception:Alongwithitsproducts,SAP'sself-image ischangingdue to
mySAP.com.The companyreorganizesitsExecutiveBoardareasandfoundsthe German
Internetsubsidiarye-SAP.de,reflectinganevenstrongerfocusonthe customerinthe Internet
age.
Major successes:SAPdoesnothave to wait longto welcome itsfirstmySAP.comcustomers.
The soccer clubFC BayernMunich, the financial servicesproviderMLP,andotherssignup in
October,while NovemberandDecemberwitnessthe arrival of Hewlett-Packard,the Ford
subsidiaryVisteon,andthe pharmaceutical groupHoechstMarionRoussel.
Key figures:More than 20,000 employeesgenerate€5.1 billioninrevenueforSAP.The
companyinvestsnearly15%of this sumintoresearchand development.
 2000
The neweconomy: SAPisnowthe world'sleadingproviderof e-businesssoftware solutions
that integrate processeswithinandamongcompanies.The companyisalsothe third-largest
independentsoftware vendoronthe planet.Itsworkforce now numbersmore than24,000
employeesinover50 countries,generatingrevenuesof €6.3 billioninthe 2000 fiscal year(a
23% increase comparedto1999).
Cooperatingwithout boundaries:Comprehensivee-businesssolutions,innovative
technologies, andextensive servicescome togetherinthe forward-thinkingmySAP.com
platform.Asa result,employees,customers,suppliers,andotherbusinesspartnerscanwork
togetheracrosscompanyborders – anytime,anywhere.
Online marketplacesand portals: SAPentersthe worldof electronicmarketplacesand
corporate portalsby outsourcingitscorrespondingareatoits SAPPortalssubsidiaryand
startinga partnershipwithCommerce One.
Solution-oriented:Incontinuingtoexpanditsproductandservice portfolio, SAP
demonstratesitscommitmenttoevolvingfromacomponentvendorintoasolutionprovider.
Otherworld-leadingcompaniesrecognizethe value inthisapproach – Nestlé,forone,signs
the largestSAPcontract to date.
 2001

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A new market: SAPadds a numberof corporate portalsto itssolutionportfoliobytakingover
TopTier,the leadingcompanyinthe correspondingIsraelimarket.TopTier'sfounder,Shai
Agassi,takesoverthe managementof thisbusinessareaandisappointedtothe SAPExecutive
Board one yearlater.
From revolutionto evolution:SAPexpandsmySAP.com, makingita comprehensive
technologyforbusinessapplications.Asaresult,SAPhasthe architecture itneedstohelp
companiesintegrate awide varietyof ITsystems.
Ongoinggrowth: The "NewEconomy"bubble hasburst,andthe IT marketissufferingfrom
the resultingdecline ininvestment.However,customerfaithinSAP'ssolutionsremains
undaunted,andSAPincreasesitsrevenuesonce againby17%.
 2002
More birthday cake: Thirtyyearsafterits foundation,SAPisthe third-largestindependent
software providerinthe worldanda paragonof the Germaneconomy.The SAPbrand stands
for high-qualitybusinesssoftware.
A rising star: SAP'sportfolioisnotthe onlythingwitnessingconstantgrowth.The company's
workforce alsoincreasestoaround29,000 bythe endof 2002. Approximately1,300
employeesmove intothe newstar-shapedbuildingthathasopeneddirectlyadjacenttoSAP's
headquartersinWalldorf.
Newblood at the top: The Executive BoardbolstersitsrankswithShai Agassi,whoassumes
responsibilityfornewtechnologies,andLéoApotheker,whotakesoverglobal sales.
 2003
End of an era: HassoPlattnerresignsfromthe Executive Boardandiselectedchairmanof the
SupervisoryBoard.Plattneristhe final SAPco-foundertoleave the company'smanagement
team,but remainswithSAPinanadvisoryrole.Upontakinghisleave,the nautical enthusiast
receivesaspecial gift –a sail signedbyall of SAP'semployees,whichtheyhope will carryhim
to furthersuccess.
Technologyof the future:What beganinthe "new economy"asmysap.comandevolvedto
mySAPtechnologyreachesanewpinnacle inSAPNetWeaver.ThistechnologyenablesSAPto
offerfast,open,andflexiblebusiness applicationsthatsupportend-to-endbusinessprocesses
– nomatter whethertheyare basedonsystemsfromSAPor otherproviders.
Global developments:SAPLabsChinamarksthe ninthopeningof a developmentlocation
outside of Walldorf.Thisandthe otherresearchcentersinIndia,Japan,Israel,France,
Bulgaria,Canada,and the UnitedStateshelpSAPconvertITexpertise intobusinessutilityfor
itscustomers.The companynowemploysaround30,000 employees,approximately17,000 of
whomworkoutside of Germany.
 2004
Major success: SAPbringsthe firstversionof SAPNetWeavertomarket.The response tothis
newintegrationandapplicationplatformisoverwhelming.Bythe endof the year,well over
1,000 customersacquire the product,withevenmore on the way.Meanwhile,more than
24,000 total customersare running84,000 SAP software installationsinover120 countries.
Joiningforces:SAPannouncesitsintentiontoacquire the remainingsharesof itsconsulting
subsidiarySAPSIandto merge the companyintoitscorporate group.Thismove strengthens
SAP'sglobal portfolioof strategicITconsultingandintegrationservicesandmakes SAPthe go-
to providerof manycustomers – especiallythose inGermany,Switzerland,andthe United

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States.
A clear vision:SAPplansitsfuture aroundthe conceptof enterprise service-oriented
architecture (enterprise SOA).AccordingtoCEOHenningKagermann,SAPwill make all of its
businessapplicationsservice-basedinthe mediumtermtoprovide itscustomerswiththe
mostflexibilitypossible.Indoingso,SAPsetsthe standardforthe rest of the market.
Strong statistics: Under Kagermann'sleadership,quarterlyrevenue gainsandaconstantly
increasingmarketshare keepSAPatthe headof the pack inthe rejuvenatedIT
market. Business Week namesKagermannone of the 25 bestbusinessmanagersinEurope,
praisinghiscustomer-orientedcorporate philosophy.
 2005
Excellence recognized:A studyconductedonbehalf of the businessmagazine Capitalnames
SAPGermany"Bestemployerof 2005" amongother companieswith5,000 employeesor
more."I acceptthis awardwithpride andgratitude onbehalf of the more than 32,000 people
whowork at SAP.For usas a company,itwill mainlyserve asmotivationforthe future.After
all,SAP'ssuccesswill continue todependonthe skills,drive,anddedicationof ourcurrentand
future employees,"declaresSAPExecutive BoardmemberClausHeinrichuponreceivingthe
award fromWolfgangClement,Germany'sFederal Ministerof EconomicsandTechnology.
Somethingcooking inthe east: In February,SAPofficiallyopensitsnew researchand
developmentfacilityinthe Hungarian capital of Budapest.SAPLabsHungaryand itssome 50
developersjoinSAP'sglobalnetworkof researchlocations,whichincorporatesthe brightest
mindsinIT all overthe world.
Organic growth: The year2005 is markedbya seriesof acquisitions.While itscompetitors
initiate theirownmajortakeovers,SAPfocusesonorganicgrowthbyacquiringsmaller
companieswhose specificsolutionsaugmentitsportfolioinsensible ways.These companies
include the tworetail providersTriversityandKhimetrics.
Impressive numbers:The company'ssoftware license revenuesincrease by18%,andit
recordsparticularlyhighratesof growthin the Americas.The more than35,800 SAP
employeesaroundthe worldgeneratetotal revenuesof €8.5 billion.
 2006
International recognition:SAPonce again garnersnumerousemployeraccolades.Alongwith
SAPGermany,SAPAustria,SAPChile,SAPAndinaydel Caribe,SAPMexico,andSAPRegion
Sur winthe "Great Place to Work"award fromthe institute of the same name.Inaddition,SAP
Labs Indiareceivesthe distinction"RecruitingandStaffingBestinClass"fromthe Indian
Institute of ManagementStudies&Researchforitsinnovative methodsinworkforce planning
and management.
Harmonious partnership:SAPand Microsoftintroduce Duet,the firstproductof the two
companies'jointeffortsindevelopment,support,sales,andmarketing.Thissoftware enables
usersto quicklyandeasilyintegrateMicrosoftOffice andSAP-supportedbusinessprocesses.
The partnerssell 200,000 licenses injustthe firstthree months.
Onward to furthersuccess: Atthe firstSAPPHIREeventof the yearinOrlando,Florida,SAP
announcesthe general release of itsflagshipapplication,SAPERP."SAPERPconstitutesthe
foundationof SAP'sindustrysolutions andaspringboardtoenterprise SOA,"saysSAP
Executive BoardmemberLéoApotheker.
Goodnews from the midmarket: SAPnoticeablyexpandsitsshare of the midmarketwiththe
solutionsSAPAll-in-One andSAPBusinessOne.InJune,the companyannouncesthat the
lattersolutionhasgainedits10,000th customer.SAPalsohasgeneratesaround30% of its
€3.1 billionintotal software licensingrevenuesfromcompanieswithfewerthan2,500
employees.

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 2007
Seizingnewopportunity: Whenan acquisitionmakessense inenhancingitsproductportfolio,
SAPdoesnot shyaway fromthe investmentrequired.The companybuysPilotSoftware –a
private Californiaproviderof strategymanagementsoftware –as well asYusa,OutlookSoft,
Wicom,and MaXware.SAPalsoannounces itsintentiontopurchase BusinessObjects,a
companyspecializinginbusinessintelligence applications.
Restructure of the Executive Board: LéoApothekerisnamedSAP'sdeputyCEOatthe endof
March. SAPalsoformsan Executive Council,whichcomprises corporate officerswhoshare
responsibilitiesformarketandproductstrategiesandreporttothe Executive Board.This
restructuringfollowsShai Agassi'sdeparturefromthe ExecutiveBoard.
Another year,another employeraccolade: Inits 35th year,SAPtakeshome the title of
"Germany'sBestEmployer"forthe thirdtime inthe annual "Great Place to Work" awards.The
companyalsoreceivesaspecial prize foritscomprehensivehealthmanagementprogram.SAP
Labs Indiaalsoranks eighthamongotheremployersinIndia.
Head start in the midmarket: As part of a special eventinNew YorkCity,SAPrevealsSAP
BusinessByDesign,aproductdesignedspecificallyforsmall businessesandmidsize
companies.SAPCEOHenningKagermannstatesthatthisnew offering"representsSAP's
ambitiousattempttocreate an all-new solutionforanuntappedmarket."
 2008
In the bag: SAPsuccessfullycompletesitsacquisitionof BusinessObjects.Purchasingthe
Frenchproviderof businessintelligence solutionsexpandsSAP'ssoftware portfolioandmakes
it the marketleaderinbusinesssoftware,enterpriseperformance management,andbusiness
intelligence.
The choice of skilledemployees:Forthe fourthtime,SAPisnamed"Germany'sBest
Employer"amongcompanieswithatleast5,000 employees.The companyalsoreceives
numerousawardsinothercountries,includingChina,Bulgaria,Denmark,India,Japan,and
Mexico.
A global focus:The SAPSupervisoryBoardnamesLéoApothekerco-CEOalongsideHenning
Kagermann.Twolongstandingmembers,PeterZenckeandClausHeinrich,resignfromthe
Executive Board.The boardthenwelcomesErnie Gunst,Bill McDermott,andJimHagemann
Snabe,whose internationalbackgroundswill enrichSAP'sexecutive management.
Sustainable business:SAPprovesits commitmenttosustainable businesspractices,releasing
itsfirstSustainabilityReport.Asthe leaderinitsmarket,SAPisina unique positiontoprovide
informationtechnologythathelpscompaniesandorganizationsof all sizesimprove theirtrack
recordsand achieve long-termsustainability.
 2009
Difficulttimes:Withthe effectsof the global financial crisishavingreachedthe real economy
in2008, the businessworldfacesitsownplight.Susceptibletothe situationathand,SAP
initiatespersonnel cutbacksandothercost-savingmeasures.Asof Q3 2009, SAPstill employs
some 47,800 people.Meanwhile,the companysupportsitscustomerswithspecial programs
designedtohelpthememergefromthe crisiswiththe strengthtosucceed.Thankstothese
programsand itscutbacks, SAPisable to improve itsoperatingmargindespite the difficult
circumstances.
Another businessmilestone:Atalauncheventat itsofficesinNew YorkCity,SAPunveilsits
SAPBusinessSuite 7software,whichisdesignedtohelpbusinessesoptimize their
performance andreduce ITcosts. A condensedramp-upphase enablesthe firstcustomersto
go live withthe software inMarch.In earlyMay, the nextgenerationof the suite isreleasedto
the rest of the world.

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Passing the torch: After27 yearsat the company – including18years onthe Executive Board
– HenningKagermannbidsfarewell toSAP.LéoApothekerbecomesthe company'ssole CEO.
In hisinaugural addresstoSAP'semployeesinJune,he stakesoutaclearnew path forthe
company,includinghisplansforSAP'sfuture,itspurpose,andthe associatedvalues.
In it for the longhaul: SAP demonstrateshow importantitconsiderssocial involvementby
supportingPlaNetFinance,aninternational non-profitorganizationthataidsmicrofinance
institutions(MFIs).SAPandPlaNetFinanceaimtooptimize the microfinance sectorwitha
combinationof financing,newtechnologies,andexpandedvalue chains.Inadvance of the
15th UnitedNationsClimate ChangeConferenceinCopenhagen(COP15),SAPalsooffersits
assistance tothe U.N.'s Hopenhageninitiative.Lastbutnot least,SAPemployeescontinue to
volunteertheirtime insupportof social projectsall overthe world.
 2010
Dynamic duo: In February,the SupervisoryBoardnamesBill McDermottandJimHagemann
Snabe co-CEOsof the company.Chief technologyofficerVishal Sikkaalsojoinsthe Executive
Board. AngelikaDammannfollowsSikkainJuly,becomingthe firstwomantoserve onthe
Executive Boardasshe assumesresponsibility forglobal humanresourcesandlaborrelations.
Major acquisition:In May, SAPannouncesitsplansto purchase the Californiacompany
Sybase forapproximatelyUS$5.8 billion.Sybase isthe largestbusinesssoftware andservice
providerspecializingexclusivelyininformationmanagementandmobile datause.The
synthesisof the twoleadingcompaniesistoproduce solutionsfor"wireless"companies.
Real-time innovation:More than50,000 customersand otherinterestedpeople attendSAP's
SAPPHIRENoweventeitherlive oronline –a new record.Inadditiontoa comprehensive
overviewof SAP'sproductstrategy,theywitnessnumerousinnovations –chief amongthemis
in-memorytechnologywhichushersinanew eraof real-time processinginbusiness
applications.
 2011
Outstanding results:The newyear getsoff to a great start.Software revenue of EUR1.5
billioninthe final quarterof 2010 enablesco-CEOsBill McDermottandJimHagemannSnabe
to pointto the bestquarterin SAP'shistoryandpleasesinvestors. Double-digitgrowthinthe
followingquartersshowsthatmore andmore customersare turningto SAP'ssoftware
innovations.
Anytime, anywhere:Customers,alreadyexcitedin2010 by SAP'svisionof SAPin-memory
computing,are able totake full advantage of itsbenefitsin2011. Initial customersimplement
the firstin-memoryproduct,the SAPHANA platform, enablingthemtoanalyze datain
secondsratherthan the daysor evenweekstheywouldotherwise have needed.Demandfor
SAPHANA can be comparedtothat for SAPR/3 software atthe time of its launch.SAP's
strategyfor mobile businessapplicationsisalsobearingfruit.Since itsacquisitionof Sybase,
an SAPcompany,in2010, SAPand itspartnersnow shipmobile applicationsthatopenupthe
SAPworld to a newtype of user – those whoare out inthe fieldratherthaninthe office.
Growth: SAPannouncesitsplansforgrowth:It islookingtoexpandinemergingmarket
economiessuchasBrazil,India,Russia,andespeciallyChina,anditintendstoinvestsome EUR
2 billioninthe mid-marketsectoralone.Italsohasgrowthplansfor itsbusinessinthe
boomingcloud-computingmarket.Justbefore the endof the year,SAPannouncesitsEUR2.5
billionacquisitionof SuccessFactors,the leadingproviderof cloudapplications.
2.2) FUNCTIONALAREAS OF SAP
BusinessSolutions

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 SAPAdvancedPlannerandOptimizer(APO)
 SAP Analytics
 SAPAdvancedBusinessApplicationProgramming (ABAP)
 SAPApparel andFootwearSolution (AFS)
 SAPBusinessInformationWarehouse(BW)
 SAPBusinessIntelligence (BI)
 SAPCatalogContentManagement ()
 SAPConvergentCharging (CC)
 SAPPRD2(P2)
 SAPEnterprise BuyerProfessional (EBP)
 SAPEnterprise Learning
 SAPPortal (EP)
 SAPExchange Infrastructure (XI) (Fromrelease 7.0onwards,SAPXIhas beenrenamedasSAP
ProcessIntegration(SAPPI))
 SAPExtendedWarehouse Management (EWM)
 SAPGRC (Governance,RiskandCompliance)
 SAPEHSM (EnvironmentHealthSafetyManagement)
 SAPEnterprise Resource Planning(ERP)
 SAPHANA (formerlyknownasHigh-performanceAnalyticsAppliance)
 SAPHuman Resource ManagementSystems (HRMS)
 SAP SuccessFactors
 SAPInternetTransactionServer (ITS)
 SAPIncentive andCommissionManagement (ICM)
 SAPKnowledge Warehouse (KW)
 SAPManufacturing
 SAPMaster Data Management (MDM)
 SAPRapidDeploymentSolutions (RDS)
 SAPService andAssetManagement
 SAPSolutionsformobile business
 SAPSolutionComposer
 SAPStrategicEnterprise Management (SEM)

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 SAPTest Data MigrationServer(TDMS)
 SAP Trainingand EventManagement (TEM)
 SAPNetWeaverApplicationServer (WebAS)
 SAPxApps
 SAPSupplyChainPerformance Management(SCPM)
 SAPSupplyChainManagement(SCM)
 SAPSustainabilityPerformance Management(SUPM)
 SAP CustomerRelationshipManagement(CRM)
 SAPProductLifecycle Managment(PLM)
 SAPSupplierRelationshipManagement(SRM)
Industry Solutions
 SAPfor Retail (ISR)
 SAPfor Utilities (ISU)
 SAPfor PublicSector(ISPSCD)
 SAPfor Oil & Gas (ISOil & Gas)
 SAPfor Telecommunications (IST)
 SAPfor Healthcare (ISH)
 SAPfor Banking(SAPforbanking)
 SAPfor Insurance (SAPforInsurance)
 SAPFinancial ServicesNetwork (FSN)
 SAPShippingServicesNetwork (SSN)
 EngineeringConstruction&Operations (EC&O)
Solutionsfor Small and Midsize Enterprises
 SAPBusinessOne (6.2,6.5, 2004, 2005, 2007, 8.8x,9.0)
 SAPBusinessByDesign
Platforms and frameworks
 SAP Enterprise ServicesArchitecture
 SAP NetWeaverPlatform
 SAPNetWeaverPortal (formerly SAPEnterprise Portal)
 SAPNetWeaverBI(formerly SAPNetWeaverBW- "BW"is still usedtodescribe the underlying
data warehouse areaandacceleratorcomponents)

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 SAPNetWeaverVisualComposer
 SAP Auto-IDInfrastructure
 SAPComposite ApplicationFramework
 SAPNetWeaverDevelopmentInfrastructure
 SAPNetWeaverIdentityManagement
 SAPNetWeaverSingleSign-On
 SAPBusinessConnector(deprecated/removedfromproductrange)
 SAPHANA
Others
 OpenUI5
 SAPCCMS, monitoringprogram
 SAPgui
 eCATT
 SAPCentral ProcessScheduling,processautomation andjobscheduler
 SAPFiori
 SAPSolutionManager
 Sybase ASE
2.3) ROLE OF SAPIN BUSINESS PROCESS
Many companiesare realizingthatSAPsolutionshave gainedimportance totheirbusiness.The
emphasisonthe use of SAPis due to many successful andlarge companiesusingSAPsystems
broadlyfortheiroperationsandreporting.The software nullifiesall the deficienciesinan
organisation’sinformationsystem.SAPERPsystemsare fullyintegratedbusinessreal-timesystems.
Theyenable transactionstobe processedend-to-endandeliminate datainconsistenciesbetween
sub-systems.Organisationshave nowbegunreplacingtheiroldbusinesssystemswiththe bestERP
packagesdevelopedbySAP.
The benefitsof usingSAPforyourbusinessare numerous.SAPdeliverssystemsthatare modernand
highlyefficient.Theirsupportinfrastructure isunmatchedinthe softwareindustry.The productivity
arisingfroman SAPimplementationcanbe remarkable.Recordsare fedinonlyonce.There are no
sub-systemstoconsolidate andverify.Datacan be forwardedtootherswithinthe organizationby
efficientworkflows –usinginternal messages,emails,SMSalertsorothermeans.Operationscanbe
authorizedandpassedalongforthe nextpersontoprocess.The overall reportingandanalytics
procedure isimprovedtoa level thatfacilitatesoperationmanagement.The topmanagementcan
monitorandcontrol the entire Companyoperations.
Many companiesstartto findoutinsufficiencyintheirinformationsystemsarchitecture.There might
have some systemstomanage the General Ledger,aseparate systemtorun the production

30
procedures,anothertomanage the salesprocesses,etc.Datahadtransferredbetweensub-systems
to make the statementsthatdifferentlevelsof organizationrequiredtohandle theirprocedures.
SAPERP systemsare entirelyintegratedbusinesssynchronizedsystemswhichallow nonstop
communicationprocessedandremove datadiscrepanciesbetweensub-systems.SAPbringssystems,
modernandextremely efficient.SAPsupportcommunicationsare unmatchedinthe software
business.
You can get an inclusivesetof integrated,cross-functional dealingprocesseswhichisthe main
benefitof the SAPsystem.Here are some pointsinwhichimportance of SAPinbusinessisdescribing:
AlignPoliciesand Operations
You have to do a detailedanalysisof the presentenvironmentbeforethe executionof anSAP
system.Thisanalysisisreferredtoas ‘As-Is’analysis.The brief,mediumandlong-standingpoliciesof
the businessshouldbe acknowledged,elucidatesandprioritized.Nextmainstepisthe upcoming
conditionstate of the business’informationsystemisprecise whichisknownasthe ‘To-Be’state.
Enhance Output and Insight
It isthe wonderful thatproductivityenhancementsoccurwiththe implementationof SAP.There are
no sub-systemstocombine andvalidate sothatdata can be forwardedtootherssystemsusinginner
messages,SMSalerts,emailsorotherways.Workerscan processmanydealingsontheirfrom
differentaccessterminals.Thisoverall reportingsystemandanalyticsettingare enhancingthe
productivitythatmakeseasyoperationmanagement.
Reduce Costs by Increasing Flexibility
To developprocessconsistency,efficiencyandflexibility,SAPexpandsitsbusinessecological unitby
extrapolatingdealings,information,andcollaborativetasks.
Minimize Risk
To solve the complicatedbusinesschallengeswith SAP,youhave totruston longstandinggrowthand
experience workingwithorganizationsindifferentcountriesratherthananyotherdealer.
DevelopFinancialAdministrationandCorporate Authority
Financial andexecutive accountingfunctionalitiessharedwithbusinessanalyticspresentsthe SAP
clientdeepvisibilityintotheirbusinesses.SAPalsoenhancesproductivity,improvesfinancial
manage,andcontrolsrisk.
Optimize IT Expenses
Make use of SAP systemincrementallyimprovesmoneyflowanddecreasedexpensive borrowing.
SAPincorporatesandoptimizesbusinessdevelopmentsalsoitcausesreductioninhighintegration
expensesandthe requirementtogetthird-partysoftware.
3) WHYSAP?
In today'schallengingbusinessenvironment,best-runcompanieshave clarityacross all aspectsof
theirbusiness,whichallowsthemtoact quicklywithincreasedinsight,efficiency,andflexibility.This
isparticularlytrue if yourbusinessincludesSAP.
SAPis the world'slargestbusinesssoftware companyandthe third-largestindependentsoftware
providerintermsof revenues.Eventhoughthe competitionisfierce withalotof new entrantsinthe

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marketplace fromlarge andsmall vendorsoverthistime,SAPisstill aleaderinenterprisesoftware.
Here are some reasonswhichexplainthe question“WhySAP?”:
1. The firstreasonissimplythe factthat SAPsolutionsare scalable andcan be customizedaccording
to the evolvingbusinessrequirementsof anenterprise.Itcanbe easilyintegratedwithfuture
applicationsgivingusersasignificantcompetitiveadvantage inthe market.SAPsolutionshave
become integral tothe foundationof international businesses,asalmosthalf of the world's
Fortune1000 companieshave implementedERPsolutionsfromSAP.
2. SAP hasbeenmainlyfocusing onenterprise applicationsforthe last30 years,the area where they
holdthe marketleaderspottodayacross the globe.While the otherlarge ERPsoftware vendors,
tendto have multiple businessfocuses - like,databasesasanexample.
3. SAP continues tofocusitsERP applicationsonmaximizingresources,reducingcostsandoptimizing
performance thatiscustomizedforbusinessesandindustries.SAPprovidesacomprehensive range
of businesssoftware andenterprise applications - designedforglobal operationsandsupportedwith
globalizationservices - toempowereveryaspectof yourbusiness.
4. SAP architecture isextremelystrongwithaprocess-centricfocusanda foundationthatoperatesin
real time communicationwithenterprise wide businessprocessesthatishighlyflexible.
5. Lastly,withthe experienceof the last30 yearsSAPhas affordedtheirenterpriseapplicationstobe
extremelyindustryandbusinessspecific.Theyhave alreadybuiltandrefinedtheseindustryspecific
solutionswithreal customersandreal implementationscarryingthe knowledge base andenhancing
theirtechnologyandapplicationofferingseachyearforthe lastthree decades.
SAPnot onlyhelpstomanage dayto day operationsefficiently;italsosharpensbusinessinsightby
providingreal time accesstotimelyinformation.Asthere are more solutionsavailable onthe
marketplace tochoose from,andevengiventhe increasingcompetitivelandscape,SAPhaskept
theirmarketdominance.
3.1) COMPARISONBETWEEN SAP AND OTHERS
As shouldcome asno surprise,the battle fordominance inthe marketcontinuesas SAP,Oracle,
MicrosoftDynamics andInfor each seektogrow theirglobal userbase.Eachof these fourvendors
are quickto adaptto the ever-changingneedsof theirclients,anticipatingandcapitalizingon
economictrendsanddevelopingofferingsforverticalsoutside of theiroriginal targetmarkets.
SAP
SAPbeganas an ERP software providerandtodayisthe leadingplayerinthe ERPmarket.SAP
developedclose relationshipswithavarietyof alliance partners,whichfueleditsgrowththroughthe
1990s and 2000s. There are an abundance of third-partydeveloperswhosupplynumerousadd-on
programsthat work inconjunctionwithSAPproducts.SAPalsooffersERPsolutionsappropriate for
all sizesof organizations.

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Basedon SAP’stechnologyplatformNetWeaver,SAPBusinessSuiteisaset of integratedbusiness
applicationsthatprovidesindustry-specificfunctionalityandscalability.Althoughverypowerful,SAP
can be more difficulttochange as a businessevolves.Thisisbotha strengthanda weakness:onthe
one hand,it istightlyintegratedandhelpsenforce standardizedbusinessprocessesacrossan
enterprise,butitcanalsobe more difficulttomodifythe software toadjusttoevolvingcore
processesandrequirements.
SAP’score offeringsinclude SAPBusinessAll-in-One andSAPBusinessOne.
SAPBusinessAll-in-One isacomprehensive,integratedenterprise software thatoffersindustry-
orientedsolutions. All-in-One focusesonsmall- tomid-sizedorganizationswithupto2,500
employees.SAPBusinessAll-in-One istemplate-based,andaconfigurable derivativeof SAPBusiness
Suite.Itoffersmore than700 industry-specificsolutionsbydeployingtheir“best practices.”
SAPBusinessOne isa single,integratedapplicationdesignedforsmall organizationswithlessthan
100 employees.Itmainlysupportsretail,wholesale,servicesandmanufacturing.Withthird-party
add-ons,SAPBusinessOne isable tosupportavarietyof industriesandfunctions.
In orderto meetthe needsof small ormid-size businesses,SAPoffersSAPByDesign.Available in
UnitedStates,Germany,France,the UnitedKingdom, India,andChina,SAPByDesignsupports
organizationswith100 - 500 employees.AsaSaaS-type on-demandsystem,SAPByDesignhaslow
upfrontcostsand may require fewerITresourcesthantraditional ERPsoftware.
Basedon qualitativeandquantitativeinputfromourclientsaswell asourownimplementation
experience,someof SAP’sfunctional strengthsinclude:
• Strongproduct developmentfunctionality
• Ease insupportingMake-To-Orderprocessing
• Integratedretail module
• Clearvisibilitytogoods-in-transitorders
• Good qualitycontrol andqualityassurance functionality
• Good compliance withSOXandtax regulations
• Strongcash managementfunctionality
Oracle
Oracle was originallyknownforitsdatabase systemsratherthanitsERP systems.The organization
expandeditsshare inthe ERPmarketthrough organicgrowthand a numberof high-profile
acquisitionsincludingJDEdwards,PeopleSoft,SiebelCRMand the like.Giventhisparticulargrowth
model,Oracle hasbecome aconfigurable andflexible optionandoffersa best-of-breedoptionforits
customers.

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Oracle has grownprimarilythroughacquisitionof best-of-breedpointsolutionsandhasmade
considerable progressmergingthe JDEdwardsEnterprise One functionalityintoOracle EBS.Oracle
EBS is comprisedof overtenproductlines,eachof themwithseveral modulesthatare licensed
separately.
Oracle’sotherkeyERP offeringsincludeJDEdwardsandPeopleSoft.JDEdwardssupportsthe
manufacturingindustryespeciallywell.Itisanintegratedapplicationssuite of comprehensive ERP
software thatsupportsa wide varietyof businessprocesseswithone commondatabase.JDEdwards
EnterpriseOnehasanopenplatform,whichprovidesforabroadsupportfor differentoperating
systems,databases,andmiddleware fromOracle andothervendors.
PeopleSofttargetslarge organizations,especiallyinthe publicsectorandfinancial servicessector.
PeopleSofthaseightdifferentapplicationsolutionssuchasfinancials,supplychain,HR,CRMandso
on,among whichHR and CRMsolutionsare the mostdesirable.Before beingacquiredbyOracle,the
PeopleSoftsuite wasbasedonaclient-serverapproachwitha dedicatedclient.The current
PeopleSoftversionisbasedonaweb-centricdesign,whichallowsall of anorganization'sbusiness
functionstobe accessedandrun on a webbrowser.
Oracle offersitssolutionswithdifferentdeploymentmodels,includingbothon-premise andon-
demand.Examplesinclude E-BusinessSuiteOn-Demand,PeopleSoftEnterprise OnDemandandJD
EdwardsEnterpriseOne On-Demand,all of whichare hostedapplicationsbutare nottrue SaaS
applications.There isamove toprovide “virtualization,”whichisMicrosoftterminologyforthe cloud
environment.
Oracle’sbest-of-breedapproachsometimesallowsformore flexibilitytoaccommodate changing
businessneeds,butthisstrengthcanbecome aweaknesswhenitbecomeshardertoenforce
standardizedprocessesacrossa largerorganization.
experience,someof Oracle’sfunctional strengthsinclude:
• Strongfinance andaccountingfunctionality
• Advancedpricingmodule supportscomplex pricingscenarios
• E-portal providesforeasyinteractionwithcustomersandsuppliers
• Well-builtITarchitecture
• Strongproduct configurator
• Good functionalityforproductionoperations

34
MicrosoftDynamics
Alreadyestablishedasthe premiersupplierof operatingsystemsandbusinesssoftware,Microsoft
Corporationenteredthe arenaof ERPsoftware throughacquisition.In2000, Microsoftacquired
Great Plains,one of the firstaccountingpackagesinthe USA that wasdesignedandwrittentobe
multi-userandtorun underWindowsas32 bitsoftware.Thiswassoonfollowedbythe 2002
acquisitionof Navision,aDanishsoftware organizationwhoofferedanaccountingandERPsolution
offeredforMicrosoft'sWindows 2000 Professional operatingsystem.Navisionhadmergedwith
Damgaard Software in2000. Damgaard’sproduct wasAxtapa,a highlyrespectedaccountingsystem
and ERP solutionoriginallybroughttothe UnitedStatesfromEurope byIBM in1996. Written
completelyinJava,Axaptawasdesignedtobe acomplete ERPsolutionwhichincludedadvanced
distribution,processanddiscrete manufacturing,built-inCRMcapabilities,andwithinanintegrated
developmentenvironment.The productsmaintainedtheirownidentitiesunderMicrosoftandwere
originallymarketedasMicrosoftBusinessSolutions,untilbeingchangedtoMicrosoftDynamicsERP
in2006.
MicrosoftDynamicsGP, the formerGreat Plainsproduct,isdesignedforsmall tomid-sizedbusiness
desiringasimple,out-of-the-box softwaresolution.MicrosoftDynamicsNAV,the formerNavision
product,is designedforsmall- tomid-sizedbusinessesthatneedbroaderfunctionalityandthe ability
to customize theirsoftware solution.The formerAxtapaproduct,now marketedasMicrosoft
DynamicsAX,isthe flagshipof the MicrosoftDynamicsofferings,andisgearedtowardlarger,
enterprise-wideimplementations.Otherproductswithinthe MicrosoftDynamicsproductline
include SL(formerlySolomon),whichisdesignedforprojectorientedbusinesses,andCRM.
MicrosoftDynamicshas historicallyrelieduponitslarge network(10,000+) of partnersto develop
extendedandindustry-specificfunctionalitybeyondthe core products.However,the recentAX2013
release incorporatesintothe core offeringindustry-specificfunctionalityformanufacturing,public
sector,service industriesanddistribution.Additionally,thisrelease incorporatessignificantly
improved“cloud”capabilities.
experience,MicrosoftDynamics’functional strengthsinclude:
• Ease of customization
• High flexibility
• Ease of integration
• Familiarity of user interface
• Strong inter- and multi-organization support
• Strong multicurrency and localization capabilities
• Data dimension-enabled tracking of physical moves and financial transactions
• Strong MRP and trade capabilities

35
Infor
Inforbuildsbeautiful businessapplicationswithlastmile functionalityandscientificinsightsfor
selectindustriesdeliveredasa cloudservice.With13,000 employeesandcustomersinmore than
200 countriesandterritories,Inforautomatescritical processesforindustriesthatinclude
healthcare,manufacturing,fashion,wholesaledistribution,hospitality,retail andpublicsector.Infor
buildsitsapplicationswithamodern,standards-basedarchitecture thatembracesopensource
technologyandprovidescustomerswithunmatchedflexibility,scale andpower.
Infordifferentiatesitself bybuildinglast-mile functionalityforeachof itstargetedindustriesdirectly
intovertical,andevenmicro-vertical,applications.Workingdirectlywithcustomersandindustry
thoughtleaders,Inforidentifiesthe critical needsof specificindustriesandprepackagesfunctionality
intoitsapplications.The resultisthatcompaniescanreduce oreveneliminatethe needforcostly
customizationsthatprolongimplementationsandcomplicate future upgrades.
Inforhas made a major investmentinbeingable todeliverthese industry-drivensolutionsinthe
cloud.PartneringwithAmazonWebServices,Inforprovidessecure,flexible andcosteffectivecloud
hostingoptionsthatcan increase businessagilityanddramaticallysimplifyITlandscapes.Whether
customerswantto deployon-premise,inthe cloudora combinationof both,Inforhasthe
infrastructure andresourcestosupportwhateverchoice isbestfortheirbusinesses.
Othermajor areasof investmentinclude userexperience anddatascience.Inforhaspioneereda
revolutioninenterpriseusabilitythroughitsin-house creative lab,Hook&Loop,whichhas grown
intoone of the largestcreative agenciesinManhattansince itsinceptionin
2012. Staffedwith“left-braincreatives,”the teamatHook & Loop drawsfromunique andeclectic
backgrounds,like fashiondesign,digital animation,andstorytelling,tore-imagine the experience of
usingenterprise software, helpingcustomersmove fromforms-based,dataintensive interfacesto
beautiful,intuitive,touch-and-gesture-basedexperiences.
Recognizingthatcompanieshave enormousamountsof databutlack the knowledgeandresources
to make that data workfor them,InforalsorecentlyformedInforDynamicScience Labstohelp
embedscience andmachine learningdirectlyintoInforapplications.Basedoutside M.I.T.in
Cambridge,MA,Inforhas employedsome of the bestandmostinnovative datascientiststohelp
customersuncoveropportunitiesandrecommendnextstepsthatdrive improvementsinall areasof
business,fromrecruitingandstaffingtoassetmanagementandpricing.
Market Share
The graph belowshowsthe overall marketshare distributionforthe time periodfromJune 2014 to
October2015.

36
Source: Clash of the Titans 2016 Report- Panorama Consulting Solutions
The data showthat SAPholds26-percentof total marketshare,Oracle holds16-percent,Inforholds
16-percentand MicrosoftDynamicsholds9-percent.TierIIsolutionsrepresent12percentof the
market,while TierIIIandothersrepresent26-percentof the total market.
Listing and SelectionComparisons
Short-listingisthe processof cullingthe longlistof potentialERPvendorstobetweentwoandfour
potential solutions.Amongthe keydatapointsinthisreportare the ratesthat SAP,Oracle,Microsoft
Dynamicsand Inforare short-listedandthe ratesthateach vendorisselectedaftershort-listing.
The data reveal thatSAP isthe most commonlyshort-listedERPsystemof the fourinour study
(short-listedby45-percentof respondents).SAPisfollowedbyOracle at31-percent,Microsoft
Dynamicsat 18-percentand Inforat 8-percent
Rates of BeingShort Listed
Vendor Frequency
SAP 45%
Oracle 31%
MicrosoftDynamics 18%
Infor 8%
%26
%23
%16
%16
12%
9%
Market Share
TierIII andothers
SAP
Oracle
Infor
TierII
MicrosoftDynamics

37
Afterbeingshort-listed,the popularityof the fourvendorsslightlyshifts.SAPhasthe highestrate of
selectionaftershort-listing(21-percent)withInforfollowingcloselyat19-percent,Oracle at 14-
percentandMicrosoftDynamicsat 9-percent.Duringthe lastfew years,SAPhascontinuedtohold
the top positionforselectionaftershort-listing.
SelectionRatesWhenShort-Listed
Vendor Frequency
SAP 21%
Infor 19%
Oracle 14%
MicrosoftDynamics 9%
The fact that SAPis short-listedatsucha highrate suggeststhatits name recognitionand
widespreaduse persuade organizationstoconsiderSAPsolutions.While boththe shortlistingand
selectionratesare strongforSAP,there isno evidence thateveryorganizationmakesthe right
decisionbychoosingSAP.Manyorganizationssimplydonothave the propermethodologiesor
skillsetsinplace toeffectivelyassessERPsystems.Ratherthanconsideringthese findingstobe
indicative of the suitabilityof the productofferings,itisuseful toview themasbroaderdata
regardingtrendsinthe salescycle experiencedbythe fourvendors.
ImplementationDuration
Implementationdurationcanbe directlycorrelatedtoprojectscope,resource availability,the typeof
software purchasedandthe fitand functionalityof thatsoftware.Furtheraffectingdurationare the
numberof solutionsthatSAP,Oracle,MicrosoftDynamicsandInforeachprovide fordifferent
verticals,industriesandneedsaswell asthe levelsof customizationeachorganizationchooses.
Comparedtoour previousreport,eachof the four vendorsincreasedinimplementationduration.
MicrosoftDynamicsimplementations,whichaveraged12.5monthsin2013, increasedto24.9
monthsthisyear.Oracle implementations,whichaveraged22.5monthsin2013, saw a slight
increase to23.4 months,as didSAPfrom 18.5 monthsto 19.5 months.A small increase in
implementationdurationmaybe attributedtochangesinprojectscope andresource availability.
More significantincreasesmaybe attributedtounclearrequirementsorexcessivecustomization.
Thisyear,Inforhas the shortestoverall implementationtime (16.2months),followedbySAPat19.5
months,Oracle at 23.4 monthsand MicrosoftDynamicsat 24.9 months.

38
Please notethatimplementation duration periodsbegin atthe time of purchaseof the softwareand
end upon full functionality.Severalvariablesaffectimplementation duration,including scope,size
and complexityof the organization implementing thesoftwareaswellas thespecific solution and
deploymentmodelchosen.
ExtendedDurations
The most commonreasonfor extendeddurationsisthe extensionof initial projectscope
(15percent).Respondentsalsoindicatedthattechnical issuesanddataissuescontributedtoproject
delays.These are commonissuessufferedbyorganizationsthatrushintoimplementationwithout
takingthe time to properlyplanandsetrealisticexpectations.
15.8
20.4
21.4
15.2
19.5
23.4
24.9
16.2
0
5
10
15
20
25
30
SAP Oracle Microsoft
Dynamics
Infor
ImplementationDuration
Planned (Months)
Actual (Months)

39
Reasons Behind Extended Durations
Other
Training issues
Conflicts withother priorities
Vendor didnot deliver promised
functionalityintimelyfashion
Project timeline wasunrealistic
Organizational issues
Resource constraints
Data issues
Technical issues
Initialproject scope was expanded
0
10%
12%
12%
14
%
14
%
15%
While the topreasonfor extendeddurationscontinuestobe the extensionof projectscope,this
percentage hasdecreasedduringthe pastfew years.Thismayindicate thatmore organizationsare
investingtime inprojectplanningwhichensuresthatthe scope of all projectcomponents,including
organizational change management,are consideredupfront.
Payback Periods
Paybackis definedasthe pointintime whenthe organizationrecoupsitsinitial investmentonthe
project.Thismetriccan onlybe determinedif keyperformanceindicators(KPIs)andbaseline
measurementsare putintoplace priortoimplementation.
Panorama’sresearchshowsthatpaybacktypicallyhappensafterthree years.Ittakestime forpeople
to learna newsystemanduse all of itsfunctionalitysoitmaytake justas longto realize benefits.
8%
7%
6%
2%

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