Managing Automation - May 2008 - (Page 33)

top of SAP’s software. “We want them to understand this is a new model, and it is not a services-led model anymore,” Duffaut says. “Since Business ByDesign has a shorter implementation cycle, the model can no longer be based on services. It is now about volume, and profitability will come from software and maintenance, not from basic implementation.” As a result of the new required mind-set, SAP has so far taken a go-slow approach to signing up resellers and customers for Business ByDesign. The company has The differences between SAP’s and Oracle’s signed up 20 reseller partners and of the early product strategies may be most pronounced 150 customers. Manyhand-picked customers have been when it comes to on-demand applications. by SAP, resellers say. The company’s goal for 2008: 1,000 Busiage, with extensions for the pharmaceutical ness ByDesign customers. industry developed by The Hackett Group, SAP is also using the slow rollout to gather Inc. With the help of SAP reseller partner B4 information about what customers want in an Consulting, Graceway was able to deploy All-inon-demand ERP product. Already, for example, One in a few weeks. the company has learned that, even in an on-de“We would have loved to have been able to mand service, SMEs want the ability to select go to something like All-in-One from the beindustry-specific configuration options, says ginning, but we didn’t have time,” Swetnam Sheila Zelinger, vice president for SME solution says. “We see it as a natural progression, marketing at SAP. and now we can respond to future changes in Oracle, meanwhile, says its customers have the business.” no interest in an on-demand ERP offering, at least for the time being. “Frankly, we don’t see IS ON-DEMAND IN DEMAND? a big demand yet for on-demand ERP,” The differences between SAP’s and Oracle’s Kender says. “There’s been a lot of noise product strategies may be most pronounced about it, but do a significant number of comwhen it comes to on-demand applications. SAP panies really want to do business this way? I is placing a big bet on Business ByDesign at a still remain unconvinced.” time when many SMEs still aren’t ready to Most SMEs are more concerned with softrely on an online service to run most of their ware functionality than with how it is business processes. According to a recent surdeployed, Kender says. managingautomation.com vey by AMR Research, 14% of companies with Oracle could certainly change 100 to 499 employees said on-demand would be its tune if SAP’s investments stimRELATED ARTICLES: their preferred model for purchasing ERP apulate a healthy market among The Great Migration from Legacy Systems (The Great Migration) plications, while 44% still want to buy on-premSMEs for on-demand ERP, analysts www.managingautomation.com/migration ise applications via one-time licenses. note. If that happens, some expect SAP Vs. Oracle: Tackling the Plant Floor Still, SAP is pumping big money into BusiOracle to acquire on-demand servwww.managingautomation.com/erpextend ness ByDesign. SAP CFO Werner Brandt reices provider NetSuite Inc., in The Great Enterprise Applications Race cently told financial analysts that the company which Oracle CEO Larry Ellison www.managingautomation.com/enterpriserace invested €125 million to roll out Business Byhas invested. On-Demand, Ready or Not Design in 2007, and the company plans to inIn the meantime, experts say, www.managingautomation.com/notes45 vest between €175 million and €225 million how fast the on-demand ERP marWhose Mid-Market? more this year to turn Business ByDesign into ket takes off will have a lot to do www.managingautomation.com/notes37 a volume business. with whether SAP or Oracle esThose big investments notwithstanding, tablishes a leadership position in COMPANIES MENTIONED: SAP officials acknowledge that software-as-athe SME market. CDC Software www.managingautomation.com/CDC service is still new territory for many man“SAP is taking a sizable gamble ufacturing SMEs and many of its resellers. on Business ByDesign,” says SiOracle www.managingautomation.com/Oracle3 Duffaut says Business ByDesign will require mon Jacobson, an analyst at AMR a new approach by the company’s resellers, Research. “It probably won’t be unSAP www.managingautomation.com/SAP3 most of which are accustomed to making til early next year before we see if it money by layering high-touch services on is going to pay off.” I and in November 2007 deployed SAP Business One over a six-week period to automate its core business processes. In the middle of the deployment, however, company management decided to take over distribution of its products, a function it had previously outsourced, says Thomas Swetnam, vice president of IT. Since the Business One system wouldn’t support the inventory tracking mandated by regulation, Graceway, just a few months after implementing Business One, decided to replace it with SAP’s All-in-One pack- maonline 33 May 2008 http://managingautomation.com http://www.managingautomation.com/migration http://www.managingautomation.com/erpextend http://www.managingautomation.com/enterpriserace http://www.managingautomation.com/notes45 http://www.managingautomation.com/notes37 http://www.managingautomation.com/CDC http://www.managingautomation.com/Oracle3 http://www.managingautomation.com/SAP3

Table of Contents Feed for the Digital Edition of Managing Automation - May 2008

Managing Automation - May 2008 Contents Take 1 Award-Winning Shoe-Maker Otabo Alters Course, Shifts Production to China IBM Partners with Universities for Cloud Computing Getting Noise in Production Under Control Incuity Embarks on a Vertical Market Strategy Foundation Intensifies OPC Standard Testing Mailbox Notes PM Roundtable Cover Story: The Business of Going Green Special Report: Night and Day Delivering on Promises Finding the Right Fit for Wireless Driving RFID Product Scan Advertiser Index Next

Managing Automation - May 2008

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