5 things to consider before committing to SAP

Installing SAP applications is no panic. Employees who are capable of installing and maintaining SAP software are in high ultimatum and practically form a whole profession by themselves.

SAP, has developed its reputation with ERP software, is hardly chosen by enterprises for one off applications, In this month AMR Research analyst Jim Shepherd notes in a report The Five SAP strategies  that you need to understand.  He wrote the huge organizations, this is typically a multiyear, multimillion dollar effort to change the business. Unfortunately, administrators rarely pay less attention to SAP installations once they are deployed.

Let take a view on the Five SAP strategies Shepherd details in his report and how it effects to your technology decisions.

SAP’s growth strategy

SAP tries to increase the revenue by licensing 75 percent or more each client’s employees and by convincing ERP clients to sign up to expand the portfolio of business tools such as Microsoft Office integration and Business Objects’ set of reporting, business-intelligence and analytics applications.

Shepherd wrote, the strategy is planned to give competencies that either encourages additional user seats within the existing products or requires licensing brand-new products outside the Business Suite [software line],”

Customer Challenge: SAP’s customers pay a huge amount in upfront on licensing charges and a lesser amount in ongoing for additional licenses as needed and maintenance fees.  Shepherd Wrote SAP does not need a lot of money in the upfront- but it requires a lot of money later and this builds considerable debate and tension.

Users think new capabilities will be available for free as product enhancements but SAP likes to position new experience as brand- new products, Shepherd wrote “SAP generates most of its income from the installed base. Its object to ensure that user wills never stops purchasing the licenses and maintenance and servers.


SAP’s industry strategy

SAP has gained the vast market in various industries as oil and gas, chemical and life sciences by altering products to their specific needs. Now SAP is focusing to increase its market in this industry where they have given a strong base. Look for SAP to use achievement s and partnership to target the client needs of industries where the vendor is looking to grow. This includes non-manufacturing such sectors as trade, insurance, teaching, finance and government.

SAP’s product strategy

Shepherd wrote SAP was basically a one product company for most of its history First it was R/1, then R/2 and then R/3.

SAP’s product-release strategy

SAP historically has repaired its ERP product line every five years. Clients used to face a rigid choice each time a new product was established, but SAP finally is providing easier moves, with enhancement packages being allotted every six to 12 months at no extra cost.






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