1. SAP R/3 in the Standard Software Market Ian Mizrahi December 3, 1998

2. Basic Facts n Number one vendor of standard business SW. n Fifth largest independent SW supplier in the world. n More than 6000 companies worldwide use R/3. n Most of the top Fortunes 500 companies use SAP.

3. Issues Addressed in the project n What are the problems companies have been facing with business software? n Why has people chosen SAP to solve this problems? n Who should choose SAP? n What are SAP risks and limitations?

4. Problems companies have been facing with business software. n Mainframe computers were expensive. n Legacy systems are based on island solutions. n Custom software expensive and involves a high risk. n Business reengineering was insufficient.

5. Why companies choose SAP? n Integration. n Price, Standard software. n SAP’s reputation. n Client/server technology. n Assists Business Engineering

6. R/3 Reference Model n In the past people used BPR. Used IT to automate functions. n Business Engineering, utilizes IT to create and support process design. n Why reinvent the wheel. Use prefabricated models based on best practice. n SAP blueprint is called “R/3 Reference Model”

7. Who should choose SAP? n Categories of companies, by Forrester Research Inc. 20% of the market incremental extenders. 65% one-time transformers. 15% true rengineers.

8. Risk and Limitations n Technology. – Desktop used as dump terminal, no pure OO. – Monolithic response to integration. – It could become a legacy system. n Lack of flexibility – Modifications can be made but bring major upgrade problems. – Difficult to integrate with other systems.

9. Risks and Limitations n Technology. n Lack of flexibility. n Lack of fit with corporate strategy. n Complexity.

10. Risk and Limitations n Lack of fit with corporate strategy – Some companies business model can’t accommodate to R/3. – Reengineering may be forced on a business. n Complexity – Business, technical and behavioral change are necessary to implement R/3.

11. Conclusions n SAP R/3 is not the silver bullet. n Good answer for companies were: – Want to migrate completely. – Don’t suffer rapid changes. – R/3 Business Model satisfies all their needsadn can benefit from a business blueprint. – Want the security provided by a leader.