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SAP Business ByDesign

SAP recognizes that hosting technology is more than simply a method to realize lower computing costs and faster ROI. It is a disruptive innovation in enterprise software and will represent one of the early battlegrounds of technology evolution for the next several years. The future of hosting technology will change the enterprise systems industry through four individual, somewhat overlapping phases.

  1. First version hosting applications have reduced computing costs and increased information systems ROI, however, have not benefited new customers to the degree of the decades old high-risk and high-cost on-premise products.

Although first generation hosting products are somewhat limited in scope, they provide a meaningful solution to an undeserved market. Research illustrates that the SMB market has historically not made the transition from simple contact management systems to CRM applications. According to Aberdeen Group, “Less than 15 percent of the 5 million to 6 million US companies with fewer than 500 computer users have CRM software installed” and according to research firm Morgan Stanley, only 10 percent of companies with revenues un d er $500 million have acquired CRM software. Reasons for historically low CRM adoption by this market segment are largely price and resource (staffing) related. Acquisition barriers include the high up front capital expenditures as well as the recurring expense for additional IT staffing.

First version hosting providers deliver specific applications without up front capital investment, complex software installations or other financial barriers. Recurring costs such as computer hardware and IT or support staffing are eliminated. The subscription-based delivery removes financial risk by licensing the software on a monthly pay-as-you-go rental basis, removes time-to-benefit risk by achieving a very short implementation timeframe (normally days or weeks as opposed to weeks or months) and operational risk by outsourcing the administration and maintenance to experts. The result is a limited but trouble-free CRM information system which permits the customer to focus on their core business activities while achieving dramatically reduced total cost of ownership (TCO).

  1. Second generation hosting applications will mature to possess business functionality and automation that rivals or even exceeds that of the decades old high-risk and high-cost on-premise products. This generation will change market dynamics in terms of hosted solutions being perceived as inferior or immature when compared to tier one or traditional on-premise systems.

SAP believes it is the first hosting provider to achieve the level software functionality and automation available in the older high-risk and high-cost on-premise products, however, missing in the current environment of hosted applications. SAP's next generation solution uniqueness goes beyond just providing the three tentacles of CRM to further include:

  • The ability to accommodate both B2C and B2B account selling and support
  • Support for various selling and support methodologies (e.g. Miller Hieman Solution Selling, Strategic Selling or Power-Based Selling)
  • Thorough Account Management
  • Lead Distribution and Management
  • Activity Management with complete 360 degree viewing
  • Opportunity Management with Product Inventory with Quote Generator
  • Competitor Management and Competitive Intelligence (CI)
  • Time & Task Management
  • Workflow and Business Rules processing
  • Outstanding access to information and a complete reporting suite; including a Reports Library, user-based report writer and data warehousing with OLAP (Online Analytical Processing)
  • Direct integration with desktop applications (such as MS Outlook, Word, Excel and Adobe PDF)
  • Remote Access and Offline Utilization via Offline Edition and Mobile and Wireless devices
  • Global capabilities (data presentation, foreign currency, multiple languages)
  • Meaningful system customization by a non-technical users
  • An underlying Portal component capable of integrating and consolidating enterprise-wide information systems and providing a strong basis for continued product evolvement beyond standalone CRM systems

The second generation will weed out ‘point solution', market niche and piecemeal component players in favor of broader suites and enterprise-wide business solutions.

  1. Just as Internet-enabled CRM applications have connected the decentralized operations and staff across the enterprise, Web services will act as a platform and catalyst to link multiple Web-based applications together and extend the Internet backbone to connect different organizations in a structured and real-time collaborative environment. A standardized and real-time integration of business processes among business partners or distinct organizations holds tremendous value in seamlessly delivering multiple vendor solutions to satisfy client demand. Web services uniquely permit loosely coupled online business integration among business partners, customer and vendors, and even disparate organizations whom will achieve real-time collaboration, information sharing and business process automation.

  2. Fourth, the market adoption of hosted and online applications will offer a new enterprise software publishing and distribution model which SAP refers to as the OnDemand Value Chain. This model will dramatically increase the availability of customer solutions and significantly lower costs.

The OnDemand Value Chain is a software development foundation and delivery model uniquely available to ASP's and which eliminates redundant activities by decentralizing software development and distribution with a divide and conquer approach among developers and publishers. The OnDemand Value Chain allows ISV's (independent software vendors), software authors and domain experts to focus on creative development while the publisher satisfies packaging, distribution, fulfillment, deployment, payment, collections and similar non-development related distractions.

SAP is strategically and technically positioned to tap into the expansive and global Microsoft development community, which has standardized on the same Microsoft tools and technologies used by SAP, to act as an online business systems publisher. SAP's membership in the Microsoft community, as well as its founders demonstrated history in providing leadership within this community, offer a vantage point from which to acquire and grow key business partnerships and evolving product solutions. The Microsoft community offers SAP a value chain extension that is not available to primary SAP competitors such as Salesforce.com and Siebel OnDemand due to the competitors' reliance on non-Microsoft tools and technologies and the absence of other technology memberships comparable to the Microsoft business partner community.




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