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SAP Unveils New ERP System at CeBIT, Signaling the End of the R/3 Era

SAP rolled out a new product configuration called mySAP ERP at the CeBIT international technology show held annually in Hanover, Germany. mySAP ERP is essentially a combination of SAP’s R/3 Enterprise product and its recently announced NetWeaver technolog
Written by Jim Shepherd, Contributor

SAP rolled out a new product configuration called mySAP ERP at the CeBIT international technology show held annually in Hanover, Germany. mySAP ERP is essentially a combination of SAP’s R/3 Enterprise product and its recently announced NetWeaver technology platform. SAP co-chairman and CEO Henning Kagermann acknowledged that in recent years SAP had moved away from using the term ERP to describe its product, preferring instead to call it an e-business suite. However, in many markets such as China and Japan, buyers don’t want to talk about e-business--they are simply looking for an Enterprise Resource Planning (ERP) system.

mySAP ERP should be an attractive option for new customers and existing SAP users. It offers a very competitive set of traditional ERP functionality, including financials, human resources, order management, production, maintenance, and procurement, but it also includes support for corporate services such real estate management, travel management, and incentive and commissions management. Because it is based on the NetWeaver platform, mySAP ERP will also feature comprehensive business intelligence and strategic planning, a full portal infrastructure, and a very sophisticated Web-services-based architecture and integration capability.

One order of ERP, hold the side of SCM, CRM, and PLM

SAP has obviously recognized that many prospects and existing customers are simply overwhelmed by the size and scope of its flagship product, mySAP Business Suite. They may be happy to know that SAP can surround its ERP system with Supply Chain Management (SCM), Customer Relationship Management (CRM), Product Lifecycle Management (PLM), and the like, but they aren’t ready to buy and implement them. mySAP ERP is comprehensive enough to replace most companies’ legacy systems and provide a great foundation for future extensions. Customers can then make their own decisions about which add-on applications are appropriate or necessary for their business.

If SAP develops an appropriate re-licensing scheme, this should become a very attractive upgrade option for existing R/3 customers. Many companies have been debating whether to move to R/3 Enterprise or migrate to mySAP Business Suite, and this is likely to make the decision much easier. The SAP sales force is also likely to be very happy with the new product, which should be much more appealing in a market in which buyers clearly favor smaller upfront commitments with optional incremental expansion. mySAP ERP is “available for customer shipment immediately,” but we suspect it will be some time before the field organization can answer questions about pricing, upgrades, industry versions, and such. The product and technology already exists, so making the CDs is easy--the packaging and marketing has always been a bigger challenge for SAP.

Say Goodbye to R/3

After reigning for a decade as the dominant ERP product, this may finally signal the end for R/3. SAP has been struggling to convince people that the technology and functionality are new while the product name stayed the same. The R/3 Enterprise name confused people even more, and no one seemed to be able to understand its relationship to mySAP Business Suite. This new ERP product should allow SAP to stop selling R/3 to new customers and send a clear message to existing customers about their migration path. R/3 has had a remarkable run, but it is time for SAP to make a clean break and send it off to the Software Hall of Fame.

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