lf could hope to successfully implement and sell, they overlook the opportunity it presents. However, with SAP opening new reseller channels, that's about to change.
The R/3 System
R/3 is an application suite that manages and integrates the spectrum of business needs for a company by linking such disparate functions as financials, sales and distribution, logistics, and manufacturing. To do this, R/3 uses a typical client/server, three-tiered architecture consisting of a database, an application layer, and a presentation layer. The latest release, 3.1, is
Web-enabled
, adding what SAP calls an Internet Transaction Server to the architecture.
To work with R/3, you need to understand what SAP calls the Business Framework. This includes two main technologies: Business APIs (BAPIs) and Application Linking and Embedding (ALE). Also part of the Business Framework are the SAP Business Objects, an effort to structure R/
3 in an object-oriented way, and the Open Information Warehouse (OIW), a collection of R/3's data-warehousing features.
BAPIs use Microsoft's COM to create an object-oriented interface to the business-application logic within R/3. They allow R/3 to pull identifiable content from non-SAP applications into R/3, extending the functionality of the product to other, unrelated corporate systems. "A BAPI is business content," explains Peter Graf, technical marketing manager with SAP. "BAPIs change slower than content, which means you can achieve independence from technical issues and just worry about keeping your content up to date."
R/3 introduced ALE with version 3.0. This feature loosely synchronizes physically separate R/3 systems as well as R/2 and non-SAP systems.
The Business Objects feature, SAP's approach to the object-oriented movement of data, uses Microsoft's COM/DCOM to allow business objects to coexist in loosely coupled, multiplatform, multistandard environments. A Business Object co
nsists of a core business-logic layer, or business-object kernel; a second layer for rules and constraints, which ensures data integrity; and a third layer, which consists of methods, attributes, and event controls. The fourth level is the access layer, where object-oriented standards, such as COM/DCOM and CORBA, reside.
The OIW is a data-warehouse solution within the R/3 system. It's an extensible on-line analytical processing (OLAP) server with information models for business management that are derived from the R/3 system. The Business Explorer is an integrated analysis tool, based on Excel and Internet technology, with ready-to-go reporting libraries for corporate data analysis.
Also important to R/3 are Internet links for conducting Web transactions and running business functions through the Internet. New Internet features include bank data transfer, order entry, order-status requests, human-resources (HR) employee self-service applications, and graphical on-line product catalogs. With a tra
nsaction server, this architecture makes it possible to guarantee that when someone clicks on a Web application, that transaction will be carried out. The SAP Internet Transaction server, which runs on Windows NT, is an addition to the R/3 architecture and does not change it in any fundamental way.
Because R/3 ties into a company's Web site, it eliminates the need to invest in new Web-enabling technology. "We're staying competitive because we can show our products on our Web site and tie our business into the site without changing our business model in any way," says Jean Fulchino, MIS director of Polyfibron Technologies, a printing firm in Billerica, Massachusetts.
The New R/3
This year, SAP plans to introduce R/3 4.0. With this release, SAP adds new features that take an object-oriented approach to business applications, which will provide more functionality.
With release 4.0, HR functions will be a separate component. But these functions won't be isolated from other business fun
ctions; R/3 Human Resources will be easy to integrate into R/3 Financials and Logistics applications because the HR applications are part of BAPI. This approach makes back-office HR information available to the front office for better management of HR. The new HR functions include a number of country-specific versions, as well as modules for employee self-service through Internet or intranet applications.
With the new release, what SAP calls an Availability-to-Promise, or ATP, server for order-processing transactions will be available. The R/3 customer can access this server, which runs on a single general-purpose database, across corporate networks or the Internet to perform multilevel product-availability checks.
Another innovation with release 4.0 is the Engineering Workbench, a dedicated platform for managing real-time changes that users make to the R/3 business process. The Workbench is Internet-enabled and instantly incorporates the latest templates for business applications into the R/3 sys
tem.
R/3 4.0 also extends its international business features by providing an intelligent function that will convert financial information to and from the European Monetary Union currency.
SAP plans for R/3 to be written in pure Java in the future. The GUI for release 3.1 is already written in Java. "We reimplemented the GUI as an applet," says Graf. "When you use our GUI, there's zero maintenance needed at the client level." The Java-enabled GUI also makes it easy to push R/3 content out to the Web.
SAP for Smaller Companies
R/3 got its reputation as a big company's product because SAP sold it that way. SAP's new, separate channel for smaller customers means R/3 no longer needs to be characterized as a big corporation's tool. Small firms are now a target for R/3, which is a boon not only for them, but also for the resellers and integrators that SAP is using to sell to this market.
In August 1996, SAP created the Certified Business Solutions (CBS) program. CBS is a network of
independent providers focused on customers with an annual revenue of $200 million or less.
"SAP realized that large enterprise projects accounted for only 50 percent to 60 percent of our business," says
Bryan Plug
, executive vice president of SAP America. "The other 40 percent were what now falls into the CBS program."
A CBS customer's R/3 solution is typically viewed as being in a different league from that of a small to midrange or start-up company. SAP, however, is making a concerted effort to sell the product to these organizations. Simple awareness of the CBS reseller channel is a problem for many resellers. "I hear, 'Jeez, I thought we were too small for SAP' from a lot of companies," says Gil Missana, an SAP reseller with Missana & Associates of Westbrook, Illinois. "The challenge is not awareness of R/3, but to help people appreciate the new strategy for delivery."
R/3 didn't need to change, but SAP's implementation practices did. "We learned what mattered w
as that the product must fit Best Business practices and be scalable and easy to use, acquire, and maintain," explains Plug. "This means we tie up the smallest possible number of people, because these companies simply don't have manpower to spare for implementation when people are needed at work."
SAP also learned that system needs may be the same for smaller companies, but implementation needs are more exacting when there are fewer resources. Michael Malone, executive vice president of sales and marketing with CTS, a reseller company based in Atlanta, says, "Companies set expectations, but without block-and-tackle documentation, customers wait too long and then fall prey to time constraints."
CBS Is Small
SAP's CBS reseller channel is pretty tight: SAP plans for about 20 resellers in North America, and 16 of those slots are already filled. SAP investigates the organization, staff, product-management experience, information-technology (IT) experience, and capital of a reseller firm before
making a company a certified reseller.
But unless you're one of four companies ready to take the mantle of Certified Business Partner from SAP, discussing this channel seems pointless. SAP has looked at over 50 resellers just to select the ones who are certified resellers today.
Fortunately, R/3 is such an expansive technology that the opportunities for people who can sell peripheral products and services, such as hardware resellers and IT companies, are endless. "Our resellers are typically not hardware resellers, networking experts, NT experts, or database experts," says Plug. CBS reseller companies are experts in R/3 implementation, but they depend on others for the extensive peripheral services and hardware needed for a complete execution.
Integrators and resellers need an assortment of platform and environment skills. Seventy-five percent of R/3 systems currently in use run on Windows NT, but knowledge of Unix for LAN and WAN environments is frequently needed. Oracle databases predomi
nate, and extensive knowledge of it is necessary for the implementation of R/3.
CTS sells IBM RS/6000 servers and its expertise in Oracle database products to R/3 customers. CTS works with larger consulting firms, such as Andersen and Cooper, who build the SAP environment, while CTS builds the server and database architecture. "A lot of resellers miscalculate the size of the box needed," says Malone. "R/3 eats up small boxes, and we need to feed it more hardware for an upgrade."
Customization
Many people chafe at the notion of buying into a monolithic solution like R/3 because it would seem to rigidly impose a single business model on companies with distinct personalities. But this simply isn't the case.
"It's flexible enough that we can run things the way we did before," says Polyfibron's Fulchino, who's currently in the process of migrating to R/3. "There are minor changes that we put up with: We had to adjust some methods because of the size of the number field in some applicatio
ns." Polyfibron has two people on staff who can script in ABAP/4, SAP's scripting language. To customize R/3 applications, a company should have staffers familiar with ABAP/4, but all R/3 applications are somewhat customizable without scripting to fit a company's general business needs.
Sheryl Haller, business applications manager for NetManage, a Silicon Valley-based development company, agrees that R/3 is flexible. "The software is designed generally enough that it's not a hindrance. We'll use it as long as it meets our requirements." (See the sidebar "SAP Gets Small".)
In addition, R/3 applications are easily recognizable by standard Windows interfaces and the integration of Microsoft Office programs, which can be used for presenting R/3 files. "I think the real strength of the system is the use of Windows programs for presentation," Fulchino says. "They're familiar to just about anyone with a computer at their desk."
How long does all this take? SAP aims for general implementations to ta
ke five to six months. "Some companies have encountered delays because they don't have sufficient knowledge of how their business works in the first place," explains Fulchino.
Of course, the time to implementation is affected by the approach a company takes. Most companies prefer a gradual one, implementing one or more R/3 modules in the department or departments that need it most, and adding on as necessary. The "big bang" approach may be lucrative for companies that are impatient to update their systems, but it sharply increases the learning curve for the whole company. "We changed over our financial department first," says Fulchino. "I think changing gradually makes a smooth transition possible."
The opportunities for a reseller in R/3 implementation are currently growing. As SAP's market share grows, and as the company cultivates its new sales avenues, more resellers, integrators, and consultants will be able to cash in on its product family.
But no one should leap blindly to this produ
ct line. SAP is picky about who it selects for certification, and R/3 itself is such an all-encompassing technology that no one can half-heartedly adopt it. This is true for integrators and customers alike. As Jean Fulchino summarizes the implementation of R/3, "it's an investment, not an acquisition."
Where to Find
Computer Associates International
Islandia, NY
Phone: 516-342-5224
Fax: 516-342-5329
Internet:
http://www.cai.com
Thinking Small(er) with SAP
