When I was researching SAP Nation, I was impressed with how many customers are swapping out software, moving to third party maintenance, “ring fencing” the core solution with specialist tools, and implementing two and three tier strategies – different solutions for headquarters, large and small subsidiaries. I presented a sample of case studies in the book.
I have been running a series of blogs following up on the book research - see earlier posts on I UNIT4’s successes in the UK local government sector Microsoft in two-tier setting and Rimini Street for third party maintenance.
While many of these strategies are cost driven, the “ring fence” strategy is often motivated by inadequate functionality from SAP. As the book describes, SAP has been distracted with its HANA focus and its acquisitions that functionality in many of its products has lagged over the last decade.
I recently re-connected with Michael Schmitt, CMO at E2open (I knew him earlier at J.D. Edwards and Ariba). He told me the company’s Supply Chain Cloud applications for Collaborative Planning & Execution surround SAP solutions in nearly 100 customers.
Examples include HP, which I had profiled in the book for ring fencing SAP with Salesforce, Workday, and other SaaS tools, uses E2open for Order Promising and Response Planning, as well as deploying its Supply Chain Planning to synch components from suppliers with its contract manufacturers. Avnet, the large distributor of electronic components (think 5 million+ parts), replaced SAP’s Global Available to Promise with E2open’s E2PR for Order Promising and Response Planning. Avon which sells 4 lipsticks every second and has been attempting to roll out SAP, uses E2open applications for supply chain visibility and management of contract manufacturers. L’Oreal, another large cosmetics company, uses collaboration tools from E2open for supply planning, inventory and order management around SAP’s modules. Shell, a large SAP customer, uses E2open to provide Supply Chain Visibility for “track and trace” of materials that go into oil rigs.
Individually, you could dismiss them as small cracks in the frozen tundra, but there are many such cracks if you use a wide angle lens. Over the next few weeks I will profile other such “snapshots” and show why I believe they are an indication of coming significant churn in the enterprise software market.