Chapter 5 • Enterprise Systems 201ERP is a relatively comprehensive package, with strength
in the operations area as has historically been the case
for SAP.
In addition to the modules in SAP ERP, other
available applications in the SAP Business Suite include
customer relationship management (CRM), product
lifecycle management (PLM), supply chain management
(SCM), and supplier relationship management (SRM)
(see Figure 5.7 for the supported core business processes
for each application). The names and core business
processes of the applications should provide a reasonable
understanding of what most of the applications do, but let
us mention a few of the particularly interesting capabili-
ties. Within the CRM application, the Web channel
capability permits your business to carry out business-to-
business (B2B) or business-to-consumer (B2C) sales on
the Web; it also provides support for Web catalog
management, content management, customer segmenta-
tion, and personalization, as well as a Web store locator.
Within the PLM application, the enterprise asset manage-
ment capability supports the selection, purchase, and
installation of equipment; tracks the costs of individual
assets and aggregates these costs as desired; and assists in
determining the optimal time to replace equipment.
Within the SRM application, the supplier collaboration
capability permits the electronic exchange of documents
in any format with suppliers and provides the tools to
create and manage a supplier portal.
All of the previously mentioned SAP applications
are generic software packages that would work in many
businesses. In addition, the early years of the twenty-first
century have seen the development of industry solutionsby
SAP and other ERP vendors that are tailored to the special
needs of particular industries. SAP, for example, currently
offers 24 specific industry solutions, including automotive,
banking, chemicals, health care, insurance, life sciences,
retail, and wholesale distribution. The trend is for more
specialization of ERP packages, with variations for smaller
businesses being introduced and more industry solutions
under development.
Companies choose to implement the SAP modules
or applications that make sense for them. Comcast
Corporation, the leading cable provider in the United
States, has selected the SAP Human Capital Management
(HCM) solution to carry out the human resources and
payroll business processes for the company’s employee base
of approximately 90,000 people (SAP, 2007b). Harry &
David Operations Corporation, the premium gourmet food
retailer, has selected the SAP for Retail solution, including
the SAP Merchandise and Assortment Planning and
SAP Forecasting and Replenishment applications, to drive
business benefits in inventory management and retail and
channel sales. These applications will support Harry &
David’s ability to offer more targeted merchandise
selections in its retail stores. Harry & David will begin its
implementation with food and beverage capabilities,
followed by SAP ERP Financials. “We are poised for
tremendous growth, both as a direct retailer and as a
wholesaler to numerous retail outlets,” said Joe Foley,
Chief Information Officer of Harry & David Holding, Inc.
“The seasonality of our business demands a platform that
can rapidly scale and meet our ever-changing needs. Only
SAP’s fully integrated business model can provide us with
a single operating platform that will take costs out of
our infrastructure and give us a solid basis for growth”
(SAP, 2007a).
In other examples, Graybar Electric Company, a
leading North American wholesale distributor of electrical,
telecommunications, and networking products, has chosen
the SAP ERP application to more effectively manage its
physical inventory (more than 1 million stock-keeping
items) and process its tens of thousands of purchase and
customer orders and quotes daily. Benefits to Graybar from
SAP ERP include streamlined reporting of key performance
indicators, yielding better decisions; improved inventory
management resulting from better forecasting; better
control of chargebacks; and enhanced efficiency from self-
service functions and improved workflows (SAP, 2007c).
As part of an outsourcing agreement with EDS, Dial
Corporation has scrapped enterprise software packages
from Oracle, Siebel Systems, and Manugistics and moved to
a single suite from SAP. The SAP implementation included
manufacturing, supply chain, finance, accounting, perform-
ance management, and customer relationship management
software and cost about $35 million, including licenses,
implementation services, and maintenance. According to
Dial Chief Information Officer Evon Jones, Dial went with
SAP because “SAP and the processes with SAP’s software
are regarded as best in class and will drive operational
efficiencies, particularly when you start to get greater
visibility within your supply chain” (Bacheldor, 2003).
For a more detailed description of a SAP implemen-
tation at a major pharmaceutical firm, see the section
entitled “What is the Experience with ERP?” in Jacobs,
Berry, Whybark, and Vollmann (2011, pp. 26–30). Also
see the box entitled “Toyota Motorsport Accelerates
Formula One Operations with SAP.” Today, ERP software
systems are still a hot commodity.Data Warehousing
In order to create a data warehouse, a firm pulls data from
its operational systems—the transaction processing
systems we have just discussed—and puts the data in a