SAP's Strategic Approach

SAP's Strategic Approach



SAP's Strategic Approach

Section A: Compulsory

Question 1. Using module theory, critically evaluate SAP's strategic approach and the extent to which the company effectively exploited its core capabilities and the changing industry structure between 1972 and 2006. Use case evidence to assess and compare SAP's strategic approach and competitive position in its early years, especially during the 1980s, and after 1995.

SAP is a software system which integrates key business processes into one system. Although this system has helped many companies grow, the benefits do not come easy. The implementation process can be slow and every company has special needs and presents unique obstacles that must be addressed in order to achieve a successful system. (Appleton, 2007) SAP was founded in 1972 and is today one of the world's largest independent business software providers - and one of the three largest independent software companies based on market capitalization. Today, SAP has approximately 47,800 customers in over 120 countries and employs more than 51,200 employees in more than 50 countries in the Europe, Middle East, and Africa (EMEA), Americas, and Asia Pacific Japan regions. SAP's core business is developing and licensing business software solutions. The product portfolio includes the SAP NetWeaver technology platform and the following software applications:

•SAP Business Suite applications, which help enterprises improve business operations ranging from supplier relationships, to production to warehouse management, sales, and all administrative functions, through to customer relationships

•SAP solutions for small businesses and midsize companies, including SAP Business ByDesign, SAP Business All-in-One packages, and SAP Business One

•Solution portfolios for more than 25 industries including financial services, consumer products, public sector, manufacturing, service industries, and discrete industries.

ERP is a fine expression of the inseparability of IT and business. As an enabling key technology as well as an effective managerial tool, ERP systems allow companies to integrate at all levels and utilize important ERP applications such as supply-chain management, human resource management and customer relationship management. They represent large, complex, computerized and integrated systems, which can strongly influence long-term business success. (Bancroft, 2007)

ERP software supports an organization's entire Business process. Typically, consists of multiple software modules that integrate activities across functional departments - from product planning, parts purchasing, inventory control and product distribution, to order tracking. Most ERP software systems include application modules to support common business activities - finance, accounting and human resources.

Oracle has always been an innovative company. It was one of the first companies to make its business applications available through the internet--today, that idea is pervasive. Now Oracle is committed to making sure that all of its software is designed to work together. How does Oracle stay toward the top? They will continue to innovate and to lead the industry while always making sure that they're focused on solving the problems of the customers who rely on their software. (Brynjolfsson, 2006)

As with the other ERP software, implementation can fail for the following reasons: inherent complexity of ERP implementation, unrealistic expectations, outside consultant issues, over-customization of software, inadequate training, using IT to ...