In Enterprise Software, One Size Does Not Fit All

Dennis Byron

The Dec. 2 press release by SAP touting its leadership in wholesale distribution ERP illustrates the importance of selecting enterprise software that was designed or later optimized for your industry. One size ERP or standalone packaged software does not fit all.


The SAP press release also reminds me of the old journalists' rule: the longer the press release the less news in it. SAP's leadership in wholesale/distribution is not new news; SAP has always been a leader in wholesale distribution. Wholesale distribution ERP is just real ERP without the process formulary or the material requirements planning module. At the core, it's accounting and inventory management/purchasing.


SAP simply didn't have products with the words Wholesale Distribution in the title until 2003. Then, presto, all of a sudden it had two separate products: one based on Business One and one based on All-in-One. In October 2004, SAP added a heritage-R/3-based Wholesale Distribution product based on the rapidly growing SAP middleware, NetWeaver (of course All-in-One is also based on R/3). Equally presto -- SAP was a leader in the segment.


Another factor that helped was SAP's early dedication to getting R/3 running on the IBM AS/400. AS/400 was one of the most favored platforms of wholesale distributors, which is why all of the most well known early ERP products - BPCS (from SSA), J.D. Edwards World products, Mapics, Marcam, and more - were AS/400 based (and many were IBM System/3- or System/3x-based before that). Not coincidentally, most of the ERP brands you never hear of anymore did not make the AS/400 commitment that SAP made. I don't keep track anymore, but at one time not too long ago 10 percent of SAP's revenue was based on selling software onto AS/400 systems.


A third factor in SAP's favor among wholesale distributors was that it followed its customers: manufacturers that became distributors. When you look at SAP's wholesale distribution client list you find that many of them used to make things; now they simply distribute things made by job shops in countries friendlier to manufacturers. This is especially true in technology manufacturing, an early penetration area for SAP.


So in looking at enterprise software, look for software that has your industry in mind. More to come in an upcoming year-end review of the software market and another on the ERP market in particular; articles about both reviews will be published here in IT Business Edge.

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