In my research of 10Q's I see a lot of companies converting to the SAP programs. How mission critical is it, and in general what is it responsible for? My understanding is that it is a major database. How complicated is it to get going (understanding that it will be more difficult the larger the company)?

-- Anonymous, June 04, 1999

Answers

SAP is a vendor of ERP (enterprise resource planning) software. ERP software is generally used by manufacturing companies to coordinate all the resources required to satisfy a customer order, from order entry to raw materials (purchasing) to manufacturing (production scheduling) to distribution (transportation and warehousing) to billing and accounts receivable. SAP software has the reputation of being very time consuming and expensive to install, with project time frames measured in years and costs in the tens, if not hundreds, of million dollars. Most SAP projects are contracted out to large consulting firms that have practices devoted to SAP installation. For a manufacturing company, SAP would definitely be a mission-critical application.

With regard to electric utilities and Y2K, two observations: 1) SAP systems have no role in operating generation, transmission, or distribution systems. Modules of the system might be used for purchasing or other administrative functions. 2) If you didn't start in early 1998 at the latest, you probably won't have the SAP products running smoothly in time to replace older systems that are not Y2K-ready.

-- Anonymous, June 04, 1999

Oooh, this is so cool - I worked on one of these for a biggggggg electric company (MM module team and Business Integration team). And we didn't turn BPR and configuration over to Price-Waterhouse (our integrator) - we went through all of the required SAP training and the utility folks did it themselves (with PW looking over our shoulders). So I can adquately answer this.

As Peter noted, definitely mission critical - all of our financials, materials management, work planning and scheduling, human resources, etc. etc. were part of the package. It's a big deal. The process was started early in 1996, and I think the end cost will top out in excess of $100,000,000 for the enterprise wide implementation. Does this implementation take care of all Y2K issues in back office systems? Perish the thought. Our gap analysis pegged backoffice replacement by SAP at around 65%, if I recall correctly. That may have increased, as SAP has come out with more functionality to their modules over the past few years.

Oh, and are they finished, you ask? Not yet. One of their major business units (Nuclear) was just getting ready to go live, last time I heard (a few weeks ago).

SAP *does* take care of a lot of backoffice Y2k problems, but not all of them. Also, you still have hardware, O/S, platform, and database Y2K issues to deal with (most SAP implementations seem to run on a Unix O/S with an Oracle DB behind them, if I'm not mistaken, although some smaller installations have actually implemented on NT). Plus, those pesky systems that SAP didn't replace (such as customer service, GIS applications, and other "lifeblood" systems).

-- Anonymous, June 04, 1999

These are OT, I guess, so I'll just post the links.

ERP Projects Dumped As Y2K Approaches ERP's Fight For Life

-- Anonymous, June 07, 1999

On SAP .... SAP was installed at Union Carbibe last year. When it was turned on the system crashed.It couldn't be restarted and the old system failed too ! Carbide was unable to do anything for almost two months, including pay monies owed to local contractor companies. My son worked for one of those " local companies " , and it almost put them out of business . Eagle

-- Anonymous, June 09, 1999