SAP and business process re-engineering

To remain competitive many businesses in the 1990s have undertaken business process re-engineering (BPR) projects re-organizing and re-structuring their business operations. At the same time the need for an IT business solution has enabled integrated business packages such as SAP's R/2 and R/3 to quietly dominate the IT systems industry. Although the successes and benefits of SAP have been widely published, there is little literature on the problems associated with embracing such an integrated and unique system. The paper results from a case study of the evaluation and implementation of SAP by a very large US multinational corporation in its European, Australian and New Zealand businesses. The different approaches to the installation of an integrated core system and BPR are explored. Problems and lessons that can be learnt from the company's experiences are also highlighted in this paper. Introduction This paper cover a period from the late 1980s to the late 1990s, when systems, applications and products in data processing (SAP)[1] became widely used outside Germany to replace core systems. SAP, originally developed and marketed in Germany, is an integrated software package providing core business applications. In the 1990s SAP software became better known outside Germany and captured a large share of the integrated package market in medium and large companies throughout the world. With extensive functionality and a high level of integration the software covers the full range of business requirements, including financial accounting and control, sales and distribution, materials management, production planning and human resources management. During the 1990s an increasingly competitive world was also driving the use of BPR (Hammer and Champy, 1993) and business restructuring to improve profitability and return on capital employed. Substantial, and in some cases traumatic, restructuring and downsizing took place in many organizations to reduce costs and management layers. The challenge was to structure a leaner, more customer focused and flexible organization to meet the competitive challenges in the global economy. In this case study SAP software was used to drive the restructuring of a very large business in 16 countries in Europe. The individual businesses in the 16 countries were combined into a single pan-European business, headquartered in the UK, with a SAP core system and a standard reporting process serving a centralized management team. In the same timeframe SAP was installed as the common core system in the Australian and New Zealand businesses with no immediate restructuring The current issue and full text archive of this journal is available at http://www.emerald-library.com