Following the bursting of the Internet “bubble” and the Silicon Valley retrenchment, the economy is rebounding and the electronics/high-tech industry seems poised to regain a measure of its former panache. Yet at the same time, it is beset by many of the challenges that have hit other fast-paced industries.
High-tech companies today must manage complex, virtual supply chains, coordinating resources shared among a shifting matrix of partners. Rapid price erosion and margin pressures call for lower cost structures and increased flexibility. Many of them see the need for outsourcing and new fulfillment approaches, such as factory-direct sales to consumers and businesses. The road to the future looks good, yes, but bumpy.
Robert W. Quicke, senior vice president of BearingPoint – an SAP Business Partner with long experience in the electronics and high-tech industry – addressed these problems and the BearingPoint R²i (Rapid Return on Investment) solution in a webinar entitled “Tech 4 Tech,” co-sponsored by SAP and BearingPoint.
R²i for Electronics is a pre-packaged, qualified mySAP All-in-One solution for small and midsize original equipment manufacturers (OEMs). As Quicke explained, it is an electronics-industry-specific version of mySAP Business Suite designed as a cost-effective, turnkey deployment with a predictable total cost of ownership.
BearingPoint, previously known as KPMG Consulting, went public in 2001. Its 16,000 professionals worldwide provide full business advisory, systems integration, and managed services. Quicke noted that BearingPoint can deliver the whole ball of wax for SAP applications: implementation, support, and managed services, including platform hosting and application maintenance.
During the webinar, he outlined the process of bringing a successful IT solution to an SMB – which, Quicke emphasized, has a different consulting model from a larger company. He noted that a critical time in a company’s development comes when it decides to make a significant technology investment. “Companies in our space have a growth objective,” he said. “They’re SMBs looking to establish a footprint in the marketplace, with not many internal resources for technology investment,” so they must entail a studied, careful approach
What scope of IT investment should they choose? Should the firm invest in an enterprise solution immediately? A purely back office system, he said by way of example, does not hit the pain points of getting to market or customer interaction, so it may make sense to combine front and back office for investment right off the bat. But the client must be aware that total cost of ownership reflects the full range of infrastructure and support costs, not just during implementation, but over at least the next three to five years. Support has to involve a major, continuing investment – which is especially key in the SMB market.
Who are BearingPoint’s high-tech clients? “Cisco was our startup 10 years ago,” said Quicke. And TiVo implemented a SAP system through BearingPoint about five years ago: “They’re midmarket today but will be Fortune 1000 tomorrow.”
SAP solutions development
Quicke recalled that SAP approached BearingPoint – based on his company’s experience in what he referred to as the electronics/high-tech “micro-vertical” – to put together a mySAP All-in-One solution. BearingPoint developed, with SAP’s assistance, a preconfigured OEM solution, which is now certified and jointly marketed.
He explained the layers involved in the mySAP All-in-One solution, which builds up from the full mySAP Business Suite, with its “generic” preconfiguration, to which are added SAP industry best practices for high-tech. For the next layer, BearingPoint developed industry-specific functionality. Finally, modifications and extensions can be provided for specific clients.
R²i for Electronics, which offers the business benefits of a top-drawer SAP enterprise system at a more competitive price, includes such modules as finance, sales and distribution, materials management, production planning, SAP Customer Relationship Management, a SAP Enterprise Portal, SAP Business Intelligence, and SAP Business Information Warehouse.
Altogether, BearingPoint delivers 218 preconfigured business transactions supporting 25 business processes, including such pillars of the high-tech industry as configure-to-order, returned materials authorization and processing, collaborative planning and forecasting, subcontracting, and service and warranty tracking.
Reporting solutions provided by Crystal Decisions, he noted, are intuitive and designed specifically for integration with the SAP system. Prepackaged functionality includes 20 standardized business intelligence reports for sales, purchasing, finance, and service.
You tell us
As a systems integrator, BearingPoint aims to be a one-stop shop for SAP in the midmarket. “We address change management, conversion, and training,” said Quicke. The bedrock underlying the company’s panoply of cost-cutting and management tools, he explained, is their flexible consultancy: “The approach we take with our clients and potential clients is unusual: We ask, ‘How would you like to run your business?'”
BearingPoint works to get the client’s executive team involved immediately whenever possible, presenting a workshop on key value changes. “We like to see the whole company, not just a portion, to look at the impact of the various business processes,” explained Quicke. “We do a map of the organization using predefined profiles, then the decision is made on the support structure. We’re not training users in how to use system, but how to do their job using the system.”
Most of the processes that BearingPoint implements – whether its own or those of SAP – have a collaborative element, he said. They interact in some way, through the supply chain, or with management sharing drawings and designs, to meet the increasingly exacting requirements of OEMs. R²i makes it possible for information to be securely shared across the internal organization, as well as with partners, suppliers, and customers.
The basic implementation of BearingPoint R²i for Electronics comes to about $400,000, said Quicke, including hardware, software, support, and consulting. Additional elements, such as CRM, add more. The average implementation time runs about 10 weeks, although in the case of a “compelling event” it’s possible to shorten it – “eight weeks was fastest we saw,” he recalled. Training can sometimes lengthen the time frame.
Firming up the niche
Quicke noted a number of changes in the IT scene over the past decade that have helped make both SAP and the R²i solution appropriate for the SMB market. First of all, in the early ‘90s, SAP solutions did not include such specific functions as configure-to-order, but pressure from strong user groups helped steer development in that direction. Today, he said, SAP has not only focused on industry-specific functions that work well in the midmarket but has pushed its targeted solutions into new areas, such as biotech.
During the same period, he added, BearingPoint fine-tuned its implementation to include “personalization not just configuration – we aim to add specifics into the system and spend more time focusing on business change” to make the cost of implementation more predictable.
Within the high-tech industry itself, he wrapped up, business models have matured, and virtual supply chains have strengthened links between suppliers and manufacturers.
To view a replay of the webinar, “Tech 4 Tech,” visit www.sap.com/solutions/smb/allinone/newsevents/partnerwebconferences.asp.
To learn more about the BearingPoint R²i solution, see
www.bearingpoint.com/r2i_for_electronics/ or www.sap.com/solutions/smb/allinone/prepackagedsolutions/r2i.asp.