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SAP AG (SAP - Analyst Report) announced two new strategic initiatives yesterday in order to better serve its clients by improving forecasting capability and dealer management solution. However, the announcements hardly made any positive impact in the markets and the shares slipped 0.1%.
SAP launched new capabilities at the Gartner Supply Chain Executive Conference 2013 yesterday. The new capabilities, or the SAP Enterprise Demand Sensing, improve companies’ demand management and business planning processes with tools that provide a real-time view of market information.
SAP Enterprise Demand Sensing comes with a real-time outlook and analysis on all market activities, which include the sentiments from social networks. Based on this, the companies will be able to sense demand and accordingly promote products. Thereafter, supply chain teams will ensure quick response to changes in demand patterns.
This new software is expected to quickly improve the quality of demand forecasts in order to reduce stock-outs, thereby lowering costs and ultimately boosting sales. This new application not only provides the current information about the market trends and activities, but also provides historical forecast trends, compares and accurately combines different forecast sources with demand analytics and describes demand by analyzing historical forecast accuracy, bias and intermittency trends.
Therefore, through the launch of SAP Enterprise Demand Sensing, the company now puts forward a complete, end-to-end demand management solution to facilitate demand-driven supply chains. SAP Enterprise Demand Sensing perfectly complements the existing Demand Signal Management application and SAP Advanced Planning and optimization component.
In addition, on the same day, SAP and Accenture Plc. (ACN - Snapshot Report) expanded their global alliance through a reseller agreement, whereby Accenture will deliver a comprehensive dealer management solution for the dealer network of a heavy-equipment manufacturing company. The solution will help dealers operate their businesses more effectively through industry-leading capabilities including mobility for field sales and service personnel and improved business intelligence.
Accenture will act as a global value-added reseller (VAR) and it will be the single point of contact to deliver both its technology services and SAP products under a single structure directly to Accenture clients. The dealer management solution will comprise SAP software that Accenture will configure depending on the dealers’ use cases, by integrating industry best practices for analytics, finance, sales, parts and service.
Prior to this, SAP and Hortonworks had entered an agreement whereby SAP will be reselling the latter’s Data Platform (HDP) to its customers. Through this reseller agreement SAP will deliver a complete Enterprise Architecture leveraging the industry’s first 100% open source data platform powered by Apache Hadoop.
These strategic initiatives come at an opportune time as the global competitive pressure is severely pushing the companies to transform and upgrade their supply chains in order to become more demand-driven/market-driven. Today, supply chain professionals and the marketing force need to have more integration in terms of work than ever before to generate value for their customers, thereby improving their business efficiency.
SAP seeks to position itself as the market leader against software giants like Oracle Corp. (ORCL - Analyst Report) and IBM Corp. (IBM - Analyst Report). According to market research firm Gartner, worldwide enterprise IT spending is expected to be $3.6 trillion in 2013.
Spending on enterprise software is expected to increase more than 6.0% to $304.0 billion, driven by higher spending on database management systems. Therefore, with innovations such as these, SAP can clearly benefit from the increased spending in the IT industry.
SAP currently has a Zacks Rank #3 (Hold).