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(Posted on behalf of Bjoern Bernard)

When they hear the word ‘Adoption’ most ordinary people will think – as defined by Wikipedia – of ‘the legal act of permanently placing a child with non-biological (adoptive) parents other than the biological (natural) parents.’ Personally, this concept became very real for me as my 2 kids are adopted children.

In the software world ‘Adoption’ has a very different meaning or meanings. Looking at the ‘legal’ definition above and applying this to software, one could make the case that implementing software in an organization is like ‘implanting a foreign object into a living and breathing organism’.

In some sense this is true and like in the medical world implants are often rejected or take years to become ‘one’ with its new owner. With any new software or technology the organization needs to adjust to new processes, digest the change and ‘adopt’ new behaviors. Otherwise software projects are doomed for failure.

With SAP TM this is no different. Organizations in the case of transportation processes very often still operate in highly rudimentary or outdated environments such as…

  • Excel spreadsheets used to maintain freight rates or business rules
  • Freight contracts being negotiated annually – soon after the the paper version disappears in a drawer until the next negotiation round
  • Transportation planning and execution tasks are very often completely outsourced to Logistics Service Providers for a high price – both in terms of monetary fees as well as a loss of control and visibility
  • Freight invoices are often processed manually in paper-based environments
  • Legacy systems running out of shelf-life. These systems are like drugs that require something similar to a rehab program in order to ‘de-tox’ the organization from its use

One of SAP Transportation Management’s primary goals is to digitalize these tasks and at the same time try to automate processes, effectively reducing manual intervention and human errors. The TM solution inherently provides tools that help with these tasks. In the case of replacing legacy systems the task at hand of course is much more difficult as business users will have a hard time accepting new tools that might not look&feel like the incumbent system.

I would like to circle back to the ‘Adoption’ concept and talk about market adoption of SAP TM. Arguably my opinion is biased as I worked at SAP on the topic for a number of years during the Market Introduction phase. Still, from my vantage point the adoption rate of SAP TM will be quite steep – at least compared to some of the other business suite solutions that SAP introduced over the last few years.

Several factors can be listed as indicators –

  • Economic factors – higher oil prices leading to higher transportation and logistics costs. With oil prices most likely staying above at least the $60-70 range if not higher, companies have an inherent interest to start saving on freight spent
  • Demand – we see interest in SAP TM from basically every industry that is involved with shipping of goods. There are the obvious candidates like Consumer Product, Chemicals, Mill Products, Oil&Gas or Industrial Machinery and or Engineering & Construction. However, also other industries where SAP has had a tougher time selling SCM applications – Retail, Automotive or Telecommunications – suddenly is pushing real hard for SAP TM to become a mainstream product. Finally, of course, Logistics Service Providers with SAP TM 8.1 are quickly moving into the telescope of eager SAP sales folks trying to enter this industry segment
  • Technology – Transportation processes require highly performant and scalable communication patterns. The technology is now in place to link systems of business partners together in a way that allow for responsive, task driven collaboration processes like Broadcast Tendering or electronic Rate Quotes
  • the SAP ERP factor – SAP’s major advantage is and will always be ‘Integration’. Being able to provide key business scenarios in a seamless fashion across systems is priceless. SAP TM demonstrations that illustrate the power of integration will without a doubt leave a lasting impression with any prospect that runs SAP ERP. That’s why a lot of IT departments often are on the SAP side, it makes their life so much easier.

In ending I would like to challenge SAP to do its share in this Adoption process. For SAP to truly capitalize on its large installed base SAP TM processes need to be adopted in a multitude of other solutions – Global-Available-to-Promise, EWM, CRM, TSW, SNC – just to name a few. I recently blogged on GOPA ITC’s own SAP TM blog site about the Alphabet Soup that exists in SAP’s solution footprint. We would welcome others to join the community at http://blog.gopa-itc.com.

SAP has a very solid roadmap that commits a lot of resources in the coming years to SAP TM and Supply Chain Execution. We all hope that SAP TM will become the default choice for any customer looking for a TMS solution and as a result SAP TM will be a poster child of successful ‘software adoption’.

Bjoern Bernard
Vice President – SAP SCM/TM Practice
GOPA IT Consultants Inc.

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