Key Trends Impacting ERP Software Revenues For SAP In 2014

Sanjay Kumar
Senior SAP Professional / Senior Director
Fort Worth, TX

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German software developer SAP AG is the global leader in ERP (enterprise, resource, planning) application software, with a market share of approximately 24.6% in 2012 and annual revenues exceeding $6 billion. ERP software product sales contribute to about 31% of SAP’s stock price, and is the most important driver for the company. SAP offers ERP software modules that serve companies across various operating groups (such as sales and marketing, finance, supply chain and logistics, engineering and manufacturing etc.), allowing them to manage and optimize their resources through its products, including Business All-in-One, Business ByDesign, Business One, Business Suite and mySAP.

In the current article, we study SAP’s ERP software division and take a look at the various trends shaping the global ERP market.

HANA Integration To Drive ERP Sales For SAP

Since the launch of its high performance HANA platform, SAP has been integrating its application software modules with the in-memory platform to boost processing rates. In November 2013, SAP rolled out its Business All-in-One application powered with the HANA platform, for key industries in 52 countries globally. The integrated offering could be deployed on-premise as well as through a private cloud placement for more than 24,000 Business All-in-One customers. Additionally, SAP has previously integrated its Business Suite software with the HANA platform.

Going forward, we expect to see further integration of the HANA platform into SAP’s ERP application software packages. Moreover, the rapid rise in demand for SaaS offerings as opposed to on-premise offerings should accentuate the company’s position within the ERP market and boost cloud subscription revenues for SAP in the future.

Cloud & Mobile ERP Offerings To Expand Rapidly In 2014

SAP posted triple-digit growth in cloud subscription revenues for the three quarters in 2013, from €183 million in 2012 to €547 million in 2013. According to technology research firm Gartner, public cloud services globally are expected to reach $131 billion in 2013, up from $111 billion in 2012. Software-as-a-Service offerings are expected to account for 14.7% of the estimated $131 billion cloud service revenues in 2013. This translates into approximately $20 billion in cloud application sales in 2013, and presents a huge opportunity for on-premise software developers such as SAP, Oracle and IBM.

The adoption of ERP software by small and medium enterprise businesses is also crucial to SAP’s future growth in the ERP division. The SME ERP market lacks strong presence of legacy ERP systems due to their smaller financial position. Moreover, increasing demand for interaction and collaboration between application suites for business streamlining has favored the launch of modern, flexible cloud-based systems that are being adopted by SMEs. SAP’s competitor NetSuite leads the cloud ERP market space, and given that SME businesses prefer low cost on-demand offerings, SAP could face significant competition in entering the legacy-absent SME ERP market.

Additionally, mobile ERP platforms are expected to take center stage in the future, with business processes being conducted on smartphone and tablet devices rather than on personal computers. SAP is positioned to gain the most from the move to smartphone and tablet devices, with its Mobile Platform having a 49% market share according to IDC. IDC estimates the market size of applications developed on mobile development platforms to increase at an annualized pace of approximately 39% through 2017, and reach close to $4.8 billion from its current size of $938.5 million. Going forward, we believe SAP will increase its focus on cloud and mobile ERP product offerings, in line with the current market migration towards enterprise mobility and cloud ERP solutions.

Sanjay Kumar



Sanjay Kumar

Business Applications Advisor



  • Twenty-five years’ experience in the industry, including 17 years in SAP (13 of those at SAP America in presales and delivery), comprising Strategy, Business Processes, Architecture, Technology, hands-on implementation, Program Management and IT Management.
  • Advisor to multiple financial institutions to provide input on the competitive landscape for Business Applications and general technology trends.
  • Led and managed large-scale engagements, working with senior executives from IT and Business as well as global subject matter experts & IT professionals to ensure that information solutions are developed, deployed and aligned effectively.
  • Managed SAP programs, project managers, and teams of up to 35 people. Experienced in working with a wide range of IT partners and vendors, and in managing and optimizing outsourcing.
  • Developed and executed strategic multi-year IT roadmaps encompassing the entire set of business streams, with resource, time and cost estimates, prioritized based upon various business and value criteria, and supplemented with inputs from stakeholders.
  • Created and managed SAP Centers of Excellence to support SAP solutions design, implementation and delivery; train people to develop a highly effective team of SAP experts; work with emerging technologies; and provide a platform for co-development efforts with SAP and other partners.
  • At SAP America, generated multi-million dollar new projects at several customers. Extensive experience in SAP proposals development, project and program management.
  • Presented Papers and was the designated “Meet the Expert” at several forums such as ASUG. Taught several SAP Education training classes at SAP.


Objective :


An advisory position for ERP, Business Intelligence and related solutions, comprising one or more of the following:


  • Help define scope, select the right vendor (SAP, Oracle, JD Edwards etc), implementation strategy (eg, on-premise versus hosted/cloud), estimate end to end timeline and costs, deployment strategy, change management and training strategy.
  • Validate implementation costs, timeline, scope, strategy, staffing, strengths/weaknesses of existing vendor(s) to help reduce costs and risks.
  • Rescue projects that are not meeting objectives, are getting delayed, or are otherwise headed to failure.
  • Help define objectives and goals for IT that resonate better with the business, and get business buy-in for short and long term plans.
  • Assist management in managing the project and its costs, timeline and risks.
  • Act as management’s eyes and ears and work in management’s interests in overseeing important projects.






M.S. Computer Science, University of Southern California, Los Angeles, CA

M.S. Petroleum Engineering, University of Southern California, Los Angeles, CA

B. Tech. Chemical Engineering, IIT Varanasi, India


Key Accomplishments


  • Identified multimillion dollar savings from hardware migration and optimization at a large company.
  • Established SAP Centers of Excellence at two major SAP customers.
  • Introduced a novel internally supported PaaS (Platform as a Service) model in one of the biggest companies to provide agility and reduce costs.
  • Published 3 books and several papers.
  • SAP Employee Award(s) and management recognition awards.




Experience Summary


2013 – 2013                         Smith and Wesson, Springfield, MA

Senior Director, SAP

Designed and managed an IT CoE.

Working for the CIO, set the IT strategy for planning, designing, and managing current and future IT programs to take S&W to the next level, with an appropriate mix of internal and external resources to provide the best solutions capability and business value at an acceptable cost.


2010 – 2013                         McKesson Corporation, Dallas, TX

Director, SAP Business Processes

Worked with the lines of business and various subsidiaries to develop strategy, roadmap and plans for business solutions and technology, aligned with the corporate vision and objectives, to enable and/or support current and emerging future needs.

Overhauled the Business Intelligence platform to improve capabilities and performance. Introduced new tools to improve user experience.


2009 – 2010                         BlackBerry (formerly Research In Motion), Dallas, TX

Sr. Manager (SAP Architecture).

Led teams of 30+ employees and contractors, and established trusted advisor relationships with key business and IT executives. Responsible for design, review, and management oversight for multiple new SAP Solutions, and to provide solution expertise to enhance and extend business processes.


1997 – 2009                         SAP America, Dallas, TX

Managing Principal Enterprise Architect (2007-2009),

Principal Consultant (2004-7), PreSales Solution Engineer (2003-4), Senior Consultant (1997-2003).

Responsible for SAP solutions deployment and delivery over the period for various customers, including:

High Tech: HP, Honeywell, Microsoft, Varian Technologies, Research in Motion.

Banking: Dresdner Bank, ABN-Amro Bank.

Petroleum/Energy/Chemicals: ExxonMobil, Dow Chemicals, ConocoPhilips, Akzo Nobel, Safety-Kleen.

Consumer: Coca-Cola Enterprises, Home Depot, SanDisk, Clorox.

Aerospace & Defense: Lockheed Martin, Newport News Shipyard.

Public Sector: Univ. of Nebraska, Calif. State VTA.


1988 – 1997                         Deminex Oil GmbH, International (joint venture of BP, Shell and Veba Oil)

(Petroleum) Production Manager, Deminex Egypt (1995-97); Sr. Petroleum Engineer (1988-95).

Worked with 7 direct reports, representing over 300 persons, to manage130,000 bpd production from 3 oilfields.



US Citizen



SAP America Experience: Some Sample Projects


Industry: High-Tech – Waterloo, ON, Canada

Business Problem/Scope: Multiple business pain points in multiple systems and manual processes, for example: 15 days sales outstanding, inability to process 60 million Billing records, manual Procurement processes, manual compliance causing huge risks, etc.


Work with the individual process teams to design the solution roadmap for the next few years for this industry leader undergoing growth of over 100% a year. Design and prioritize optimal solutions to meet customer’s business processes and business needs. Scope project solution, phasing, and implementation approach to deliver quick time to value. Introduce, and educate the customer about, the latest solutions from SAP and Partners.

Solutions used: SAP ECC 6.0, SCM 2007, MES, PI 7.1, BW 7.0, Business Objects, Adobe UI, SRM 7.0, GTS, external-facing Portal, and Solution Manager.


  • Developed an integrated SAP Roadmap for addressing current and expected future needs, leading to the generation of over $20 million of projects.
  • Based upon this and other work, a further $40 million of products and services sales are under discussion.
  • Conducted several demo, design and discussion sessions to address CRM 7.0, ECC 6.0, BI, Business Objects, Adobe UI options, PI, eRecruiting and eLearning, SAP SCM, SAP SRM, SAP-BPC, SAP-MES, Solution Manager, DMS, and MDM solutions.
  • Providing multifaceted oversight to projects being initiated for HR, SCM, SRM, GTS, and BOBJ based on recommended plans.


Industry: Process Industry / Consumer Goods – Oakland, CA

Business Problem/Scope: Enable business to have end-to-end automation with Supply Chain processes, Business Intelligence, and Trade Promotion Management.


As an initial step to enable Supply Chain, BI and TPM, design and implement a business warehouse platform. Scope the project solution, phasing, and implementation approach to derive maximum business value and reduce risk. Plan and oversee implementation of all aspects of the project, including solution design and integration.

Solutions used: BW, CRM-TPM, SAP ERP, SCM, BPS, EP.


  • Reduced existing data extraction window from 7 hrs to 2.5 hrs.
  • Developed strategy for existing and new Business Warehouse to exist on a single SAP ECC back-end, thus reducing costs for the customer.
  • Deliverables led the Customer to ask for additional proposals to implement Business Planning & Simulation system and an Enterprise Portal.


Industry: Integrated Oil and Gas, Chemicals Subsidiary – Houston, Texas

Business Problem/Scope: Customer was suffering from very high operating costs, poor performance, and high maintenance costs. Integration issues due to, for example, obsolescence, too much customization, and systems out of sync.


Propose, plan and oversee implementation of systems optimization including over 200 SAP instances worldwide. Develop strategy and plans for functional upgrade to reduce custom code. Propose performance optimization techniques. Get business buy-in, plan timing and technology options, find and engage expert resources from SAP. Conduct workshops to help guide IT and business on the upgrade process and the newer functionality.

Solutions used: Systems Portfolio Optimization.


  • Carried out a detailed Portfolio Assessment for the global Chemicals subsidiary.
  • Developed a plan and implemented Portfolio Rationalization, including aligning current ongoing projects.



Industry: International Banking – Amsterdam, The Netherlands

Business Problem/Scope: Difficulty in timely and relevant reporting; high maintenance and high operating costs. The environment consisted of a vast number of systems, with custom point-to-point integration, and capacity constraints especially for real-time transactions.


Address design and implementation issues for integrating 46 systems, with the goal of providing a unified source for all data for real-time reporting for Consumers, Corporate Clients, and internal Management.

Solutions used: Integration and Reporting Strategy for 46 systems in 78 countries for SAP BI and SEM implementation.


  • Liaised with SAP Waldorf to seek resolution on the new SAP Banking solution in order to develop an optimal integration strategy.
  • Laid out the architecture, and the tasks for the project. Assisted in getting resources engaged to move the project forward.
  • Developed the solution phase-in and worldwide rollout strategy for the next 5 years, working together with senior and mid-level executives from both IT and the Business.



Older Projects Outline:


Short-Term / Part-Time Assignments                          

SAP Solution Advisor (Strategy, Operations, Global Rollout Planning): Paper Products – Richmond, VA, Ongoing from Sep 2008.

CRM-TPM Solution, Project Strategy and Plans: Consumer Products – Oakland, CA, 4 months.

BI 7.0 Upgrade Strategy & Planning: Aerospace & Defense – Wash. DC/Denver      2 months

R/3 4.7 to ECC 5.0 Upgrade Assessment Project Mgr.: Energy /Utilities, Wash. DC 2 weeks

BI 7.0 Landscape and Architecture: Global Chemicals Company, Detroit, MI           2 weeks

SAP ECC 6.0 Landscape Sizing: Consumer High Tech Industry, Allentown, PA      1 week

Manage Technical Development: Utilities / Waste Industry, Houston, TX                 2 months



High-Tech Memory Chips Manufacture – San Jose, CA

Enterprise Solution Architect and BI/BPC Lead for SAP ERP, CRM-TPM and CHM, SCM, SRM, PI, BI, BPC. Worked with the individual process teams to design optimal solutions to fit customer’s business processes and business needs. Advised the project on solution scope, phasing, and implementation approach. Assisted in getting business buy-in, resolve implementation issues, and find and engage expert resources. Achieved executive agreement to reduce scope and phase-in some of the solutions to improve project timeline, reduce risk, and reduce budgetary commitments.


High-Tech Computer and Consumer Technology Conglomerate – Palo Alto, CA

Solution Architect for BW-CRM project. Demonstrated the value, Developed relationships, and got management buy-in, for upgrading to BW 2004s and CRM 5.0. Estimated resource requirements, and proposed timelines to minimize risks. Developed and implemented, a risk-mitigation strategy with phased Go-Lives that resulted in project success. Invited to present to global team leads and Upper Management lessons learned from this implementation and my view of the possible future project direction to best exploit the available technology solutions for meeting emerging business needs.


Expert, SAP Solution Reviews, Multiple Industries. Review overall SAP implementation with a view towards upgrading and/or introducing newer SAP solutions; Recommend upgrades and/or solution development projects to ultimately improve business support; Provide high-level project plans, and prioritize the projects according to expected Business Value. Get buy-in from all parties on the projects recommended and their priority. Educate business and IT on best practices and on some of the newer aspects of SAP solutions.


High Tech Manufacturing & Services – Minneapolis, MN. Principal Consultant. BI Strategy and Overall Architecture, with Integration and Analytics Layers to support reporting flexibility as well as high performance. Assisted in NW2004s BI Ramp-up, BI-Portal integration. Maximized efficiency (costs, time) by leveraging SAP GDC (offshore).


SAP Product Sales, Multiple Industries. SAP Solution Engineer. Analyze customer needs and present/demonstrate at the CxO stakeholder level the latest SAP solutions to address technical and business needs to realize business value. Successfully introduced: (1) the newer solutions in SAP HR (E-recruitment, Travel Management etc) at Hughes, Halliburton, and ExxonMobil. (2) SAP ERP at Altera, Seiko, BJ Services; (3) SAP-XI at TI and Flowserv; (4) SAP APO/BW at Chevron (5) SAP BW Upgrade for Visual Composer at Apple (6) SAP SEM-BCS at Celanese.


Industrial Hazardous Waste Management – Dallas, TX. Principal Consultant, CRM landscape and integration with R/3, BW, Mobile CRM and Legacy applications. Reduced interface development and complexity, Developed a brand new extension for mobile CRM to allow Service Contract creation, including Billing Plans and Service Plans. Contributed significantly to project implementation methodology, finding and vetting resources, advising on the scope to reduce risks, and partially save a project that was on a high alert status.


High Tech Manufacturing – Palo Alto, CA. Sr. SAP Consultant for CRM 4.0 Mobile Sales &Mobile Service Implementation. Wide range of activities to address: CRM Landscape and Application Design, System Build and Backup Strategy, Client Strategy, and Integration of CRM, R/3, BW, CRM Mobile and Legacy applications.


Beverages Bottling & Marketing Company-Atlanta, GA. Lead CRM Consultant for a two-year phased global implementation of CRM 4.0 Mobile Sales. Carried out a challenging CRM 4.0 – BW 3.0 integration, with many custom fields and custom reporting needs. Resolved major performance issue with extremely large data volumes.  Presented a related paper at ASUG 2004.


Media Company – Los Angeles, CA. Implemented the CRM-IPM solution for a media company (CRM 4.0, Service Ind Extension), one of the first full IPM projects, primarily for Licensor Royalties payments.


Discrete Manufacturing – Las Vegas & Reno, NV. Rapid development of a CRM Mobile Sales application, in the face of a constantly changing R/3 system. Integrated SAP R/3 and BW with CRM, to enable sophisticated BW Reports encompassing SD, CRM and FI.


Chemicals & Pharmaceuticals – Chicago, IL. Project Advisor for Global CRM 3.0 Internet Sales B2B Implementation. Assisted in Application Design, Technical and Functional issue resolution, and Project Planning and Budgeting.


Large Oil & Gas Company – Houston, TX. Upgraded SAP CRM Mobile 2.0C to CRM 3.0, and carried out related middleware/technical work. This was the first such upgrade in the US.


Electric Lightings Manufacturer – Boston, MA. Set up Middleware for custom pricing structures and data download from R/3 to CRM. Reviewed the entire Middleware setup for CRM 3.0. Involved in troubleshooting middleware downloads.


Large Computer Hardware Manufacturer- Palo Alto, CA. Configured R/3 and CRM for carrying out all required Middleware downloads.


Large Chemicals Company, Houston, TX. Assisted in the installation of SAP CRM Mobile Sales with integration to BW.


Large Aerospace & Defense, Aircraft Sales Division- Atlanta, GA. Built a Proof of Concept Project for SAP CRM Opportunity and Contact Management with full BW-CRM integration to demonstrate the extensive reporting capabilities of SAP BW.


Large Utilities Company, Reading, PA. Configured HR Master data; assisted in Time Management configuration.


Explosives & Chemicals Company, Salt Lake City, UT. HR (Functional/Technical) and SD (Technical) consultant.


Large Global Conglomerate, Menlo Park, CA. ABAP Consultant for SD MM and PP modules.


Fortune 500 Global Software Company, Redmond, WA. Technical Manager, SAP HR Implementation Project. Led the development of the US HR/Payroll system for Microsoft.


California State Government, San Jose, CA.Consultant, SAP HR Implementation Project. Assisted in Time and Payroll configuration. Implementing a number of reports and interfaces to/from SAP to in-house/vendor systems.


State University, Lincoln, NE. Development Manager, SAP HR Implementation Project. Also assisted in technical tasks for the FI and MM modules.


Large Wall Street Bank, New York, New York. Assisted in implementing SAP HR including migration from existing Ceridian system.


SAP Internal

CRM@SAP Focus Initiative. High visibility internal project, sponsored by the SAP Board, to improve the CRM application support for the SAP Sales force and to serve as a showcase for CRM implementation for key customers. Responsible for training and communications on a part-time basis.


Testing/Validation for the SEM-BCS 6.0 Release. Focused on COI.


Testing/Validation for the CRM 5.0 Release. For the CRM 5.0 Marketing module.


SAP Internal Marketing Project. Configured the CRM 4.0 standard functionality for Marketing Planning & Campaigns, and upgraded to handle Campaign message conflicts for Target Groups.


SAP Internal Project to Build Solution Manager Content for IS-IM&C. Working with various team members (SD, cProjects, PLM, MM, xRPDetc), added content to Solution Manager (for release in 2005) for the IM&C industry.


SAP America, Philadelphia, PA. Taught various HR and CRM classes at SAP training centers in Atlanta, Boston, Chicago, Philadelphia, and San Francisco. Provided customized training for  large SAP Customers at their facilities (Colgate, Symbol, Reliant, Newport News, Enron etc).


SAP America, Philadelphia, PA. Installed and configured SAP CRM Internet Sales for a  Customer project.


Pre-Sales Support: LA Unified School District (Los Angeles); Tyson Foods (Dallas); Fujitsu (Dallas); Ethyl Corp. (Richmond); LSI Logic (Milpitas, CA); EarthLink (Atlanta); Lennox (Dallas); and many others.