For well over a decade, SAP AG (NYSE: SAP) has been offering market-leading enterprise
applications software tailored to specific industries, starting with the oil and gas and the
utilities industries (the original SAP industries). Other industries, such as media, insurance,
chemicals, banking, and the public sectors have followed, highlighting SAP's lesser-known side
as a market-oriented provider of industry-tailored solutions for midsized enterprises. For
instance, SAP software has mapped standard business processes as well as particularly specific
core banking processes in financial accounting since 1997, with solutions for other industries
following suit. Over the years, the vendor has created twenty-eight industry-specific products,
thus offering customers a mass of expertise, along with information technology (IT) solutions
particular to their respective industries.
This segmentation is also reflected in the company's organization: in 1996, SAP started creating
specialized departments called industry business units (IBUs) for groups of targeted industries,
such as financial services, manufacturing, public services, trading, and service industries.
Accordingly, the SAP NetWeaver platform and standard enterprise suites like mySAP ERP and mySAP
CRM, as well as applications for user productivity and analytics, have all recently been
designed with an industry perspective. Certainly, insights from SAP's core or standard
developments, along with partner solutions, benefit all of SAP's industry units, and cover
common business processes. But each industry has particular demands that cannot be met by
generic solutions, and SAP thus invests in complementary programs, with the goal of a complete
and integrated solution portfolio that will eventually support every process in each industry.
In close cooperation with leading industry customers, and with consulting and independent
software vendor (ISV) partner companies, SAP has created more than fifty SAP "solution maps,"
which chart consolidated best-practice approaches for specific industries. These maps are
checked and updated annually with the latest business and technical requirements, enabling SAP
to promptly react to regulatory requirements such as the US Sarbanes-Oxley Act (SOX), Basel II,
and a raft of other environmental compliance measures. Many SAP solution maps even provide
specific requirements for sub-segments of certain industries. For instance, media customers can
leverage microvertical maps designed for broadcasting, entertainment, newspapers and magazines,
and premium-content publishing houses.
Consequently, perhaps, most of the chemical, high tech, and pharmaceutical Fortune 500 are SAP
customers. The vendor boasts eight of the world's top ten banks, thirty-three of Europe's
leading fifty financial institutions, and nine of the ten most successful insurance companies in
the world. SAP also claims leadership in ten of the eleven manufacturing industries it targets,
and asserts that over 900 utility companies in seventy countries are using SAP software, in
nearly thirty languages. To better understand the market, SAP maintains close contact with
relevant industry players, and organizes and attends industry-specific user events and forums.
There are a number of regional and international information days aimed at continuing an in-
depth dialog with customers, so as to identify new specific market segment requirements, and to
assess the vendor's current functional and technological fits and gaps in its portfolio.
SAP has also created advisory councils and architect forums for thought leaders from the
individual industries to maintain close and regular contact with the market, with the focus on
ever-evolving business issues and IT infrastructure landscapes. Finally, SAP also contributes to
the development and definition of industry standards as a member of industry associations,
standards committees, and various user groups worldwide. The best examples include RosettaNet
for the high tech and electronics industry, Chemical Industry Data Exchange (CIDX) for the
chemical industry, Petroleum Industry Data Exchange (PIDX) for oil and gas, and Automotive
Industry Action Group (AIAG)/ Standards for Technology in Automotive Retail (STAR) for the
automotive industry.
For instance, the Chemical Industry Data Exchange (CIDX) (www.cidx.org) is a nonprofit,
industry-funded standards body whose mission is to improve the ease, speed, and cost of
conducting business electronically between chemical companies and their trading partners.
Industry players, through the central coordination of the CIDX group, have created standards for
about sixty business transactions: this standardizes the transmission of data between chemical
company buyers and sellers. For example, in a transaction such as create purchase order, a 50-
character alphanumeric field that shows line #1 of the vendor address might be prescribed for
field #32. Using CIDX standards to transmit data via extensible markup language (XML) technology
means that everyone should thus know where to store (or look for) information, allowing everyone
to speak the same language when exchanging data. This enhances the industry's overall ability to
automate business and increase data visibility.
applications software tailored to specific industries, starting with the oil and gas and the
utilities industries (the original SAP industries). Other industries, such as media, insurance,
chemicals, banking, and the public sectors have followed, highlighting SAP's lesser-known side
as a market-oriented provider of industry-tailored solutions for midsized enterprises. For
instance, SAP software has mapped standard business processes as well as particularly specific
core banking processes in financial accounting since 1997, with solutions for other industries
following suit. Over the years, the vendor has created twenty-eight industry-specific products,
thus offering customers a mass of expertise, along with information technology (IT) solutions
particular to their respective industries.
This segmentation is also reflected in the company's organization: in 1996, SAP started creating
specialized departments called industry business units (IBUs) for groups of targeted industries,
such as financial services, manufacturing, public services, trading, and service industries.
Accordingly, the SAP NetWeaver platform and standard enterprise suites like mySAP ERP and mySAP
CRM, as well as applications for user productivity and analytics, have all recently been
designed with an industry perspective. Certainly, insights from SAP's core or standard
developments, along with partner solutions, benefit all of SAP's industry units, and cover
common business processes. But each industry has particular demands that cannot be met by
generic solutions, and SAP thus invests in complementary programs, with the goal of a complete
and integrated solution portfolio that will eventually support every process in each industry.
In close cooperation with leading industry customers, and with consulting and independent
software vendor (ISV) partner companies, SAP has created more than fifty SAP "solution maps,"
which chart consolidated best-practice approaches for specific industries. These maps are
checked and updated annually with the latest business and technical requirements, enabling SAP
to promptly react to regulatory requirements such as the US Sarbanes-Oxley Act (SOX), Basel II,
and a raft of other environmental compliance measures. Many SAP solution maps even provide
specific requirements for sub-segments of certain industries. For instance, media customers can
leverage microvertical maps designed for broadcasting, entertainment, newspapers and magazines,
and premium-content publishing houses.
Consequently, perhaps, most of the chemical, high tech, and pharmaceutical Fortune 500 are SAP
customers. The vendor boasts eight of the world's top ten banks, thirty-three of Europe's
leading fifty financial institutions, and nine of the ten most successful insurance companies in
the world. SAP also claims leadership in ten of the eleven manufacturing industries it targets,
and asserts that over 900 utility companies in seventy countries are using SAP software, in
nearly thirty languages. To better understand the market, SAP maintains close contact with
relevant industry players, and organizes and attends industry-specific user events and forums.
There are a number of regional and international information days aimed at continuing an in-
depth dialog with customers, so as to identify new specific market segment requirements, and to
assess the vendor's current functional and technological fits and gaps in its portfolio.
SAP has also created advisory councils and architect forums for thought leaders from the
individual industries to maintain close and regular contact with the market, with the focus on
ever-evolving business issues and IT infrastructure landscapes. Finally, SAP also contributes to
the development and definition of industry standards as a member of industry associations,
standards committees, and various user groups worldwide. The best examples include RosettaNet
for the high tech and electronics industry, Chemical Industry Data Exchange (CIDX) for the
chemical industry, Petroleum Industry Data Exchange (PIDX) for oil and gas, and Automotive
Industry Action Group (AIAG)/ Standards for Technology in Automotive Retail (STAR) for the
automotive industry.
For instance, the Chemical Industry Data Exchange (CIDX) (www.cidx.org) is a nonprofit,
industry-funded standards body whose mission is to improve the ease, speed, and cost of
conducting business electronically between chemical companies and their trading partners.
Industry players, through the central coordination of the CIDX group, have created standards for
about sixty business transactions: this standardizes the transmission of data between chemical
company buyers and sellers. For example, in a transaction such as create purchase order, a 50-
character alphanumeric field that shows line #1 of the vendor address might be prescribed for
field #32. Using CIDX standards to transmit data via extensible markup language (XML) technology
means that everyone should thus know where to store (or look for) information, allowing everyone
to speak the same language when exchanging data. This enhances the industry's overall ability to
automate business and increase data visibility.
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