Cloud Computing with SAP: One User's Experience

Quick implementation and predictable costs were among benefits of using SAP’s new Software-as-a-Service ERP product for a start-up plant in China, says Excel Polymers’ Steven Lubowicz

Steven Lubowicz
Steven Lubowicz
Business ByDesign (BBD), the long-delayed, cloud-based enterprise resource planning (ERP) system from SAP AG, is finally ready for prime time. Executives at the Walldorf, Germany-based enterprise software giant announced at SapphireNow, the company’s May 17-19 user conference, that BBD version 2.5 will be released at the end of July as a “volume-ready product.” Aimed for use by small to mid-sized companies, BBD will be delivered over the Web to customers on demand, using a Software-as-a-Service (SaaS) model. Though SAP first announced BBD in late summer 2007 with a stated goal of 10,000 customers for the application by 2010, the company later pulled back on those projections, and BBD since has undergone multiple revisions.

Only about 100 customers have experience in using early versions of Business ByDesign, according SAP. One of those users is Excel Polymers LLC, a Solon, Ohio-based manufacturer of elastomeric products such as customized rubber rolls, sheets and additives, with annual revenues of around $350 million. Automation World Managing Editor Wes Iversen spoke recently with Steven Lubowicz, Excel Polymers chief information officer, about his company’s experience using BBD. Following are some highlights from that conversation.

Automation World: What prompted Excel Polymers’ use of Business ByDesign?
Steven Lubowicz: We have six sites in the United States, one in Mexico, one in the United Kingdom and one in China. We use SAP’s R/3 [ERP] product to support our operations in North America. Our China location is a start-up joint venture, in Foshan, China, and we were looking for a solution specifically for that location.

A couple of things came into consideration as we decided to go with ByDesign. One was that we needed a full ERP suite, a full set of solutions—order-to-cash down to the manufacturing shop floor, where we have a custom-built solution. We wanted to be able to hand off orders to that shop-floor solution, and then report production back up, and at the same time, collect all the financials, understand where customer orders stand, and what our supply and demand picture looks like from a forecasting perspective.
   
One of our challenges was that this was a start-up business, and we needed to put a solution in place pretty rapidly. We looked at extending our North American template for R/3 to include China, but because that template was developed for North America, it didn’t accommodate a lot of the localization requirements for China. We also looked at some other solutions for small and medium enterprises outside of R/3 as well, and some of them did take care of those requirements. However, in the end, the [BBD] Software-as-a-Service solution was attractive to us for the start-up because it was a low-cost point of entry, it could be deployed very quickly and it was a full suite of functionality. Those were really the main drivers.

AW: How quickly could BBD be deployed, and how would that have compared to an R/3 solution?
Lubowicz: We determined ahead of time the scope and the functionality that we were going to tackle, and came up with a timeline of approximately 12 weeks to build and deliver the solution. And we were able to do that on time, and also on budget. We took the BBD solution live in October of 2009. It would have taken six to nine months to implement the R/3 extension.

AW: What sort of an interface do you have to the shop floor with ByDesign?
Lubowicz: It’s not really an automated interface. But we found that ByDesign gave us the ability to take the production order data out of the system and download it into a Microsoft Excel spreadsheet very easily, and then we can consume that into our custom-developed shop-floor system. It’s a similar process coming back the other way. We are able to report finished product produced and raw materials consumed out of our shop-floor system, and that information is then keyed directly into ByDesign by the operators.

That’s the way it works right now. But future releases [of BBD] will provide more access to the data. And SAP also will be adding some solution developer kits. So we’re hoping that we can streamline that process a little bit. In North America, [the data exchange between R/3 and the shop floor system] is a fully automated process.

AW: So generally speaking, how would you say the BDB implementation went?
Lubowicz: The implementation actually went very well. For this facility, this was really the perfect solution, because we were able to get it up and running quickly. The ongoing cost is very predictable, because it’s a monthly subscription for the service itself. So we can plan ahead and know what that’s going to cost as we ramp up this business over the coming months.

AW: You said you’ve got six U.S. locations and one in Mexico. Do you think ByDesign or a cloud-based solution could potentially be used for the whole company?
Lubowicz: We’ve had R/3 in place for a long time, so its very mature, our business is accustomed to using it, and we’ve made a number of customizations in it. So I don’t think today that the [BBD] solution would be ready to plug into the rest of the business. But as I step back from the detailed requirements that we have here in North America, and kind of look at it, the Software-as-a-Service model is terrific. And I could see that expanding out, as the product grows and matures, to service the rest of the organization.

On The Web: To listen to the complete interview with Excel Polymers’ Steven Lubowicz, please visit http://www.automationworld.com/podcast-7197.

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