SAP R/3 or SAP Z/3?

No Tie Generation campus, Monday August 24th 2009: SAP offers flexibility when it comes to applying your own company policy. There are many places to control code to influence the standard system with company specific rules. But be aware that the SAP system may become inflexible on the long term depending on the type of alterations to the standard made.

There is always tension between ‘keeping to standard’ (SAP R/3) and ‘alter the standard’ (also referred to as SAP Z/3). By default conceptual changes interfering with the existing SAP system integration will become very expensive to maintain. Although sometimes inevitable, always make sure that the compromise by complying with the standard SAP system disadvantageous.

As a rule only deviate from the standard SAP system when custom made solutions have direct strategic advantages regarding:
a) customer satisfaction,
b) cost reduction and/or
c) tax benefits.

Every company needs to know their competitive advantage. In most cases the mistake is made to focus on price, but that battle can never be won. There will always be a competitor who is going to be cheaper, and in the end the only option left is to offer your products or services for free.

Instead focus on an element linked to Supply Chain Management that can be developed into a strong marketable advantage. As soon as it is found, then it would make sense to push the boundaries of existing standard SAP functionality.
Pioneers have the competitive advantage before it is converted into new standard SAP features that will be available for everyone. Therefore it is vital that the Return On Investment in developing non standard SAP functionality is worthwhile.

So what could be seen as a strategic decision that can offer a competitive advantage? Maybe applying a efficient and reliable customer returns process will make the difference. Maybe more detailed vendor evaluation on price, quality and reliability is required to ensure finished products with zero defects. These examples are pro-active as the company is actively seeks benefits based on their own strengths.
But every company also needs to stay alert on what their competitors are doing and copy their behaviour more effectively. This needs to be seen as a re-active approach. For example, your competitor is able to avoid outgoing cash flow by establishing the head office in a country offering tax benefits. It would make sense to investigate strategies to legally avoid or delay the payment of taxes.

Another interesting strength of SAP is the assurance that the latest legal requirements and best practices are available, as long as you keep up to date with the most recent release and updates. When the company has deviated from the SAP standard, then it runs the risk that it cannot take immediate advantage of new standard functionality.

So when in doubt, remember that it is much easier and more cost affective to change your internal organisation by keeping loyal to the standard SAP system.

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