IBM's SAP Practice: Win Some, Lose Some

By Kim S. Nash Print this article Print

Dossier: IBM has done SAP installations for more than 10% of SAP's 17,000 customers, but even that global reach isn't enough to sway every buyer.

IBM has done SAP installations at 1,900 companies—more than 10% of SAP's 17,000 customers. It has an unmatched 160-country reach.

But here's the thing: Choosing an integrator isn't all logic. Gut feel, serendipity and inertia count, too. Alltrista Consumer Products, a $150 million maker of canning jars, didn't even think about IBM. It chose Andersen Consulting (now Accenture) because they had worked together before.

Marathon Oil, a $33 billion fuel company, used IBM to help it understand how SAP software would impact its business. Then after the SAP applications were humming, Marathon contracted out support of them to IBM. But in between, Marathon chose PricewaterhouseCoopers to manage the meaty installation and integration work.

Price and oil-industry experience were key factors, says Gregg Stapleton, change manager for Marathon's SAP group. PricewaterhouseCoopers could offer a team fresh from an SAP job at Texaco.

Marchon Eyewear, a $300 million eyeglass company, though, picked IBM over PricewaterhouseCoopers. One reason was IBM's expertise with its own AS/400 servers. Another was how IBM and SAP seemed to work together well, says Jim McGrann, Marchon's chief information officer.

"Even though most of the big implementers seem to have a great relationship with SAP, it seemed that the IBM relationship was even tighter," McGrann says.

IBM was in the running to manage a 30-country installation of SAP software at Air Products and Chemicals. IBM was hired to set up and support the hardware for the project, but not to lead it. KPMG got that job.

Dave Sheffield, an information technology director at $5.7 billion Air Products, says confidence can be key. "[You don't] have experience with SAP," he says, "so you have to have trust in your consultant to lead you."

IBM endured one of the world's largest SAP projects itself, however. No consulting firm has been through a similar SAP project, says AMR Research analyst Jim Shepherd. "They can say, 'We're just like you.'"

Compass Group, a $4.1 billion food services firm, used IBM to manage a $25 million SAP job during the pre-Year 2000 rush. In that period of craziness, "there were a lot of 23-year-old captains," says Rob Watkins, Compass Group's chief information officer. Still, Compass Group was pleased and called on IBM again for an upgrade.

IBM Global Services' SAP Practice
330 N. Wabash Ave., One IBM Plaza, Chicago, IL 60611 (312) 245-2000

Ticker: IBM
Exchange: NYSE
Dedicated SAP Consultants: 5,263

Paul Scherer
Director, Enterprise Resource Consulting for IBM Global Services
Responsible for selling, staffing and implementing SAP engagements. Joined IBM in 1995, steadily moving up the consulting chain.

Bill Ciemny
Vice President, Enterprise Resource Solutions, IBM Global Services
Formerly vice president of SAP Integration Services at IBM Global Services.

Bruce Harreld
Senior Vice President of Strategy for IBM
Manages business and investment strategy, and IBM's Business Transformation/CIO organization, which is immersed in IBM's own internal SAP project—one of the biggest SAP sites worldwide.

Volker Loehr
Vice President, Global IBM/SAP Alliance

Key Services
Plans project; designs software infrastructure; prototypes; converts data; installs, configures and integrates applications; upgrades systems.

Reference Checks

Compass Group
Rob Watkins
(704) 329-4000
Project:One of the first food service companies to use SAP R/3 applications, including human resources, payroll and purchasing. IBM helped with configuration sizing, project planning, integration and later upgrades.

Marchon Eyewear
Jim McGrann
(631) 755-2020
Project: Expected to go live in the U.S. May 1 with several SAP finance modules; another 10 countries to be up by year's end; IBM is helping with change management and configuring and installing the software on 20 AS/400 servers, among other tasks.

Twinlab Corp.
Christopher Pendergast
Chief Technology Officer
(631) 467-3140
Project:In May 2001, put in the last of many SAP packages, including manufacturing, planning, sales, inventory and finance. Used IBM for implementation and now for application management services.

Valero Corp.
Kent Brewer
Director, Core Business Systems
(210) 370-2000
Project: IBM helped Valero migrate SAP applications from 56 Sun servers to five IBM servers last year.

Mike Berendsen
Director, Supply Chain Information Services
(616) 923-5000
Project: IBM configured and tuned performance of hardware for Whirlpool's SAP implementation on 28 Unix servers and a mainframe.

Seaquist Closures
Michael Wedge
Chief Information Officer
(262) 363-7191
Project: IBM led implementation of the fastener and closure company's SAP software in 1999.

This article was originally published on 2002-05-15
Senior Writer
Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.
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