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What is The Real Cost of SAP®-APO?

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Cost of SAP APOThe question of should a company use Best-of-Breed supply chain planning system vs. SAP®-APO has been going on for a long time. Business users have typically wanted more functionality than is offered by SAP, but SAP has always sold to the executives of the IT group on the strength of the lower cost of an integrated system. If the discussion were in any other area besides "supply chain planning", the position of the IT departments would be tough to challenge, but APO is not part of the core SAP system. It is a separate system that just like any other Best-of-Breed planning system is bolted onto R/3.  Furthermore, the technology for memory resident planning is very different than for transactional computing, so it is so much harder to leverage core SAP R/3 technology to any cost advantage.

SAP has gotten a pass on the real cost of implementing APO for too long. It is time to examine the real cost of ownership for APO. It would help a lot if IT and supply chain professionals that read this open dialogue contribute to answering the following questions. What is the cost of ownership of SAP's APO? How easy was it to integrate all the data that is required to run APO?  Was the big "integration" story worth the results?  

For the sake of this analysis the purpose is to not compare functionality, but only examine the cost of getting the system running in the way that supports the desired business process.  Are there really IT and cost advantages to implementing SAP's APO?  The areas that are worth looking at include: cost of the software, cost of the hardware required to run the system, cost of implementing similar functionality, cost of implementing required supporting systems (such as using Business Warehouse to support the need for analytic views), cost and complexity of integration to and from all sources of data, cost of supporting the system once it is up and running, etc.

I am hoping that we can hold an informal discussion and feedback going on this topic, so please feel free to share your experiences or answers with us.  Or feel free to email me at wgreen@adexa.com

 

About the Author:  Bill Green is the Vice President of Solutions at Adexa, for more information about him please visit http://adexa.com/company/green.asp     

 


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Comments

I have been working as Consultant in Supply Chain Planning for the last 10 years, and have witnessed several implementation projects with SAP APO. My general conclusion is that the cost of implementing the whole suite is extremely expensive in terms of out of pocket costs (consultants, hw, training, etc) and internal costs also (effort and grief) for the supposed "integrated" results. When it comes to Detailed Production Scheduling, the system can´t cope with all the variables involved for sequencing and load balancing, thus usually the firms do these tasks downloading the CRP in excel and then uploading the work orders in the ERP.
Posted @ Tuesday, April 27, 2010 8:03 AM by Eduardo Huerta-Mercado
My eyes caught up with this article, when i was trying to understand TCO of SAP APO. Your article tries to bring forth the key deciding factors, but misses to present some insight on what one expects from an expert. 
 
 
 
Would be keen to discuss through any channel more on this. I am evaluating a planning engine for my organization, a 500 Mn $ FMCG company.
Posted @ Wednesday, July 21, 2010 11:41 PM by Radhe
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