SAP taps EDS for ERP outsourcing

SAP taps EDS for ERP outsourcing

Enterprise resource planning (ERP) software vendor SAP America and outsourcing giant Electronic Data Systems (EDS) have teamed to bring SAP's ERP applications to small and medium-sized businesses.

ERP systems have a formidable reputation as being complex to implement. The outsourcing alliance between SAP and EDS is designed to persuade customers who are considering implementing an ERP system to make the leap, according to Tom Melchiore, director of outsourcing with SAP.

SAP will provide its R/3 software and, through EDS's 80 data centers around the world, Texas-based EDS will host the servers and data communications lines ERP systems typically require, according to Melchiore and Mike Ahern, general manager of ERP outsourcing at EDS.

"We're providing two Sun Microsystems servers to each client and all of the system support required to keep the system optimised, tuned and highly available," Ahern said.

Customers will need to contract with a third-party SAP-certified implementor and must sign contracts with the implementor as well as separately with both EDS and SAP. Customers will receive separate invoices from the companies, but the services and pricing are predefined, according to Melchiore and Ahern. This set-up makes it easier for customers than if they had to locate, interview and negotiate with multiple companies to receive the same services, Melchiore said.

Several analysts were impressed with the offering but noted that it could offer more "one-stop shopping" than it currently does. Having to work with a third party to implement the system "adds a slight burden" to the customer, and it would be convenient if SAP or EDS could offer implementation services, said Joshua Greenbaum, principle with Enterprise Applications Consulting in Berkeley, California.

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