“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

This famous quote from Charles Darwin is certainly applicable today, in terms of which companies will survive this economic downturn.  Richard Howells, Senior Director of SCM Solution Marketing at SAP, used this famous quote in his presentation at the SAP Insider event last week, and in many ways “responsive to change” was the underlying theme of all of the sessions that I attended.

Another great quote from the conference came from the Vice President of Global Information Technology at a global SAP customer.  In his keynote presentation, he posed the question: How do we manage in these times?  His paraphrased response: We follow our strategy.  In other words, they will “stay the course” on their long term strategy, while making adjustments in priorities in the short term.  Not surprising, part of their strategy is to leverage SAP’s solutions and R&D.

Of course, responsive to change also applies to SAP.  Last month, SAP announced the release of SAP Business Suite 7, which essentially allows companies to deploy solutions and upgrades in modular fashion-i.e. instead of incurring the cost and risk of a full enterprise solution, companies can deploy functionality in incremental fashion, focusing first on business processes and solutions that provide near-term benefits.  For example, in the realm of supply chain management, SAP is positioning Collaborative Demand & Supply Planning and Logistics & Fulfillment Management capabilities (among other “value scenarios”) to CPG companies, and Manufacturing Network Planning & Execution to improve visibility and outsourced manufacturing collaboration for companies in High Tech.  We’ll have to wait a few months to see how the market responds to this message, and how well SAP Business Suite 7 performs in practice, but I believe they’re heading in the right direction.

The missing piece, in my opinion, is a more defined and cohesive software-as-a-service (SaaS) strategy, particularly for their transportation management (TMS) solution.  As I’ve written before (see “A Beginner’s Guide to Software-as-a-Service TMS” and “More Questions About Software-as-a-Service“), lower upfront costs and quick time-to-value are synonymous with SaaS deployment, but with the exception of CRM, SAP has yet to fully embrace SaaS in its overall strategy.

Speaking of TMS, Debbie Kaplan from SAP gave the best presentation on SAP’s TMS capabilities that I’ve ever attended.  The reason is simple: she answered the most common question I get from customers-i.e. what is the difference between SAP Transportation Management, Transportation Planning & Vehicle Scheduling (TP/VS), and Logistics Execution System (LES)?  I won’t go into all the details here, but the short answer is that SAP TM leverages services-oriented architecture, can serve as a stand-alone solution (i.e., you don’t need SAP ERP to use it), and it has functionality for logistics service providers (3PLs).  The latter point is what SAP stressed when it first introduced SAP TM in 2007, and for good reason, since the 3PL market is the fastest growing segment for TMS.  But I think many shippers, especially existing SAP customers, perceive SAP TM as a 3PL solution, or they don’t fully understand how to leverage it if they already use TP/VS and LES.  My advice to SAP: communicate the points in Kaplan’s presentation to your customer base because it answers many of the questions they have about the solution.

One final memorable quote from the event: It came from a supply chain executive from Argentina who I sat next to during lunch the first day.  Our conversation eventually led to the economy, and when I asked him how Argentina and his company were faring in this environment, he smiled and basically said “welcome to our world,” meaning his country, like so many others in the region and in other parts of the world, are constantly dealing with unemployment, currency revaluations, political changes, etc.  The only difference, he said, is that when the United States falls on hard times, they feel the pain even more.

Which gets me thinking: maybe the most adaptable companies aren’t those bred here in the United States or in other established economies, but those in other parts of the world that continue to succeed (yes, survive) despite a long history of economic and political challenges.

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