Strategic Competitive Positioning

 Industries?
 Weak – IMC, Automotive, Aero & Defense (Oil &Gas, Public Sector)
 Strong – Materials, Engineering Conglomerates,High End Technology

 Solutions?
 Strong – Financials, Core ERP, Project Management
 Weak – CRM, PLM, Service Management

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 1

 SAP Has A Strong Industry Footprint In Machinery &
Equipment - US
ETO / MTO / ATO
Harnischfeger Industries
Komatsu America Corporation
Kubota Tractor Corporation
Peter Kewit & Sons, Inc.
Kubota Engine America
Gunnebo-Johnson Corporation
Fastest Inc.
SIG-PACK, Inc./Doboy Division
American Soda, LLP
Cooper Cameron Corporation
Halliburton Energy Services, Inc.
Millar Elevator Service Company
Schindler Elevator Corporation
United Technologies-Otis Elevator
Motion Control Engineering
Schumacher Elevator Company, Inc.
Rapistan Demag Corporation
Translogic Corporation
Rexroth Corporation
Mannesmann Demag Corporation
Makino Inc.
Guhring, Inc.
Gleason Corporation
Gilman
Giddings and Lewis
Cross Hueller
Paper Converting Machine
Mitsubishi Chemical America, lnc.
Polyfibron Technologies, Inc.
NexPress Solutions LLC
APV Homogenizer Group
APV CONSOLIDATED INC (DEL)
APV NORTH AMERICA, INC.
Applied Materials, Inc.
FSI International
Joy Technologies, Inc.
Tennant Company
Aquatech International Corporation
Hauck Manufacturing
Rexroth Worldwide Hydraulics
 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 2
ATO / MTS MTS
Construct. Machinery Briggs & Stratton Corporation Turbines/Generator ABC-NACO, Inc. Railroad Equipment
Construct. Machinery Tuthill Corporation Turbines/Generator TTX Company Railroad Equipment
Construct. Machinery ProMinent Fluid Controls, Inc Pumps & Pumping Equi Amada America, Inc. Metal Cutting Tools
Construct. Machinery Sulzer Process Pumps (US) Pumps & Pumping Equi Johann A. Krause, Inc. Metal Forming Tools
Construct. Machinery Sta-Rite Industries Inc Pumps & Pumping Equi Nordson Corporation Air/Gas Compressors
Construct. Machinery FAG Bearings Corp. Ball & Roller Bearin Stihl, Incorporated Power-Driven Handtoo
Construct. Machinery FAG Information Services Ball & Roller Bearin S-B Power Tools Company Power-Driven Handtoo
Construct. Machinery ZF Batavia Ball & Roller Bearin Ryobi North America, Inc. Power-Driven Handtoo
Mining Machinery Siemens Power Corporation Ind.Machinery, NEC Multiquip, Inc. Welding Apparatus
Oil/Gas Machinery Duo-Fast Corporation Ind.Machinery, NEC The Lincoln Electric Company Welding Apparatus
Oil/Gas Machinery Acer America Corporation Ind.Machinery, NEC TelGen Welding Apparatus
Elevators KHD Deutz of America, Inc. Ind.Machinery, NEC Square D / Schneider Electric Welding Apparatus
Elevators Southern Pump & Tank Ind.Machinery, NEC
Elevators Amrep, Inc. Ind.Machinery, NEC
Elevators Lennox International, Inc. A/C & Heating Equip.
Elevators Heatcraft, Inc. A/C & Heating Equip.
Conveyors American Standard Inc. A/C & Heating Equip.
Conveyors Modine Manufacturing Company A/C & Heating Equip.
Conveyors Carrier Corporation A/C & Heating Equip.
Overhead Travel.Syst Karl Schmidt Unisia, Inc. Industrial Machinery
Industrial Patterns MDV Northamerica Industrial Machinery Approx. 100 Machinery &
Machine Tools/Acces. ZF Group Industrial Machinery
Machine Tools/Acces. Leybold Inficon, Inc. Industrial Machinery Equipment SAP customers in
Barloworld Ind'l. Distribution Inc. Industrial Machinery
Machine Tools/Acces.
Metalwork. Machinery ABB Business Services IMS Industrial Machinery
US
Metalwork. Machinery Maxitrol Company Industrial Machinery
Paper Industry Mach. Cooper Power Systems, Inc. Power Transformers SIC codes 35xx & 36xx
Print Trade Machiner Siemens Information & Communication Switchgear Apparatus
Bourns, Inc. Switchgear Apparatus
Print Trade Machiner
Print Trade Machiner Yaskawa Electric America, Inc. Switchgear Apparatus
Additional companies
Food Prdts Machinery Siemens Energy & Automation, Inc. Switchgear Apparatus assigned to other segments
Food Prdts Machinery Nitto Denko America,Inc. Electric Ind Apparat
Food Prdts Machinery FIAMM Technologies Inc. Electric Ind Apparat other than E&C with similar
Tyco Flow Control Electric Ind Apparat
Special Ind.Machines
Special Ind.Machines Whirlpool Corporation Electr.Machinery,NEC
business processes
Fans/Blowers Purifi. PSC Scanning, Inc. Electr.Machinery,NEC
Svc Ind.Machinery,NE Nissei Sangyo America/Hitachi Electr.Machinery,NEC
Svc Ind.Machinery,NE VDO Automotive Electronics Electr.Machinery,NEC
Svc Ind.Machinery,NE Mitsubishi Electronics America, Inc Electr.Machinery,NEC
Pumps & Motors Philips Consumer Electronics Electr.Machinery,NEC
Mannesmann VDO Control Systems Inc.Electr.Machinery,NEC
SAMEX Electronics Mechanics Electr.Machinery,NEC
 Strategic Competitive Positioning

Top 3 statements they use to position themselves in this

industry?
Simplify – Technology, Processes
Configure – Don’t Customize
Rapid Implementation – Hosting,Consulting, DB

 Top 3 statements they say about SAP?

Proprietary-Scalability, Technology
Costly –Implement, support

 Top 3 statements we should say about them?

Not Truly Global – Regional Teams, 60%+ US based revenue
Minimal Industry Experience –Supplier > CO > Customer, SAP Industry
Team
Details - Can Not Fully Demonstrate Order to Cash
Collaborative Solutions –Compatibility,Third Party,Interfaces

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 3

 Strategic Competitive Positioning

What is their pricing and discount policy?

Slash & Burn- 100%discount, Completion based projects, Free Hosting
Upgrades – Non specified costs, DB, Re-implementation

 Provide examples of win/loss

Lego- SAP Public Challenges
York- $25M in the first two years
References – We have almost as many clients in IM&C as they have
clients

Additional
Culture – Larry is all things to all people
SAP Public Challenges
Bottom Up – Solution, SE, Consulting, Site Survey

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 4

 York Overview Agenda
York International Win Against Oracle

Appendix

Oracle Message

Oracle Solutions

Oracle Competitive Strategies

Winning Against Oracle

Oracle Pricing

Oracle Demo Environment

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 5

 York International – Opportunity
Describe the Opportunity:

 York has grown through acquisition

 Never consolidated core operational functionality
 No standard processes
 Changing Business environment
 Sky Scraper to Office Park
 Product to Service
 New Product Introduction

 Basic Business Capabilities

 European Opportunity
 Expanded to Future Needs
 Reference Sale
 Global Team

 Selection Criteria
 No Negative Selling
 40 Person Regional Evaluation Team
 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 6
 York International – Competitive Landscape
Describe the Competitive Landscape:

 What they wanted vs. what we Sold

 Everything
 What they could justify and Support

 Bearing Point

 Decision Process
 40 Person Committee in Three Regions
 Board
 The CFO

 Oracle Bias
 Denmark Relationship
 9 Month Evaluation
 Changing Divisional Structure & Changing Managment

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 7

 York International – Why SAP
SAP Message, Why SAP:

 Attack Plan, Solution Positioning Expanding the Landscape

 Team Involvement & Make-up

 How all SAP Resources Leveraged

 Impact of Industry Resource Support, US & IBU

 SAP Differentiation Positioning

 Why not Oracle

 References

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 8

 York International – Positioning

 Attack Plan, Solution Positioning

 Burned a lot of time focused on Oracle
 Needed to spend more time with line Resources

 Team Involvement & Make-up

 UK, Denmark, Hong Kong, US
 15 SE’s, 4 AE’s, 2 Industry Resources, Senior Management (Corp,
Regional)
 Hosting, Training, Reference Team, Competitive Intelligence
 Partners

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 9

 York International – Lessons Learned

 Do’s & Don'ts….Attack Plan, Solution Positioning

 Verify everything the client says
 Make the investment
 Sell from the Bottom Up
 Involve Management Selectively
 Sell at both Strategic and Functional Level

 Team Involvement & Make-up

 The SE’s will make or break before, during and after
 The financial Source is the key but the team decides

 Oracle Differentiation Positioning

 Oracle will try to reduce the cost of sale until they lose
 The deal is more complicated after the Sale
 Oracle Never Brought in an industry Team
 References were Inappropriate based on Size and Geography
 Comprehensive Solution

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 10

 Appendix

Competitive Information SAP – Oracle Comparison

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 11

 Functional Comparison

Source: DDI Aug 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 12

 Vision Comparison

Source: DDI Aug 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 13
 Technology – Oracle Weaknesses

Oracle claims to have a single DB, however this is not true because they need an
extra DB for integration points and some modules. SAP has been doing this since
1993.

Oracle is forcing customers to upgrade from Oracle 10.7 to 11 to keep support

Back & front-office applications must be running on the same release to work
together effectively

All CRM 11i modules will run only on the Oracle 8i database
 HP-UX, Solaris, Windows NT and Linux operating systems supported

Not an open architecture

 Specific APIs for CRM 11i are proprietary and only published internally -
within Oracle and its integration partners

No true thin clients offered (no pure Browser access)

 Browser + Browser Plug-In + Oracle Forms Client

“The CRM E-Business 11i-Suite is compatible with only Oracle database

operating systems. […] Just be aware that the Oracle environment is a world
onto itself – it is not compatible with outside databases or applications.” Gartner,
January 14, 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 14

 Oracle Claims & SAP Answers

To have a single database

Oracle needs an extra DB for integration points and for some
modules. SAP has been doing it since 1993

To have pure internet infrasturcture

Not 100% Internet-Infrastructure, still using PL/SQL

No pure browser access

For professional Access to the system you have to additionally
install software(JVM, Jinitiator client,..)

To have good scalability

Still needs a lot of hardware – not better than SAP.

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 15

 Oracle Claims & SAP Answers

To be open and that integration is easy

Oracle still does not publish any APIs
"Oracle has had a patchy history in collaboration"
"Organizations should not assume that Oracle's collaborative product
set is a suite of tightly integrated collaborative components and
instead should view it as a toolkit of collaborative technologies that
require integration"
Only one pre-built adapter available
(from Oracle 11i CRM to SAP)
No adapter offering from partners
No support for .Net -Quote: METAbits, January 2001, Ashim Pal

That it is easy to use

Oracle has no improvements on their client since release 10.7.
OK, new color, rounder buttons, prettier buttons, nothing substantial,
no standard front-end, everything looks different (parts of CRM, Self-
Service and Professional look different)

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 16

 More Oracle Claims & SAP Answers

Wants to be the Microsoft Office of business applications by positioning

itself as the “internet company” and leader in all of e-business -- “Oracle
powers the internet”

„Oracle has a web-enabled architecture ready for the 21st century“

Oracle claims client/server is dead and SAP runs on proprietary platform.

Oracle has a performance advantage over SAP which

 Leads to lower cost for Hardware

•Limited standards support e.g. Rosetta Net

•No single sign-on
•SAP uses J2EE, Oracle does not

Inconsistent architecture; various types of interface and integration

•Proprietary system e.g. no A/S 400 support
•No common data/information model first with release 11.6i

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 17

 Pricing–ORCL Weaknesses & SAP Strengths
Strength
Oracle “buys” the contract from the customers
Sales reps can give up to 100% discounts immediately to underbid competitors
They then turn around and get them on all the hidden costs and upgrades
If they’re giving their products away for free, it can’t be that good can it?
ORCL’s license fees start lower than SAP’s but then quickly go up.
Oracle is very aggressive in pricing
Constantly changing and unproven architecture leads to poor performance and high
costs for the customers
No protection of investment for customers
The customers never know what is coming next
SAP has a clear upgrade philosophy
SAP protects investments of its customers by delivering upward compatible
products
SAP‘s license fees stay the same and there are no hidden costs
SAP ensures customers lowest cost of ownership by providing Best Practices for
mySAP CRM
mySAP CRM pricing is based on named user fees and roles
Customers pay for functionality they really use

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 18

 Cost Comparison

Source: DDI Aug 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 19
 ORACLE Product Overview

According to AMR ORCL is ranked on place 16 for total and 13 for

license revenue.
Oracle is not a strong player in the PLM market.
Oracle’s offering is not comparable to SAP.
Oracle does not offer a PLM solution like the mySAP PLM solution.
The strength of Oracle is their Project Management. Here they offer
an integration to MatixOne.

“Database share is more strongly than ever owned by Oracle as the

basis for the new PLM license business. Most of the larger vendors,
especially those that have a strong PDM and engineering heritage,
lean toward Oracle.”
Source: AMR The PLM Applications Report, 2001-2006, June 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 20

 Gartner Quadrant - 2002
Large-Enterprise, Asset-Intensive ERP
II Magic Quadrant for 2Q02

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 21

 CRM-ORCL Weaknesses & SAP Strengths

Oracle‘s CRM solution is a collection of 3rd party products which are not well-integrated
Oracle CRM does not offer a complete view of the market (360°)
 Customer service and support is poor, no helpdesk, customers can’t track orders

Customers are frustrated because of a bug-fix patches (5,000) and malfunctioning modules
How well are the Analytical CRM functions integrated into the rest of the suite?
 “Oracle's analysis-product plans are ambitious and backed by the company's strengths in
databases and data warehouses, which may give it an edge over rivals such as Siebel
Systems and Clarify.” Meta Group

Oracle is late to market and is following their footsteps in terms of collaborative technology

Oracle lacks understanding and supporting of collaborative business processes between

different enterprises across various industries
mySAP BI offers a true platform for analytical applications
 SEM, CRM, SCM, E-commerce analytics (closed loop concept)

Seamless integration across mySAP.com solutions and non-SAP components

Predefined, role-oriented reporting and analysis scenarios
Industry-specific content
Complete Web integration and support of mobile standards
Strong service capabilities and ecosystem

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 22

 e-Business – Oracle & SAP

Oracle is a major player in the E-commerce business but solutions are

usually built on-site at the customer (more costly for customer)
Oracle iStore and e-procurement are focused on simple B2C and B2B
scenarios
Oracle lacks product offerings for sophisticated Internet sales and
procurement scenarios
 No real-time pricing(no pricing engine) & no real-time info about
availability
Companies find the applications limited, integration troublesome, and managing
catalogues difficult
SAP offers a comprehensive out of the box solution for Internet Selling and
Buying
“MySAP.com now has a fully integrated online procurement environment
that can compete with best-of-breed vendors like Ariba [...].“
- Charles Hommes, Forrester Research, June 13, 2000

“We think that [SAP’s] integrated SCM, CRM and PLM offering is
unique in the industry” Deutsche Bank, February 28, 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 23

 Industry Solutions – Oracle Weaknesses

“We have some gaps in terms of functionality in some industries. For

example, we are not so strong in the energy sector.“
- Jeff Henley and Larry Ellison, November 2000
Oracle announced support of vertical markets with CRM 11i but the
company does not provide vertical solutions or have industry expertise
Partnering with industry-software providers to integrate their solution to
the Oracle solution results in
 Poorly integrated solutions
 The majority of development done at customers site
 Their third party solutions do not address all the needs

Larry Ellison admitted there are certain industries it cannot and will not
address, like Oil & Gas. Oracle leaves these industries for SAP.
- AMR Research, Randy Weston and Tom Cook, February 22, 2001

“Some of Oracle’s vertical offerings (e.g. pharmaceuticals & public sector) are
weak or nonexistent.” - Gartner, April 8, 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 24

 Integration – Oracle Weaknesses (1)

Integration problems between modules due to different architecture,

release level, patches, etc.
Weak cross-channel integration resulting in no 360° view of the customer
No business-oriented integration only database table integration
 Mostly batch-mode integration, not real-time (necessary for the
Internet)
No standard integration points, but first moves with its InterConnect
 Integration to other vendors requires development project on-site

Gartner says…
 “There are no current plans for integration of Oracle Marketing
Online to MS Outlook.” (November 7, 2001)
 “Integration compatibility with competing vendors’ products,
whether CRM or back- or front-end products is limited to the use of
open application programming interfaces (APIs) and Oracle
Application Interconnect (OAI).“ (November 7, 2001)

“While Oracle talks about integration with the SAP back office, it cannot
produce implementation references, aside from their sales configuration
module.” Gartner, April 8, 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 25

 Integration – SAP Strengths

Integration of mySAP CRM into all other components – mySAP R/3

Enterprise, mySAP BI, mySAP SCM - is a key element of the overall SAP
solution
 Lower implementation costs – total integration eliminates the need to
create/adjust the SAP interfaces throughout the entire lifecycle
 Upgrading SAP is much easier – no custom interfaces

The Front Office / Back Office integration of SAP is not only a technical
connector but is integrated by design

The mySAP EP with its integration concept is a key differentiator for SAP
 Demonstrate SAP’s integration with mySAP EP

“Not surprisingly, the leading strength of mySAP CRM 3.0 is its ability to
integrate with the full R/3 line. Its tight front- and back-office integration
capabilities make it the CRM system of choice for organizations already
committed to SAP products.“ Gartner, May 1, 2002

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 26

 Enterprise Portals – Oracle Weaknesses

Oracle Portal is the new official name for Oracle’s enterprise portal (formerly
known as WebDB)
It is a tool-based approach (SAP delivers complete product, based on roles)
Gaps exist in a number of areas, including:
 No single sign-on
 No integration of workflow
 Limited personalization options
SAP Strengths include:
 Network for contacting Employees and accessing external communities
 Convenient access - Point and click, Drag and Relate, Single Sign-On
 Tight Integration of information, applications, and services from SAP
and non-SAP systems
 Provides role concept and personalization tools to follow customer
patterns
 Allows for true collaborative business processes
 Access possible via Web browser and mobile devices
 Hiding potential system complexity

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 27

 Globalization – Oracle Weaknesses

Oracle claims UNICODE capability with the 11i release, but globalisation
has always been a challenge for Oracle and its customers
 First EURO compliant release 11 arrived too late
 Oracle offers incomplete multi-language and multi-currency support
 Still doesn‘t support all languages and code-page combinations

Oracle US-centric focus leaves some of their subsidiaries behind

concerning new developments and knowledge.

Country-specific needs (localisation) are not supported and will only be

developed at the customer site

Unsatisfied customers (e.g. Michelin)

What about Amazon.com?

 Oracle uses them as examples for one global database - as a matter
of fact there are at least two without any integration

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 28

 Services – Oracle Weaknesses

One factor that delays Oracle 11i implementation is a shortage of trained personnel

Gartner Group warned that staffing may be a significant problem for 11i adopters
 Oracle doesn't yet offer a certification program for 11i, although it does offer
several courses on implementing specific 11i modules

Users complain that Oracle's own support staff hasn't been properly trained on the
workings of the 11i suite

Other weaknesses include

 95% of customers do not get specialized service offerings for going live,
functional upgrade or EURO conversion
 Customer Solution Centre for database problems only
 weak partner program, Oracle claims consulting business for themselves
 technical optimisation based on technical parameters only
 Gold Services are very expensive (about 30% of license fees)
 no clear knowledge transfer strategy
 re-active support can sometimes be too late
 system monitoring for high-risk profiles systems only

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 29

 Sources of Competitive Information

Corporate Market Intelligence

 Your Customers!!! (the most under-utilised resource)
 They hear it from the competitor’s own people – the way they
present it!
 Competitive Intelligence Network (via SAPnet alias CMI)
 Sales Response Line (sales.response@sap.com)
 The World Wide Web
 Competitor’s own web sites
 Gartner, Forrester, AMR, and others
 Partners (often have practice specialising in the competitor’s
product)
 Colleagues – former competition employees
 Other sources?

 SAP AG 2002, Sales Training @ SAP – Heiko Flohr 30