German IT departments and SAP related innovation

Just about everytime I visit a customer, I’m impressed with the add-ons that they build on top of SAP, often with SAP tools.  Usually these remain hidden under a bushel, either deliberately (perhaps because of a perceived competitive advantage), or because no-one talks about it beyond the company borders. We vendors should do a lot more to highlight customer driven innovation, because there is lots of it out there.

Two examples of innovation.

A few years ago, many of the German Multinationals spun off their IT departments into separate companies. These firms then charge the other members of the group for their services. Some of these firms have developed successful secondary businesses providing implementation and hosting services to other companies. BASF, the world’s biggest chemical company is a good example of this BASF IT Services has a very successful SAP based payroll and HR service. They have been running SAP for years themselves, so they have turned this competence into thriving business. They run the SAP German pension engine on behalf of several other German employers, and the HR systems for many of the local towns and authorities. …  Over the years they have established themselves as a key SAP partner, especially in the German speaking market. They are growing outside of Germany too. BASF have been one of the pioneers of Kiosk based Employee Self Services in factories, and it is really impressive to see the stuff that they have added to the standard.

BASF IT Services was created in April 2001 with the consolidation of BASF’s IT units in Europe. Including the results for 2005, the subsidiary has to date made savings for the BASF Group to the tune of some 300 million euros.

Impressive, customer-driven innovation. Driving down costs for BASF Group, adding to the bottom line, and providing a service to the broader supply chain.

Just up the road from SAP is the pretty town of Weinheim. 


Well worth a visit if you like quaint half-timbered houses and old castles. It is also home to Freudenberg, World leaders in  seals, vibration control components, filters, automotive carpeting reinforcements, engine compartment insulation and auto headliners, lubricants and release agents. Freudenberg produces nonwovens for the textile and clothing industry  and Freudenberg nonwovens are used as carrier material for roofing membranes or for insulation and soundproofing in metal-profile ceilings. Freudenberg’s  rubber floorcoverings are laid in airports, hospitals and other public buildings. They also make really funky cleaning products. It is a family business that is probably why not many folks outside Germany know about them.

They have also spun off the IT department into a separate business called F-IT, and turned strong internal SAP competence into a successful services business.

I read today about F-IT producing a new X-app, called Dispute Management. The press release is in German, but I’ll vaguely translate a bit here.

F-IT has used the SAP Netweaver Visual Composer to built a new application, Dispute Management. The integrated SAP solution connects heterogeneous data sources, and provides a user friendly graphical interface.  The solution has been certified by SAP as part of the SAP xApps (Packaged composite Applications framework.)

This is great. Customer-driven innovation, using SAP tools.  I’d love to see more companies doing what F-IT has done, take in-house SAP competence and turn it into a valuable service, or better still product. 

The German SAP consulting market is highly competitive, partly because of this IT service company model. It probably explains why the big SIs have less market penetration here than elsewhere.


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