SAP Beefs Up Efforts To Attract More Government Business

The Walldorf, Germany, company, which reported second quarter earnings at the end of June, of approximately $1.9 billion, appointed former Clark County, Nev., CIO Rod Massey to accomplish the task. Massey will lead the company's global public-sector business unit, which aids governments and public organizations to improve process efficiencies and economic growth.

"I'll first make sure I clearly understand the toolsets SAP offers to ensure we are effectively communicating the best value to our customer," Massey said. "The challenge is articulating the benefits."

SAP has served the public sector for 20 years, but the industry transformation came around 2000, according to Tom Shirk, president at SAP Global Public Services. "Six years ago in the U.S. there wasn't a statewide ERP system deployed from any software vendor," he said. "Pennsylvania was the first to adopt a system."

As the former Clark County CIO, which includes Las Vegas, Massey led a large-scale enterprise resource planning (ERP) initiative using SAP software. The deployment involved 2,600 county employees in more than 40 departments.

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Despite SAP's emphasis on government agencies, Massey's awareness of certain requirements and business processes come from experience. "In a market like the government sector that's relatively new to integrated systems and ERP platforms, credibility is important," said Jim Shepherd, AMR Research Inc. senior vice president.

"SAP is strong in public sector utilities, especially in cities, and in its partnerships with system integrators like Axon," said Ray Wang, principal analyst at Forrester Research Inc. "Oracle has a strong presence in the public sector through its acquisition of PeopleSoft. We don't see Microsoft Dynamics as much in this market."

Microsoft Corp.'s ERP division, however, does have more than 7,800 public sector customers worldwide that buy its ERP and Customer Relationship Management (CRM) product. Of that, about 2,200 are in the U.S. public sector, which includes federal, state and local governments and educational institutions. Wang said Lawson Software Inc. also supports government agencies at the state and local level.

Earlier this month, systems integrator and consulting firm CIBER Inc. said it would implement an ERP platform from Lawson for the State of New Hampshire in a $13 million deal.

Lawson's marketing director for government and education practice Ken Munson said there are two major trends occurring in the public sector: consolidation of IT solutions and risk management. The rate of adoption in the public sector is accelerating faster than in the private, he said. As for the State of New Hampshire, the cost to maintain the old system was too high, and finding those with the skill sets to support the platform proved difficult.

The multiyear project will replace the state's existing financial and human resources IT system. The deployment will cut across budgeting, financial accounting, accounts payable, grants and projects, assets and inventory, purchasing, human resources, revenue, and receipts and treasury.