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SCMP Reporter

The German software firm has set up a primary support hub in Dalian to serve Asia-Pacific clients

A steady move towards market deregulation, the Olympic Games in 2008 and the growing number of domestic firms competing overseas are pushing German software giant SAP to build up its investment in the mainland.

Senior executives of the world's largest business applications supplier revealed this strategy on the sidelines of the opening of the SAP global support centre in Dalian last week.

SAP invested about Euro10 million (HK$95.04 million) to set up a new world-class centre to serve as the primary support hub for SAP's corporate customers in the Asia-Pacific region, especially those from the high-growth markets of Japan, South Korea and the mainland.

More than 4,200 SAP enterprise installations throughout the region should benefit from the highly skilled workforce providing support in customers' native languages, said Uwe Hommel, senior vice-president for SAP's active global support unit.

The Dalian centre will complement centres in Ireland, Spain, Austria and India. That means the Dalian facility will serve SAP customers worldwide as part of the company's active global support 24-hour service and support network.

SAP's active global support has more than 3,000 employees in more than 40 countries. It supports more than 23,400 customers running more than 79,800 SAP installations. It also performs more than 34,000 remote service sessions a year to safeguard new installations and provides more than 1,500 onsite services.

The new support centre in Dalian, a major industrial and trading gateway in northeastern China, will initially have a staff of more than 130 native speakers of Putonghua, Japanese, Korean and English.

Mr Hommel said: 'This facility has been built with capacity for workforce expansion as the number of customers being served increases.

Dalian mayor Xia Deren  said SAP was one of more than 350 technology firms that had set up business inside the Dalian Software Park. This group comprised some of the world's largest companies, including GE, IBM, Hewlett-Packard, Dell, Nokia and Accenture.

Compared with IT vendors IBM and HP, SAP is a young vendor in China. It has been selling its flagship enterprise resource planning (ERP) software products to the mainland for about 11 years.

SAP Asia-Pacific president and chief executive Hans-Peter Klaey  said: 'SAP has more than 2,500 software installations and more than 800 customers in Greater China, including some of the most prominent businesses such as Lenovo, Haier, Sinopec, Cosco, China Telecom and Shanghai Power.'

Mr Klaey said expansion of operations on the mainland was in line with growing demand for SAP software across the Asia-Pacific region.

Despite competition from PeopleSoft and Oracle, the German firm has found renewed enterprise IT spending in the region favours its portfolio of software products. These companies compete in selling ERP, customer relationship management and supply-chain management systems.

SAP recorded a 19 per cent increase in Asia-Pacific revenues in the second quarter to Euro69 million from Euro58 million in the same quarter last year. Total software revenues worldwide were Euro497 million in the second quarter, up 15 per cent from Euro431 million in the same quarter last year.

Mr Klaey said: 'China, along with India, has been the growth driver for us in this region.'

He said a healthy appetite for SAP business applications in the mainland would continue because several industries would deregulate based on commitments that China made when it became a member of the World Trade Organisation.

Demand would continue to come from Chinese firms of all sizes that were pushing their products and services internationally.

Mr Klaey said white goods manufacturer Haier was a prime example of a mainland manufacturer and SAP customer that had successfully been growing inside and outside its home market.

Mr Hommel said he expected SAP software's backing of business process integration would also prove useful to companies developing their IT infrastructure in the run-up to the Beijing Olympics in 2008.

SAP's new initiatives to support radio frequency identification technology projects in the manufacturing sector would target mainland contract suppliers of large American and European retailers.



SAP pushes further into China