Orlando – Invariably, each year at SAP’s (NYSE: SAP) annual Sapphire user conference Robert Courteau calls on companies to leverage technology to go global with their businesses, and look beyond the U.S. marketplace. With the Canadian and American dollars reaching parity recently though, this year the SAP Canada president and managing director says the need is even greater.It’s been a sea of change during the last 20 months in Canada, said Courteau, as the dollar steadily gained in value, eroding the built-in advantage Canadian companies had when doing business in the U.S.
“For many years Canada did really well as a near shore trading partner of the United States, and we took advantage of that as far back as 1977,” said Courteau. “Now that’s gone away.”
The new economic reality also sees Canadian retailers, for example, having to compete on price in their home market with U.S. retailers, who with the dollar situation are eyeing the market in Canada closely.
“We must not look inward to protect our local markets,” said Courteau. “We need to look externally to find new global markets.”
Vinay Nair, research manager, enterprise applications with IDC Canada, also echoed Courteau’s call for Canadian companies to go global, saying the new competitive realities of a world with dollar parity necessitate it.
“Canadian companies are slowly staring to think about those realities and the need to go global, and definitely in crunch times investment in productivity and innovation is the only way to go,” said Nair.
Its areas like Asia, the Middle East and Africa where the growth is happening, he said, adding its unfortunate that more large Canadian companies aren’t taking part in that growth.
“There’s more to the world out there than just us; it’s a whole new world of opportunity out there,” said Nair. “People like to work with Canadians, we’re not involved in wars, we should leverage that brand globally.”
Despite the tough economic times though, Courteau says SAP Canada has been doing very well, because smart companies recognize a downturn can be a time to consolidate the market, and are leveraging technology to expand. Tim Horton’s installed a new fiscal system in record time, for example, and Canada’s Dollarama chain is using SAP technology to fuel an aggressive move into the U.S.
“We’ve actually enjoyed a very prosperous time at SAP Canada,” said Courteau. “We’ve done that by focusing on our customers and our key industries, such as health care, oil and gas, utilities and municipalities.”
The fact SAP Canada is a direct Canadian entity with a lot of local investment and headcount, and not solely a North American entity, is another advantage, said Nair.
“That’s very important for large companies that invest heavily; they want to work with a company that is local, invests in the market and understands their concerns,” said Nair. “Lots of technology companies in Canada are just satellite offices.”
The fact that Canada is, by its demographics, a mid-market country has also been a plus for SAP Canada as Nair said much of the enterprise growth worldwide has been coming from that segment.
In order to succeed in Canada, Courteau said SAP needs to focus on two things: developing new solutions for its existing customers that push the edge and allow them to be best-run companies, and expansion into new markets.
On the first front SAP Canada has signed a multi-year development agreement with railway company and long-time customer CN to develop a transportation management framework that will become a model for other organizations. Courteau said SAP is excited to be taking its relationship from vendor/partner to one where they’re co-developing applications for the marketplace.
“We want to do more of this,” said Courteau. “We understand we don’t have all the ideas in the marketplace.”
On the expanding into new markets front, Courteau financial services is a key focus area for SAP Canada. The company already has a win in the sector, announcing at Sapphire that ATB Financial, an Alberta-based financial institution with 158 branches and 135 agencies, will be replacing its core banking and back office systems with SAP’s Banking, ERP and CRM solutions.
Alberta’s booming economy is a challenge for ATB said Ken Casey, the organization’s senior vice-president of major initiatives. While it’s an opportunity for ATB to expand its reach, he said bank’s 1970s-era legacy systems aren’t able to support their expansion plans or empower employees to offer new services.
After analyzing the options for five years, Casey said ATB turned to SAP because it was able to offer an integrated suite approach for banking, ERP and human resources, and had a strong SOA strategy around its NetWeaver platform. That suite approach and the horizontal integration is important to ATB, said Casey, because it enables the company to plug-in new applications down the road.
“Services in banks are absolutely critical,” said Casey. “We’re in an environment where we don’t know where the next generation is coming from or where they’ll be banking, so we need to develop channels for the future and be able to deliver services through those channels just as we do through the branch.”
When the SAP implementation is complete ATB expects to reduce its back office costs by 25 per cent, and reduce its IT costs as well. More important though, said Casey, will be the agility the new system enables, as well as the risk reduction realized from having fewer points of failure.
