SAP and Siemens are implementing a practical integration of their companies and technologies over the next few years.
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SAP and Siemens released details and a roadmap framework outlining innovation milestones pertaining to the integration of S/4HANA (ERP) and Teamcenter (PLM), which was first announced July 2020 (see IN-5879). The significance of the partnership is faster, more tightly integrated product management—from design and sourcing through manufacturing, delivery, and after sales service and support—in addition to each company selling the other’s product(s) (SAP will offer Siemens’ Teamcenter software as the core foundation for product lifecycle collaboration and product data management and Siemens will offer SAP Intelligent Asset Management solutions and SAP Project Management applications). The practical implications are easier data sharing between business systems, more streamlined product development, and better traceability for Environmental, Social, and Governance (ESG) activities.
A Three-Phase Approach
SAP and Siemens will be delivering the integration in three phases through the end of 2022, with additional phases planned beyond that time to address new digital threads.
- Phase I (October 2021) focuses on product engineering fundamentals and establishing a framework of core business scenarios on a shared domain model that will underpin end-to-end business processes. This enables enhanced traceability, federation, and linkages across Siemens and SAP systems.
- Phase II (Spring 2022) aims to shorten time to market by providing optimized integration between product engineering, extended supply chain, and manufacturing operations, delivering the foundation for advanced capabilities such as variant rules and schema, project and portfolio management, and integration to manufacturing.
- Phase III (Fall 2022) will focus on bi-directional traceability and closed loop collaboration between manufacturing engineering and production engineering, covering use cases such as cross-system impact analysis, change initiation, and process execution.
Together, these integrations serve to improve product design and delivery in addition to closing the loop on sourcing and sustainability.
Of the 36 planned innovations published to the SAP Teamcenter roadmap, 28 are scheduled between Q2 and Q3 2022. Five innovations are scheduled for Q4 2021 and another three in 2023. This means that as far as the market is concerned, most of the heavy lifting will happen in about one year’s time.
Examples include the ability for product development to create and maintain plant-specific and configurable bill of materials; cross-system portfolio and project management integration (S/4HANA with Teamcenter) that improves transparency across different domains by sharing project and portfolio-related information between the engineering department and the extended supply chain; and the ability to perform change impact analysis from design through operation due to better data transparency and accessibility. The expectation is that by 2023 SAP/Siemens customers and their supplier networks will have the option to work on a shared set of information.
Where the duo will be challenged is in the inherent diversity of their customer base. Getting productization right is only part of the battle; the other part is adoption. Manufacturers will welcome the partnership given the integration and customization challenges they have endured for decades. However, there will be a cost to the extra value delivered by the integration and whether users are willing to pay remains to be seen. Still, it will take time for companies to migrate their systems and way of working once they buy in. The main trends that SAP and Siemens are pursuing fit into four strategic areas: intelligent products, intelligent factories, intelligent assets, and empowered people. If anything, the partnership underscores the interrelated nature of these four worlds.