On April 21st, SAP announced its intent to acquire environmental, health and safety (EH&S) partner TechniData AG, and the acquisition should be completed in the beginning of the third quarter of 2010. In fiscal year 2008, TechniData recorded sales of EUR 64.9 million One phrase in the press release summarizes the announcement best: this acquisition is the next logical step. There's more marketing spin in the rest of that statement, but this is one of those deals that has appeared
Based in Germany with almost 500 employees, TechniData provides systems integration, managed EHS services, regulatory-related content, and software for regulatory compliance. TechniData has been a strategic SAP partner for more than 15 years, and has contributed significantly to SAP’s sustainability offerings in EHS, particularly in REACH compliance. REACH, or Registration, Evaluation and Authorization of Chemicals, is a European regulation that has far-reaching consequences for the use (and sale) of chemicals into and within Europe. Registration impacts all chemical substances produced in or imported into the European Union (EU) above a total quantity of 1 tonne (metric ton) per year. Close to 143,000 substances were pre-registered by 65,000 companies between June and December 2008 in the first phase of REACH. Substances of "high concern" will go through an assessment process, beyond registration. For example in June 2009, the European Chemicals Agency responsible for enforcing REACH recommended that seven chemical substances of very high concern should not be used without specific authorization.
IDC Manufacturing Insights is already seeing impact on US companies in many industries, if not directly from the REACH legislation, then as downstream users and from changing expectations among consumers and supply chain partners. However, beyond the top-tier chemical manufacturers headquartered in the U.S., such as Dow and DuPont, North America has been relatively slow to understand REACH, considering the first REACH deadline was back in December 2008. Yet REACH and the ongoing product safety regulatory debates in the U.S. will definitely influence IT investments in a number of categories, including master data management, product lifecycle management (PLM), and EHS.
While the acquisition locks down TechniData's known assets in development and service resources and expertise, what's most interesting is the broader scope implied in the acquisition, beyond regulatory compliance. We've long talked about regulatory compliance as the foundation for sustainability, especially in manufacturing, and this is where we see SAP headed: using EHS and compliance as a building block for "product, plant, and people safety" (including what SAP often calls Product Safety and Stewardship). We see this as an opportunity for the SAP-TechniData combination to excel as issues such as sustainability and enterprise risk management grow increasingly important to C-level executives.