The SearchSAP.com Conference

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SAP 2003: Your Technology and Business Roadmap

Jim ShepherdSenior Vice PresidentAMR Research

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Agenda

SAP’s Business Strategy

SAP’s Product Strategy

SAP’s Technology Direction

What Should You Worry About ?

Maximizing The Value of Your SAP

Investment

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SAP Snapshot

7.4B € in FY02 Revenues

• 56% from Maintenance and Services

FY03 Expectation: Flat Revenue, Improved

Profits

19,300 Customers

50,000+ Installations – 120+ Countries

23 Industry Solutions

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SAP’s Business Strategy

Account Control- “The Reliable Business Partner”

Growth – “Influence Greater Share of IT Spending”

Customer Lifecycle Management - “ROI -SAP Delivers Value

Services, Maintenance, & Add-ons

New Markets and Channels

“We don’t want to be just the safe haven– Consider us your trusted innovator”

Henning Kagermann – Sapphire 2003

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CIO Issue

10%10%

40%

OPERATION

CONSOLIDATION

INNOVATION30%30%

60%60%

Today 3 years from now

20-25%

35-40%

Source: SAP AG

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SAP Business Strategy:

InfrastructureConsulting

InfrastructureConsulting

Infrastr.SoftwareInfrastr.Software

TechnicalSupport

TechnicalSupport

InfrastructureSupport

InfrastructureSupport

Business SoftwareBusiness Software

Business ConsultingBusiness Consulting

System SupportSystem Support

Out-sourcing

Out-sourcing

System IntegrationSystem

Integration

System IntegrationSystem

Integration

System Integration*

System Integration*

Discover & Evaluate -> Implement -> Operate

HardwareOS, DB, ...HardwareOS, DB, ...

Strategic Consulting

Application Layer

Middleware Layer

IT Layer

Source: SAP AG

Become Your “Trusted Partner”

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SAP Business Strategy:

New Maintenance Offerings

Architecture Planning

Custom Development

Consulting

System Integration

Operations Planning & Optimization

Hosting / Outsourcing

“Extended Range of Services”

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SAP Business Strategy:

Source: SAP AG

SAP Direct Sales

Vertical Resellers

Business One CentersSales/Service Partners

New Markets and Channels

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SAP Product Strategy:

SAP NetWeaver

SAP for <Industry>

SAP Enterprise Portal

SAP Master Data Mgmt.

SAP Business Intelligence

SAP Exchange Infrastructure

mySAP Business Suite

mySAP ERP

mySAP CRM

mySAP SCM

...

SAP xApps

SAP xApp Resource & Program Management

SAP xApp Mergers & Acquisitions

...

SAP Smart BusinessSolutions

mySAP All-in-One

SAP Business One

SAP PackagedSolutions

Service Management for <Industry>

Financial Insights for <Industry>

...

SAP Mobile Business

SAP Web AS

SAP for Aerospace & Defense

SAP for Oil & Gas

...

Source: SAP AG

All Things For All Buyers

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SAP Customers Within Fortune 500

source: Fortune 500 2002; SAP Analysis

78%81%

76%

63%37%48%

54%

100%

90%

100%

86%

100%

97%

69%

87%

87%

57%

86%

0

10

20

30

40

50

60

70

CP

Ret

ail

A&

D

Au

to

E&

C

HT

Ch

em Mill

Min

ing

O&

G

Ph

arm

a

Ban

k

FS

P

Ins

Med

ia

Ser

v.P

Te

lco

Uti

l

CP/Retail Discrete Process FinancialServices

Services

SAP customer Fortune 500 comp

companies

Source: SAP AG

SAP Vertical Market Penetration:

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Current Application Strategy

The Ever Expanding mySAP Business Suite

R/3 Enterprise or MySAP ERP ?

Scalability : All-in-One and Business One

The xApps (Cross-Applications) Framework

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The Ever Expanding mySap Business Suite

Business Partners World

Inte

rnet

Extr

an

et

Enterprise Group

ENTERPRISE

COLLABORATION

Advanced Supply Chain Planning

Customer Relationship Mgmt

Business Warehousing

Intr

an

et

R/3 Logistics

R/3 Accounting

R/3 HR

R/3 Fulfillment

...

B2B ProcurementStrategic Enterprise Management

Strategic Enterprise Management

KnowledgeWarehouse

Comprehensive e-Business Solutions

Industry-Add-ons

Portals

Marketplaces

Supply Chain Hubs

Collaborative Engineering

E-Recruiting

Electronic Bill Presentment & Payment

Collaborative Forecasting

Source: SAP AG

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SAP Product Strategy:

mySAP.comHeadquarters

Factory

Distributor

SAP R/3 Enterprise

SAP Business One

Sales Subsidiary

SAP All-in-One

Exchange Infrastructure

Source: SAP AG

Scalability

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SAP Product Strategy:

xApps arePackaged Composite Applications.

They deliver newend-to-endbusiness processes,that snap-on to an existingIT environment.

Start out as separate next practices but migrate to suite-based best practices

New, snap on cross-functional business processNew, snap on cross-functional business process

Existing applicationsExisting applicationsand data sourcesand data sources

xAppxApp

Source: SAP AG

xApps

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Source: SAP AG

Functional Transactions (Hindsight)

Bu

sin

ess

Vie

ws,

Eve

nts

(C

onte

xt &

Insi

ght)

SCMSCM CRMCRMPLMPLMHRHR Finan-cials

Finan-cials LegacyLegacy

Desk-top/

OfficeSupport

Desk-top/

OfficeSupport

SRMSRM

SAP xAppEmployee Productivity

SAP xAppResource and Program Mgmt

SAP xAppProduct Definition

SAP xAppMergers and Acquisitions

Announced xApps

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R/3 Enterprise

SAP Web Application Server 6.20Replaces Basis Server

Provides J2EE and ABAP SupportCommon Foundation for all mySAP.com Components

SAP R/3 EnterpriseExtensionFor SCM

SAP R/3 EnterpriseExtension

For FIN

SAP R/3 EnterpriseExtension

For HR

SAP R/3 EnterpriseExtensionFor Travel

SAP R/3 EnterpriseExtensionFor PLM

SAP R/3 Enterprise Core 4.7All Existing R/3 FunctionalityFuture Changes limited to:

• Legal Changes• Defect Fixes• Performance Enhancements

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R/3 Enterprise Rollout

New “Ramp-up” Release Process

~200 Customers in Controlled Release Phase

1000’s of Copies Shipped Since January

Reports From Customers Are Very Positive

InternalCustomerRelease

RestrictedShipments

UnrestrictedShipments

7/02 12/02

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mySAP SCM

mySAP PLM

mySAP SRM

mySAP CRM

mySAP ERPFinancials

Human ResourcesCorporate Services

Operations

Maintenance & Quality

Inventory & Production

Sal

es

Ord

er

&

Del

ive

ry M

an

ag

em

en

t

Pu

rch

ase

Ord

er

Ma

na

ge

me

nt

SAP NETWEAVER

mySAP Business Suite

Source: SAP AG

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SAP NetWeaver

CorporateServices

OperationsManagement

Human Resources

Financials

Employee RelationshipManagement

Employee LifecycleManagement

Employee TransactionManagement

Purchase OrderManagement

Maintenance& Quality

ProductionManagement

InventoryManagement

Corporate Real Estate

Management

Incentive & CommissionsManagement

Travel Management

Application PlatformProcess IntegrationInformation IntegrationPeople Integration

mySAP ERP

Analytics Financial Analytics Workforce Analytics Operations AnalyticsStrategic Enterprise

Management

Delivery Management

Sales OrderManagement

FinancialAccounting

Financial Supply Chain Management

ManagementAccounting

Source: SAP AG

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mySAP SCM

mySAP CRM

+

+

mySAP Business Suite Customer can buy and deploy

mySAP Business Suite

+mySAP SCM

mySAP CRM+

R/3 Enter-prise

SAP NetWeaver

Quickstep Packages

+

mySAP ERP Customer can buy and deploy mySAP

ERP

Combining mySAP ERP & Solutions Customer can combine mySAP ERP

with mySAP Solutions

Combining R/3E & Parts Customer can combine existing R/3

Installations with Solutions, SAP NetWeaver (also parts of it like e.g. Portal or BI) and with Quickstep packages

SAP NetWeaver

mySAPBusiness Suite

SAP NetWeaver

mySAPERP

SAP NetWeaver

mySAPERP

+

+

+

Quickstep Packages

+

+

1

2

3

4

SAP Migration Strategy

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Source: SAP AG

New technology foundation of MySAP products

Centralized collection of SAP technologies• Application Servers• UI Management• Integration Framework• Security• Business Process Mgmnt• Data Warehousing• Portal Framework• Etc.

Neutral positioning toward IBM WebSphere and Microsoft .NET

.NET

Web-Sphere

…

DB and OS Abstraction

People Integration

Com

posi

te A

pplic

ati

on F

ram

ew

ork

Process IntegrationIntegration

BrokerBusiness Process

Management

Information IntegrationBusiness

IntelligenceKnowledge

Management

Life C

ycle

Managem

en

t

Portal Collaboration

J2EE ABAP

Application Platform

Multi-Channel Access

SAP NetWeaver™SAP NetWeaver™

DB and OS Abstraction

Master Data Management

SAP NetWeaver

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What Should You Be Worrying About ?

Instance Consolidation

New mySAP.com Functionality• PLM, APO, Portals, CRM, etc.

Release Strategy & Expectations• R/3 Enterprise, MySAP ERP, MySAP Business Suite ?

Extended Deployment• Internally• Externally

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Maximizing Your SAP Investment

Competency Center -- Business Process

Improvement Not A Help Desk!

Continuous Training & Education

Enterprise Performance Management (EPM)

Network Theory -- A system becomes more

valuable as it touches more users

Any ERP System Needs Better Public Relations