SAP 2003: Your Technology and Business Roadmap Jim Shepherd Senior Vice President AMR Research

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

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

SAP’s Business Strategy Account Control- “The Reliable Business Partner” Growth – “Influence A Greater Share of IT Spending” Customer Lifecycle Management - “ROI - SAP Delivers Value” Services, Maintenance, & Add-ons New Markets and Channels

SAP Business Strategy: Become Your “Trusted Partner” Strategic Consulting Discover & Evaluate -> Implement -> Operate Business Consulting Business Software System Integration System Support Out- sourcing Application Layer Infrastructure Consulting Infrastr. Software System Integration Infrastructure Support Middleware Layer Hardware OS, DB, ... System Integration* Technical Support IT Layer Source: SAP AG

SAP Business Strategy: “Extended Range of Services” New Maintenance Offerings Architecture Planning Custom Development Consulting System Integration Operations Planning & Optimization Hosting / Outsourcing

SAP Business Strategy: New Markets and Channels SAP Direct Sales Vertical Resellers Business One Centers Sales/Service Partners Source: SAP AG

Product Strategy: All Things For All Buyers SAP for <Industry> SAP for Aerospace & Defense SAP for Automotive ... SAP Packaged Solutions Service Management for <Industry> Financial Insights for <Industry> ... SAP xApps SAP xApp Resource & Program Management SAP xApp Mergers & Acquisitions ... mySAP Business Suite mySAP ERP mySAP CRM mySAP SCM ... SAP Smart Business Solutions mySAP All-in-One SAP Business One SAP NetWeaver SAP Enterprise Portal SAP Master Data Mgmt. SAP Business Intelligence SAP Exchange Infrastructure SAP Mobile Business SAP Web AS Source: SAP AG

Current Application Strategy The Ever Expanding mySAP Business Suite Vertical Industry Solutions ERP Extensions R/3 Enterprise or MySAP ERP ? Mid-market : All-in-One and Business One The xApps (Cross-Applications) Framework

The Ever Expanding mySAP Business Suite Business Partners World Internet Extranet Enterprise Group ENTERPRISE COLLABORATION Advanced Supply Chain Planning Customer Relationship Mgmt Business Warehousing Intranet R/3 Logistics R/3 Accounting R/3 HR R/3 Fulfillment ... B2B Procurement Strategic Enterprise Management Knowledge Warehouse 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

SAP Product Strategy: Scalability Headquarters mySAP.com Distributor Exchange Infrastructure SAP All-in-One Factory Sales Subsidiary SAP R/3 Enterprise SAP Business One Source: SAP AG

New, snap on cross-functional business process xApps xApps are Packaged Composite Applications. They deliver new end-to-end business processes, that snap-on to an existing IT environment. New, snap on cross-functional business process Existing applications and data sources xApp Source: SAP AG

Announced xApps Business Views, Events (Context & Insight) Desk- top/ Office Support HR Finan- cials PLM SRM SCM CRM Legacy SAP xApp Resource and Program Mgmt SAP xApp Mergers and Acquisitions SAP xApp Employee Productivity SAP xApp Product Definition Functional Transactions (Hindsight) Source: SAP AG

R/3 Enterprise SAP Web Application Server 6.20 Replaces Basis Server Provides J2EE and ABAP Support Common Foundation for all mySAP.com Components SAP R/3 Enterprise Extension For SCM For FIN For HR For Travel For PLM SAP R/3 Enterprise Core 4.7 All Existing R/3 Functionality Future Changes limited to: Legal Changes Defect Fixes Performance Enhancements

R/3 Enterprise Rollout New “Ramp-up” Release Process Internal Customer Release Restricted Shipments Unrestricted Shipments New “Ramp-up” Release Process 200 Customers in Controlled Release 1500 Copies Shipped Since January Reports From Customers Are Positive 7/02 12/02

Purchase Order Management Sales Order & Delivery Management mySAP Business Suite mySAP PLM Maintenance & Quality mySAP ERP Financials Human Resources Corporate Services Operations mySAP SRM mySAP CRM Purchase Order Management Sales Order & Delivery Management Inventory & Production mySAP SCM SAP NETWEAVER Source: SAP AG

mySAP ERP – Edition 2003 Strategic Enterprise Management Workforce Analytics Operations Analytics Analytics Financial Analytics Financial Accounting Management Accounting Financial Supply Chain Management Financials Human Resources Employee Relationship Management Employee Lifecycle Management Employee Transaction Management Operations Management Purchase Order Management Inventory Management Production Management Maintenance & Quality Delivery Management Sales Order Management Corporate Real Estate Management Incentive & Commissions Management Corporate Services Travel Management SAP NetWeaver People Integration Information Integration Process Integration Application Platform Source: SAP AG

Combining mySAP ERP & Solutions 1 mySAP Business Suite Customer can buy and deploy mySAP Business Suite SAP NetWeaver mySAP Business Suite 2 mySAP ERP Customer can buy and deploy mySAP ERP SAP NetWeaver mySAP ERP 3 Combining mySAP ERP & Solutions Customer can combine mySAP ERP with mySAP Solutions SAP NetWeaver mySAP ERP + mySAP SCM + + mySAP CRM + + + Quickstep Packages 4 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 R/3 Enter- prise + mySAP SCM + mySAP CRM + SAP NetWeaver + Quickstep Packages

SAP NetWeaver™ 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 DB and OS Abstraction People Integration Composite Application Framework Process Integration Integration Broker Business Process Management Information Integration Business Intelligence Knowledge Management Life Cycle Management Portal Collaboration J2EE ABAP Application Platform Multi-Channel Access SAP NetWeaver™ Master Data Management Web- Sphere .NET … Source: SAP AG

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

Maximizing Your Investment Competency Center -- Business Process Improvement Not 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