The Future of Enterprise Software. Henning Kagermann

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1 The Future of Enterprise Software Henning Kagermann

2 Characteristics of Enterprise Software Criticality high Infrastructure Software Business Software low Office Software low high Adaptability SAP AG 2003, HenningKagermann / 2

3 30 Years in Enterprise Software mysap.com One-Step- Business mysap Business Suite SAP NetWeaver ESA R/1 0.3 mill. 9 Employees R/2 Mainframe 5.1 mill. 60 Employees 50 Customers in 2 Countries R/3 Client/Server 424 mill. 3,200 Employees 2,800 Customers in 35 Countries 6,265 bill. 25,000 Employees 15,000 Customers in 120 Countries 7.4 bill. 28,654 Employees 19,300 Customers in 120+ Countries / /2003 SAP AG 2003, HenningKagermann / 3

4 The Promise of Client/Server Software Flexibility, Openness and Integration CLIENT Order Processing SERVER Credit Control SERVER Inventory Management SERVER Sales Management Solvent customer? Open item per period Product in stock? Stock per warehouse Profitable deal? Cost per item Network SAP AG 1993 SAP AG 2003, HenningKagermann / 4 distributed scaled locally stable

5 What was Missing? Open standards No open technical standards like http, XML, SOAP Proprietary stacks were competing IT performance and infrastructure Processing power, memory & network A stable backbone was missing - the ERP Acceptance Standard software was not used for businesscritical processes White collars hardly used IT Commitment It was just an IT game The IT industry was not committed to open standards SAP AG 2003, HenningKagermann / 5

6 30 Years in Enterprise Software mysap.com One-Step- Business mysap Business Suite SAP NetWeaver ESA R/1 0.3 mill. 9 Employees R/2 Mainframe 5.1 mill. 60 Employees 50 Customers in 2 Countries R/3 Client/Server 424 mill. 3,200 Employees 2,800 Customers in 35 Countries 6,265 bill. 25,000 Employees 15,000 Customers in 120 Countries 7.4 bill. 28,654 Employees 19,300 Customers in 120+ Countries / /2003 SAP AG 2003, HenningKagermann / 6

7 1999: One Step Business Internet Selling Internet Buying Buyer C Buyer B Buyer A Marketplace Seller X Search Register Select Confirm Buy Buy Offer Information Hub Switching Board SAP AG 2003, HenningKagermann / 7 Seller Z Seller Y Sell Collect

8 2000: Application Architecture Business Unit Hub Enterprise Hub Private Marketplaces Public Marketplaces ERP Corporate Service Collaborative Service Extended E-Services ERP ERP Location Business Unit Supply Chain Partner Enterprise Intranet Extranet Internet SAP AG 2003, HenningKagermann / 8

9 2001: Collaborative CRM Solution n Online Product Configuration, epricing (mysap CRM) n Commited day of delivery (mysap CRM, mysap SCM) n Build-to-order (Supply Chain Hub) n Hosted Dealer Management System (Private Exchange) Customer Portal Dealer Portal Private Exchange Dealer Mgmt. Value-Added Services Benefits n n n n n Unique service offering Realtime responsiveness Future flexibility Dealer loyality Supply chain optimization SAP AG 2003, HenningKagermann / 9 Inventories Production Supply Chain Hub

10 New Reality Business Requirements Reduce costs Improve efficiency by better processes & practices Decrease TCO of IT solutions Faster ROI on IT investments Leverage existing investments, i.e. integrate them Solutions aimed at business pain points, not "three letters acronyms" Solutions that adapt to changes Solutions that support competitive strategies Solutions that do not slow down the evolution of business Better visibility Business performance management Real Time" business: faster, better, cheaper SAP AG 2003, HenningKagermann / 10

11 30 Years in Enterprise Software mysap.com One-Step- Business mysap Business Suite SAP NetWeaver ESA R/1 0.3 mill. 9 Employees R/2 Mainframe 5.1 mill. 60 Employees 50 Customers in 2 Countries R/3 Client/Server 424 mill. 3,200 Employees 2,800 Customers in 35 Countries 6,265 bill. 25,000 Employees 15,000 Customers in 120 Countries 7.4 bill. 28,654 Employees 19,300 Customers in 120+ Countries / /2003 SAP AG 2003, HenningKagermann / 11

12 The Information Economy Life Cycle Economic Value Added INDUSTRIAL INFORMATION Q1 Science Gestation Q4 Organization Decline Q3 Business Maturity Q2 Technology Growth Solid State Physics Information Theory The Adaptive Enterprise New Media IT Services Portals Chips Operating Systems WWW 1750s 1850s 1950s Source: It s Alive, Meyer / Davis, 2003 today Year SAP AG 2003, HenningKagermann / 12

13 The Next Move to Adaptive Business Business Requirements Integrated processes Replace Leverage È 3-Tier Client/Server Adaptable business Enterprise Service Architectures X Standard software Mainframe Technology Advances SAP AG 2003, HenningKagermann / 13

14 The Opportunity of a Service-based Architecture Assemble enterprise services and services from partners to build flexible event-driven business processes. Role-based User Interfaces Composite Business Processes Service request Price ATP Delivery delay Focused Operational "Nodes" SAP AG 2003, HenningKagermann / 14

15 SAP Enterprise Services Architecture (ESA) Make Web Services work for your business Open, Web Services Environment Snap on business process People Integration Information Integration Process Integration Enterprise Services Existing Systems Objective Add new levels of flexibility and extensibility while leveraging existing investments ESA is the blueprint for complete and services-based business solutions Empowers all participating people (internal and external, all relevant roles) Manages all information (structured and unstructured) Encompasses all systems (SAP and non-sap) SAP delivers its business solutions using an Enterprise Services Architecture SAP NetWeaver implements an ESA SAP xapps, mysap Business Suite, custom solutions are powered by SAP NetWeaver SAP AG 2003, HenningKagermann / 15

16 What are Enterprise Services? Hard Coded Interfaces Web Services Enterprise Services FI CRM CRM CRM 3rd Party SAP AG 2003, HenningKagermann / 16

17 SAP NetWeaver - The Business Foundation SAP NetWeaver COMPOSITE APPLICATION FRAMEWORK PEOPLE INTEGRATION Multi channel access Portal Collaboration INFORMATION INTEGRATION Bus. Intelligence Master Data Management PROCESS INTEGRATION Integration Broker APPLICATION PLATFORM J2EE Knowledge Mgmt Bus. Process Mgmt ABAP DB and OS Abstraction LIFE CYCLE MANAGEMENT Unifies and aligns people, information and business processes Integrates across technologies and organizational boundaries A safe choice with full.net and J2EE interoperability The business foundation for SAP and partners Powers business-ready solutions that reduce custom integration Its Enterprise Services Architecture increases business process flexibility... SAP AG 2003, HenningKagermann / 17

18 IT Follows Business Business people can understand services Business logic guides design Self-contained, self-explanatory Business people can compose processes Combine services from internal units & external partners Focus on core competencies and leverage partners Business people can re-compose processes Adapt business quickly to new requirements Limited end-user impact from process changes Business people can define and redefine roles Improve user productivity up to 50% Foundation for mobile business SAP AG 2003, HenningKagermann / 18

19 Enterprise Services for Ambient Intelligence New dimension of real time integration Get the business process closer to the real world Real Time Business Service request Availability Trigger Assembly Goods receipt Operational Backbone Intelligent Stuff SAP AG 2003, HenningKagermann / 19

20 Future Store - RFIDs in the Retail Industry Distribution Center Back Store Front Store Packing gate trash gate palette shelf check out gate smart shelf The Future Store Project will enable Metro Group to streamline purchasing and define retail processes for the future and try them out firsthand. RFID Server RFID Server SAP SII RFid Gate Test RFID and complementary technologies under real-life conditions Make shopping more comfortable and easier for customers Improve procurement processes SAP AG 2003, HenningKagermann / 20

21 Computers Speak to Robots Benefits n Reduction of interfaces and process layers n Seamless production automation n Proactive robot maintenance Today SAP AG 2003, HenningKagermann / 21 Tomorrow

22 Challenges for the Customer Learn and Adapt Channel Mgmt. Corporate Shared / Managed Services n Finance, HR n Customer Interaction Center Division.. Division 1 mysap All-in-One Integrate Eco-System Continuos Business Innovation SAP Business One Integrate Subsidiaries mysap ERP VMI Continuous Business Automation ( Sense and Respond ) Production SAP AG 2003, HenningKagermann / 22 Distribution Service

23 Challenge for SAP: Industrialization 113 Upgrade & Implementation validation projects covering 64 component releases Recurring Support Package validation for 18 further component releases Status: March 6, 2003 Handover of scenario to Validation Scenario validation Handover Production to Ramp-Up SAP AG 2003, HenningKagermann / 23

24 Challenge for SAP: Knowledge Transfer Area Comp. & Release RKT Project Lead Status L-Maps SAP AG 2003, HenningKagermann / 24 Status OKP abs. distinct learners abs. #hits abs. #downloads SolMan SolMan 2.10 M. Erhardt live (Sep. 20, 2002) live CRM CRM 3.1 J. Meyer live (Sep. 11, 2002) live SCM APO 3.1 C. Schmidkonz live (June 6, 2002) live R/3 Enterprise R/3 Enterprise 4.7 K. Reineck live (Nov. 7, 2002) live Commerce SRM 2.0 R. Pfisterer live (Aug. 19, 2002) in prep na Integr. Platform EP 5.0 H. Dreissigacker live (Sep. 27, 2002) in prep. 703 na* na* HCM Learning Solution 100 S. Deminger live (Oct. 30, 2002) in prep Techno./Dev. WebAS 6.20 J. Tillinger live (Feb. 03, 2003) in prep not provided* PLM cproject Suite 2.0 S. Koehler live (Dec. 10, 2002) live Integr. Platform BW 3.1c R. Uhle live (Nov. 4, 2002) in prep not provided** SCM Event Manager 1.1 C. Schmidkonz live (Nov. 7, 2002) live Integr. Platform XI 2.0 T. Volmering live (Jan. 24, 2003) in prep not provided** FIN SEM 3.2 T. Fleckenstein live (Jan. 09, 2003) in prep Sales/Marketing QuickStep K. Young live (Sep. 2002) n.a na HCM Manager Self Service M. Raih live (Dec. 20, 2002) in prep SMB Business One New S. Rutz live (Feb. 13, 2003) in prep Sales/Marketing Industry Sales New J. Burd live (Feb. 24, 2003) n.a Totals Compare Totals as of Feb. 07, Note: na* = via Portal not provided** = download by save target as = highest increase in learners compared to Feb. 07, external Learners

25 Challenge for SAP: Software SAP Volume of SAP business solutions* lines of code function modules screens database tables programs (reports) interfaces ( 48+ standalone components 10 operating systems supported 7 databases supported 28 languages Distributed development 7967 developers 9 locations across the globe Broad customer base 13 Mio end-user installations customers of all sizes 23 industries *example based on SAP R/3 Enterprise data as of February 2003 SAP AG 2003, HenningKagermann / 25

26 The Future of Enterprise Software Henning Kagermann

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