SAP at their annual user conference, SAPPHIRE 2009 this week unveiled a series of new announcements and direction for where they will take their enterprise applications and business technology software.  The first day of the conference and keynote was led by co-CEO, Léo Apotheker and soon to be the sole CEO as Henning Kagerman will retire from SAP and was complimented by Léo for his contribution to SAP. But most important is the concept that Léo introduced of ‘Timeless software’ which basically means that SAP has transitioned from being more than a transactional application provider with ERP, CRM or SCM applications to one focused on any business solutions that can be interconnected with varying flavors of SAP and the enterprise in a non-disruptive manner.  This is no easy task culturally as the breadth of solutions and prioritization was not clear from today’s keynote where there was no substantive discussion on direction of ERP, CRM, SCM, HCM and other application suites that have been hallmarks of the company.

But what should be a simple step forward in helping organizations in business and now even more important the business to business efforts  to be interoperable is what SAP calls the ‘business network’ for business to interact more easily is not so simple. A critical step in helping organizations in establishing a true business network is establishing shared goals and objectives and establishing a common framework for business to business planning. I have discussed this critical baseline for meeting the service and supply chain needs to operate at lowest cost and risk but achieve optimal performance.  But the simple steps of leveraging strategy management and planning components that SAP has and organizations could collaborate on should be the easy steps for SAP but not so as they have not been clearly articulated to organizations.  Interesting that SAP is promoting a book called ‘Business Network Transformation’ that does not clearly engage the game changing elements of using technology for collaborating and using planning across business networks.

It was nice to see that SAP is advancing the dialogue on Performance Management integrated with risk management to ensure that all aspects of strategy and planning integrate with decision execution. It should be no surprise that SAP continues to promote performance management and we have seen this now a top priority in organizations today. I have already discussed the importance of integrating Risk and Performance Management and just this week my colleague, Robert Kugel outlined his view on managing risk across the enterprise and he has identified as a top investment priority for 2009. This type of effort will go a long way to bring unified information and collaboration on operating across the business network. Of course it was also nice to see a new book by SAP executives called “Driven to Perform”, which outlines the performance management needs across an entire enterprise. In great depth of over 700 pages nicely cites and credits Ventana Research work in the benchmark research as supporting facts to this critical business imperative.

SAP is not going to miss the opportunity to explain how their software can help business with their consumer and customer applications that operate across mobile and communications platforms back into business. In their keynote the demonstration brought forward a practical demonstration of a customer insurance claim in an automobile accident to the immediate dispatch of services to the agent interaction with the customer. I have highlighted the importance of using mobility as a key differentiation for business processes and information and this year is lining up to be as big as I asserted at the beginning of the year. SAP will have to look at how to operate this in a unified communication approach that can interoperate across any communication or mobile technology like BackFlip Software was demonstrating on the exhibit floor. SAP will have to decide if they go to the next level and work to help support consumer interacting with business across platforms like RIM and Apple to unified communications technologies using Cisco and Polycom more aggressively.

The first day of the event brought two major announcements with the first being focused in the areas of new advancements in the business intelligence (BI) technology for harvesting data from SAP with a new product called SAP Business Objects Explorer that begins the unification of SAP NetWeaver BW and Business Objects product portfolio. I will cover the details of the BI advancements in separate blog as this was a major portion of today’s discussion in simplifying the access and analysis to information in SAP and critical for almost all organizations using SAP.

The second big announcement was in the areas of sustainability solutions and industry collaboration that advance the discussion of corporate social responsibility (CSR) into practical solutions including sustainability performance management. I have to mention this as was a key point of the keynote and SAP is focused on providing sustainable performance bringing economic, environment and social aspects of what SAP is doing to advance the global responsibility for themselves and their customers. I have outlined the importance of corporate social responsibility (CSR) for 2009 and SAP is bringing their full suite of tools and applications to bear on the opportunity, along with acquisitions, to meet this market potential. This new business effort is being led by SAP veteran, Dr. Peter Graf who is now the Chief Sustainability Officer at SAP and will make their new solution map a reality for SAP along with working with customers to follow their example. SAP also has embraced the need for a sustainable workforce and IT infrastructure to fulfill on this mission. This initiative of SAP is taking hold quickly and moving beyond existing commitment to performance management as a key executive position and priority as our US government has with a Chief Performance Officer to address needs of the organizations.

SAP also realizes that they need to advance the simplicity and usage of their software to be just as easy as the business social media that is rapidly taking center stage. This social aspect of collaboration for business is also critical to integrate with the need for external information that we call Market Intelligence which SAP recognizes as key steps for their own future. SAP has more to do as they have not addressed the challenges of existing customers who are trying to manage performance of their customers and sales more strategically in their solution roadmaps.

Of course many organizations will evaluate an upgrade to the SAP Business Suite 7 that has significant advancements in integrated process management and support for SOA that as I said earlier this year and you must judge its importance for you compared to all the other choices from SAP. A very interesting and important day for SAP indeed as they advance their agenda into a new wave of solutions and capabilities to make them easier to do business with today.SAP has also become more pragmatic in how they help their customers advance their agenda and compete with Oracle and IBM for mindshare and wallet share for technology spending.

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Regards,

Mark Smith - CEO & EVP Research