IR SYMPOSIUM SAPPHIRE 02 Lisbon Sept. 5 2002

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IR SYMPOSIUMSAPPHIRE 02 LisbonSept. 5 2002
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Executing in Uncertain Times

• Hasso PlattnerCo-Chairman CEO, SAP AG

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The Leadership Challenge

• CEO Leading the High Performance, Adaptive
  Enterprise

Strategy
Measure Evaluate Impact
Align Priorities
Management Departments Users
Sales
Product Development
Marketing
Manu-facturing
Services
Finance, HR,Operations
IT
Execute

• CIO Managing a high performance information
  platform to support fast evolving strategies AND
  ever more efficient operations for all departments

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The CIO Challenge
From CEO through to hourly employees
From smallest subsidiary to the centralized
headquarter
From solving complex issues to managing the
unexpected
Adaptability x Usability x Scalability TCO
Performance
Implementation, Setup Integration,
Operation Maintenance, Evolutions
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Adaptability The SAP Advantage Empowering the
User
Example Operations of a Service Department
Roles (VP, Manager, Engineer)
Blueprints
Portal
New Service Launch
Solution Map
CRM SCM
Office
Internet Services
Business Intelligence
Organization
Processes
Exchange Infrastructure
HR
Fin
CRM
SCM / SRM
PLM
CAD, CAM
Legacy
3rd Party
Spare Parts Procurement Scheduling
Call Center Service Contracts
Product Information
DesignSpecs
Taxation
Identification of Personnel
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SAP Delivers the High Performance IT Platform
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Achieving Business Excellence is About Doing this
Repeatedly and Profitably

• Support "agile" strategies
• Tightly link strategy and operations monitor
  and execute
• Improve performance while reducing TCO

• Full mastery of an adaptive IT environment will
  make the difference between winning and losing
  the game.

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Scalability SAP Supports the Global Enterprise
Headquarter
mySAP.com
Distributor

• Worlds leading business solution
• Full integration across value chain

SAP All-in-One
Factory
Exchange Infrastructure

• Full functionality
• Pre-configured
• Single Database

SAP R/3 Enterprise
Sales Subsidiary

• All core functionalities
• Integration up down

SAP Business One

• Necessary functionalityup to 100 users

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SAP Smart Business Solutions

• SAP Business One
• Small enterprises and subsidiaries
• Off-the-shelf product
• Easy to customize
• Wide range of innovative functionality
• Immediate impact
• Easy to use / running in a few days
• Low cost of entry and ownership
• Low maintenance
• Over 800 customers

• mySAP All-in-One
• Midsize companies and subsidiaries
• Complete functionality
• Easy to get started
• Pre-configured, single database
• Adaptable
• Industry templates configurable
• Partner network with
• Proven solutions and expertise
• Proven ROI and over 2000 customers

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SAP R/3 Enterprise Strategy Exceeding Customer
Requirements

• Continuity
• Deploy all new, available functions
• Integrate new, available technology
• Truly Global
• Languages, measures formats
• Legal requirements processes
• Flexibility and Optimization
• Flexible upgrade strategy
• Phased deployment of new functionality
• Stability and performance optimization
• Transition into e-Business
• Seamless integration of enterprise and
  collaboration capabilities

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SAP Supports the High Performance Adaptive
Enterprise

• World Class Technology
• Lowest Cost of Ownership
• Open standards
• Scalable
• Secure
• Reliable

• World Class Applications
• Create value for your organization
• Empower every employee
• For every size of business
• Appropriate functionality
• Collaboration
• Industry expertise

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Strategic Initiatives at SAP

• Wolfgang KemnaExecutive Vice President Member
  of the Extended ManagementBoard, SAP AG

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Overview Strategic Initiatives (1)

• Beginning of 2001 creation of Strategic
  Initiatives to increase efficiency in our go to
  market strategy
• Focus on solutions from development side and
  ensure customer satisfaction
• Mid 2002 Foundation of an umbrella organisation
  as a corporate function under executive
  leadership to strive for industry leadership
• Strategic Initiatives concept is designed to grow
  business value by aligning field, development and
  marketing efforts
• Enhanced ERP offering and extended e-business
  applications enable SAP to meet needs of existing
  customers, reach new customers and industry
  segments
• Three Initiatives have proven success by a strong
  field execution
• Global CRM Initiative Global SCM Initiative,
  R/3 Enterprise Initiative
• SAP strategic initiatives focus on our customers
• Profitability, productivity, ROI
• Time to market
• Overall higher customer satisfaction

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Overview of Strategic Initiatives (2)

• Global CRM Initiative
• Analysts predict that the CRM sector will be the
  the biggest market for Enterprise Applications by
  2002
• Gartner SAP is the fastest growing CRM vendor
  worldwide
• SAP comes in second in the CRM market in 2002
• SAP wins the CRM space because of the
  multifacetted market focus
• Global SCM Initiative
• Achievements Gartner ranked mySAP SCM no. 1 in
  their leading quadrant
• Vision of Adaptive Supply Chain Networks has made
  SAP the market leader in SCM
• Targeted Supply Chain Solutions throughout the
  vertical industry sectors is the area which shows
  appreciable growth
• Global R/3 Enterprise Initiative
• SAP is the market leader in the ERP space
• SAP continues to be first choice for enterprises
  looking for a reliable ERP solution
• R/3 Enterprise enables customer to move
  seamlessly into the e-business world with my
  SAP.com
• SAP R/3 is the trusted foundation for our
  customers enterprise

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mySAP CRM - Reaching for Market Leadership

• Over 1700 mySAP CRM customers worldwide
• In Q2 2002, mySAP CRM related software revenues
  reached 175 m YTD (19 of total license
  revenues)
• 1 within SAPs installed base
• 2 in the world-wide CRM market

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mySAP CRM - Case Study Tyrolit Group
a sales and marketing version of supply
chain management, making a seamless value chain
beginning from end users, through (our) customer,
all the way back to working capital
TYROLIT GROUP

• Implementation of mySAP CRM resulted in 83
  Return on Investment through
• 25 improvement to bottom-line
• Reduced labor costs by 80
• Reduced rework order entry error
• Increased cash flow through better management of
  open orders against receivables
• Improved delivery cycle time against customer
  delivery needs

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mySAP SCM - Thought Leader in Supply Chain
Management

• Marketleader since 2001
• Leader in Gartners Magic Quadrant
• Over 6000 mySAP SCM customers worldwide
• Growth of our of live installations from Q1 2001
  to Q1 2002 by 321
• mySAP SCM contributed (21) to total license
  revenues in Q2 2002

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mySAP SCM is Delivering Value to Our Customers

• Reduced inventory days on hand in the range of 9
  to 20
• Inventory reduction by 20 for finished products
  subcomponents
• Capacity utilization--20 improvement

• 13 increase in cash flow through improved
  planning cycle times
• Increased forecast accuracy from 40 to 80
• Improved on-time shipments to customers by 41 as
  inventory was reduced by 26

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mySAP SCM Leader in the Gartner Magic Quadrant
2Q 2002
we do see some positive movement in ability to
execute, lifting two vendors from positions in
the Visionaries Quadrant, SAP and Manugistics
Gartner Group, 2002
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R/3 Enterprise - SAPs R/3 Strategy Based on ur
Customers Requirements

• Continuity Deploy all new functions as they
  become available and integrate new technology
  when available

Continue enhancing SAP R/3! When is 4.7 available?

• Flexibility and Optimization More flexible
  upgrade strategy, allowing deployment of new
  functionality in phases on the one hand,
  stability and optimization (e.g. performance) on
  the other hand.

I need to optimize and expand my SAP R/3 into new
areas and want to do this in a more flexible way
I want to move from SAP R/3 landscape into a
complete e-business solution!

• Transition into e-BusinessBringing enterprise
  and collaboration together to form a seamless
  e-business environment

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SAP R/3 Enterprise Architecture
SAP R/3 Enterprise is built along the principle
of optimizing the stable and mature core
processes and infrastructure and making new
enhancements optional and deployable as needed.
Tuned core, optimized for performance bases on
4.6C (SAP R/3 Enterprise Core)
Optional new Functional Enhancements (SAP R/3
Enterprise Extensions)
Newest version of mySAP.com Technology
technologies and infrastructure enhancements (SAP
Web Application Server)
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Proof of Success with R/3 Enterprise

• UNICEF, the United Nations Childrens Fund, has
  been using SAP R/3 since 1999 and plans to go
  live with the new enterprise solution over the
  coming months.
• We are having a very smooth upgrade to SAP R/3
  Enterprise, SAPs carefully managed ramp-up
  process has allowed us to resolve upgrade issues
  quickly, thereby lowering our total cost of
  ownership. SAP and UNICEFs shared interest in
  making this project a success has further
  strengthened our partnership
• André Spatz CIO of Unicef
• Press Release SAPPHIRE Lisbon 2002

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SAP Smart Business Solutions

• Hans-Jürgen UhinkSVP Global Field SMB

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Agenda - SAP Smart Business Solutions
SAP Smart Business Solutions
Actual Status
Next Steps
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The SMB Market in Europe Presents a Considerable
Opportunity
Number ofemployees
2000
117 000
250
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Type of industries
A
B
C
D
Mainly other services, small retailers and
project oriented industries
Industrial business services, medium HORECA,
utilities, construction
Car dealers, wholesale trade and medium sized
retailers
Heavy industry, automotive, mail order, banks
insurance
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SAP Now Offers to 80 of the Overall Market
SAP Announced at Cebit 2002 Smart Business
Solutions Program for Small and Medium Sized
Businesses (SMBs)

• Three different offerings from SAP for the
  different segments
• mySAP All-in-One vertical solutions for the
  sophisticated SMBs, configured by partners,
  based on specific mySAP.com versions
• New solution for Advanced SMBs SAP Business
  One - The simple but powerful solution mainly
  for trade and service
• SAP is offering solutions to companies with more
  than 10 employees
• New global SMB organizationannounced in August
  2002

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SAP Approaches SMBs Through a Tiered Structure
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Agenda - SAP Smart Business Solutions
SAP Smart Business Solutions
Actual Status
Next Steps
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Actual mySAP All-in-One Status

• More than 2000 mySAP All-in-One customers sold by
  our channel partners
• More and more mySAP All-in-One solutions
  qualified (actually about 200 solutions)
• More than 200 channel partners
• SAPs mySAP All-in-One development offers a solid
  support for partner solutions and solution
  attractiveness
• Channel partners getting better sales and
  implementation performance in using their
  vertical knowledge
• Solution Roll-out within partner network

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Their Success Could be Your Success
The Claverham Experience of Ascent SAP
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Actual SAP Business One Status

• First new country versions are being rolled out
  as announced at Cebit
• First new partner contracts signed
• Channel cooperation agreement signed with HP
• First new live customers in Germany with the
  new country versions
• Legal requirements
• Local best practices
• Successful sales of the existing country versions
  (800 cstmrs.)

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Our customers wants ease-of-use
Ergonomics is the number one feature
First criterion when choosing a product
Price
Ease of use,ergonomics
Evolutivity
Maintenance, upgrades
Business specialization
Adaptability toneeds of SMBs
Technical support

• Source BCG research, Germany, France, 2002

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SAP Business One - Countries, Languages,
Availability

• Languages available today
• German (DE, AT, CH)
• English (US, SGP)
• French (CH)
• Norwegian
• Hungarian
• Danish
• Dutch
• Finish
• Italian
• Serbian
• Polish
• Spanish (Panama)
• Hebrew
• Cyprus (English UK)

• Country Version 1st availability
• Israel
• Germany 09/2002
• Austria 10/
• Switzerland 10/
• Norway 10/
• Finland 10/
• Denmark 10/
• Netherlands 10/
• US 12/
• Poland available
• Cyprus
• Serbia
• Singapore
• Panama

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SAPs Approach Serves the Entire Market

• Up to 40 of all SMBs are subsidiaries of large
  customers
• SAP Exchange Technology serves as Integration
  Hub
• Facilitate commerce communities between
  corporations of all sizes
• SAP Exchange Technology enables Supply Chain
  completion

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Agenda - SAP Smart Business Solutions
SAP Smart Business Solutions
Actual Status
Next Steps
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SAPs IT Value Chain Offering

• Henning KagermannCo-Chairman CEO, SAP AG

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Evolution of SAP

• SAPs
• Business
• Infrastructure
• Solutions
• Multi-Suite inheterogeneousenvironments
• Multi-Platform inheterogenous environments
• Multi-Industry-
• with specific
• customer defined solution

• mySAP.com
• One-Step-
• Business
• Multi-Solution
• Multi-Platform
• Multi-Industry

• NDA
• Multi-Product
• Multi-Platform
• Multi-Industry

• R/3
• Client/Server
• One Product
• Multi-Platform
• Multi-Industry

• R/2
• Mainframe
• One Product
• Multi-Platform

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Trusted Advisor Across Entire Lifecycle
Discover Evaluate -
Implement - Operate
CEL
CEL
Business Software
Infrastructure Software
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Trusted Advisor Across Entire Lifecycle
Discover Evaluate -
Implement - Operate
CEL
CEL
Business Software
System Support
Out-sourcing
Infrastructure Software
Infrastructure Support
Technical Support
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Trusted Advisor Across Entire Lifecycle
Strategic Consulting
Discover Evaluate -
Implement - Operate
CEL
CEL
Business Software
Business Consulting
System Support
Out-sourcing
Infrastructure Consulting
Infrastructure Software
Infrastructure Support
Technical Support
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Trusted Advisor Across Entire Lifecycle
Strategic Consulting
Discover Evaluate -
Implement - Operate
CEL
CEL
Business Software
Business Consulting
System Support
Out-sourcing
Infrastructure Consulting
Infrastructure Software
Infrastructure Support
Technical Support
Hardware OS, DB, ...
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SAP as a Trustworthy Business Partner
Strategic Consulting
Discover Evaluate - Implement
- Operate
CEL
CEL
Business Software
Business Consulting
System Support
Out-sourcing
System Integration
Application Layer
Infrastructure Consulting
Infrastr. Software
Infrastructure Support
Middleware Layer
Technical Support
Hardware OS, DB, ...
IT Layer
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Extended Range of Service

• Solutions
• SAP Solution Management
• SAP Hosting
• Global Customer Development Services
• Benefits
• Single cockpit for operation
• Alleviate adaptation pain
• SAP operations development expertise

With SAP Solution Manager we can fully manage a
state-of-the-art e-Business solution.
Service Marketplace
Solution Manager
System Landscape
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Support Service
Maintenance Offerings

• MaxAttention Onsite
• MaxAttention ServiceLevel

• 2 Full Time Equivalents onsite

• MaxAttention ServiceLevel
• Standard Support
• Safegurading for up to 2 mission critical
  projects

• Named SAP Active Global Support contact
• Back office support for self services
• Service Level Agreement

Standard Support

• Up to 2 SAP EarlyWatch Checks
• SAP Early Watch Alert
• SAP GoingLive Check or
• SAP GoingLive Functional Upgrade Check or
• SAP OS/DB Migration Check

• Worldwide Support 24 x 7
• Support and Maintenance for SAP Software
• Integrated Support for mysap.com solutions and
  partner products
• SAP Solution Manager
• Access to the SAP Service Marketplace

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Ensure Reliable Operations

• Solution SAP Hosting
• Implementation hosting
• Ramp-up hosting
• Upgrade Hosting
• Application hosting
• Remote technical operations
• Benefits
• A la carte services
• SAP expertise
• Build on partner expertise

• Typical Deal
• Customer Profile
• Public and Private Companies in all Industries
• Annual Sales 0.53.0 M
• Deal Characteristics
• Term 36 months
• License Revenue 0.55.0 M
• SAP Hosting Rev. 0.53.0 M

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Right Solutions for the Right Needs

• Solution Global Custom Development Services
• Functional Enhancements Expansions
• Development of Intensive Integration
• Project Management Services
• Development Maintenance Outsourcing
• Development Coaching Audit Services
• Benefits
• Accelerated delivery for unique requirements
• Ensure quality of custom solutions
• Access to SAP Resources and Best Practices
• Mediate risk of in-house development

Working with Custom Development Services enabled
Kimberly Clark to further leverage our investment
in SAP as an infrastructure platform.
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GPSO Complements SAPs Strategy to become a
Global Solution Provider
SAP Strategy

• Consulting is a key enabler for SAP
• GPSO is ...
• a strong and focused service arm
• ensuring consistent and professional services
• fuelling global SAP consulting initiatives
• leveraging industry capabilities for clients

Global Professional Services
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Global Field Operations

• Léo ApothekerPresident, Global Field Operations
• Member of the Executive Board, SAP AG

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SAPs IT Value Chain Offering
G F O
Business Software
System Support
Out-sourcing
Business Consulting
Infrastructure Consulting
Infrastructure Software
Infrastructure Support
Technical Support
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Addressing Changing Market Needs The Selling
Environment I

• Customer purchasing behavior is changing
• Deals shifting from a few large deals to multiple
  smaller deals
• Companies staggering buying pattern buying in
  increments as they go
• Smaller deals does not mean less strategic deals.
• Smaller deals may lead to less price pressure
• Customer C-Level involvement in deals requires
  SAP Executive involvement
• Customers leveraging existing software
• Looking for new purchases to enhance existing
  systems with easily integrated applications
• Sales people need to position a business solution
  not a product
• Evaluating ROI before making additional purchases
• Low cost of ownership
• Faster ROI
• Need to address local needs in a customer-centric
  organization

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The Selling Environment II

• Need to deliver consistent, high quality
  solutions and services to all types of customers
• WE DO WHAT WE SAY WE SAY WHAT WE DO
• Delivering the appropriate solutions for
  delighted customers (GLOCAL)
• Global customers have global priorities and want
  worldwide high quality execution
• Local customers need local attention (importance
  of local accounts and local key accounts for
  SAP)
• Looking for the long-term partner
• Not just a simple purchase looking for
  after-sales service, enhancements, and support
• Deliver solutions with commitment
• Customer prefer well-established vendors, that
  will be around for sometime.
• Strategic mega deals still exist where a
  customer goes with SAP for everything.

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Addressing Changing Market Needs Global Field
Operations

• SAPs worldwide sales force realigned around the
  needs of its customers, prospects and partners,
  yielding
• Consistent processes
• Seamless operations across geographies
• Customer-centric sales approach
• Improved North American and Latin American sales
  efficiency

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A Customer Perspective Waldemar Nickel, Postbank

• Waldemar Nickel is the Program Director, IT at
  Deutsche Postbank
• In this role, Waldemar is responsible to provide
  leadership and direction to deliver a corporate
  wide SAP solutions roll out to enahce the core
  banking offering.
• Deutsche Postbank 7.4 B Organization with
  10,400 employees
• In his presentation, Nickel will focus on the
  Core Banking at Postbank - Decision in Favor
  of SAP

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SAPs Global Professional Services Organization
(GPSO)

• Dick Stewart
• Senior Vice President, Global Professional
  Services Organization, SAP AG

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Why GPSO?

• Customers desire one throat to choke
• Increased reliance on SAP services
• Rationalized services strategy and related
  governance model

Hosting
GPSO
Support
EdServe
GPDS
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SAP GPSO - Open for Business as of January 1st,
2002
Our Mission is to provide best in class
services for innovative business IT-solutions
helping our customers around the globe to achieve
competitive advantage together with our partners
and other SAP units.
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GPSO compliments SAPs strategy to become a
Global Solution Provider

• SAP remains primarily a software company
• Consulting is a key enabler for SAP
• Sector Support
• Global PSO
• SAP SI
• GPSO is ...
• a strong and focused service arm
• ensuring consistent and professional
  services
• driving global SAP initiatives
• leveraging industry capabilities for clients
• delivered on a regional and global basis
• Close cooperation with Partners remains a vital
  success factor

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GPSO leverages global capabilities for our
customers, partners and SAP

• Global
• Leverage global capabilities for customers
• Professional
• Development of critical expertise
• Deployment of tools methodologies
• Establish and share best-practices
• Professional consulting career development
• Services
• Development and deployment of service offerings
• Specialized offerings around
• global industries
• strategic solutions
• strategic customers

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Our customers and partners can expect geographic
reach, quality, speed and business impact
GPSO promises to external stakeholders

• Ensure solution design and implementation
  world-wide
• Increase implementation quality and speed
• Maximize IT impact and competitive
  differentiation
• Engage professionally and continuously

Customers
Partners

• Faster build-up and transfer of knowledge
• Align with partners
• Increase partner sales

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SAPs IT Value Chain Offering
Strategic Consulting
System Support
Out-sourcing
Business Software
Business Consulting
Infrastructure Consulting
Infrastructure Software
Infrastructure Support
Hardware OS, DB, ...
Technical Support
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SAPs IT Value Chain Offering
Strategic Consulting
System Support
Out-sourcing
System Integration
Business Consulting
Business Software
Infrastructure Consulting
Infrastructure Support
Infrastructure Software
System Integration
System Integration
Hardware OS, DB, ...
Technical Support
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Q A
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IR SYMPOSIUMSAPPHIRE 02 LisbonSept. 5 2002