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Presentation on theme: "DRIVING CUSTOMER SUCCESS"— Presentation transcript:

Schroder Salomon Smith Barney Investor Conference New York, NY – May 22, 2002 Nils Herzberg SVP, Industry Business Sector Manufacturing SAP AG

2 Safe Harbor Statement Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of Words such as “believe,” “estimate,” “intend,” “may,” “will,” “expect,” and “project” and similar expressions as they relate to the Company are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the Company’s future financial results are discussed more fully in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 20-F for 2001 filed with the SEC on March 28, Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

3 Today‘s Customer Requirements
All Customers Want Quick ROI Reduced Cost of Ownership Protection of existing IT investments Lower switching costs Many Customers Want Tightly integrated targeted solutions Complete end-to-end solutions Guaranteed mission readiness

4 The Cost of Integration – Customer Reality
How to capitalize on existing IT investments ? ERP legacy ~15 systems Challenge: Cost of Integration SAP R/3 ~30 systems, Versions 3.1I - 4.6B 15,000 interfaces Development cost: ~ 75,000 USD / interface Costs of ownership: ~ 10,000 USD / year / interface Overall: 150 Mio. USD / year ERP non-SAP ~25 systems, different versions E-Procurement 10 units Technical systems SAP Markets Enterprise Buyer Professional Edition Trading e-Sales Collaborative Engineering

5 mySAP Technology Provides the Infrastructure ...
... to integrate several applications from different vendors to form an open but consistent e-business platform Infra- structure Services Security Global Standards IT Land- scape Mgmt. Portal Infrastructure mySAP CRM mySAP SCM ... SAP R/3 Enterprise Partner System Web Application Server Legacy / Third Party Exchange Infrastructure mySAP Technology

6 Improve Bottom Line - Adaptive Supply Chain Network
Unilever East Asia Pacific Integrated mySAP SCM and mySAP BI provides consolidated transparent information. Solution: mySAP SCM Make-to-stock (Collaborative Demand Planning) Direct Procurement (Supply Chain Exchange) Replenish-to-shelf (Vendor Managed Inventory) e-Logistics Performance Management (Analytical Web Services) Benefits Reduced inventories Lower transportation cost Reduced cash-to-cash cycle Improved customer retention Replenish- to-shelf Performance Management Coordinator Carrier Supplier Promotion Planning Direct Procurement Supply Chain Exchange Retailer

7 Manage Change - Role-Based Organizations
Solution Review the content of SAP’s Role Library (Best Practices for Adapt to corporate objectives (mySAP Enterprise Portals) Build role-based organization (mySAP HR) Benefits Applies directly Accelerated business transformation Manage-by-exception Personal productivity (+10-50%) General Motors It is critical to have a portal like this to gain efficiency in both our internal processes as well as our processes with our customers. Roles Workflow Business Rules 1 2 3 Change Execution Exception handling Education AS WAS TO BE

8 SAP and our Customers: Building Partnerships
CEL Customer Segmentation Different offering for different needs Customer Engagement Lifecycle Creating value across the entire lifecycle Combining openness and flexibility with integration Partner Value Net Unique ecosystem SAP Field Operations Solution portfolio mgmt. Partner Value Net Corporate Governance Service Infrastructure

9 SAP Milestones over 30 Years
Smart Business Solutions mySAP Technology 7,341 mill. € Revenue 29,000 Employees 18,000 Customers in Countries One-Step Business 6,265 mill. € Revenue 25,000 Employees 15,000 Customers in 120 Countries Client/ Server 424 mill. € Revenue 3,200 Employees 2,800 Customers in 35 Countries R/2 Mainframe 5.1 mill. € Revenue 60 Employees 50 Customers in 2 Countries R/1 0.3 mill. € Revenue 9 Employees 1972 1979 1992 1999/2000 2002

10 Growth Drivers 2002 and Beyond
2002 is expected to be another challenging year, software sales trends continue to be unsettled in a tough economic environment 2002 sales to be expected up by around 15% 2002 operating margin excl. stock based compensation and TopTier acquisition cost to be expected up at least 100 basis points (2000: 20%) Operating margin excl. stock based compensation and TopTier acquisition cost mid-term target of 25% License revenue growth drivers: CRM, SCM, Technology & ERP Migration path to Currently ~25% of global customers run ~15% of R/3 customers have migrated to By 2005: 80-90% migration to

Schroder Salomon Smith Barney Investor Conference New York, NY – May 22, 2002 Nils Herzberg SVP, Industry Business Sector Manufacturing SAP AG


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