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SAP Seeks to Tie Up Loose Ends
SAPPHIRE '08: Relying on services-oriented architecture, SAP co-CEO Henning Kagermann believes his company can now help businesses "close the loop" between strategy and execution.
Posted May 6, 2008
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ORLANDO, FLA. -- The competitive landscape for businesses is becoming tougher and tougher, with an increase in competitors and a lurching economy. SAP Co-CEO Henning Kagermann acknowledged this growing situation in his keynote address this morning, but insisted SAP's support for enterprise service-oriented architecture can ensure that there is light at the end of the tunnel.

Speaking to the current state of affairs, Kagermann said, "Yes we are in challenging times. But we should all take this as an opportunity." He explains that businesses are becoming more complex, the business world is moving faster, and industry boundaries are shifting -- and so the need for business model innovation is essential. "Business model innovation is more important than product innovation," he adds.

In order to create these innovative business models, Kagermann stresses that it is necessary for companies co-design with customers in order to create cross-industry platforms. Using BASF as an example, he explains the multinational chemicals manufacturing corporation underwent a five-year project to expand the scope of their product offerings and become closer to customers. The insight, relationships, connecting with people, and information sharing Kagermann says BASF realized is the epitome of what business should be moving forward.

Enterprise SOA is essential to reap these benefits, according to Kagermann. "Use patterns are emerging," he says. "SOA is in mass adoption across all industries." Consequently, he echoed the company announcement of growing market adoption for SAP Enterprise Support, which supports companies' business processes and heterogeneous software environment. According to company statistics, nearly 200 customers have picked up the solution since its launch in February 2008. SAP Enterprise Support is delivered in different components in order to address particular business needs, from design of support to ongoing support and upgradability.

While Kagermann insists SAP has delivered enterprise SOA, Paul Greenberg, president of CRM consultancy The 56 Group, says many companies claim they have "done SOA", but no one has been able to prove it to him yet. "I really want to see it," he says. "At this point, SAP would be the largest company to do this, if in fact they truly have." Calling SOA the "Holy Grail for technology infrastructure", Greenberg asserts actually having a complete enterprise SOA would be a huge competitive advantage.

Speaking about his key takeaways from Kagermann's keynote address, Greenberg says SAP has surprised him over the past year. "SAP actually in the last 12 months transformed its thinking, roadmap, application strategy, and its way of focusing on customers," he says. "The deep commitment is clearly real. Right now, as far as the authenticity of SAP's commitment is concerned, it is 100 percent real."

Greenberg attributes this shift in the past year from a traditional enterprise application provider, purely operation and application focused, to truly understanding the value of collaboration and joint development. "SAP realized, number one, that this was necessary," he begins. "Number two, management of customers is no longer management, but engagement." During the keynote address, great emphasis was placed on the user interface (UI) running now on SAP CRM 2007, which has personalization features and drag-and-drop capabilities much like iGoogle. Greenberg says this was intentional. "SAP really wanted you to see the user interface," he says. "And that's important, because [SAP] wants to show this isn't the SAP of old, they are user-friendly, and our customers matter. That's an exceptionally important facet."

This paradigm shift for SAP has brought it back fully into the CRM 2.0 conversation, according to Greenberg. While it is too soon to tell who would be the outright leader in the space, Greenberg insists that SAP cannot be counted out any longer. "One year ago, I'd say the leaders for CRM 2.0 would be Salesforce.com and Zoho," he recalls. "Now, you have to include Oracle and SAP."


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