SAP Co-CEO Léo Apotheker Says “Clear Enterprises” Will Be the First to See and Act on Signs of an Improving Economy

New Technologies and Strategies Will Radically Change the Way Organizations Operate and Respond to Market Fluctuations;
To Be “Best Run,” Companies Must Embrace Change and Act with Greater Transparency and Accountability

Orlando, FloridaIn his keynote address to nearly 10,000 CEOs, IT executives and users from customer and partner organizations at SAPPHIRE® 2009, SAP AG’s (NYSE: SAP) international customer event, SAP Co-CEO Léo Apotheker called on businesses worldwide to “see clearly, think clearly and act clearly” in order to thrive in the current global economic crisis. To better navigate this crisis, Apotheker encouraged executives to focus on making their organizations more efficient, flexible and transparent — and to open silos of information and processes for evaluation and transformation. He stressed that emerging technologies will facilitate this process and will radically change the way enterprises operate in the future.

At later keynote sessions, SAP Executive Board Members Bill McDermott and Jim Hagemann Snabe outlined steps organizations can take to increase responsiveness to business disruption and opportunity, and discussed how companies can become stronger than their competitors by building, protecting and delivering greater value to customers. The keynote presentations were delivered at SAPPHIRE 2009, being held in Orlando, May 11-14.

SAP Co-CEO Apotheker Says Companies Must Pursue Insight and Transparency
During his keynote, Apotheker observed that the increasing connectivity of business networks has helped companies to increase profitability, fill gaps in the supply chain and more strategically allocate resources. However, network interdependency has also made companies more vulnerable to risk and volatility.

“What we are seeing is a growing and lasting need for clarity and insight,” said Apotheker. “Doing business within global networks has brought greater complexity and risk into the game. For example, recent incidents involving contaminated consumer products—such as toys, baby formula, spinach and peanuts—show us how difficult it is to protect a brand when suppliers two or three steps deep in a business network fail to meet acceptable safety standards. Executives must have visibility into every aspect of their business and network to act effectively and decisively.”

Apotheker noted that information technology (IT) will provide executives with a clear view and greater insight into their businesses. For example, in-memory databases and analytical applications will help companies navigate mountains of data, giving them insight into businesses and networks to make more informed business decisions. Smart devices and services that can access and share information in real time will fundamentally change and benefit the decision-making process, helping executives cross the chasm from “I think this is a good idea” to “I know this is a good idea” with insight and confidence.

Apotheker also suggested that clear enterprises must adopt business practices that build confidence with stakeholders, given the recent erosion of trust emerging from the global economic crisis. Operating itself as a clear enterprise, SAP recently announced that it is working with the SAP User Group Executive Network (SUGEN) to establish a framework of key performance indicators to measure the value delivered by the SAP® Enterprise Support program (see “SAP and SUGEN Announce SAP Enterprise Support Milestones”). Indicators will be independently monitored and the results reported every year, with certain fee rates tied to performance levels and customer value.

“SAP sees the value of greater transparency and accountability to our stakeholders and to our organization,” said Apotheker. “The recent SAP Enterprise Support announcement signaled a move unheard of in the software industry. By setting up a formal benchmarking program, we are providing customers with a baseline against which to appraise and compare the value delivered by SAP Enterprise Support. We believe embracing this level of transparency and accountability is critical to becoming a favored partner in an increasingly connected business network.”

Snabe and McDermott Urge Executives to Cultivate High-Value Areas of the Business
Later in the day, SAP Executive Board Members Jim Hagemann Snabe and Bill McDermott appeared before thousands of SAP customers and partners to give organizations practical measures to respond competitively to market conditions.

“Companies are currently rethinking their business,” said Snabe. “They have been looking for new ways to save money, seeking greater transparency and searching for insights on how to optimize their processes even further. As these actions have begun to bear fruit and bring operations under control, they have started to look for ways to become more creative—to turn a crisis into an opportunity.”

Snabe continued to state that defining business strategies with better insight is a good first step, but it is not enough to be a best-run organization. Once the strategy is defined, the next step is to implement best practices, which are business processes that span organizational units and even entire business networks. Implementing best practices based on a consistent platform gives companies more resources and flexibility to differentiate where it matters the most. To do so, Snabe recommended organizations engage in “value discovery,” where executives evaluate their organizations, pinpoint areas of greatest value, benchmark them against industry peers and develop a clear business case to invest in strengthening this value—including the investment of IT. With the recent launch of SAP® Business Suite 7 and SAP® BusinessObjects™ Explorer software, SAP is providing enhanced solutions to help companies achieve this set of objectives: to improve business insight, provide clarity, enhance best practices and accelerate the speed of innovation.

Bill McDermott stressed the importance of aligning IT with business strategy, finding a common language to address performance gaps, identifying best practices and setting a unified course of action to attain a business outcome. SAP has been working to help companies discover and deliver greater value through a number of new solutions, including SAP BusinessObjects Explorer, a breakthrough solution in changing the way workers can access and use data to pinpoint potential value areas, and the new SAP Business Suite, which has been re-assembled to help companies design and deliver business processes that deliver greatest value to customers.

“Companies need to ensure that their products and services are delivered not only on time and on budget but on value,” said McDermott. “Economic cycles come and go every seven to 10 years, but today’s environment is driving a deeper level of structural change in every industry and market. In order to lead, companies must align business strategy, enablement of IT and delivery of business outcomes with a persistent focus on value discovery and delivery and continuous innovation.”

For more information on the executive keynotes from SAPPHIRE 2009 Orlando, please visit www.sap.com/about/newsroom/sapphire.

SAPPHIRE® 2009 Orlando
More than 10,000 customers, partners and industry experts are convening at SAPPHIRE® 2009 to discover how SAP and its thriving partner ecosystem are delivering IT solutions that help today’s best-run businesses achieve clarity in every area of their operations. SAP’s premier educational and networking event, SAPPHIRE is the one occasion every year where senior executives, business managers and decision-makers can come together to explore how innovative business solutions foster long-term, profitable growth. SAPPHIRE 2009 is being held in Orlando, Florida, May 11-14. For more information, please visit www.sap.com/sapphire. Join the conversation via Twitter at #sapphire09.
Based on the success of last year’s events, SAP and the Americas’ SAP Users’ Group (ASUG) are co-locating their premier events in Orlando, where the 2009 ASUG Annual Conference takes place May 11-14.

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