SAP Japan Announces New FY2006 Strategies to Focus on Increasing Customer Value and Strengthening Partner Collaboration

Leveraging brisk FY2005 performance to further expand business

TokyoSAP Japan Co., Ltd. announced today that, having posted brisk business results for FY2005, the company will outline its major strategies and reform its organization in conjunction with the new business year started in January 2006.

SAP Japan increased software-related sales by 8% year-on-year and total sales by 7% YOY in FY2005 (on a fixed exchange rate). The company attributes the increase in sales to a number of factors: the Japanese economy entered on a recovery path, corporate executives began to aggressively make IT investments, and various measures taken to cope with changes in the market worked well.

SAP Japan has announced the following mid- and long-term goals and business focuses for FY2006 in order to further expand its business based on the performance results achieved in FY2005.

Mid- and long-term goals towards 2010:
1) To establish itself as the leading vendor for industry standard business applications that replace large-scale custom developed systems.
2) To achieve such leadership position by software license sales in the three sectors of banking, public and retail, where use of package software is relatively low.
3) To develop an industry-leading mid-market VAR (value added retailer) business with partners in Japan, reach all industries and geographies and grow with the partners.
4) To establish SAP’s BPP (business process platform) as the standard ESA (enterprise service architecture) platform, help create an ISV (independent software vendor) community and provide value added solutions across a wide range of businesses and operations.

Focuses for FY2006:
1) Superior Customer Value
To provide business value through value engineering
To create customer value office
To conduct “Let’s Talk Campaign” to establish close communication with management of partner companies

2) Development of Strategies to Grow with Partners
To enrich all partners in product, technology, service, and channel sectors to achieve win-win relations
To support open platforms such as SDN (SAP Developer Network) and PBN (Powered by SAP NetWeaver)
To create joint strategies with each partner

3) Maximum Use of Employees and Development of Potentials
To aggressively hire and internally promote key management executives and employees
To bolster talent management and provide management training
To implement fair high-level pay-for-performance package
To establish two-way communication in-house

4) Technology Innovation – ESA to Innovate IT Industry
To provide solutions specific to management issues in the form of high customer value based on platform
To enable speed, quality and cost reduction through the provision of modularized applications powered by platform

With regard to its go-to-market strategy for FT2006, SAP Japan will reform its organization, in order to create customer value as one single team.

Issues in organizational reform:
1) To establish segment-specific sales divisions in order to achieve superior customer satisfaction within corporate sales headquarters
To establish regional sales divisions (for sales units of small- and medium-sized enterprises)
To establish sales units targeted at key industries
* manufacturing sales division
* high-tech industry sales division
* distribution and service industry sales division
* process industry sales division
* strategic and industry sales divisions (banking and public)
To strengthen strategic solution business division (provision of HCM and CRM)
To bolster VE division and strengthen activities

2) To assign dedicated staff of all of the company’s units to support the sales division, including marketing, alliances, solutions, consulting, value engineering, support, and sales operations

3) To create ESA Office as a dedicated unit to promote ESA and carry out ESA business development