Strategic position is stronger
SAP set itself three main operational goals for fiscal year 2003: to continue to increase market share and to improve operating margin and earnings per share. SAP implemented numerous, primarily development- and sales-related, measures to achieve those goals:

• To orient itself more closely to the needs of its customers and to continue developing solutions quickly and efficiently, SAP reorganized its development organization. The development of industry-specific and cross-industry solutions was brought together into three Business Solution Groups (BSGs) in the summer of 2003 following the technology development consolidation under Executive Board member Shai Agassi in February 2003. Each BSG is led by a member of SAP’s Executive Board or Extended Management Board, who has overall business responsibility for the BSG and for its revenue, product quality, and customer satisfaction targets. The three new BSGs are BSG Manufacturing Industries, BSG Services Industries, and BSG Financial and Public Services. SAP also created the Application Platform & Architecture (AP&A) group. This team will seek to develop program modules that can be used in more than one SAP product. The AP&A group will also seek to create an Enterprise Services Architecture that describes how companies can use an integration and application platform to map business processes rapidly and flexibly and align them with each other.
• The Company’s solutions for SMBs, SAP Business One and mySAP All-in-One, which it introduced in the fall of 2002, were well accepted around the world in 2003. These solutions meet the need for reliable technology that can grow as companies grow, while minimizing operating costs. Alongside the SAP sales force, the Company uses a partner network, which it expanded further in 2003, to deliver SAP’s SMB solutions to the market and to support SMB customers around the world. IBM and American Express are just two of SAP’s worldwide sales partners for SAP Business One – a solution specifically designed for small businesses. Versions of SAP Business One are available for 25 countries, and over 2,500 customers run them. The number of independent software vendors developing functional enhancements and their own solutions on the basis of SAP Business One has also grown. In addition, SAP set up a global sales network of more than 300 SAP partners for its mySAP All-in-One solutions, which it offers for small and midsize businesses with more complex IT processes. At the end of 2003, at least 4,600 customers were using more than 310 industry-specific solutions that were developed on the basis of mySAP All-in-One. To stimulate growth, SAP arranged innovative financing programs to enable small companies to acquire the IT solutions they urgently need.
• During 2003, SAP brought numerous new versions of its software solutions to market. In particular, version 4.0 of mySAP Customer Relationship Management (mySAP CRM) offers a multitude of innovative functions and is one of the Company’s most important new products. SAP also presented enhanced versions of, for example, mySAP Supply Chain Management (mySAP SCM) and SAP Enterprise Portal.
• The technological basis of SAP’s solutions was strengthened by the introduction of the SAP NetWeaver integration and application platform. SAP NetWeaver is designed to integrate heterogeneous IT systems and to bring together business processes, information, and users throughout a company. Numerous customers already deploy several individual components of SAP NetWeaver, such as SAP Business Information Warehouse and SAP Enterprise Portal.
• SAP launched the “Powered by SAP NetWeaver” partner initiative at the SAP TechEd technology conference in Basel, Switzerland in September 2003. This initiative enables partners and independent software vendors to develop new business applications on the SAP NetWeaver integration and application platform.
• SAP has launched a worldwide initiative to support customers strategically plan, implement, operate, and continually improve their SAP applications: The SAP Customer Services Network aims to offer customers higher-quality service when implementing their SAP solutions and to expand the range of services offered for upgrades and profitability analyses. SAP has also set up a Global Customer Competence Center to help customers develop the skills they need to support their SAP applications. In the future, SAP will work closely with its customers to offer certification programs.
• SAP completed the bundling of its local consulting units in one global organization, SAP Consulting.
• SAP concluded a number of important cooperation agreements in 2003. For example, SAP will work with Accenture to develop and market IT solutions for banks and insurance companies worldwide. Also, IDS Scheer has teamed up with SAP to offer a joint solution for business process management and to merge and integrate IDS Scheer’s ARIS process platform with SAP NetWeaver. SAP and Adobe Systems Inc. concluded a strategic alliance agreement concerning the development and marketing of Adobe Portable Document Format (PDF) and printing capabilities integrated in SAP Software.