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RESEARCH AND DEVELOPMENT
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Thirteen percent of revenue plowed into R&D
SAP knows that in the medium term it must continuously
improve its portfolio of innovative products to maintain and
reinforce its current leading position in the business software
segment. In 2004, it therefore continued to enhance its current
software solutions and develop new products. Consequently,
expenses for research and development (R&D) were 6% higher
at €1,011 million (excluding expenses for stock-based compensation
and acquisition-related charges). The portion of its total
revenue that the Company spent on R&D (excluding expenses
for stock-based compensation and acquisition-related charges)
was 13 % (2003: 14 %). The importance of research and development
was also reflected in the breakdown of employee profiles.
In 2004, the total headcount of the SAP Group was 32,205, of
whom 9,900 were engaged in development work. The number
of developers increased 12 % in the year, and they now constitute
31 % of the Company’s workforce.
Technology and applications progress
The key achievement in 2004 was the strategically significant
continuing work on SAP NetWeaver, the open technology
platform that had already been delivered to around 1,500
customers by the end of the year. SAP NetWeaver facilitates
IT system integration on three levels: people, information, and
business processes. It is designed to integrate people in a company
by bringing the right functions and information to the
right employees, and it integrates information by making
both structured and unstructured information available in the
company in a consistent and accessible manner. It is also an
application platform that is designed to integrate business
processes so they run seamlessly across heterogeneous IT systems.
SAP NetWeaver synchronizes all of its technology
platform components in a total package and offers many new
features, including RFID functions. SAP NetWeaver implements
SAP’s Enterprise Services Architecture concept and is
expected to form the technological base for all future versions
of mySAP Business Suite solutions.
One of the outstanding SAP NetWeaver innovations
in 2004 was the new version of SAP Master Data Management.
It supports efficient administration and rapid analysis of
information about the processes that a company runs in its
diverse system environments by significantly improving and
accelerating the management of master data.
SAP also extended its program of collaborative research
and development projects in 2004 to include more partners
and customers. For example, the Company started a development
project to create a much enhanced marketing resource
management (MRM) platform for mySAP Customer Relationship
Management (mySAP CRM) in collaboration with
leading health, hygiene, and well-being product manufacturer,
Kimberly-Clark. The aim is to automate time-consuming
administrative tasks involved in the processes of planning,
budgeting, developing, executing, and measuring companies’
marketing efforts. Promotions would also be integrated more
simply with companies’ subsequent processes. Toward the end
of 2004, SAP and Accenture introduced a packaged composite
application named SAP xApp Integrated Exploration and
Production (SAP xIEP), which they had developed together. It is
powered by the SAP NetWeaver technology platform. SAP xIEP
is designed to help energy companies enhance the management
of their upstream operations, including key oil and gas
exploration and production processes.
In 2004, the Company launched a completely new
version of mySAP Supply Chain Management (mySAP SCM).
mySAP SCM includes applications for planning, executing, and
controlling production processes and the supply chains with
which they connect. The key innovations are a responsive replenishment scenario that automates and thus accelerates
the replenishment of warehouse stock, and RFID support for
execution scenarios. Companies gain up-to-the-minute
demand visibility and can immediately adapt their purchasing
to any fluctuations.
SAP strongly improved its offerings for small and midsize
businesses. It added new functions to the industry and
sector solutions in the mySAP All-in-One family of products
for SMBs. During the year, the Company also added new applications
to its mySAP All-in-One suite for enterprise resource
planning (ERP) – which includes support for production, sales,
distribution, logistics, and financial processes – and for customer
relationship management (CRM). Some of the mySAP
All-in-One out-of-the box qualified solutions are developed
by SAP partners. They support core processes for the industrial
machinery and components, automotive, chemicals, hightech,
and consumer-products industries as well as for IT service
providers.
At the same time, the Company advanced the development
of its SAP Business One solution, which is geared to small
businesses, and in 2004 it launched a new version. Among the
many new functions is material requirements planning. Thus
SAP responded to the growing demand from SMBs for cost-effective,
simple-to-use solutions.
Moreover, the Company launched many new additions
to its range of solution sets for industries in 2004:
- For instance, in the pharmaceuticals and health field, SAP
for Life Sciences supports the management of regulatory
compliance and time-to-market processes and the optimization
of time-to-value strategies.
- SAP for Railways helps customers optimize railway passenger
and freight transportation business processes. It also supports
sound decision-making on infrastructure investments.
- The new SAP for Logistics Service Providers solution set
enables key transaction data to be rapidly collected and
analyzed. This significantly improves data exchange between
the back office, the field, customers, suppliers, and business
partners.
- The SAP for Postal Services solution set supports postal
services by optimizing letter and parcel distribution, streamlining
logistics processes, and putting retail and bank services
on a more efficient footing.
- SAP for Wholesale Distribution addresses the needs of the
wholesale sector, from groceries to industrial to medical
and health care. It provides improved marketing processes,
central cash flow data collection, and concepts for analyzing
data and figures that are specific to the industry.
- The Company enhanced its SAP for Insurance solution set
by adding a policy management solution. The solution has a
base system with extensions for specific segments.
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