ASSURED 2011

Management Report

Research and Development

Research and development are at the heart of SAP’s customer-focused innovation strategy. Led by SAP ResearchSAP ResearchThe global technology research and innovation organization of SAP. The organization explores emerging IT trends to drives applied research and the incubation of promising projects while focusing on the business impact and contribution to the SAP product p and SAP Labs, SAP’s research and development efforts channel the Company’s deep expertise and diversity to investigate new technology and develop new applications for delivering business value to current and future SAP customers.

Research

SAP ResearchSAP ResearchThe global technology research and innovation organization of SAP. The organization explores emerging IT trends to drives applied research and the incubation of promising projects while focusing on the business impact and contribution to the SAP product p is the global technology research and innovation unit of SAP. By exploring emerging IT trends, the group drives applied research and the incubation of promising projects while focusing on the business impact and contribution to the SAP portfolio. The business model of SAP ResearchSAP ResearchThe global technology research and innovation organization of SAP. The organization explores emerging IT trends to drives applied research and the incubation of promising projects while focusing on the business impact and contribution to the SAP product p is based on co-innovation with customers, partners, and other third parties; activities span from large-scale collaborative research projects with academic and industrial partners to specific innovation projects with individual customers. The best-validated results and technologies are further developed into prototypes and potential business opportunities within SAP.

SAP’s global research network consists of 19 locations worldwide and involves more than 800 partners from industry, academia, and governments as well as SAP customers. The group demonstrates its approach to co-innovation and applied research, among others, with a network of living labs and co-innovation centers. These sites provide hands-on, real-life settings to expand on trends and drive new prototypes as well as dedicated customer solutions. Contributing to talent development at SAP, SAP ResearchSAP ResearchThe global technology research and innovation organization of SAP. The organization explores emerging IT trends to drives applied research and the incubation of promising projects while focusing on the business impact and contribution to the SAP product p runs its own doctoral program that is attracting top candidates who wish to work on their theses in a real business context.

Significant initiatives by SAP ResearchSAP ResearchThe global technology research and innovation organization of SAP. The organization explores emerging IT trends to drives applied research and the incubation of promising projects while focusing on the business impact and contribution to the SAP product p in 2011 include:

Business Web initiative: The “Business Web” is envisioned as a cloud platform and business environment that offers a one-stop shop for applications, services, and content, as well as tools for rapidly developing and operating applications in the cloud. It combines SAP’s strength in business processbusiness processSet of logically related activities performed within an organization to complete a defined business task. Order processing is a typical example. SAP provides software and technology that enable and support business processes. management with the benefits of cloud computingcloud computingGeneric term for flexible, IT-related services available through, or hosted on, the Internet for consumers and business, including storage, computing power, software development environments, and applications, combined with service delivery. Accessed as n and enterprise mobility. The Business Web platform is being shaped together with partners and early adopters by working on real-world B2B scenarios from various industries. The project will continue in 2012, and a team of 80 researchers is currently working on the first prototypes.
Future Fleet at SAP: In a field test from February to September 2011, this project offered over 500 SAP employees the chance to get behind the wheel of 27 e-cars charged solely with renewable energy at four SAP locations around Walldorf. SAP ResearchSAP ResearchThe global technology research and innovation organization of SAP. The organization explores emerging IT trends to drives applied research and the incubation of promising projects while focusing on the business impact and contribution to the SAP product p developed a software prototype to administer the e-cars and demonstrated that IT plays a key role in enabling electric mobility.
Successful conclusion of the THESEUS/TEXO research project: Funded by the German Federal Ministry of Economics and Technology, this project focused on developing software for the evolving Web-based service economy with semantic technology. Project results include the creation of the Unified Service Description Language, a platform-neutral language for describing services, making it easier to compare and trade services online.

Development

The SAP Labs network leverages the business and IT acumen of SAP and includes a distributed network of locations in high-tech centers across the globe that deliver local market-oriented solutions optimized for customer value. Each SAP Labs location has the flexibility of a small company as an integral part of the global network and each has a clear focus topic and area of responsibility. SAP Labs engage closely with universities, offering leadership talks, engineering courses, and exchange programs. They take part in outreach and corporate social responsibility programs such as the FIRST LEGO Leagues and work with local charities. Allied with SAP’s strong brand, SAP Labs’ engagement ensures that within their local ecosystems, SAP continues to be recognized as an employer of choice and that SAP attracts the best talent.

In 2011, SAP continued to make strides in introducing leaner, faster, and more efficient development across the Company. While more agile methods of development have been associated with companies of smaller size, SAP is among the first companies of its size and scale to adopt short development cycles, small teams with greater empowerment, and closer customer alignment.

Research and Development Expenditure

Our strong commitment to research and development (R&D) is also reflected in our expenditures: In 2011, we increased our R&D expense by €210 million, or 12%, to €1,939 million (2010: €1,729 million). We spent 13.6% of total revenue on R&D in 2011 (2010: 13.9%). Our non-IFRS R&D expense as a portion of total operating expenses declined slightly from 20.0% to 19.9% year over year – a fact that demonstrates an increase in our efficiency.

The importance of R&D was also reflected in the breakdown of employee profiles. At the end of 2011, our total full-time equivalent (FTE) count in development work was 15,861 (2010: 15,884). Measured in FTEs, our R&D headcount was 28% of total headcount (2010: 30%). Total R&D expense includes not only our own personnel costs but also the external cost of works and services from the providers and cooperation partners we work with to deliver and enhance our products. We also incur external costs for translating, localizing, and testing products, for obtaining certification for them in different markets, patent attorney services, strategy consulting, and the professional development of our R&D workforce.

New SAP Offerings

New Applications

Cross-Industry SAP Business Suite Software

Through our enhancement packages for our core applicationscore applicationsStandard business applications available in SAP Business Suite, including SAP ERP, SAP Customer Relationship Management (SAP CRM), SAP Product Lifecycle Management (SAP PLM), SAP Supply Chain Management (SAP SCM), and SAP Supplier Relationship Management as well as new versions of industry-specific applications, we have provided updates and enhancements for various functional areas of our SAP Business SuiteSAP Business SuiteA family of integrated core applications, industry applications, and supplementary applications, built on the SAP NetWeaver technology platform. The software supports core business operations ranging from supplier relationships to production, warehouse ma software. These include the latest enhancement packages for SAP ERPSAP ERPThe SAP ERP application is designed to optimize business and IT processes by reducing IT complexity, increasing adaptability, and delivering more IT value at a lower cost than traditional ERP solutions. It can support mission-critical, end-to-end business, SAP ProductproductDeliverable software unit that customers can view, install, and renew. Lifecycle Management (SAP PLM), SAP Customer Relationship Management (SAP CRM), and SAP Supplier Relationship Management (SAP SRM), as well as applications supporting supply network collaboration, supplier lifecycle management, extended warehouse management, asset retirement obligation management, sourcing and contract lifecycle management, transportation management, and a manager self-services add-onadd-onSAP application that is technically dependent on – and can be only be installed on top of – another SAP application..

In addition, we are currently working on products and solutions that address the priorities of lines of business across multiple industries. Other key initiatives and areas of development include master data governance, commodity management, the visual enterprisevisual enterpriseThe ability to visually communicate parts of the business helps maximize productivity, improve process efficiency and quality, and reduce cost and cycle time. Solutions that support the “visual enterprise” unify and synchronize product information from mu..., extending the business network, multichannel support, transportation management, and sustainabilitysustainabilityFor SAP, sustainability is the ability to manage economic, social, and environmental risks and opportunities holistically for increased profitability. It contributes to our vision to make the world run better and improve peoples’ lives. SAP is committed t... enhancements.

In 2011, we launched a number of core applicationscore applicationsStandard business applications available in SAP Business Suite, including SAP ERP, SAP Customer Relationship Management (SAP CRM), SAP Product Lifecycle Management (SAP PLM), SAP Supply Chain Management (SAP SCM), and SAP Supplier Relationship Management for different lines of business, designed to help companies work as efficiently as possible:

SAP Web Channel Experience Management

Addressing companies’ need to deliver an integrated and consistent customer experience over the Web, SAP developed the SAP Web Channel Experience ManagementSAP Web Channel Experience ManagementAn application that SAP developed to address companies’ needs to deliver an integrated and consistent customer experience over the. The software allows organizations to deploy state-of- the-art Web shops, fully integrated with their back-end order managem... application. Launched in July 2011, it allows organizations to deploy easy-to-use Web shops, fully integrated with their back-end order management and inventory systems. In addition, this next generation e-commerce solutionsolutionSAP solutions enable a customer to meet a challenge or take advantage of an opportunity and are built or assembled by flexibly combining SAP applications and other SAP software. The solutions may include support for best business practices and be aided by brings together e-marketing, sales, online self-service, and social customer conversations on a single platform to provide a one-stop, synchronized Web customer experience.

SAP Commodity Risk Management

Companies can use the SAP Commodity Risk Management application to take suitable steps for coping with fluctuating commodity prices and mitigating currency risks, thereby helping safeguard their profitability, control materials costs, and comply with applicable regulations.

SAP Commodity Procurement

The SAP Commodity Procurement application provides end-to-end support for commodity buying processes and knits them tightly with quality management, settlement, and, most importantly, with risk management.

SAP Commodity Sales

The SAP Commodity Sales application helps companies contract at market prices and streamline billing. It supports automated provisional, differential, and final invoicing. Each SAP commodity management application is designed to support enterprise servicesenterprise servicesA set of highly integrated Web services that can be accessed and used repeatedly by applications to support business processes. Used as building blocks for composing larger units of software, enterprise services can be quickly defined by SAP or its partne that help integrate them with other vendor’s applications.

SAP Business Suite Industry Solutions

Solutions for Small Businesses and Midsize Companies

Enhancements to SAP Business One

Building on strong market acceptance, the SAP Business OneSAP Business OneApplication designed especially for small businesses with up to 100 employees, providing a single, integrated solution for managing the entire business across financials, sales, customer relationships, purchasing, inventory, analytics, and operations. application reached the milestone of 30,000 customers. By September 2011, 32,000 small businesses and midsize companies in over 100 countries were running SAP Business OneSAP Business OneApplication designed especially for small businesses with up to 100 employees, providing a single, integrated solution for managing the entire business across financials, sales, customer relationships, purchasing, inventory, analytics, and operations.. The new application features improvements that include enhanced integration technologies and support for mobility and social networking. New delivery options offer SAP Business OneSAP Business OneApplication designed especially for small businesses with up to 100 employees, providing a single, integrated solution for managing the entire business across financials, sales, customer relationships, purchasing, inventory, analytics, and operations. fully hosted and managed by selected SAP partners. Alternatively, starter packages provide preconfigured software enabling customers to go live in three to ten days.

Sustainability Solutions

SAP EHS Management

In September 2011, we added new risk assessment and incident management features to SAP EHS Management software. Companies in asset-intensive industries can go beyond compliance by implementing a closed-loop process to proactively assess and control workplace safety risks, avoiding costly incidents and improving operational efficiency. The new incident management functionality helps organizations learn from accidents and “near-miss” events, and take preventive actions to keep people, assets, and the environment safe.

SAP Product Safety Management OnDemand

For manufacturers, ensuring material and productproductDeliverable software unit that customers can view, install, and renew. safety requires safe transportation, storage, and use as directed by key regulations such as the EU Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), the U.S. Toxic Substances Control Act (TSCA), and the Globally Harmonized System of Classification and Labelling of Chemicals (GHS). The SAP ProductproductDeliverable software unit that customers can view, install, and renew. Safety Management OnDemand solutionsolutionSAP solutions enable a customer to meet a challenge or take advantage of an opportunity and are built or assembled by flexibly combining SAP applications and other SAP software. The solutions may include support for best business practices and be aided by, launched in October 2011, helps integrate material and productproductDeliverable software unit that customers can view, install, and renew. safety. The solutionsolutionSAP solutions enable a customer to meet a challenge or take advantage of an opportunity and are built or assembled by flexibly combining SAP applications and other SAP software. The solutions may include support for best business practices and be aided by is available on a usage-based subscription providing cloud access to an SAP-hosted platform that includes the SAP EHS Management and SAP EHS Regulatory Content packages. The solutionsolutionSAP solutions enable a customer to meet a challenge or take advantage of an opportunity and are built or assembled by flexibly combining SAP applications and other SAP software. The solutions may include support for best business practices and be aided by is available today to chemical producers and retailers in Europe. The solutionsolutionSAP solutions enable a customer to meet a challenge or take advantage of an opportunity and are built or assembled by flexibly combining SAP applications and other SAP software. The solutions may include support for best business practices and be aided by is fully integrated with SAP ERPSAP ERPThe SAP ERP application is designed to optimize business and IT processes by reducing IT complexity, increasing adaptability, and delivering more IT value at a lower cost than traditional ERP solutions. It can support mission-critical, end-to-end business and includes key functionality including substance master data, safety data sheets, dangerous goods management, global label management, standard operating procedures, and substance volume tracking.

New Analytics Solutions

Business Intelligence Solutions

The 4.0 releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. of SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform BI solutions in February 2011 manifests the broad range of technology innovations that are shaping the future of analyticsanalyticsData analysis typically generated in the form of reports and charts which can be used for business insight and decision making.. These solutions enable real-time analysis, with in-memory computingin-memory computingA major advance in information technology that creates a dramatic change in computing, analytics, and data storage. Combining advances in multicore processing with more affordable servers, in-memory computing allows information to be stored in the main me, putting powerful BI in user’s hands through new mobile capabilities. They allow the combination of business and social data to provide new insights by bringing together structured and unstructured information, all delivered on a platform that provides various models for deployment on premiseon premiseTraditional model of software deployment where enterprises purchase software licenses and deploy applications in-house. , in the cloud, embedded in business operations, or in a “hybrid” manner.

Enterprise Information Management Solutions

In February 2011, SAP made available the 4.0 releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. of SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform EIM solutions, designed in conjunction with the 4.0 releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. of SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform BI solutions, as well as SAP HANASAP HANAFlexible, data-agnostic, in-memory appliance software that helps organizations analyze their business operations, using huge volumes of detailed transactional and analytic information from virtually any data source. The appliance software provides the fou appliance software to help customers perform real-time analyticsanalyticsData analysis typically generated in the form of reports and charts which can be used for business insight and decision making. on big dataBig DataThe large volume of data created by billions of connected devices and people generating a tremendous amount of information about their behavior, location, and activity. This availability of massive amounts of data requires companies to rethink technology , integrate structured and unstructured data, and analyze information from social networks. In addition, with new offerings such as SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform Information Steward software and SAP Master Data Governance application, business and IT can collaborate like never before to support information governance across the enterprise.

Enterprise Performance Management Solutions

In May 2011, we shipped the 10.0 releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. of SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform EPM solutions, designed to help organizations better execute on their business strategy. New in the 10.0 releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. are a unified Web and Microsoft Excel interface that can be used across multiple applications for a common look and feel and greater productivity, comprehensive applications designed for finance and other lines of business, and support for new technologies such as mobile devices.

Governance, Risk, and Compliance Solutions

In March 2011, SAP made available the 10.0 releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. of SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform GRC solutions. These solutions help reduce the cost and effort required to manage risk and compliance programs; more confidently protect revenue streams, shareholder value and reputation; and contribute to optimized organizational performance and results. The 10.0 releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. introduces a common look and feel across all applications in the GRC suite; embeds BI reports and dashboards; and includes a graphical tool to define and depict risks.

Analytic Applications for Industries and Lines of Business

In 2011, we launched a number of analytic applications in the SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform portfolio tailored to address challenges in specific industries and lines of business. Co-created with customers and designed to work in any environment, the applications provide the insight and best-practice support that companies need to better understand risk, uncover opportunities, and make the right decisions to optimize their business.

Analytics Applications for Sustainability

To help companies ensure productproductDeliverable software unit that customers can view, install, and renew. safety, comply with environmental regulations, and better protect their employees, in 2011 we released SAP Best PracticesSAP Best Practices packages for sustainabilitysustainabilityFor SAP, sustainability is the ability to manage economic, social, and environmental risks and opportunities holistically for increased profitability. It contributes to our vision to make the world run better and improve peoples’ lives. SAP is committed t.... These include the SAP Best PracticesSAP Best Practices for AnalyticsanalyticsData analysis typically generated in the form of reports and charts which can be used for business insight and decision making. in Health and Safety, SAP Best PracticesSAP Best Practices for AnalyticsanalyticsData analysis typically generated in the form of reports and charts which can be used for business insight and decision making. in ProductproductDeliverable software unit that customers can view, install, and renew. Safety and Stewardship, and SAP Best PracticesSAP Best Practices for AnalyticsanalyticsData analysis typically generated in the form of reports and charts which can be used for business insight and decision making. in Environment Compliance packages. The new packages feature operational analyticsanalyticsData analysis typically generated in the form of reports and charts which can be used for business insight and decision making. designed to give line-of-business managers in environment, health and safety and productproductDeliverable software unit that customers can view, install, and renew. areas improved insight into core processes and information.

New Mobile Solutions

Mobile Apps for SAP BusinessObjects

In February 2011, SAP launched the 4.0 releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. of SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform BI and EIM solutions to bring business analyticsanalyticsData analysis typically generated in the form of reports and charts which can be used for business insight and decision making. to mobile devices, as well as mobile apps for SAP BusinessObjectsSAP BusinessObjectsBroad portfolio of tools and applications designed to help optimize business performance by connecting people, information, and businesses across business networks. Included in the portfolio are solutions for business intelligence (BI); enterprise perform and SAP Business Explorer software. Leveraging SybaseSybaseSAP acquired Sybase in late 2010, broadening the SAP portfolio for enterprise mobility, introducing a complete mobile platform and mobile apps that enable customer access to data stored in SAP software and systems from anywhere and from any device. Sybase Unwired Platform, our mobile BI suite can process content from SAP and business applications from other providers.

Mobile Platform

In September 2011, SAP launched the next-generation SybaseSybaseSAP acquired Sybase in late 2010, broadening the SAP portfolio for enterprise mobility, introducing a complete mobile platform and mobile apps that enable customer access to data stored in SAP software and systems from anywhere and from any device. Sybase Unwired Platform with releasereleaseSAP software that has a version number, is shipped at a particular time, and has defined maintenance phases. 2.1. The platform is an expansive enterprise mobility solutionsolutionSAP solutions enable a customer to meet a challenge or take advantage of an opportunity and are built or assembled by flexibly combining SAP applications and other SAP software. The solutions may include support for best business practices and be aided by for developing and managing the entire lifecycle of native and Web apps across key mobile device platforms. We also announced an enhanced version of our software development kit (SDK) for ecosystemecosystemConstruct encompassing SAP and its customers and partners that extends the value SAP provides its customers. By bringing together community-based insight, innovative partner solutions, and industry-leading collaboration and co-innovation, it enables custo partners and customers, enabling them to develop complementary applications to help run their business better. The SDK includes a wide variety of mobile apps that can run on a broad selection of mobile devices.

Mobile Apps for Industry and Lines of Business

In November 2011, SAP and SybaseSybaseSAP acquired Sybase in late 2010, broadening the SAP portfolio for enterprise mobility, introducing a complete mobile platform and mobile apps that enable customer access to data stored in SAP software and systems from anywhere and from any device. Sybase announced a series of new mobile apps built on SybaseSybaseSAP acquired Sybase in late 2010, broadening the SAP portfolio for enterprise mobility, introducing a complete mobile platform and mobile apps that enable customer access to data stored in SAP software and systems from anywhere and from any device. Sybase Unwired Platform aimed at making business processes and business information mobile across key industries including manufacturing, consumer products, utilities, high tech, oil and gas, and retail:

The SAP Field Service mobile app provides full online and offline access to assignments, service orders, and service confirmation. Functions for mobilizing and customizing SAP CRM applications give field service engineers more mobile application features.
The SAP Retail Execution mobile app provides online and offline access to accounts, contacts, visits, surveys, and products and fully integrates with native device functionality.
The SAP EAM Work Order mobile app addresses the requirements for plant maintenancemaintenanceSoftware support comprising support for legal changes and corrections delivered through the SAP Notes tool, support packages, problem support, and access to information and online service channels – depending on the maintenance phase. operations staff for work order management, notifications, technical object management, inventory, and business partner management.
Mobile apps for employee productivity are simple single-purpose mobile apps, built on SybaseSybaseSAP acquired Sybase in late 2010, broadening the SAP portfolio for enterprise mobility, introducing a complete mobile platform and mobile apps that enable customer access to data stored in SAP software and systems from anywhere and from any device. Sybase Unwired Platform. Designed similar to consumer apps, they can be used by employees with zero training. These productivity apps allow users to act on workflows and access critical business information stored in SAP ERPSAP ERPThe SAP ERP application is designed to optimize business and IT processes by reducing IT complexity, increasing adaptability, and delivering more IT value at a lower cost than traditional ERP solutions. It can support mission-critical, end-to-end business Human Capital Management solutionsolutionSAP solutions enable a customer to meet a challenge or take advantage of an opportunity and are built or assembled by flexibly combining SAP applications and other SAP software. The solutions may include support for best business practices and be aided by, SAP CRM, SAP SRM, and other applications from their mobile devices.

Mobile Device Management

In November 2011, we added some critical capabilities for AfariaAfariaA mobile device management solution that provides a single administrative console to centrally manage, secure, and deploy mobile data, applications, and devices. Afaria simplifies the management complexities of a workforce on the go by making the data sto mobile management software, including end-user self-service portal and application enablement. In addition, the new telecommunication expense management capabilities provide administrators with a powerful tool for easily managing employee mobile costs such as voice and data roaming. Application on-boarding for iOS, Android, and BlackBerry devices enables IT organizations to create and preload libraries of mobile apps for simplified access by authorized employees.