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December 5, 2006

SAP eases SOA transition for ERP customers

SAP AG has released the first in a series of enhancement packages that are intended to gracefully evolve its ERP customer base to take advantage of newer enterprise service-oriented architectures.

By CBR Staff Writer

Speaking at the company’s fourth annual analyst summit in Las Vegas this week, SAP CEO Henning Kagermann said the company is well positioned to deliver on its promise of quicker SOA innovation to operation ERP deployment to both large and mid-sized customers in a natural and normal way without disruption to businesses.

SAP’s strategy is to build off an underlying enterprise SOA blueprint to deliver a range of composite-built horizontal and vertical business applications crafted as discrete enterprise services.

The current product manifestation of that blueprint is the new mySAP ERP 2005 business applications suite, which is architected on NetWeaver and a core central enterprise services repository. The release comes with over 300 functional enhancements and is fully geared around SOA.

The next phase of that strategy, that SAP is now embarking on, is to evolve SAP customers and partners onto this platform as painlessly as possible.

The key is to get SAP customers to think of their traditional ERP suite as a business process platform [basically SAP NetWeaver and enterprise SOA] upon which enterprise services can be easily built and run.

SAP’s strategy to deliver SOA-based technical and functional capabilities through a series of planned enhancement packages that the company announced at its North American TechEd ’06 conference a couple of months ago.

The optional enhancement packages serve a dual purpose: to provide upgraded functionality to SAP ERP customers in a modular way; and to help evolve older ERP customers towards an enterprise SOA in a flexible and simple way.

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SAP has now released its first enhancement package with fully documented and ready-to-go enterprise services for human capital management, financials and demand management and PoS integration for retail and adaptive marketing for manufacturing.

The HCM scenario addresses service level agreements and employee interaction center analytics. Meanwhile the financials scenario provides improved functionality for credit and collection management, analytics and invoice-to-cash processes.

Two industry-specific scenarios are also included: demand management for retail that leverage SAP’s recent acquisitions of Triveristy (for PoS integration) and Khimetric (for pricing optimization); and the integration of manufacturing task and quality management in production processes.

Each enterprise services is fully documented and published as in an interactive Wiki format allowing for easy deployment. SAP said that customers can pick and choose the functionality they wish to upgrade to in their own timescales.

Kagermann said that SAP intends to deliver enhancement packages in waves of at least two or three enhancement packages every year.

SAP has devised a roadmap for continuously rolling out enhancement packages up to 2008. In fact any future enhancements made to mySAP ERP through 2010 will be made via enhancement packages.

SAP is also tapping into its eco-system of partners and newly created Industry Value Networks to create enterprise services for SOA that will also be delivered in future enhancement packages.

Kagermann believes the approach can take much of the pain associated with long and expensive ERP upgrade cycles that can take 10 years to complete for large, complex deployments.

We’re providing simplified way for customers to gradually upgrade to enterprise SOA that takes away 50% of the migration cost.

Kagermann said that having a stable enterprise SOA business process platform like ERP 2005 is key, as it gives customers the flexibility to introduce new innovations much quicker by shielding them from the complexity of multiple and long drawn out upgrades.

SAP’s analyst summit drew a crowd of over 250 industry and financial analysts and members of the media.

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