WebinarSAP Jam: The Future Of ERP, SAP’s Business Challenge And Industry Solutions Mike Gilpin, Vice President, Research Director Andrew Bartels, Vice President, Principal Analyst Paul D. Hamerman, Vice President, Principal Analyst Liz Herbert, Principal Analyst Jost Hoppermann, Vice President, Principal Analyst George Lawrie, Vice President, Principal Analyst China Martens, Analyst May 30, 2013. Call in at 10:55 a.m. Eastern time #ForrSAPJams
Agenda • The future of ERP • SAP customers on SAP • The business of SAP • SAP industry solutions • Forrester’s overall take on SAP’s strategy and road map
Within the next five years, technology change will disrupt our preconceived notions of ownership costs, process flexibility, usability, and speed related to enterprise applications.
ERP is among the leading software investment categories Source: Forrsights Software Survey, Q4 2012
The ERP footprint supports mission-critical applications across many industries Source: May 9, 2013, “Global, Industry, And Technology Forces Shape The ERP Landscape” Forrester report
Top innovation trends for apps 1. Cloud 2. Mobile 3. Social 4. Business flexibility 5. Big data
The evolution of business applications Source: May 24, 2012, “Increase Business Flexibility By Embracing Future Trends” Forrester report
Evolve your app strategy as you move toward the target Source: March 26, 2013, “Define The Road Map For Transforming Your App Landscape” Forrester report
Make digital innovation your platform for transforming application value Source: May 30, 2012, “Optimize Application Strategy To Generate Business Value” Forrester report
SAP customers on SAP ***An early look at new survey data, which will appear in a July 2013 Forrester report on SAP ***
Most of our survey respondents use SAP Business Suite and SAP Business Objects Source: May 2013 Global SAP Applications Online Survey conducted by Forrester Research
The majority of survey respondents plan to upgrade to the next release of their current SAP application Source: May 2013 Global SAP Applications Online Survey conducted by Forrester Research
Survey respondents like the stability, scalability, and reliability of their SAP applications Source: May 2013 Global SAP Applications Online Survey conducted by Forrester Research
Survey respondents dislike the high licensing and maintenance costs of their SAP applications Source: May 2013 Global SAP Applications Online Survey conducted by Forrester Research
Respondents have a mixed take on whether or not they plan to implement SAP SaaS applications Source: May 2013 Global SAP Applications Online Survey conducted by Forrester Research
Respondents have mixed feelings about whether or not to use SAP HANA analytics and how to use it Source: May 2013 Global SAP Applications Online Survey conducted by Forrester Research
SAP’s revenue growth has been healthy SAP revenues in billions of euros 10% 14% 15% €17.9 €16.2 €14.2 €12.4 *Forrester forecast
SAP has outpaced Oracle Comparing euro growth in SAP software product revenues versus Oracle software product revenues Comparing US$ growth in SAP software product revenues versus Oracle software product revenues *Forrester forecast
However, SAP’s license revenues have slowed Comparing euro growth in SAP license versus software product revenues *Forrester forecast
SAP’s SaaS revenues are mostly from acquisitions, with accounting rules reducing reported revenues SAP revenues in billions of euros *Forrester forecast
Firms are using SaaS to complement more often than replace existing apps “What are your firm’s plans to complement or replace the following applications with software-as-a-service (SaaS)?” Base: 181 to 523 US firms, depending on the application; Source: Forrsights Software Survey, Q4 2012
2011 to 2012 shift in percent of firms that plan to replace on-premises apps with SaaS “What are your firm’s plans to complement or replace the following applications with software-as-a-service (SaaS)?” Base: 181 to 523 US firms, depending on the application; Source: Forrsights Software Survey, Q4 2012
SAP focuses its SaaS strategy on four functional pillars plus ERP SAP’S SAAS BUSINESS IS GROWING; TODAY IT GENERATES MORE THAN €1 BILLION IN REVENUE
SAP current offering: consumer packaged goods SAP (Enterprise) enjoys unrivalled success in CPG: SAP broadened its footprint to include a demand signal repository, S&OP, multiechelon inventory, and analytics for promotional uplift. Co-developed Trade Promotion with Nestle. Co-developed Demand Signal Repository with Unilever. Co-developed DSD with Coca-Cola Bottling. SAP’s sweet spot in wholesale, e.g., Grainger
SAP current offering: retail IS retail: Focus on master data foundation Global Data Synchronization in SAP for Retail Retail DSD Master Data Workbench offers a mass maintenance functionality for the category manager to maintain supply relationships and pricing conditions for the DSD articles on store level. SAP’s retail vertical acquisitions and partnerships: Acquisition with Triversity PoS Store execution partnership with Reflexis SAP’s retail vertical innovation: Sybase and Syclo acquisitions: focus on mobile
Forrester analysis: SAP in CPG and retail Strength in retail merchandise master data Strength in mobile applications Potential in “direct-to-consumer” Opportunities: in-memory-powered processes, such as assortment planning Sapphire presentation from women’s wear fashion chain Charlotte Rousse on assortment planning in HANA
Forrester recommendations: CPG and retail Exploit SAP’s strengths in data-intensive consumer goods and retail subverticals, e.g., big box, grocery. Strength in mobile applications Explore opportunities in mobile interaction and in “direct-to-consumer.” Explore opportunities within in-memory-powered processes, such as assortment planning or performance management.
A quick look at SAP for Banking Source: Forrester SAP defines its banking platform via business apps belonging to two different categories. Banking-specific business applications, such as: SAP Deposits Management, SAP Loans Management, SAP Collateral Management, and SAP Limit Manager SAP Financial Customer Information Management, SAP Bank Analyzer, and SAP Basel II SAP Accounting For Financial Instruments, SAP Profitability Analysis and Management Accounting, SAP Payment Engine, and SAP Treasury More channel-related banking apps, such as: Sybase 365 Retail eBanking and Sybase 365 Corporate eBanking More horizontal capabilities, such as: SAP CRM and SAP Business Objects Planning and Consolidation
SAP for Banking and some of SAP’s plans for the future Source: December 17, 2012, “The Forrester Wave™: Global Banking Platforms, Q4 2012” Forrester report Plans include: Expanded functional footprint across multiple subverticals, such as commercial banking, wealth management, and capital markets. Preconfigured solutions and managed private cloud offerings. Stronger focus on localization and risk and compliance. SAP Financial Services Network (link between banks/SAP for Banking and corporates/remaining SAP biz apps portfolio). Stronger focus on channel solutions, analytics, and HANA.
SAP’s success with SAP for Banking The 2012 global vendor pyramid: new-named clients Source: March 25, 2013, “Global Banking Platform Deals 2012” Forrester report*Special qualification rules apply.†SunGard showed a minor focus on core banking.
When to consider SAP for Banking When searching for new banking platform functionality: Include SAP in your comparisons when You have an existing SAP environment. You need strong, individually deployable banking solutions. Your business demands strong support of product configuration. Your requirements fit to SAP’s currently still less than broad functional footprint. You see broad and rich business value coming from SAP for Banking’s plans and directions. Keep in mind: SAP in banking does not equal SAP for Banking — SAP’s financial services offering includes cloud, mobile, analytics, business applications, and apps infrastructure.
SAP apps vary in their industry coverage *New industry (May 2013): Sports and entertainment*
SAP continues to make “tuck-in” buys, new partners Source: Forrester based on SAP information Recent SAP single industry-focused buys include: Camilion Solutions — insurance. TicketWeb — sports and entertainment franchises. Recent SAP multi-industry-focused buys include: SmartOps — supply chain planning. Manufacturing, CPG, high-tech, distribution, chemicals, retail, pharma Recent SAP single-industry-focused partners include: WIS Telecom — telecommunications (IP exchange). Ericsson — telecommunications (cloud M2M solutions). Recent SAP multi-industry-focused partners include: Digital Route — mediation and integration software. Telecommunications, high-tech, banking, postal, logistics firms
Recommendations Keep in mind industry coverage varies by SAP app, so: Ensure you’re clear on who provides and supports which industry functionality: SAP (homegrown, acquired or OEM-ed/embedded technology). SAP partner (ISV, SI, etc.). Impact of SAP tuck-in purchase in one or more industries. Check regional/global availability of industry functionality. Check on the breadth and sophistication of industry functionality: Is what SAP offers sufficient for your current and likely future needs? If not, what kind of integrations are available into partner functionality? Does SAP have customer references that are: In your own industry or industries? Similar in size and geographic presence to your business? If not, assess SAP/partner willingness to work closely with you.
Food for thought from our SAP survey about business application architecture Source: May 2013 Global SAP Applications Online Survey conducted by Forrester Research
Mike Gilpin firstname.lastname@example.org Paul D. Hamerman email@example.com Liz Herbert firstname.lastname@example.org China Martens email@example.com George Lawrie firstname.lastname@example.org Andrew Bartels email@example.com Jost Hoppermann firstname.lastname@example.org