ORLANDO, Fla.—SAP AG CEO and Chairman of the Executive Board Henning Kagermann said during his opening keynote at the companys Sapphire 03 conference here Tuesday that economic recovery will depend on companies abilities to effectively consolidate their IT operations and adapt to changing technologies.
Not surprisingly, Kagermann positioned new SAP technologies like NetWeaver and Xapps at the center of these required changes.
Kagermann pointed out that this is the second straight year the theme of economic uncertainty has dominated Sapphire keynotes.
“I felt that times would be better,” he acknowledged. “That if wed wait a few months, everything would be better. But I was all wrong. It went worse.
“Consumers lost confidence, and so much of the wealth built up by investors for years was lost in one year.”
Economic uncertainty has in turn prompted companies to cut costs, which has meant reduced investments in IT budgets. Kagermann said such uncertainty has become a new economic reality that companies will have to adapt to.
“If you want to have success, you need growth, and if you want growth, you need innovation,” he said. “Today nearly every innovation is enabled by IT.”
Kagermann argued that business systems have become “oversophisticated” and need to instead do a better job of executing established business practices.
While he spoke of the need for consolidation, Kagermann acknowledged that customers have a choice of applications today—he made no mention of recent moves by Oracle Corp. and PeopleSoft Inc. to consolidate the enterprise applications space—and that SAPs NetWeaver is the way to go to connect those applications, as opposed to third-party enterprise application integration software.
“You hope at the end of the day, EAI tools help you meet the challenge of integration, but theyre just adding another layer of complexity on top of what you already have,” he said.
One technology area SAP is focusing on that will help companies gain new efficiencies from their business practices is Radio Frequency Identification (RFID) technology integrated with SAPs supply chain applications, adding electronic product codes to products and shipments that will make them easier to track.
“Not many technologies have no tradeoff, but this seems to be one,” said Kagermann, pointing out that RFID will improve collaboration, business insights, efficiency, security and cost savings.
“We have a pilot project now that will be ready earlier than anybody else to give you competitive advantage,” he said.
“Innovation is next, not the next budget killer.”
Another innovation at SAP is a new portal interface across its applications that is role- and pattern-based, customizable to the individual needs of each user. The interface is already in SAPs CRM suite but will become standard across all SAP applications, Kagermann said.
Kagermann rambled on about the promise of the Adaptive Computing Infrastructure that SAP technologies like NetWeaver and Xapps support, which facilitate better business process integration between disparate applications. But ultimately, he laid responsibility at the feet of enterprises to drive innovation and strengthen the economy.
“If you help us address the people factor, if you have an openness and willingness to adapt and listen, if you take some of the savings achieved and put them back into growth, then we wont be waiting for a recovery, well be creating the recovery,” he said.