SAP`s Product Innovation Lifecycle

Agenda

Agenda
SAP`s Product Innovation Lifecycle

Challenges of developing complete software solutions Key concepts of the Product Innovation Lifecycle Positioning and Scope Summary

SAP AG 2005, SAPs Product Innovation Lifecycle, 2

SAP Corporate Profile Facts & Figures

Development Locations
Germany Hungary Bulgaria France Israel

Canada USA

China Japan

India

SAP AG*)
35.000 employees Presence in 50+ countries 28.200 companies run SAP 96.400 installations 12 million users in 120+ countries 7,5 billion revenue in 2004
*) data as of July 2005
SAP AG 2005, SAPs Product Innovation Lifecycle, 3

Products/Solutions
190+ Products more than 25 Industry Solutions 30+ languages supported approx. 500 developers work in parallel on a new solution release

Challenges of developing complete software solutions 6 Key Questions:

How to develop complete solutions that can be adapted flexibly to customer and market requirements? How to reach a favourable TCO for Customers? (TCO = Total Cost of Ownership) How to ensure that development both finishes in time and meets market requirements? How to foster a high level of reuse and industrialization of Software development? How to realize distributed development at a number of international locations? Given the above context and challenges, how to maintain a high level of quality?

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Transfer to SAP: 4 reasons for introducing a global process

Reason 1: Changing Conditions for Software Development Changed product portfolio: From a single product to a portfolio of different products Global Organization: Distributed development in multiple international locations Reason 2: Improved Communication between Customers, Partners and SAP Provide one common and consistent approach to the Roll-in of Customer requirements Reflect industry scenario orientation and focus on customer business needs Ensure Alignment between internal and external stakeholders on development priorities Reason 3: Idustrialization of Software development & Reuse The Service Oriented Architecture fosters reuse at various levels Aligned processes and organizations must reflect this reuse Reason 4: Never-ending Quality Improvement Adapted processes for a high level of software quality and optimized TCO, while at the same time reducing time-to-market Build the right things the right way Planned quality along the entire product lifecycle

SAP AG 2005, SAPs Product Innovation Lifecycle, 5

Agenda

Agenda
SAP`s Product Innovation Lifecycle

Challenges of developing complete software solutions Key concepts of the Product Innovation Lifecycle Positioning and Scope Summary

SAP AG 2005, SAPs Product Innovation Lifecycle, 6

Product Innovation Lifecycle - Overview

Invent Define Develop Deploy Optimize
ROI Tracking Portfolio Planning Market Requirements Corporate Strategy Board Area Strategy Solution Requirements Solution Strategy Continuous Adjustment & Monitoring

Portfolio Management

Requirements Definition Architecture Definition High Level Planning Detailed Planning Detailed Design Implementation & Unit Test Integration & Acceptance Test Assembly & Validation Ramp-Up Planning Ramp-Up Knowledge Transfer Phased Ramp-Up Correction & Change Staged Release Transition Product Transition

Product Definition

Dev. Project Execution Assembly & Validation Ramp-Up Product Optimization

Product Standards
SAP AG 2005, SAPs Product Innovation Lifecycle, 7

Quality Gate

Decision Point

Key Concepts of PIL

Invent Define Develop Deploy Optimize
ROI Tracking Portfolio Planning Market Requirements Corporate Strategy Board Area Strategy Solution Requirements Solution Strategy Continuous Adjustment & Monitoring

Portfolio Management

Requirements Definition Architecture Definition High Level Planning Detailed Planning Detailed Design Implementation & Unit Test Integration & Acceptance Test Assembly & Validation Ramp-Up Planning Ramp-Up Knowledge Transfer Phased Ramp-Up Correction & Change Staged Release Transition Product Transition

Product Definition

Dev. Project Execution Assembly & Validation Ramp-Up Product Optimization

Product Standards
SAP AG 2005, SAPs Product Innovation Lifecycle, 8

Quality Gate

Decision Point

Key Concept: Portfolio Management

In scope for this release continue to product definition

Challenge:
Identify the right ideas to realize in the next software release Not every idea can be pursued Resource border

Portfolio Case 1 Portfolio Case 2

Approach:
Collect ideas by preparing Portfolio Cases following the boards overall strategic guidance and SAPs three year strategy Input is gathered at several levels: Industry, Application, Platform Prioritize these ideas on a company-wide basis, provide explicit decision on what to pursue Providing change-management means to allow for flexibility during the release cycle

Effort/Cost

Benefit

Portfolio Case m Portfolio Case m+1

Portfolio Case n-1 Portfolio Case n

Out of scope for this release discarded or reevaluated in next release

Allow for discarding Portfolio Cases in favor of new ones

SAP AG 2005, SAPs Product Innovation Lifecycle, 9

Key Concept: Product Definition

Portfolio Management Solution Management Invent Define Develop Deploy Optimize

Iterative approach

MRD

Prototypes

ERD

Portfolio Case

Reqirements
(with unique, traceable ID)

ARC-Sheet Work packages

Operational Development Projects UI Spec Spec Design

High-Level What

Detailed What

Architecture / High-Level How

Detailed How

PC Owner (Solution Management)

Program/Project Owner (Development)

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Key Concept: Project-oriented Development

Project Management with mySAP PLM

Common blueprints for methodology and deliverables Templates & Checklists Document / IP management Effort estimation and tracking

Centralized status tracking

across all organizational units with uniform KPIs

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Key Concept: Assembly & Validation

Development to Production

Tested & assembled Product

Validation
Upgrade- und Installation tests of Components Verification of Standard quality Regression tests of Components with automated Tests

Scenario validation Regression tests of Components in existing scenarios Regression tests of Components in new scenarios

Decision to Deploy
Production to Ramp-Up

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Key Concept: Ramp-Up

Ramp-Up
Develop
Quality Quality for Productive use

Deploy

Optimize

Services:
Project Scoping Project Coaching Direct channel into development organization Free Safeguarding Services

Developer Test

Solution Validation

Special program only for limited customers Period to build market credential (reference) Ramp-Up Start

Pilot Project

Release to every customer

Benefits:
Unrestricted shipment

Development close

Accelerated ROI Reduced Risk

Ramp-Up Knowledge Transfer

Delivery of early product-related knowledge to Sales/Presales, Consultants, Partners and Support Various Knowledge Transfer Methodologies used: Online learning maps, Workshops, Expert sessions, ()
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Key Concept: Maintenance Strategy: Support never ends

Solution releases 2006/SAP NetWeaver 2006

2006

5-1-2-Principle will be applied to all future Solution releases

5 Years
RampUp**

2005
Solution releases 2005 SAP NetWeaver 2005

1 Year

2 Years
customer specific Maintenance

Mainstream maintenance 5 Years

extended extended Maint. (+ 2%)* Maintenance (+ 4%)*

1 Year

2 Years
customer specific Maintenance

RampUp**

Mainstream maintenance

extended extended Maint. Maintenance (+ 4%)* (+ 2%)*

Solution releases 2004: 2004 mySAP ERP, mySAP RampSCM, mySAP SRM, Up** mySAP PLM 2004
(mySAP CRM will follow the 5-1-2-Strategy starting 2005)

5 Years Mainstream maintenance 5 Years

1 Year

2 Years
customer specific Maintenance

extended extended Maint. Maintenance (+ 4%)* (+ 2%)*

1 Year
extended Maint. (+ 2%)*

2 Years
extended Maintenance (+ 4%)* customer specific Maintenance

SAP NetWeaver 2004

RampUp

Mainstream maintenance
Dec. Mar. Mar.

Mar.

Mar.

Mar.

Mar.

Oct.

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

* Overall payment is Mainstream Maintenance Fee plus additional fee of 2% oder 4%. ** Planned dates; Actual dates dependent on Ramp-Up progress SAP AG 2005, SAPs Product Innovation Lifecycle, 14

Mar. 2014

Key Concept: Product Standards

Standard
Accessibility Application Integration and Interfaces Business Solution Configuration Data Archiving Development Environments Documentation Functional Correctness Globalization Multiple Clients Open Source Performance Security IT Service & Appl. Mgmt. Technical Implementation and Change Mgmt. (TICM) Third Party Usability
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Software accessible to disabled persons Integration Accessibility

Product standards

Description

Standard Owner Advisory & Review Boards

Adaptability to customer-specific business processes Archivability of business data

Change Management: Keep standards up to date Representatives from all Use of dev. environments and programming languages areas

Development Documentation for customers

Functionality Control adherence
Apply standards

Multilingual capability and internationalization

Feedback loop

Multiple client capability

Validation Controlled use of open source software

System performance and scalability deployment Support to reach a baseline product security level Smooth operation at the customer site
Check compliance before

Market

Simple implementation and upgrade capability Provide feedback Integration of software products from other providers User-friendliness
Pose new requirements

Key Concept: Quality Gates/ Decision Points

e.g. Standard compliance

Readiness Check

Q-Gate/ Decision Point meeting

SAP AG 2005, SAPs Product Innovation Lifecycle, 16

Consolidation of information for the Q-Gate/Decision Point Meeting Clarification of non-critical issues Preparation of decision proposals and Q-Gate presentation

Decisions only (Go/No-Go) Stakeholder approval required

Agenda

Agenda
SAPs Product Innovation Lifecycle

Challenges of developing complete software solutions Key concepts of the Product Innovation Lifecycle Positioning and Scope
Positioning of PIL regarding other process models Feedback Loops in PIL

Summary

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Positioning of PIL regarding other process models PIL embraces numerous principles of common process models:
Requirements Management Project Planning, Monitoring & Control Configuration Management Product Integration Verification & Validation Organizational Set-up Risk Management

The alignment with common process models is subject to ongoing evaluations and assessments.

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Feedback-Loops within PIL

SAP commits itself to provide masscapable solutions at pre-defined dates
Challenge to combine modern, iterative development strategies with sequentially given deadlines and highly dependent solution layers
E.g. NetWeaver as step-wise fixed application base to avoid continuous non-business content related changes

Balance of Commercial-Off-The-Shelf and Bespoke software

Iteration e.g. of market requirement analysis and engineering response up to a certain deadline

SAP AG 2005, SAPs Product Innovation Lifecycle, 19

Agenda

Agenda
SAPs Product Innovation Lifecycle

Challenges of developing complete software solutions Key concepts of the Product Innovation Lifecycle Positioning and Scope Summary

SAP AG 2005, SAPs Product Innovation Lifecycle, 20

Summary
PIL describes how SAP manages products throughout their entire lifecycle. PIL provides details on
Processes, Roles and Standards
Enabling the interaction of all SAPs lines of business to transform an idea into a product

Common Terminology
Providing a common understanding of the objects linking customer and development view

Tool Support
Supporting efficient realization and tracking of the process

PIL defines how SAPs functions work together to:

Deliver superior customer value Lead the market both in reality and perception Fulfill or exceed SAPs commitments to its customers Rapidly move to volume Ramp-Up

SAP AG 2005, SAPs Product Innovation Lifecycle, 21

THANK YOU FOR YOUR ATTENTION !

QUESTIONS SUGGESTIONS DISCUSSION

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