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Kagermann: Tech needs to be business-friendly

SAP chief aims to show that IT systems mean new opportunities, not added cost and complexity.

BOSTON--It doesn't have a catchy name, but SAP chief Henning Kagermann says that services-oriented architecture is an idea that deserves to catch on.

For businesses, that term translates to a better method for building applications that automate their core activities and meet their specific needs, Kagermann said Wednesday in his keynote address to the software maker's Sapphire customer conference here.

kagermann
Henning Kagermann
Chief executive, SAP

His speech also highlighted the company's newly expanded partner program, through which tech heavyweights including Microsoft, IBM, Cisco Systems and Symantec are gaining access to the technical specifications in SAP's Enterprise Service Architecture. That in turn is meant to help foster SAP-centric "business process platforms" on which third-party software providers can build add-ons and specially tuned versions.

"These platforms bring a maturity to our industry that you've been waiting for a long time," said Kagermann. "We believe that the business process platform will be the centerpiece going forward. It will deliver exactly the degree of integration that we need to deliver on all these promises and it will free up other pieces of the (technology) stack."

The company's ESA efforts are meant to show corporate leaders that IT systems can be used to create new opportunities with partners and customers, rather than add cost and complexity to their businesses.

"For a long time we've been trying to patch together systems that were not designed to succeed in a business environment," Kagermann said.

By the end of 2005, SAP expects that all of its products will be built around its NetWeaver infrastructure software, a central part of the platform plan, which in turn will extend throughout the company's entire product lineup by 2007.

As part of the keynote presentation, SAP introduced a new partnership with Home Depot, through which the massive retailer is attempting to automate operations at its almost 2,000 stores. Bob DeRodes, chief information officer at Home Depot, joined Kagermann on stage along with other customers to detail how the relationship will help streamline merchandising and supply chain operations.

"As Home Depot has expanded rapidly, we've realized that there was a business transformation required," said DeRodes. "We're not electronically connected to our vendors today, we don't have great visibility into our supply chain, and we don't have visibility into our inventory turns. We have tremendous technology needs to further our (IT) transformation, and we believe that SAP has the ability to help accelerate this effort."

Among the applications Home Depot will build using the SAP tools are systems that automate transactions with its business customers, said DeRodes. Those systems are intended to let construction companies and contractors purchase products from stores without ever having to walk through its doors.

T. Geir Ramleth, chief information officer for construction engineering giant Bechtel, said that SAP's concepts make sense and that the primary question revolves around how quickly the software maker can deliver on its plans.

"It would seem that SAP has a better chance to deliver on this type of strategy than it had in the past," he said. "But you also have to consider how you might get partners and competitors into this SAP environment."