Performance and Insight Optimization by SAPMathematics Meet Business

Gheorghe OlteanuHead of SAP Global Delivery Center Bucharest

Dr. Helmut LindeGlobal Management Office of SAP Services

Bucharest, RomaniaDecember 10th, 2009

© SAP AG 2009. All rights reserved. / Page 2

SAP In a Nut Shell

World market leader in enterprise application software

Largest German software company with ~48,000 employees

~11,000 colleagues in SAP Consulting – helping customers

to plan, build and run their SAP landscapes Center of an ecosystem of ~150,000 SAP consultants,

~300,000 SAP specialists at customers and 12 Mio users

- world wide

1972 1980 1985 1987 1992 2001 2007 2008

11.6 Bn EURRevenues

80% outside of Germany

© SAP AG 2009. All rights reserved. / Page 3

Client Server/SAP R/3

Transformation from a One-Product Company to a Multi-Product Company

Client Server/mySAP

SOA

mySAPERP

mySAP SCM

mySAP PLM

mySAP SRM

mySAP CRM

20031998 2008

Business User Solutions

SME Segment

Business ProcessPlatform

IndustrySolutions

SAP Business Suite

Industy Solutions

SAP NetWeaverIntegration

SAP NetWeaverComposition

SRM SCM ERPPLMCRM

© SAP AG 2009. All rights reserved. / Page 4

The Availability of Business Data Is Rapidly Increasing

20081995 2000

0,003 €/GB

160 TB/sec

0.006TB/sec

Transmission capacity of the internet in total

Transmission

cost

500 €/GB

How can enterprisesleverage their data?

20081995 2000

0,20 €/GB

Storage cost

1,000 €/GB

Data transmission Data storage

SAP customer example 145.000 SAP users at Nestlé in 74 countries 13 R/3 systems with 10-12 Tbyte each 3 BW systems with 30 Tbyte each

© SAP AG 2009. All rights reserved. / Page 5

Analytics Is The New Competitive Advantage in Today‘s Business

“I trust in God – all others have to bring data.”

(Web advertisement and search functionality optimization)

(Customer care and game design)

(Player selection) (Personalized movie recommendations)

(Cement distribution logistics) (Delivery route optimization)

© SAP AG 2009. All rights reserved. / Page 6

Mathematics Meet BusinessExample: Bernoulli Prize Optimization Model

Modeling: Expectation value of total revenue from time t to 0, if c items are available:

V{p}(c,t) = dt(pt) (pt + V(c-1,t-1) + (1- dt(pt)) V(c,t-1) with V(0,t) = V(c,0) = 0

Goal is to maximize V{p}(c,t) by choosing pt right

Example (optimum price in the last time step): pc,1 = 1/(2 )a

In general: pc,t = 1/(2 )a + ½ ( V(c,t-1) – V(c-1,t-1) )

All optimal prices pc,t and all V(c,t) can be calculated recursively

Problem: Maximize profit of sales of a limited number of items during a limited time

Assumption: C items to be sold in T time steps (t = T,…,1) In each time step the price can be changed In each time step one or zero items are sold dt(p) = probability to sell item at price p and time t

= 1 – a p

pc,t = optimal value for the price of an item at time t if c items are left

© SAP AG 2009. All rights reserved. / Page 7

Mathematics Meet BusinessExample: Bernoulli Prize Optimization Model

Solution of the Bernoulli model for T = 50 and a = 1/200

Dotted lines: Optimal prices for different capacities c

Solid line: Optimal pricing given a series of sales events (solid dots) and initial capacity C = 15

Results of the model for strong and weak initial demand

time time

pric

e

pric

e

Strong demand example Weak demand example

time

pric

e

© SAP AG 2009. All rights reserved. / Page 8

A Typical SAP Price Optimization Project

PreparationProof of Concept

Roll-out

Modelling & Optimization

Estimation of benefits based on historic data

Proof of optimization in a scientific experiment with control group

Full implementation of optimization solution (processes and software)

© SAP AG 2009. All rights reserved. / Page 9

Scientific Modeling is a Great Business Opportunity for SAP

Highly complex and differentiating mathematical approach to extract actionable information from existing data

Scientific Modeling & Optimization Engines

$4 billion

Analysis and reporting based on industry-specific templates and data models

Industry-Centric Performance Analytics

$28 billion

Analysis and reporting on business support processes

Budgeting and planning

Packaged Analytics / Optimization Apps

$23 billion

Foundational BI, Enterprise Data Warehouse, generic analysis and reporting capabilities

Tools-Centric Approach

$13 billion

Mark

et pote

nti

al

As communicated by the SAP Executive Board, entering this new

market is one of four strategic priorities for SAP Consulting

Services strategic direction

© SAP AG 2009. All rights reserved. / Page 10

Bucharest will be an SAP innovation center to develop and deliver analytical services

Analytical solutions for

SAP customers

Science & TechnologyBucharest, Romania

Science & TechnologyPhoenix, Arizona

Industry Expert Teams

Industry knowledge

Scientific skills

SAP technology& products

Customers

© SAP AG 2009. All rights reserved. / Page 11

Romania Is An Important Location For SAP

• SAP Skills development started in 1995-96 with the setting up of Integrator (SAP Rom)

• SAP projects in Romania started during 1998-2000 timeframe

•SAP Romania started to operate in 2002, part SAP CEE

•Total number of employees over 75 and Eco system, 300 consultants in 20 companies

•Yearly revenue above 13 million Euro

•Global Delivery (GD) started to operate in 2007 as part of SAP Romania SRL

•Globally GDC Bucharest has counterparts in India, China and Argentina (over 1000)

•Resources , average age is 27, mostly hired after graduation, or 2-3 years history

•Provides consulting services for projects outside Romania:Functional Consulting (ERP)

Software Development (ABAP)

Technical Services (Basis)

Project Management (PMI)

© SAP AG 2009. All rights reserved. / Page 12

Why SAP Services? The breadth and depth you need to succeed

Our Customers’ Success is Our Success!

18,000+ SAP Services experts

7 Global Support Centers

Unparalleled 24/7 customer and partner support, at a global level

35+ years of experience

Strategic solutions in more than 25 industries

Closed loop ecosystem from strategy to execution, including:

3,850+ partners 15 Industry Value Networks (IVNs) SAP user groups - global, regional, and

local

© SAP AG 2009. All rights reserved. / Page 13

An Out-of-the-Ordinary Company…

We hire self-motivated individuals not afraid of taking initiative

Employees are responsible for… Achieving individual goals Enhancing skills Developing a career

We ask a lot of our employees, but we also give a lot in return: Exceptional benefits Knowledge, tools, and resources Challenging projects with global customers

The opportunity to make a name for yourself!

…Recruits Out-of-the-Ordinary People

© SAP AG 2009. All rights reserved. / Page 14

ANY QUESTIONS?

EMAIL

Send an email to: Helmut.Linde@sap.com