To celebrate its 30th Anniversary, SAP is presenting the Asian Leadership Series comprised of interviews with captains of industry speaking on key business issues for the 21st Century. Each interview highlights one of three themes -- vision, innovation or experience -- concepts that have driven SAP's success over the past three decades. Lee Kum Kee Hero Honda Tenaga Nasional Berhad Quanta Computer Singapore Airlines Legend Computer LG Chem

30 Years of SAP 1972 • SAP is founded as "Systems Analysis & Program Development" in Mannheim, Germany • Number of employees at year end: 9 • Total revenues: DM 620,000 • SAP R/1 solutions launched > 1974 • Two local companies -- Rothhandle and Knoll -- select the newly developed SAP Financial Accounting (RF) System 1976 • SAP organizes as a limited liability corporation with the name of "Systems, Applications and Products in Data Processing" 1977 • SAP moves its headquarters from Mannheim to Walldorf 1979 • SAP R/2 solutions launched • Total revenues: DM 4 Million 1980 • 50 of the 100 largest industrial companies in Germany are SAP clients 1982 • SAP revenues increase to DM 24 million for the year and more than 250 companies in Germany, Austria and Switzerland are using SAP-developed programs 1985 • Headquarters in Walldorf expand by 10,000 square meters • Sales increased by another 45% • SAP system is used throughout Europe as well as South Africa, Kuwait, Trinidad, Canada and the United States • The first headquarters in the United States is established in Wayne, Pennsylvania 1988 • Subscribed capital stock increases from DM 5 Million to DM 60 Million, company goes public (Frankfurt and Stuttgart) • SAP gains its 1000th Customer, Dow Chemical 1989 • SAP stock is traded on the Zurich stock exchange • 1st SAPPHIRE Conference • 1st Stockholder Meeting • Established Asia Pacific presence with offices in Australia and Singapore. • Number of employees: Over 1000 • SAP enters Russian market and begins development of a Russian version of the R/2 system 1992 • SAP enters Hong Kong market • SAP R/3 solutions launched • Revenue increases to DM 831 million of which almost 50% derives from international operations 1993 • Customer base grows to 3,500 companies • SAP introduces an R/3 version for the Japanese market 1995 • Customer base grows to 6,000 • SAP share included in the German stock index (DAX) 1996 • SAP R/3 Release 3.1 is Internet-enabled 1997 • SAP begins developing industry-specific solutions • SAP enters the Taiwan market 1998 • Company is listed on the New York Stock Exchange • Company launches new solutions for Business Information Warehouse, Business-to-Business Procurement and Supply Chain Management. 1999 • SAP delivers mySAP.com • SAP receives "Best Managed Companies" Award by Industry Week 2000 • Named "Most Successful Company Over the Long-term in the 90's" (Jury of 40 CEO's: Wiesbaden 3/10/2000) 2001 • SAP acquires Top Tier and forms SAP Portals • Revenues for SAP in 2001 top EUR 7.3 Billion 2002 • SAP acquires TopManage Software Solutions for its SMB offering • SAP customer base grows to 18,000 • SAP has over 27,800 employees • SAP celebrates its 30th Anniversary! Q1. Taiwan Direct Shipment service has been important in Quanta's success. How did it come about? A1: In 1997 one of the biggest computer vendors was having problems in the notebook segment. It kept inventories in the U.S. and different locations in Europe. With models and components changing all the time, this was proving to be inefficient. So they came to us for help. We took their orders in Taiwan, configured the notebook PCs there and shipped them to their customers. The notebook computer is quite lightweight, so it's not expensive to ship to any place in the world. This is how the Taiwan Direct Shipment service began. Q2: You mentioned introducing innovation into corporate management. Give us an example. A2: In the OEM business, we have to be very fast and flexible. The challenge is how to do this when our customers have different needs. So we created different business units for each customer. Now each customer feels he is dealing with a small personal company with access to huge resources. Q3: What is the biggest obstacle you face today? A3: The biggest obstacle is the maturity of the computer industry. What is the next big application for the PC going to be? Can the PC market continue to grow? We need some new innovation. So the big questions is: What's next?

In this interview, Barry Lam, founder and chairman of Taiwan notebook PC manufacturer Quanta Computer, Inc. talks about the importance of innovation in his company's rise to become the world's top producer of notebook PCs.

Quanta--Taiwan's Computing Manufacturing Star
In the keenly competitive world of PC manufacturing, it's quite a feat to become the industry's largest producer of notebook PCs. Almost as difficult is keeping that accomplishment something of a secret. Yet as a matter of corporate policy, Taiwan-based Quanta Computer does not trumpet the fact that it now makes more notebook PCs than any other manufacturer in the world--16 percent of all those shipped in 2001. The reason for Quanta's reticence is that its customers are all top computer vendors, who attach their own labels to the PCs before they are shipped out to end users around the world. These high-profile customers include Acer, Dell, Fujitsu Siemens, Gateway, HP, IBM, NEC and Sony.

Keeping a low profile, then, is simply good for business. And business is good, says Barry Lam, 53, the chairman of Quanta, which he founded in 1988. Lam says he expects the company to ship 6.5 million units in 2002, achieving sales of US$4.7 billion,--a substantial increase from last year's 4.2 million units and $3.4 billion in sales.

Quanta's climb to the top in a country that has become the electronics factory to the world really began in 1972 when entrepreneur Lam founded his own electronic calculator business. The calculator uses a motherboard, microprocessor, keyboard and liquid crystal display (LCD) just like a PC. "And I could see how the LCD was going to evolve," says Lam. "So I believed it would eventually be used for displays in computers. And if this was the case, then computers would become mobile."

That vision came to fruition when he established Quanta Computer in 1988, and then introduced one of the first notebook PCs in 1990 at CeBIT industry expo in Hannover, Germany. "Until then there were only laptop PCs," says Lam, recalling the heavy, luggable boxes that represented the portable technology of the time.

Quanta followed that milestone up by then introducing the first multimedia notebook PC in 1995. However, it was such an innovative idea that some of Quanta's customers asked Lam who would want to buy a multimedia notebook computer. The answer turned out to be consumers around the globe--the kind who enjoyed stereo sound while playing music CDs on their PCs and who wanted quality graphics when they played CD-based video games.

Designing in Value
Quanta's next step was to move into design, where it adds value to the products it builds. Today it employs 500 design engineers in Taiwan alone. How much Quanta design goes into a particular product depends on whether a customer is looking to simply upgrade a PC, significantly improve it, or wants to introduce a new innovative line of products, such as the newly designed computer that uses a suspended LCD. "But many people think innovation only occurs in technology," says Lam. "That's not enough to keep us ahead of competitors. As an original equipment manufacturer (OEM) we must innovate in production, in packaging (of components), in management and with our business model." With customers in Asia, Europe, the U.S. and Japan, requirements can differ greatly, so Quanta has developed a flexible business model that can be adapted to suit the varied needs of individual clients.

In 1997 the company began its Taiwan Direct Shipment program. This allows its customers to transfer end-users orders for PC notebooks directly to Quanta's giant flexible manufacturing and assembly factory in Linkou on the outskirts of Taipei. There, assemblers put together products of varied specifications and features and ship them out within 48 hours of receiving an order. Flexible manufacturing lines and a leading edge supply-chain scheme keeps the assembly operation fed and working 24 hours a day, while a huge Quanta LCD manufacturing plant next door keeps the displays coming even when the rest of the industry suffers display shortages. More recently, the company has duplicated this success story in Shanghai, China, in order to take advantage of the cheaper labor market there and shave even more off the cost of manufacturing.

Flexibility Everywhere is the Key
Lam also looks for a similar kind of flexibility among his general managers. He expects each of them to create a strong personal relationship with a specific customer. "It's not difficult to find good engineers or good sales people," he says. "But it is difficult to find people with good management sense who can also take care of high growth and realize profits. So we need to continuously retrain our people." He also has to make certain that a manager with the right background is matched properly with a particular customer. "Some customers require us to do a lot of design work, so a manager with an engineering background is necessary. Another customer may want to improve its supply chain, so we need a manager with that kind of experience," he explains.

Lam's own background indicates a flexible approach to life. Born in Shanghai, he was brought up in Hong Kong, then went on to study electrical engineering at the National Taiwan University, and has since gone on to found two highly successful companies.

Flexibility also runs to product mix. In the last several years, Quanta has branched out into manufacturing PDAs and cell phones at one end to file servers and memory storage at the other, with notebook PCs taking up the middle ground. Non-computer products now account for 20 percent of Quanta revenues, while Lam indicates the company has already grabbed a 10 percent share of the global file server market. "And in the next three years, we plan to grow this (non-computer) side of the business to 50 percent," he says.

Flexibility is Name of This IT Game
In its earlier years, Quanta used various legacy systems and a domestic enterprise resource planning(ERP) system for its resource planning needs. But as the company expanded abroad and the number of itsoverseas customers increased, it outgrew the capabilities of its ERP system, which essentially allowed for only one way of planning businessoperations. What Quanta now required was a powerful, flexible system that would allow for doing business with a variety of multinational corporations.

"After our IT group researched the market, we found that SAP had a strong reputation and was also one ofthe most popular systems in our industry," says Lam." In many cases our customers are also using SAP. Even when some are not, they still know SAP and know how to work with it. It's become a kind of standard."

Today the company is using most of the SAP modules,including those for finance and costing, production planning, human resources, marketing and sales, materials management and service management.

"Since we are an OEM company, we need to maintain a flexible approach when dealing with ourcustomers' different ways of doing business," Lamnotes. "So when we first began using SAP, we used it in a general way. Then we learned what modifications customer A, customer B, customer C had made in their use of SAP, and we changed our interfaces with thosecustomers accordingly. Now we can exchange information much faster and much more efficiently."

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