Transform Public Sector with SAP Solutions Business Value with Intelligent ERP

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SAP Value Paper ǀ PUBLIC Transform Public Sector with SAP Solutions Business Value

2 The Need of an Intelligent ERP System Support Next Practices with Intelligent Enterprise Resource Planning (ERP) Radical change in the public sector industry is occurring at a rapid pace. Changes in technologies, in citizen expectations, in operational models, and in standards themselves require constant adaptation. Public sector organizations must be able to respond to rapidly changing conditions, yet still comply with all standards. How does a digital core with a true single source of truth help? Responding to rapid changes A digital core is an IT architecture that offers stability and long-term reliability for core enterprise processes, yet also provides the flexibility to adapt quickly to new opportunities, challenges, and regulations. This solid foundation gives you a single source of truth, which in turn enables flexibility for innovation to accommodate new processes, operational models, and regulations. Simulation and analytics The ability to respond quickly is an essential part of managing a public sector organization. To do this, simulation, prediction, and analytical capabilities are important components. Data is critical for gaining the insight to make decisions. This insight must be at a granular level, so that decision-makers have the detail they need to understand trends, opportunities, and risks, and quickly carry out what-if analysis using predictive algorithms. Making better decisions with quality data Every public sector organization needs the computing capability to carry out complex algorithms with large data sets to support timely, real-time analysis. Everyone in the organization must have access to data they need, whenever and wherever they need it. Addressing innovative opportunities Citizens are demanding innovation. Public sector organizations spanning federal, state and local agencies are responding with new capabilities that better meet individual needs. These new offerings impact every facet of organization, not just the front office. Organizations must address end-to-end (E2E) processes across departments and lines of business to deliver on new citizen experiences and services. Enhance and Extend Next-Generation Processes with Intelligent ERP Bringing SAP S/4HANA and the SAP Leonardo technologies together as a digital core results in a more flexible and intelligent enterprise. To achieve next-generation business processes, organizations need an intelligent ERP solution that can be continuously enhanced and extended with innovative business services and applications built on emerging technologies, including machine learning, block chain, and the Internet of Things (IoT). Public sector organizations that have big innovation appetites or prefer to be early adopters have already begun this journey. Land Kärnten 6x higher throughput for document clearing The conversion to SAP S/4HANA was the beginning of a journey to place the government of Carinthia as a top business location to provide digital financial services for citizens and enterprises in a simple, efficient, and reliable way. Dr. Horst Felsner, Department 2 Finance, Investments, and Housing, Amt der Kärntner Landesregierung Diakonie Michaelshoven Digitalizing the workflow for 1,000 people To be ready to take on the future, even social institutions like us these organizations in particular, in fact need to be structured to run like a business. That s exactly why we ve implemented SAP S/4HANA. Uwe Ufer, Commercial Director, Diakonie Michaelshoven e.v. 2 /

Strategic Priorities in a Digital Economy The digital economy is disruptive.

SAP supports a reimagined set of end-to-end business scenarios to support the strategic priorities of working in a digital environment.

picture instead of only offering outdated glimpses into different parts of the organization.

End-to-end scenario: Reimagine strategic procurement Data-driven government By bringing together both transactional processes and analytical intelligence and combining all agency knowledge sources in

End-to-end scenario: Reimagine budget control Citizen engagement Government now has the tools to radically simplify complicated processes for the citizen.

3 Strategic Priorities in a Digital Economy The digital economy is disruptive. Leading public sector organizations are adopting strategic priorities that drive transformation to intelligent enterprises that can better serve citizens. SAP supports a reimagined set of end-to-end business scenarios to support the strategic priorities of working in a digital environment. These are some examples: Digital government Through digitalization, agencies can now change operational models by interconnecting all aspects of the value chain in real time and by seeing the big picture instead of only offering outdated glimpses into different parts of the organization. Leaders and managers can use insight to identify, predict, and address issues to improve the effectiveness and efficiency for all involved. End-to-end scenario: Reimagine strategic procurement Data-driven government By bringing together both transactional processes and analytical intelligence and combining all agency knowledge sources in one platform organizations can turn data into actionable information. Machine learning technologies can leverage the effectiveness and efficiency in tax collection activities, for instance. End-to-end scenario: Reimagine budget control Citizen engagement Government now has the tools to radically simplify complicated processes for the citizen. Governments can become anticipatory service orchestrators, information brokers, and networkers, rather than supplying all services directly. New digital capabilities can provide personalized, self-managed online services guiding citizens through the jungle of possible transactions, giving individual recommendations. For example, a digital citizen can make citizen-to-government interaction more inclusive and easier. End-to-end scenario: Reimagine digital experience for the connected citizen Smart cities By considering a holistic approach across many city dimensions (governance, economy, transport, resources, and people) cities can better respond to constituents needs. Sensors monitor asset utilization and health, predicting potential issues and maintenance needs. Analysis of real-time data combined with historical data is helping government and commercial companies to proactively manage assets and infrastructure. Predictive modeling and simulation are helping keep citizens safe through real-time situational awareness. In-memory computing is helping translate massive data into insightful information. Optimized fleet management will reduce fuel consumption and the carbon footprint issued within cities, while improving traveler experience. End-to-end scenario: Reimagine asset performance and intelligence 3/

Digital Government Reimagine Strategic Procurement Gain spend insights, accelerate savings, and help ensure compliance through a closed-loop strategic sourcing

Traditional scenario Disparate and disconnected data sources, and inability to extract meaningful insights Manual and time-intensive supplier discovery and

supplier responses Manual authoring, longer cycle times, and high legal costs Spend reports run on a regular basis from multiple disparate or disconnected data sources

Access to supplier pool with ready visibility into preferred, qualified, and compliant sources of supply Embedded capabilities to view additional supplier risk content

sourcing Contract lifecycle management capabilities, including authoring, negotiation, execution, and digital signature Top value drivers: Analyze Increased visibility

4 Digital Government Reimagine Strategic Procurement Gain spend insights, accelerate savings, and help ensure compliance through a closed-loop strategic sourcing application suite. Traditional scenario Disparate and disconnected data sources, and inability to extract meaningful insights Manual and time-intensive supplier discovery and qualification process Inefficient bid management with RFx coordination through s; limited buyer-supplier collaboration; and manual processing and analysis of supplier responses Manual authoring, longer cycle times, and high legal costs Spend reports run on a regular basis from multiple disparate or disconnected data sources Manual search for suppliers Manual or -based bid analysis, supplier evaluation, and risk review Mismanaged and misplaced paperbased contracts A new world with SAP Access to supplier pool with ready visibility into preferred, qualified, and compliant sources of supply Embedded capabilities to view additional supplier risk content (such as media incidents, country risk, and compliance) Comprehensive RFx management with reverse and forward-auction capabilities, enabling cost savings and faster sourcing Contract lifecycle management capabilities, including authoring, negotiation, execution, and digital signature Top value drivers: Analyze Increased visibility into internal and external data Increase visibility and bring more spend under management Source and evaluate Automated, streamlined tool-based supplier evaluation and qualification, and bid management process Improve compliance and reduce risk Award Automated contract collaboration and compliance Digitalize the process and improve efficiency 4/

Data-Driven Government Reimagine Budget Control Traditional scenario Delayed activities that only begin when reports are processed Risk of budget shortage due to lack

Analyze budget consumption, and search for critical budget objects and the related documents Maintain result-based corrective budget maintenance A new world with SAP

with real-time business intelligence and ad hoc reporting at a granular level Faster and efficient budget control process Top value drivers: Receive budget alerts on

5 Data-Driven Government Reimagine Budget Control Traditional scenario Delayed activities that only begin when reports are processed Risk of budget shortage due to lack of transparency with insufficient, manual after the fact audit processes Manual, time-consuming, and effortintensive processes Run budget report on regular basis Analyze budget consumption, and search for critical budget objects and the related documents Maintain result-based corrective budget maintenance A new world with SAP Real-time budget alerts based on user defined thresholds End-to-end visibility and steering capabilities Continuous monitoring process Transformed process experience with real-time business intelligence and ad hoc reporting at a granular level Faster and efficient budget control process Top value drivers: Receive budget alerts on launchpad Improved real-time budget information Drill-down to relevant documents Increased employee productivity Take immediate actions to prevent and resolve budget issues 5/

Citizen Engagement Reimagine the Digital Experience for the Connected Citizen SAP solutions for citizen engagement help organizations

applications Web content management, contact centers, mobile apps, and so on that do not allow companies to respond with agility to

force citizens into bureaucratic service flows A new world with SAP Citizen experience that is put at the center of customer relationship

helps ensure a 360-degree view of the citizen and for the citizen Seamless omnichannel digital services that help ensure personalized and

individualization Better relationships Taxes and revenue Forms-based processes Automation Omnichannel self-service AI and machine

6 Citizen Engagement Reimagine the Digital Experience for the Connected Citizen SAP solutions for citizen engagement help organizations streamline the service process with real-time data and fully integrated and automated workflows Traditional scenario Disparate applications Web content management, contact centers, mobile apps, and so on that do not allow companies to respond with agility to citizen demands Silos of data that create duplications for government and delays for the citizen Manual, disconnected processes that force citizens into bureaucratic service flows A new world with SAP Citizen experience that is put at the center of customer relationship management: Integrated platform that enables government to plugand-play new services more easily and efficiently Connected data that helps ensure a 360-degree view of the citizen and for the citizen Seamless omnichannel digital services that help ensure personalized and convenient access Top value drivers: Automation Analytics Adaptive segmentation Intelligent marketing AI and machine languagepowered individualization Better relationships Taxes and revenue Forms-based processes Automation Omnichannel self-service AI and machine languagepowered personalization Social benefits and grants Cross-agency order orchestration Improve constituent satisfaction Reduce service cost Personalize services Secure privacy Profile Permits and licenses 360-degree golden record Citizen data Contact center Consent Citizen services Field service Outreach Discover Apply File Renew Pay Automation Intelligent service AI and machine language-powered self-service Better outcomes Finance and billing 6/

Smart Cities Reimagine Asset Performance and Intelligence Traditional scenario The SAP Predictive Maintenance and Service solution

maintenance strategies for optimization of cost and risks and improved performance enabling cities to better respond to citizen

Time- and usage-based inspection and maintenance Unknown real-time risk of failure and performance No optimization of cost, risk,

maintenance Maintenance A new world with SAP SAP Predictive Maintenance and Service for monitoring, scoring, and prediction of

and improve asset availability Combined enterprise and spatial data to create location-aware business applications quickly and to

7 Smart Cities Reimagine Asset Performance and Intelligence Traditional scenario The SAP Predictive Maintenance and Service solution provides real-time health information of assets based on critical values and trends, thereby allowing the most efficient asset maintenance strategies for optimization of cost and risks and improved performance enabling cities to better respond to citizen needs. Time- and usage-based inspection and maintenance Unknown real-time risk of failure and performance No optimization of cost, risk, and performance Lack of location intelligence information Time-based inspection planning Inspection Inspection-triggered maintenance Maintenance A new world with SAP SAP Predictive Maintenance and Service for monitoring, scoring, and prediction of asset health based on machine-learning algorithms Triggering of maintenance orders just in time to avoid unnecessary inspections and improve asset availability Combined enterprise and spatial data to create location-aware business applications quickly and to enable critical real-time decisions Top value drivers: Asset health monitor Reduction in asset service and maintenance cost Maintenance strategies based on anomaly detection, predictive forecasting, and optimization of maintenance strategies Reduction in unplanned asset downtime 7/

Deep Dives Across Key Areas for Public Sector This section examines primary capabilities where value can be achieved through SAP S/4HANA, line-of-business (LoB) solutions, and SAP Leonardo.

profitability analysis Accounting and financial close Treasury management Financial planning and analysis Governance, risk, and compliance Fraud management Digital constituent experience Real-time

8 Deep Dives Across Key Areas for Public Sector This section examines primary capabilities where value can be achieved through SAP S/4HANA, line-of-business (LoB) solutions, and SAP Leonardo. Budget and financial excellence Budget planning Budget maintenance and execution Budget and financial closing and reporting Grantee management General ledger accounting Cost management and profitability analysis Accounting and financial close Treasury management Financial planning and analysis Governance, risk, and compliance Fraud management Digital constituent experience Real-time citizen insights Predictive and personalized service Marketing with speed and agility In-moment citizen experiences Omnichannel service excellence More than 15,800 public sector institutions in 151 countries are innovating with SAP solutions 10 of the 10 most competitive countries in the world run SAP solutions Source: SAP internal data and analysis. 8 /

Budget and Financial Excellence Typical challenges Current state with ERP Capabilities of SAP S/4HANA Capabilities of cloud-based LoBs and SAP Leonardo Business Benefits* Difficulty in tracking

9 Budget and Financial Excellence Typical challenges Current state with ERP Capabilities of SAP S/4HANA Capabilities of cloud-based LoBs and SAP Leonardo Business Benefits* Difficulty in tracking financial transactions across budget and fund No single source of truth without real-time contextual information and ad hoc analysis Inability to simplify online bill presentment and payment through a consolidated view of citizen financials Difficulty in analyzing high volumes of data to investigate potential fraud along with inability to prevent fraudulent transactions from occurring Manual processes and reconciliation due to lack of financial integration Disparate ledgers without integration that create accounting blind spots and lack of spending control Business processes related to receivables management that are often addressed across multiple solutions Data samples that need to be manually extracted from multiple systems and analyzed to detect potential fraud Single consolidated view of budget information Universal journal enabling a more efficient reporting process Integration with external data providers and other data sources helping to simplify, harmonize, and improve collaboration in operations SAP Business Integrity Screening application for improving fraud identification and prevention with customized predictive detection methods, and increasing accuracy of fraud alerts with predictive algorithms that identify potential cases based on historical data SAP S/4HANA Cloud software for customer payments providing a selfservice offering to deploy electronic bill presentment and payment processes SAP Analytics Cloud solution supporting predictive analytics for bringing together actuals, forecasting, and simulation to predict future trends and run what-if analysis SAP Cash Application software, for next-generation intelligent invoice-matching powered by machine learning Improve financial and budgetary transparency Reduce silos across departments or agencies Enable more business model flexibility Improve compliance Enable greater process automation Improve productivity 9 /

Digital Citizen Experience Typical challenges Current state with ERP Capabilities of SAP S/4HANA Capabilities of cloud-based LoBs and SAP Leonardo Business Benefits* Multiple, disparate system making

10 Digital Citizen Experience Typical challenges Current state with ERP Capabilities of SAP S/4HANA Capabilities of cloud-based LoBs and SAP Leonardo Business Benefits* Multiple, disparate system making it hard for citizens to have a single view of their government Suboptimal decision-making due to citizen information in multiple, disparate data sources Lack of 360-degree citizen view across all channels Difficulty in delivering a personalized experience and services to improve outcomes across programs and channels Lack of automation leading to manual process, errors, and poor citizen service Paper-based and manual processes leading to case workers inability to serve citizens in a timely manner Difficulty in engaging citizens over multiple channels and supporting channel hopping Siloed citizen data and inconsistent processes across systems and channels Siloed channels instead of omnichannel Inability to process large amounts of data from different systems for realtime business decisions Inaccurate, outdated customer data with poor integration to other solutions Inability to offer personalized service recommendations and predictions Multiple or different systems that are needed to deliver comprehensive services across programs and departments Single consolidated view of all relevant citizen data and transactions Real-time analytics to improve service efficiency Ability to store, access, and analyze structured and unstructured data in real time to drive decisions on the spot Service personalization using contextualized customer data across all channels SAP S/4HANA solution for customer management providing an integrated platform combining frontoffice and back-office capabilities for the public sector Artificial intelligence and machine-learning capabilities for improving case and ticket resolution Ability to use bots in selfservice, contact center, and case management SAP C/4HANA suite supporting the end-to-end lifecycle of a citizen engagement SAP Service Cloud solutions with ticketing and case management SAP Marketing Cloud solutions for effectively engaging and managing campaigns and segmenting citizens SAP Customer Data Cloud portfolio for helping to securely identify citizens across devices and channels and manage permissions and consent Deliver contextually relevant service and experiences across all channels with greater speed and agility Gain a single view of citizen to provide a holistic digital experience Increase case worker and contact center agent efficiency and productivity with lean and connected processes Provide a seamless omnichannel citizen experience with selfservice and streamlined service processes Become a data-driven, citizen-centric business Improve compliance Increase productivity for case workers through mobile information access 10 /

11 SAP Strategy Deliver the Intelligent Enterprise Constituent Experience Supply Chain Data Management Digital Core Intelligent Suite Intelligent Technologies AI/ML IoT Analytics Digital Platform People Engagement Cloud Platform Network & Spend Management Intelligent ERP is the digital core of an intelligent enterprise An intelligent enterprise can be continuously enhanced and extending with business services and applications built on a digital platform to create transformative business value. Public sector organizations that have big innovation appetites or prefer to be early adopters have already begun this journey. 11 /

SAP Portfolio of Solutions for Public Sector An end-to-end intelligent enterprise for public sector The SAP

running a public sector organization along the entire enterprise value chain.

invent new business and operational models by applying intelligent technologies such as the Internet of

Constituent experience SAP C/4HANA SAP C/4HANA Supply chain SAP Asset Intelligence Network AI and machine

Cloud solution solutions solutions SAP Digital Boardroom SAP Predictive Maintenance and Service solution SAP

service Analyze program performance to help ensure effective use of time, money, and resources Use predictive

Cloud Platform SAP IoT Application Enablement toolkit SAP Data Hub solution Digital Platform Finance Allow

12 SAP Portfolio of Solutions for Public Sector An end-to-end intelligent enterprise for public sector The SAP S/4HANA Enterprise Management solution is at the core of a comprehensive suite of offerings for successfully running a public sector organization along the entire enterprise value chain. To achieve an intelligent enterprise, the employees are enabled to focus on higher-value outcomes and to invent new business and operational models by applying intelligent technologies such as the Internet of Things (IoT), artificial intelligence (AI), machine learning, and advanced analytics. Constituent experience SAP C/4HANA SAP C/4HANA Supply chain SAP Asset Intelligence Network AI and machine learning IoT Analytics People engagement Intelligent Technologies SAP SuccessFactors SAP Concur SAP Analytics Cloud solution solutions solutions SAP Digital Boardroom SAP Predictive Maintenance and Service solution SAP Fieldglass solutions Network and spend management SAP Ariba solutions Deliver seamless, omnichannel customer service Analyze program performance to help ensure effective use of time, money, and resources Use predictive models to optimize investments in infrastructure Increase employee engagement while enabling potential SAP Cloud Platform SAP IoT Application Enablement toolkit SAP Data Hub solution Digital Platform Finance Allow for visibility into the state of the business at any time SAP S/4HANA Digital core Procurement Automate and streamline complex, highvolume invoice processes and purchasing documentation 12/

The Value of SAP for Public Sector Organizations SAP S/4HANA provides public sector organizations with a proven framework to adopt industry next practices while attaining operational excellence

Strategy enablement Accelerate creation of new business models Run live (SAP Digital Boardroom) Reorganize on the fly Achieve greater speed and agility Manage risk and help ensure compliance

function costs Up to 10% increased project manager productivity Empowered employees Achieve higher productivity with a new, role-based way of working with responsive, intuitive SAP Fiori user

13 The Value of SAP for Public Sector Organizations SAP S/4HANA provides public sector organizations with a proven framework to adopt industry next practices while attaining operational excellence across the full value chain. Strategy enablement Accelerate creation of new business models Run live (SAP Digital Boardroom) Reorganize on the fly Achieve greater speed and agility Manage risk and help ensure compliance Collaborate with other agencies and external stakeholders Strategy enablement Business benefits Business benefits* 10% to 20% increase in citizen satisfaction 15% to 20% reduction in procurement function costs Up to 10% increased project manager productivity Empowered employees Achieve higher productivity with a new, role-based way of working with responsive, intuitive SAP Fiori user experience (UX) on all devices Adopt role-driven, user-centric processes and self-service business intelligence for user empowerment Enable actionable insights on unified, real-time data and processes with built-in system suggestions for decision support Empowered employees IT benefits and TCO IT benefits and TCO Reduced data footprint Merging of OLAP and OLTP Elimination of many desktop clients Lower testing costs Simplified landscapes Native integration *Benefits are based on results from early adopters of SAP S/4HANA or are conservative outside-in estimates of the benefits of moving from a traditional ERP system to enhanced SAP S/4HANA with lineof-business and cloud capabilities and SAP Leonardo technologies. As each enterprise is at a different level of maturity, we recommend working with you to determine the value proposition for your enterprise. 13/

Customers are Achieving Value with SAP Solutions Land Kärnten Diakonie Michaelshoven Industry Public sector Solution SAP S/4HANA Customer Web site https://www.ktn.gv.

To fulfill this critical mandate better, it committed to becoming a top provider of digital financial services for citizens and enterprises in a simple, efficient, and reliable way.

14 Customers are Achieving Value with SAP Solutions Land Kärnten Diakonie Michaelshoven Industry Public sector Solution SAP S/4HANA Customer Web site Click here to read the business transformation study. The Amt der Kärntner Landesregierung executes the laws of Carinthia, Austria. To fulfill this critical mandate better, it committed to becoming a top provider of digital financial services for citizens and enterprises in a simple, efficient, and reliable way. That meant it had to digitalize all public sector documents for rapid access. Document throughput increased by 600%, which allows it to keep pace with its highly engaged constituency. Industry Public sector Solution SAP S/4HANA Customer Web site -michaelshoven.de Click here to read the business transformation study. Diakonie Michaelshoven implemented SAP S/4HANA to standardize and streamline structures and processes across the organization and recast departments as internal service providers. Diakonie was able to make administration faster, simpler, and more cost-effective. The conversion to SAP S/4HANA was the beginning of a journey to place the government of Carinthia as a top business location to provide digital financial services for citizens and enterprises in a simple, efficient, and reliable way. Dr. Horst Felsner, Department 2 Finance, Investments, and Housing, Amt der Kärntner Landesregierung To be ready to take on the future, even social institutions like us these organizations in particular, in fact need to be structured to run like a business. That s exactly why we ve implemented SAP S/4HANA. Uwe Ufer, Commercial Director, Diakonie Michaelshoven e.v. /

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