SAP Transformation Study. SAP s Digital Transformation to Run Simple SAP SE or an SAP affiliate company. All rights reserved.

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1 SAP Transformation Study SAP s Digital Transformation to Run Simple

2 Table of Contents 1. Why we need to transform Digital Trends and their impact on SAP Digital transformation impacts every Line of Business 04 along the entire value chain 2. The Run Simple Initiative Transformation Approach Transformation Principles Enabling Technology How SAP is Running Simple across all Business Units Learn how SAP uses Data Management as the 11 Basis for Digital Transformation 3.2. Learn how Marketing at SAP boosts Pipeline Growth 15 powered by SAP Hybris 3.3. Learn how Sales at SAP Sells More in Less Time 21 powered by SAP Hybris Marketing and Sales 3.4. Learn how Finance at SAP drives business 26 performance in the digital world powered by S/4HANA 3.5. Learn how Procurement at SAP Simplifies Processes 32 powered by SAP Ariba Solutions 3.6. Learn how SAP simplifies Travel and Expense 37 Management powered by SAP Concur 3.7. Learn how SAP simplifies External Workforce 42 Management powered by SAP Fieldglass 3.8. Learn how HR at SAP Drives Employee Engagement to 47 the Next Level powered by SAP SuccessFactors 3.9. Learn how SAP streamlines Enterprise Analytics to 54 achieve Steering Excellence in the Digital Age 4. Want to learn more? 59

3 Why we need to transform SAP is one of the largest and most well-established software companies in the world. Despite that, we experience the same pressures as other organizations. We must accelerate to remain competitive in a changing economy. Companies are expected to grow while expanding on operating profit, be predictable and provide a unique customer experience. In order to cater to those multiple objectives, SAP needs to reinvent our operating model. This model comprises all the ingredients that contribute to the company s value generation capabilities and processes, technology assets, and people. Customer / End-User improved customer satisfaction empathize delight Shareholder improved efficiency improved profitability grow be profitable be predictable Operating Model improved decision making leverage differentiate Market Trends improved reach digitize reinvent Analytics GROW, EXPAND ON PROFIT, AND INCREASE THE SHARE OF PREDICTABLE REVENUE TO MEET SHAREHOLDER EXPECTATIONS In a cloud / subscription business, costs are immediate (cost of sales, cost of delivery) while revenue is ratable. Average deal size is decreasing while at the same time transactional volume is rising. This requires careful management of process cost and customer retention to surpass the margin trough, and to be able to scale especially through automated down stream processes. EMPATHIZE WITH AND DELIGHT CUSTOMERS In a digital world, customer expectations change. Whether it's B2C or B2B, they expect to be able to buy whatever they want, whenever they want it. They demand a seamless cross-channel experience available any time. True empathy is expected at every touch point along the customer journey, meaning companies need to be able to predict their customers needs. LEVERAGE DIGITAL TRENDS TO STAND OUT IN THE MARKET & STAY AHEAD OF THE CURVE Typically process design comes first, and technology to enable those capabilities follows. In a digital world, technology innovation also triggers process innovation business models arise from trends that have not been there before. To stay ahead of the pack, companies need to quickly leverage those opportunities to change and differentiate themselves frequently. 2

4 Digital Trends and their impact on SAP Across all industries, companies are experiencing unprecedented change that is transforming business models, processes and even the way we work. Technology trends such as hyper connectivity, cloud computing, and big data go hand-in-hand with social and business trends that are changing how we live and work. Internet of Things Machine Learning Augmented Reality Block Chain Cloud Computing Social Mobile Big Data & Analytics From onprem to (micro-service) Cloud platform & software offerings From human high-touch to automated intelligent operations From direct high-touch to digital / low-touch (omni/cross-) channels providing a unique customer experience In the midst of this change, complexity has become a major problem that stands in the way of digital transformation and innovation. Becoming a digital business means first cutting through this complexity. Simplicity is a prerequisite for innovation, and this resulting technology will be a core part of the overall business strategy. Major trends are impacting SAP s value chain end-to-end. To tap into the opportunity of digitization, this means a transformation from on-premise to cloud platform offerings, from human to automated operations, and from direct high-touch to digital low-touch channels. Constant innovation is the key to growth. Customers needs change constantly. It s easy to become irrelevant unless a company has a bias toward innovation, versus a bias toward the status quo. Bill McDermott, SAP CEO 3

5 Digital transformation impacts every Line of Business along the entire value chain R&D Marketing Sales BOOST INNOVATION AND TIME-TO-MARKET Short and effective innovation cycles through real-time customer and market insight Continuous delivery of integrated micro-services on an easy-to-extend platform GROW QUALITY PIPELINE Instant insights into campaign effectiveness Automated intelligent nurturing Automated routing through contextual reasoning INCREASE CUSTOMER- FACING TIME Automated sales content creation based on profiling / need-based segmentation Automated intelligent up-sell / cross-sell recommendations with win rate prediction Real-time 360º customer insights Service & Support F&A HR SUPPORT WITHOUT INCIDENTS Proactive care through real-time 360 customer insight and issue prediction Always-on customer support through in app chat bots and artificial intelligence PREDICT AND STEER IN REAL-TIME Real-time view on cross-board steering indicators with drill-down and simulation / prediction capabilities Fully automated down-stream execution WIN THE WAR FOR TALENT Automated intelligent talent sourcing through semantic reasoning of skill profiles and social network crawling Analytics Across the entire value chain allowing real time decision making. From Data to Insight to Action. Master Data Standardization A holistic, company-wide master data concept across organizational boundaries. 4

6 The Run Simple Initiative In 2016 SAP has embarked on a major transformation initiative called Run Simple. It s a journey to reduce complexity in our internal processes and systems. We have set in place Top Focus Projects, addressing our customers and employees pain points through fundamental process simplification, enabled by best-in-class technology: R&D Marketing Sales Delivery Service & Support F&A HR 1 Simplify Selling 2 Cloud Renewals: Strengthen Customer Retention 3 4 Simplify Cloud Simplify Sales Commisions 5 S/4HANA: Renew Our Digital Core 6 Revenue Accounting 7 Standardize Services Project Management Improve External Workforce Management Simplify Travel and Expense Management HR Goes Cloud With Run Simple we make a promise. A promise to our customers to become more agile and to deliver software that s easy to use. We have to rethink our own business model to be future-ready. We must adopt groundbreaking ideas and technologies more quickly. And we have to put our customers needs in the center of all our activities. In other words: We have to make business simple! Run Simple is our operating principle and the logical response to customer, shareholder, and market expectations. Run Simple is how we reinvent our operating model, redesigning processes along customer journeys and evolving the enterprise architecture, all while being a lighthouse for our customers. The goal: Be the MOST Innovative Cloud Company, Powered by SAP HANA. What I like best about all our Run Simple initiatives and our 10 Focus Projects is the goal itself to achieve a simpler SAP. We use our own standard software the way it was built, with little to no customization, and we use the same software that we sell. We ourselves become the best SAP reference customer. Christian Klein, SAP COO 5

7 Transformation Approach High customer and people centricity is at the core of our Run Simple philosophy. We put people s needs at the center of our activities and then work towards fulfilling them by redesigning processes, standardizing master data, modifying the IT landscape, and leveraging analytical insights. Business Process Redesign Across all Lines of Business. Leverage Digital Innovations Powered by SAP S/4HANA. Master Data Standardization A holistic, company-wide master data concept across organizational boundaries. Run Simple = High customer and people centricity Analytics Across the entire value chain allowing real-time decision making. From Data to Insight to Action. While we sometimes seem to focus too much on organizational changes, or on spending measures to improve our profitability, our future success will only be determined by the customer centricity of all we do, what we sell, and how we run. Christian Klein, SAP COO 6

8 The degree of simplification required to meet our customer s needs can only be achieved through disruptive process redesign. Think process simplification first and, based on this, modify the systems and technology base. BUSINESS PROCESS DIAGNOSIS Understand as-is process and perform gap analysis with respect to expectations. Process Steps: Process workshops with operations experts across all Lines of Business End-user feedback sessions via calls and workshops Prioritize the challenges along the end-to-end process Identify key game changers (long term) and quick wins (short term) Define a vision and roadmap per game changer BUSINESS PROCESS REDESIGN Depending on the result of the previous phases, chose the right mix of methods. Process Steps: Customer centricity: End-to-end user panels to validate processes Establish a new end-to-end mindset and optimized operating model across the value chain of the company Refocus on end-user experience along the customer journey Develop process & IT roadmap Create user stories (Business & IT) BUSINESS PROCESS IMPLEMENTATION & DEPLOYMENT Implement the quick wins in continuous improvement initiatives Execute IT roadmap in agile approach Drive deployment & end user adoption of the new solution by using it in a rapid way Transformation Principles THINK CUSTOMER OBSESSION NOT INSIDE-OUT Assess degree of value creation for our customers and end-users to continuously challenge the status quo THINK PROCESS REDESIGN FOR RESULTS, NOT PROCESS SAKE Process redesign has to focus on maximizing value generation and elimination of proxies THINK END-TO-END NOT FUNCTIONAL The biggest simplification potential is in-between silos, not in local optimization THINK DIGITAL, NOT TRADITIONAL Rethink traditional processes in the light of digital technologies 7

9 Enabling Technology SAP s system landscape has been grown over decades with a strong OnPrem core. Over the last couple of years, we have moved capabilities into the cloud, leveraging acquired assets. That has led to faster innovation cycles and more process standardization and simplification in commodity areas. In parallel, we have started to leverage the SAP Cloud Platform to rapidly improve the user experience, to embed continuous innovations (e.g. Machine Learning) into existing hybrid landscapes and to leverage it for user-centric differentiating sales apps. Manage Demand Manage Deal Execution Order-to-Cash Customer Life Cycle S/4HANA SAP Hybris Commerce SAP Hybris Marketing SAP Hybris Sales SAP Hybris Revenue Cloud SAP Hybris Billing Digital Core Digital Touchpoints Store Campaign Mgmt Response Mgmt Lead Mgmt Oppty Mgmt CPQ Order Mgmt Convergent Invoicing FI-CA Customer Service Universal Ledger S/4HANA SAP Cloud Platform SAP Analytics Cloud Master Data Governance In order to support emerging business models that transform SAP into a cloud company (growth) but at the same time contribute to a massive increase in operational efficiencies (cost savings), we decided not to just convert our ERP system to S/4HANA, but to instead start with a greenfield approach. Led by business process redesign triangulated with S/4HANA application capabilities, we designed the new digital core for SAP. The OnPrem core becomes small and further capabilities move to the cloud, such as salesforce automation, configure-price-quote and commissions management. In order to standardize and simplify, we work closely with SAP Product and Innovation Development teams on functional and integration gaps. We established a coinnovation model where IT is driving requirements into development to create a reference architecture valid for all customers of similar size and industry. Integration to Cloud satellites (Ariba, Concur, FG, SFSF) has already significantly improved, and functional enhancements in Finance (Accrual cockpit, Intercompany Billing, Royalties Management ) are being co-developed. At SAP, the end goal is to arrive at a service-oriented architecture with a lean OnPrem Core and connected cloud services that can be flexibly exchanged. This will provide agility to support new business or commercial models and establish a core that is robust and flexible enough to carry SAP into the next decade and support future growth. Plus, we leverage emerging technologies like Machine Learning within IT specific solutions to create additional business benefits. 8

10 Digital transformation impacts the entire organization Managers and employees on every level and in all our business units are facing individual challenges. Transformation can only be achieved if everyone in the organization is aware of his or her part in the game from the board members to each individual employee Learn how SAP uses Data Management as the basis for digital transformation Learn how Marketing at SAP boosts pipeline growth powered by SAP Hybris Learn how Sales at SAP sells more in less time powered by SAP Hybris Marketing and Sales Learn how Finance at SAP drives business performance in the digital world powered by S/4HANA Learn how Procurement at SAP simplifies processes powered by SAP Ariba Solutions Learn how SAP simplifies Travel and Expense Management powered by SAP Concur Learn how SAP simplifies External Workforce Management powered by SAP Fieldglass Learn how HR at SAP drives employee engagement to the next level powered by SAP SuccessFactors Learn how SAP streamlines Enterprise Analytics to achieve steering excellence in the digital age 9

11 Master Data Marketing Sales Finance Procurement Travel and External Expense Workforce HR Analytics Learn how SAP uses Data Management as the basis for digital transformation Data is the foundation of your business. Without it, you ll have trouble creating anything of value. To stay competitive and successfully support pipeline growth, you need a well maintained master data foundation. Today more than ever, data is growing exponentially. 90% of the world s data has been generated in just last 2 years *. The pain that organizations are experiencing around consistent reporting, regulatory compliance, and the move towards Software as a Service (SaaS) offerings is putting enormous pressure on Enterprise Data Management. Data is a valuable corporate asset which, when managed properly, can increase efficiency across all Lines of Business and support a company s ability to achieve strategic goals and financial results. *ScienceDaily 10

12 SAP s transformation to the Cloud creates new challenges for Enterprise Data Management. In order to Run Simple we need to: Standardize and simplify data processes Accelerate business processes through high quality master data Improve operating margins and internal efficiencies Deliver innovative business and technical solutions Enterprise Data Management s Challenges Many areas across the company depend on accurate and consistent Master Data: HR Inconsistent employee information and data quality across organization and processes. MARKETING Fragmented and de-centralized data prevents marketing operations from generating high-value business and reacting to an agile, fast-paced market. IT High cost of ownership and complex IT operations are challenging a seamless and standardized delivery of cloud-based solutions. SALES AE s are spending a lot of time on sourcing, administration, and qualification of their customer and opportunity management. DIGITAL OFFICER Accurate budget sizing, driving efficiency measures, and improving risk management is undermined by inconsistent and decentralized data. FINANCE No centralized hub to manage master data and data quality checks. 11

13 Enterprise Data Management s Transformation Approach Transforming Master Data Management is a combined effort. To achieve sustainable change, we need to equally transform our internal processes, the mindsets of our people, and our technology landscape. BUSINESS PROCESS We are leveraging a business-led global master data management and governance program to reduce complexity. PEOPLE We are holding a data council with representatives from each line of business to bring change to everyone s personal agenda. TECHNOLOGY We are using best-in-class SAP solutions for enterprise information management, like SAP Master Data Governance, SAP Data Services, SAP Information Steward and SAP CRM powered by SAP HANA. How can we provide correct, clean, current data that is easy to access, use, add and update for fast, accurate results every time? Customer Data Contacts Finance Vendor Suppliers Partners Employees Products Materials Pricing Quality Checks Automate & Standardize Governance Framework Business Rules Two-man Rule 12

14 How do we organize Master Data Management at SAP? HR Reduce the complexities of managing employee job changes (org units, job titles) Ensure accurate and timely employee information across the organization and processes MARKETING Enable high-volume business, maximize generation of high-value leads Automate, standardize, and simplify marketing operations to increase agility and efficiency IT Reduce total cost of ownership and simplify IT operations Agile-based delivery of Cloud-based solutions Infrastructure and architecture to support Big Data & IoT SALES Allow salesforce to spend more time with customers instead of admin tasks Flexible account planning and Go-To-Market model One view of the customer regardless of the channel (online, on-premise) DIGITAL OFFICER Which information can add business value, drive efficiency, or improve risk management? How much budget and commitment from the business do I need to make my company successful? FINANCE Optimize the data quality checks with data governance products and tools Use one central hub to manage master data using SAP s Master Data Governance product 13

15 Business Benefits realized 75 MILLION 25, MILLION 10% Benefits through master data improvements Hours of increased productivity for account executives in 2015 Saved with better contact data Increase in marketing productivity through continuous data quality year over year 960K >97.5% 70% Annual reduction in IT total cost of ownership of 9 million contacts meet standards for overall contact completeness Automated data operation processes Enabling Technology CURRENT We can keep adding more 1:1 replications, BUT each system is adding complexity, risk, and cost. RECOMMENDED Build a scalable and flexible platform based on SAP HANA that supports Governed Master Data and cross system Analytics. 14

16 Master Data Marketing Sales Finance Procurement Travel and External Expense Workforce HR Analytics Learn how Marketing at SAP boosts pipeline growth powered by SAP Hybris We asked ourselves: Are we running Live in Marketing? What are we doing to transform Marketing? How can we streamline and simplify our processes along our end-to-end-value chain, from campaign planning to lead handover? MARKETING NEEDS TO REACT TO A FAST-CHANGING MARKET: The customer is in the driver s seat Data silos are holding companies back Simplification for the cloud Volume business requires automation Customer journeys today are multi-dimensional and complex. Customers determine their own, unique experience and demand to be engaged through the channels of their choosing. Real-time analytics is required to understand how customers are engaging with us. Therefore customer data needs to be aggregated across the enterprise. Moving to the cloud drives companies to reinvent how they run. This results in a transformation of the IT landscape, a disruptive process redesign, and investment in your people. Automated nurturing and lead qualification, as well as a close collaboration between marketing and sales enable pipeline growth. 15

17 Marketing s Challenges In order to make life easier for our people, we asked them to give feedback on their personal pain points throughout the end-to-end marketing process. Based on the feedback we received, we identified various processes in need of improvement or redesign. MARKETING'S VALUE CHAIN: Campaign Planning Campaign Execution Response Handling Scoring & Routing Nurture Lead Handover to Sales Campaign Planning Low integration between Marketing and Sales activities Campaign Execution High average campaign preparation time Response Handling No full view into a customer s history & engagement activities Scoring & Routing <1.5 days for leads to be routed for next follow-up step MARKETER Nurture Lacking analytical capabilities to optimize marketing efforts Lead Handover to Sales Low integration between Marketing & Sales activities Campaign Planning Limited transparency on brand value Campaign Execution High cost event driven marketing vs. Digital first CMO Response Handling Delayed and manual tracking of demand generation effectiveness Nurture Lack of nurture capabilities means higher spend on tele activities Scoring & Routing Very limited automated scoring capabilities Lead Handover to Sales Ensure quality demand generation with high efficiency 16

18 Suboptimal, not intuitive end-user experience Complexity of external and internal data sources High number of independent data sources incl. external sources Historical non-digital ready and optimized master data management CIO Third party systems used at high cost GLOBAL CHALLENGES ACROSS THE VALUE CHAIN: Manual and highly complex processes Lacking support of new business models Low integration between Marketing and Sales Lacking analytical capabilities and data quality issues New structures, skillsets, working models required 17

19 Marketing s Transformation Approach Based on the pain points we identified, we defined a clear transformation vision and roadmap, including both short-term quick wins as well as long-term game changers. TODAY TRANSITION TOMORROW Business High-touch event-driven focus Complex operations with highly manual processes and various solutions Streamlines processes on a single platform Centralized data model enabling B2C scenarios Live Marketing supported by multichannel digital-driven low-touch volume marketing Simplified Marketing and Sales pipeline processes delivering efficiency and governance Technology Complex setup with third party solutions High degree of custom development Reduced complexity / Streamlining of processes and enterprise architecture Marketing Automation enabled by one central and integrated platform Live Marketing fully cloud-enabled Reduced custom development 18

20 Marketing s Business Benefits Ultimately our goal is to enable our people to focus on and even scale their daily business activities while increasing their satisfaction. MARKETING'S VALUE CHAIN: Campaign Planning Campaign Execution Response Handling Scoring & Routing Nurture Lead Handover to Sales Campaign Planning 50% reduction of campaign preparation time Campaign Execution Global standards on client data Response Handling 360 view of all customer interactions Scoring & Routing Hours vs Days for leads to be routed and followed-up MARKETER Nurture 10 mins from inquiry to initial response activity Lead Handover to Sales Simplified Engagement for improved lead qualification Campaign Planning Transparency on brand value Campaign Execution Digital First methodology enabled by strategic segmentation CMO Response Handling Real-time, automated tracking of demand generation effectiveness Nurture Full-fledged nurture capabilities available and 92% less response processing time Scoring & Routing Additional scenarios (i.e. always on) Lead Handover to Sales 40% more leads and improved acceptance / pipeline contribution 19

21 Improved End User Experience with SAP Fiori External and internal data sources more integrated (e.g. social channels) 12+ databases retired or integrated SAP teams trained on automation concepts CIO Increased usage of SAP Solutions leads to Cost Reduction Innovative Technologies integrated and co-innovation activities GLOBAL BENEFITS ACROSS THE VALUE CHAIN: One central platform to support endto-end processes, providing a 360 view of all customer interactions in real-time Marketing automation increases efficiency at lower cost Successful preparation towards Cloud Readiness Close collaboration between Marketing & Sales with pipeline contribution increase New structures, skillsets, and working models established Enabling Technology MARKETING SALES HIGH- LEVEL PROCESS Marketing Campaign Planning Campaign Execution Response Handling Score Nurture Handover Marketing to Sales Opportunity Management Quote Management Order Management REPORTING MANAGEMENT DASHBOARD OPERATIONAL INTELLIGENCE As-Is SAP CRM / SAP Hybris Marketing/ non-sap Solutions SAP CRM /SAP C4C /Harmony non-sap Sol. SAP ERP / SAP CRM non-sap Sol. ECC 6.0/ SAP S/4HANA To-Be SAP Hybris MarketingCloud SAP Hybris Cloud for Customer Revenue Cloud SAP S/4HANA 20

22 Master Data Marketing Sales Finance Procurement Travel and External Expense Workforce HR Analytics Learn how Sales at SAP sells more in less time powered by SAP Hybris Marketing and Sales As Cloud revenue will exceed On-Premise business soon, we need to act now! Currently, our process and IT landscape is solely aligned to On-Premise products and sales. However, as On-Premise increasingly becomes a thing of the past and as we move towards digital solutions at high speed, we need to fundamentally modify our transactional processes and systems end-to-end. To keep pace with market trends and our newly arranged sales pipeline, we need to be quick and courageous as we set up lean processes with quick approvals and more specific customer information gathering. We all know, Cloud is our future! And Cloud can t run on old transactions. That s why we need to simplify both our internal transactional set-up and the way we sell Cloud. New business models, markets, and sales channels are driving SAP s shareholder value: Cloud subscription Total revenue Operating Profit bn +184% bn +31% 6.63 bn bn bn 8.50 bn New markets New sales channels Digital trends 21

23 Sales Transformation Approach How can we reimagine our future while accelerating business today? BUSINESS PROCESS REDESIGN stepwise along end-to-end sales process PUT PEOPLE & CUSTOMER EXPERIENCE AT THE CENTER INSIGHT & MASTER DATA STANDARDIZATION across countries and Lines of Business Key aspects of Sales digital transformation: Omni-channel digital experience Buying behavior changes. Upstream digital touchpoints (e.g. web site, demos, trials, stores) and high-touch physical touchpoints (e.g. sales rep) are equally important. New business models New consumption-based business models need to be operationalized for go-to-market (e.g. pay-per-use, pay-asyou-go). Acceleration of innovation adoption drives competition. A smarter bundling of products and services is emerging. Cost are immediate, margins are tight With increasing share of Cloud revenue, volume in lower deal size segments grows significantly. Recurring revenue in the Cloud is based on a different cost structure. Process costs have high impact on margin, hence automation is essential. Mindset change of Sales Regular recurring deals are preferred over fewer sporadic large transactions. A tight integration from Marketing to Sales and Finance is needed to drive simplification and standardization across all deal actions. Price = customer value Pricing model needs to scale directly with the customer value generated. More standardization is required to enable scale in the Cloud (no tailored contracts). Change in Sales incentivation and compensation Customer loyalty and renewals as well as new and upsell bookings are equally important and should be rewarded accordingly. Guided Selling Leverage Machine Learning Capabilities to guide Sales Reps through the deal execution with Product Recommendations Customer expectation Value assurance and adoption is a leading paradigm. Customer success needs to be ensured to keep loyalty and renewals. 22

24 Sales process challenges and desired improvements How do we become faster and more agile, while enabling new business models and scale across geographies and businesses? How can we make execution simpler for our sales teams? SALES VALUE CHAIN: Campaign Lead Opportunity Contract Order Invoice Accounting Campaign / Lead Quote Contract Order Renewal TODAY No insight in campaigns High manual efforts to run campaigns Lead routing and nurturing too complex No low-touch process for volume business Complex deal motions and quoting process No Amazon-like guided selling Long approval chains, limited auto approvals 50% redlining in Cloud contracts Manual contract creation Too many invoices for one contract No holistic view on customer due to multiple orders Exponentially increasing order and invoice volume No standard process for renewals >1BN No active risk mitigation Highly manual XLS-based process Campaign / Lead Quote Contract / Order Renewal TOMORROW Expanded marketing automation capabilities incl. nurturing, scoring, and routing Unified lead management bridging Marketing and Sales Digital-ready data model Grow Pipeline Shortened sales cycles by prefilled, persona driven user interface Product and service configuration, guided selling and simplified pricing Unified quoting process, tighter integration to order management 360 view of customer Reduced approval chains through deal health based approval process Consistent pricing and discounting Online composition of modularized legal content Consolidated orders and invoices through solution contract Automated order management Automated provisioning Renewal@risk process for higher customer retention Automated renewal report to take action High Customer Retention Sell more in less time Automated F&A processes generate faster cash 23

25 Benefits of a transformed Sales organization BUSINESS PROCESS REDESIGN 5 WEEKS Reduction in time to market +38% of Revenue coming from New Business Models (Cloud Mix in 2016) +68% Increase in Sales Quota-Carrier Productivity (2012 to 2016) PUT PEOPLE AND CUSTOMER EXPERIENCE AT THE CENTER +77% of the Deal Execution running on Mobile device >90% OF QUOTA CARRIERS using Harmony Insights in one month (Fastest adoption of a Sales System at SAP ever) 4X FASTER to execute common deal motion activities (e.g. create a quote) INSIGHT AND MASTER DATA STANDARDIZATION +28,000 users consuming analytics and insights on SAP HANA (2016) +1.6M VIEWS/HITS of Enterprise Analytics assets (reports & dashboards) 3X more site traffic and insights served per year 24

26 Outlook on Sales Transformation into the SAP Cloud Seamlessly integrated enterprise Sales platform, connecting Marketing, Sales, and the Backoffice. End-to-End process integration and automation from Campaign to Cash, enabling low-/ no-touch sales motions including digital commerce. SAP Fiori to ensure E2E user experience S/4HANA as Digital Core SAP Hybris Commerce for SAP s Digital Store S/4HANA SAP Hybris Marketing Cloud SAP Hybris Sales Cloud SAP Hybris Revenue Cloud SAP Hybris Billing SAP Cloud Platform CAMPAIGN LEAD OPPORTUNITY QUOTE CONTRACT ORDER INVOICE ACCOUNTING 25

27 Master Data Marketing Sales Finance Procurement Travel and Expense External Workforce HR Analytics Learn how Finance at SAP drives business performance in the digital world powered by S/4HANA To be honest, life was simpler 15 years ago at SAP. We had a very simple, uniform business model. We sold the SAP Business Suite with licenses, associated maintenance, and services. We had a consistent go-to-market strategy, pricing structure, and marketing approach globally, which allowed us to de-centralize our organizational structure. But times have changed. New business models enable companies to explore new markets and grow their business. Distributed Ledgers enable the decentralized, secure, direct, digital transfer of values and assets. Mobile, Internet of Things and Hyperconnectivity enable immediate access to every thing. Big Data and Machine Learning powered by In-Memory technologies change how data is being analyzed with predictive analytics. 26

28 Challenges of SAP s Finance Organization SAP s challenges are twofold organizational and technological. One cannot be transformed without the other. BUSINESS CHALLENGES: Speed of change Finance organizations must cope with the most volatile economic and regulatory environment in decades. Dynamic markets offer new opportunities which need to be pursed quickly before they are gone. Financial Operations Keeping the lights on with regards to Compliance, Efficiency, Business Performance leads to higher lead qualification and optimized handover to sales. Finance s existing, disconnected, and often manual processes are no longer acceptable. Cost Pressure Handling tight budgets while being able to support the business, the finance organizations want to move to continuously automated lights out processes, event driven and networked with compliance embedded into the processes. Acquisitions & Mergers Finance is being asked to drive strategy in a whole new way. After an acquisition, the new entity needs to be integrated into the finance processes quickly to realize its full potential. Inflexible Finance & Increasing complex processes Executives and decision makers need to understand the impact of their decisions before they make them with live analysis, predictions, and simulations. TECHNOLOGY CHALLENGES: Digital Transformation Bringing in new technologies like Machine Learning, Distributed Ledger Technology, etc 20+ year old rigid core ERP system System with many modifications and custom reports and enhancements High manual reporting efforts 27

29 Finance s Transformation Approach As part of the Top 10 Focus Project S/4HANA: Renew our Financial Core Project, the Finance initiative will support by designing a new Lead-to-Cash process and system architecture, providing a real-time environment along the steering dimensions and core processes, and transforming all core processes to one standardized and unified data architecture for customer, material, and organization. SUPPORT NEW HIGH-VOLUME BUSINESS Enable transaction-based billing and automated collections. Flexibly support new and changing future business models. COMPLIANCE Ensure volume-readiness and increased automation and standardization of Revenue Accounting processes in the light of new Accounting Standards INTEGRATE ACQUISITIONS Allowing one single source of truth by combining legacy ERPs with S/4HANA via Central Finance NEW STEERING MODEL Harmonized steering model to gain transparency and efficiency across Line of Businesses and product lines to manage growth and profitability SIMPLIFY Setup of a new Chart of Accounts with less accounts, massively reduced number of cost and profit centers. No modifications to the standard system. TODAY TRANSITION TOMORROW Business High touch event-driven focus Complex operations with highly manual processes and various process variants Bad data Quality and manual reporting Business process redesign New master data concept with less G/L accounts, cost centers, profit centers New steering model definition Move all legal entities to the new S/4HANA system Enable low touch business models with extremely high F&A automation level Technology Complex setup High degree of custom development Non-SAP systems used by acquired companies Setup of a greenfield S/4HANA system Integrate with Central Finance to the legacy ERP system Shutdown of legacy ERP instance 28

30 Business Benefits With our recent technology shift we are now adopting a standardized and automated S/4HANA Core system. With Business Process Redesign we questioned all our existing processes. While always having our focus on our end users and our customers, and the business challenges they are facing, we defined our system landscape accordingly. Real-time business steering with the Digital Boardroom based on S/4HANA. More accurate prediction of business development Agile adaption of order to cash process to support new business models End-to-end process coverage with integrated business systems reduce process costs and increase visibility of process performance. Proactive process & data monitoring to ensure highest compliance standards CFO Adoption of new IFRS 15 accounting standards with less booking effort and less manual checks Automated accrual and fixed asset accounting process reduces manual effort within month/ quarter end closing Standardized month/ quarter end closing processes, automated tasks and increased quality with the Financial Closing Cockpit Significantly simplified closing process with Central Finance consolidating various ERP solutions CORPORATE FINANCIAL REPORTING Data consistency across Finance and HR by integrating S/4HANA and SucccesFactors. Simplified and automated bonus and vacation accrual management Low Touch Order-to-Cash process including: Real-time view on order processing volume and critical deals automated order management, proactive deal health monitoring, automated contract handling and standardized billing for all deal motions COMMERCIAL DEAL SUPPORT 29

31 Machine Learning capabilities automate accounts receivables process matching open invoices to received customer payments Universal Journal helps to reduce 70% of reconciliation efforts between FI and CO Faster processing time of ticket handling as enterprise search enables smart resolution finding SHARED SERVICE CENTER Planning, Reporting, Simulations, and Predictive Analytics in ONE system with real-time data, great visualization, and usability Value driver based financial steering concept FINANCIAL PLANNING AND ANALYSIS/ CONTROLLING Direct access to the Universal Journal with real time information allow simple and reliable reporting Less manual reporting effort allows more time for business partnering based on profound business analysis The Universal Journal supports the definition of attributes needed for our new steering dimensions, as well as the reduction of Profit Centers from 130k to <5k. Improve operating cash flow due to real-time cash & liquidity management State-of-the-art liquidity planning and forecasting, automated compliance, and a single version of truth TREASURY Real-time overview and responses to cash requirements, detailed guidance and planning for cash operations, and dynamic liquidity forecasting Drill down into global bank balances, cash positions, and individual transactions to gain more detailed insights Simplify and automate cash account analysis and liquidity management to reduce banking fees and borrowing costs 30

32 GLOBAL BENEFITS ACROSS ALL ROLES: 50% 95% 70% +10PP more time available for high quality deal support reduction of profit centers in new steering model reduction of reconciliation efforts improvement in forecast accuracy 50% 5 DAYS 50% 97% efficiency gain with Fiori reduction of quarter-end close process including group consolidation more work time available for performance management and business partnering electronic bank statements automatically posted Enabling Technology SAP S/4HANA as key enabler for SAP to become a Digital Enterprise: Process Redesign Process Redesign Starting Point Transition Tomorrow Legacy ERP with massive complexity The Journey to the New Digital Core The Digital SAP is Cloud Enabled Ariba Fieldglass SuccessFactors Concur SAP CloudPlatform Ariba Fieldglass SuccessFactors Concur SAP CloudPlatform Ariba Fieldglass SuccessFactors Concur SAP CloudPlatform Customer Experience Industry Workforce Engagement Customer Experience Industry Workforce Engagement SAP Legacy ERP Machine Learning API s Machine Learning API s SAP Blockchain Security Blockchain Security Aquisitions Non-SAP ERP SAP IoT & Supply Chain SAP HANA Legacy ERP Spend Management SAP Cloud Platform IoT & Supply Chain SAP HANA Spend Management SAP Cloud Platform 31

33 Master Data Marketing Sales Finance Procurement Travel and Expense External Workforce HR Analytics Learn how Procurement at SAP simplifies processes powered by SAP Ariba Solutions In a fast growing cloud economy, we need to secure profitability by transforming our tactical procurement function towards a holistic strategic function. This transformation comes in four dimensions: User-friendly Cloud Solutions Big Data Advanced Analytics Connected Business Networks Learning Systems Artificial Intelligence Ariba needs to be fully integrated into the global procurement organization: 32

34 Challenges of SAP s Procurement Organization PROCUREMENT'S VALUE CHAIN: Source and Negotiate Contract and Procure Invoice and Pay Monitor and Manage Contract and Procure Too many steps, clicks, windows, and interfaces High training need Missing mobile solution Invoice and Pay Complex process Multiple entry points, systems, and tools EMPLOYEE Monitor and Manage Lack of transparency across entire process Where is the stuff I have ordered? Source and Negotiate Complex discovery, prequalification and onboarding Limited competition among suppliers Contract and Procure Unstructured collaboration with suppliers Multiple systems, multiple contracts with suppliers PURCHASER Invoice and Pay Manual invoicing steps High operative workload Monitor and Manage Limited visibility on purchasing spend & budget adherence Missing entry point to gather transparency about spend Source and Negotiate High risk due to lacking supplier information Contract and Procure Compliance risks Invoice and Pay High system and integration costs Monitor and Manage Additional effort to calculate KPI s CIO 33

35 GLOBAL CHALLENGES ACROSS ALL ROLES: Lacking cloud capabilities Inefficient source-to-pay process Highly complex manual processes Lacking collaboration with suppliers Lacking monitoring capabilities Low customer satisfaction Transformation Approach How can we help deliver double-digit cost reduction while at the same time improving our reputation as a function that delivers value beyond cost cutting? Take end-to-end process responsibility for all parties involved in the entire source-to-pay process Leverage purchasing power and drive sustainable savings across all geographies Deliver best-in-class procurement processes and highest possible service levels to internal customers Be a value enabler to our Businesses and a fair partner to our suppliers 34

36 Benefits of SAP s Procurement Organization PROCUREMENT'S VALUE CHAIN: Source and Negotiate Contract and Procure Invoice and Pay Monitor and Manage Contract and Procure Amazon-like buying experience with Guided Buying One-Stop-Shop incl. Spot Buy Zero-training required Invoice and Pay One single point of entry EMPLOYEE Monitor and Manage Mobile end-to-end visibility into the whole purchasing lifecycle Quickly get the goods & services they need Source and Negotiate Quick and easy supplier discovery, pre-qualification and onboarding Efficiency and cost savings with online bidding Contract and Procure Advanced collaboration capabilities with suppliers Consolidation of contracts drives cost savings Incorporating contracts into purchasing and invoicing drives compliance PURCHASER Invoice and Pay 60% increase in invoice automation Reduced operative workload Monitor and Manage Dashboards and reports provide complete visibility into spend and risks Accurate real-time budget visibility through deep integration with S/4HANA 35

37 Lower risk with up-to-date supplier information Lower TCO Fully integrated Cloud solution into S/4HANA Improve control and compliance with integrated contract manager Out-tasked infrastructure for supplier collaboration to one EDI CIO Integrated supplier lifecycle and performance management GLOBAL BENEFITS ACROSS ALL ROLES: 6-DIGIT savings through cloud-based delivery 96% invoice quality 50% manual invoices eliminated 6,300+ suppliers enabled Largest Business Network with 2.5+M partners Enabling Technology S/4HANA centric application landscape seamlessly intergrated enterprise end-to-end purchasing processes: 36

38 Master Data Marketing Sales Finance Procurement Travel and Expense External Workforce HR Analytics Learn how SAP simplifies Travel and Expense Management powered by SAP Concur Frequent business travel is exhausting. What makes it even worse is the fact that once you return home, the journey doesn't end there. At SAP we noticed that our people were having a hard time claiming their travel expenses so we started brainstorming ways to make life easier for them. One important step was moving the entire booking to reimbursement process to the cloud. Advantage of cloud based travel and expense management: End-user Direct and mobile access to T&E management with immediate processing and minimum effort GPO Standardized and compliant E2E processing of travel and expense requests with low-touch monitoring and reporting Technology Applications are seamlessly integrated into the Digital Core and can be hosted efficiently Concur Travel and Expense Management needs to be fully integrated into the global procurement organization: 37

39 Challenges of SAP s Travel & Expense Management TRAVEL & EXPENSE MANAGEMENT S VALUE CHAIN: Execute Pre Trip Activities Execute On Trip Activities Claim Expenses Audit and Monitor Reimburse Expenses Execute Pre Trip Activities Multiple places & systems to search for information Execute On Trip Activities Manual handling of itinerary changes Lack of information Missing mobile solution EMPLOYEE Claim Expenses Not intuitive UI, too many steps No mobile expense claims on the go Audit and Monitor Missing transparency Reimburse Expenses Information not clear Long cycle time for the overall process Execute Pre Trip Activities Missing standardization causes additional effort to support multiple travel scenarios Execute On Trip Activities Missing standardization Limited reporting on preferred travel behavior SHARED SERVICE CENTER Claim Expenses Missing standardization High operative workload Reimburse Expenses Missing transparency Audit and Monitor Multiple systems to operate Complex process Compliance Issues 38

40 Execute Pre Trip Activities Limited reporting on booking behavior and expense correlation Claim Expenses Missing transparency across complete process Compliance risks Audit and Monitor Insufficient transparency on T&E costs Reimburse Expenses Highly manual error-prone efforts CFO GLOBAL CHALLENGES ACROSS THE VALUE CHAIN: No end-to-end travel experience Missing efficiency Complex custom build processes Complex booking experience Missing mobile capabilities Non-intuitive interfaces Transformation Approach The journey to digital transformation starts by empowering every employee to make good business decisions. One important piece in this puzzle is providing full transparency on expenses, and to be able to manage it proactively with the click of a button. Integrated booking tool Handle the entire end-to-end T&E process from pre trip bookings to reimbursement with one tool Mobility included Claim expenses on the go with one intuitive, easy to use mobile interface Cloud solution Applications are seamlessly integrated into the Digital Core, assuring compliance 39

41 Benefits of SAP s Travel & Expense Management TRAVEL & EXPENSE MANAGEMENT S VALUE CHAIN: Execute Pre Trip Activities Execute On Trip Activities Claim Expenses Audit and Monitor Reimburse Expenses Execute Pre Trip Activities E-receipts & card integration reduce manual efforts Full integration of booking tools Execute On Trip Activities Electronic receipt capture via mobile Itinerary changes reflected immediately EMPLOYEE Claim Expenses Mobile & web-based UIs User-friendly and intuitive Expense data flows automatically into Concur Audit and Monitor Transparency across complete process Reimburse Expenses Transparency on process Quick reimbursement due to streamlined processes Execute Pre Trip Activities Standardized processes to simplify support to traveler Execute On Trip Activities Standardized processes Enhanced reporting on travel behavior SHARED SERVICE CENTER Claim Expenses Reduced efforts due to systemenforced policy compliance Single system to operate Reimburse Expenses Transparency across complete process Audit and Monitor Single system to operate Built-in compliance Better scale through sampling checks 40

42 Execute Pre Trip Activities Enhanced reporting on booking behavior and expense correlation Claim Expenses Transparency on the overall process to ensure consistency and compliance CFO Audit and Monitor Analyze company wide travel behavior Reporting on cost optimization measures Highest security standards (ISO, SOC/SSAE16, PCI) Reimburse Expenses Reduced error handling complete process GLOBAL BENEFITS ACROSS THE VALUE CHAIN: End-to-end travel experience Increased efficiency in T&E management Globalized best practice processes Simplified travel booking experience via mobile Create / capture expenses on mobile devices 85% user satisfaction Enabling Technology S/4HANA-centric application landscape seamlessly intergrates enterprise end-to-end purchasing processes: 41

43 Master Data Marketing Sales Finance Procurement Travel and External HR Analytics Expense Workforce Learn how SAP simplifies External Workforce Management powered by SAP Fieldglass External Workforce management is undergoing a significant transformation: Growing government regulations for external workforce management Increasing demand to manage external workers end-to-end Increasing demand for self-service capabilities Growing significance of mobile devices for business applications Usability & simplicity have become critical success factors Managing the External Workforce requires a cloud-based, easy-to-use, mobile solution that offers full end-to-end transparency. In order to achieve that, SAP Fieldglass needs to be fully integrated into the global procurement organization: 42

44 Challenges of SAP s External Workforce Management EXTERNAL WORKFORCE MANAGEMENT S VALUE CHAIN: Search Order Pay Report Search Various tools Not intuitive. bad user interface Order Cumbersome third party hiring processes Pay Little transparency on compliance and the rules of engagement Report Different Reports for several requests EMPLOYEE Search Difficult E2E supplier collaboration Order Long processing time till actual hiring Pay High number of incorrect invoices Report Missing transparency across the complete process PURCHASER Search Insufficient transparency on company s third party hiring Order Missing standardization Pay Compliance risks Highly manual error-prone efforts Report Insufficient transparency across entire third party costs CFO 43

45 GLOBAL CHALLENGES ACROSS THE VALUE CHAIN: Lacking cloud capabilities High time to hire Missing standardization No mobile solution Lacking monitoring capabilities Low employee and supplier satisfaction Transformation Approach We need to invest in technologies that provide visibility into the total workforce in order to drive more strategic hiring decisions, through a seamless experience on all devices. HIGH LEVEL PROCESS: Search Order Pay Report Search for the right candidate with the right skills and the right availability Order the candidate and get the financial approvals for the order Approve worker timesheets and pay the supplier Integrated Analytics and Reporting in real-time OBJECTIVES: Improve user experience with an intuitive and user friendly end-to-end solution Manage corporate External Workforce in an efficient way Manage and approve items using mobile devices Real-time integration of the Digital Core and S4/HANA 44

46 Benefits of SAP s External Workforce Management EXTERNAL WORKFORCE MANAGEMENT S VALUE CHAIN: Search Order Pay Report Search Find the right people for the right jobs, based on scorecards and evaluations Order Reduce cycle time due to automation & mobile approvals Pay Full transparency on compliance & rules of engagement Report Full transparency on end-to-end process EMPLOYEE Search Measure vendor responsiveness Intuitive vendor qualification and rate comparisons Order SLA adherence Compliance to corporate policies Pay Cost savings due to rate adherence and consolidation of contracts Report Identify internal bottlenecks Real-time understanding of engagement status PURCHASER Search Improve collaboration with Suppliers Shut-down of decentralized applications Order Mitigate co-employment risks Analyze and enforce program budgets CFO Pay Compliance with corporate policies Get rid of paper-based invoices, increase efficiency Report Insight into budgeted, actual, and forecasted spend 45

47 GLOBAL BENEFITS ACROSS THE VALUE CHAIN: Cloud-based delivery, fast ROI / low TCO Reduce time to hire by 20% Highly automated operational processes End-to-end Mobile solution Transparency throughout the process Increased employee and supplier satisfaction Enabling Technology S/4HANA-centric application landscape seamlessly integrates enterprise end-to-end workforce processes: 46

48 Master Data Marketing Sales Finance Procurement Travel and Expense External Workforce HR Analytics Learn how HR at SAP Drives employee engagement to the next level powered by SAP SuccessFactors Change is the new normal. All organizations are experiencing it, and many CHROs are seeing a dramatic shift in HR from delivering transactional excellence to becoming architects of transformation. The new world of work operates differently and how work gets done in HR is changing: HR must deliver "experiences to prospective new hires and employees that match the best customer experiences. HR is expected to drive measurable change, reporting on impact not just activity. HR must be fluent in data analytics and predict outcomes tied to the business strategy. Solutions are expected to be integrated with finance and other business processes. Simplification is the key to success as we navigate an ever-increasing world of complexity and change. In order to live up to these expectations, SAP HR needs to: Provide access to HR processes anywhere, anytime, on any device HR services to be offered to employees and managers in a very simple and easy to consume way Make use of Digital Technology Continuous HR process and system innovations to drive people engagement & HR process effectiveness Be compliant with legal and data protection requirements across the globe HR has to ensure legal compliance in fast growing international businesses 47

49 HR s Challenges HR S VALUE CHAIN: Attract & Select Workforce Administrate Workforce Reward & Recognize Workforce Develop & Retain Workforce Exit Workforce Attract & Select Workforce No social enterprise to discover and connect Administrate Workforce No innovative HR Self Services Multiple complex user interfaces EMPLOYEE Reward & Recognize Workforce Rigid feedback processes Exit Workforce Limited ability to stay in touch with SAP Develop & Retain Workforce Lack of personalized training activities No flexible collaborative environment Attract & Select Workforce No holistic solution to manage internal and external workforce Reward & Recognize Workforce Lack of analytics to address needs of gloabl, diverse workforce Administrate Workforce Complex local processes / tools Divergent expectations of millenials vs the old guard Develop & Retain Workforce No holistic HR service offering from recruit to retire MANAGER Exit Workforce No ability for early warning signals 48

50 Attract & Select Workforce Demanding talent market Lack of tools to support recruiting of Talents via all sourcing options Administrate Workforce Need to service a large number of leaders across multiple locations HR Reward & Recognize Workforce Handling of sensitive data for employees Exit Workforce No ability to predict fluctuation No efficient way to push job postings to alumni Develop & Retain Workforce Lack of tools to manage Talent Development Leadership Readiness for the digital age GLOBAL CHALLENGES ACROSS THE VALUE CHAIN: Fragmented system landscape Lack of alignment between Finance and Sales HR Workforce Management Plan not linked to overall SAP financial plan Lacking data security and authorizations Limited analytical insights on HR data 49

51 Transformation Approach What will the digital transformation of HR look like? At SAP we foresee deeper, broader collaboration between HR and other business areas to improve talent management for example, by identifying pockets of excellence and planning for succession. HR needs to link and strategically leverage the entire workforce both employees and contractors to power specific business results. Business Process Redesign Across all Lines of Business. Based on Cloud Make use of SAP SuccessFactors and integration to other Core Applications via Cloud Platform Master Data Standardization Put People Experience at the Center Analytics HR needs to boldly embrace fully integrated, enterprise-level HR solutions that harness digital technologies which unify data, simplify and accelerate HR analytics and core processes, and provide real-time visibility into operations, the workforce, and costs. 50

52 HR s Business Benefits HR S VALUE CHAIN: Attract & Select Workforce Administrate Workforce Reward & Recognize Workforce Develop & Retain Workforce Exit Workforce Attract & Select Workforce 92% of candidates like the job search and application experience Administrate Workforce Simple and easy to use SAP Fiori interface Reward & Recognize Workforce 89% prefer a continuous dialogue with their managers over annual reviews Develop & Retain Workforce 100% of learnings delivered in 2016 can be consumed on mobile EMPLOYEE Exit Workforce Alumnis from more than 80 countries joined our Alumni network Attract & Select Workforce 15-20% less effort for standard tasks Administrate Workforce 50% lower costs for accrual and payroll administration with no administrative effort Reward & Recognize Workforce Reduced reporting efforts by 3 days per month Develop & Retain Workforce 1.3 million learnings were delivered in 2016 MANAGER 51

53 Attract & Select Workforce 25,000 External Workers securely managed Administrate Workforce 100% Compliance for all HR and Finance accrual processes Reward & Recognize Workforce Shortened compensation planning cycle from 9 to 3 weeks Develop & Retain Workforce Real-time steering based on one source of truth for all HR and Finance master data HR Exit Workforce 93.7% employee retention GLOBAL BENEFITS ACROSS THE VALUE CHAIN: 78% business health culture index 85% employee engagement index 93.7% employee retention 57% leadership trust reached 33% reduction in administrative tasks SAP HR CUSTOMER SATISFACTION SCORE OVER TIME: 7,8 7,5 7,0 6,9 6,3 6,5 6,

54 Enabling Technology Transformation of SAP s on-premise HR Landscape to a cloud-based solution portfolio: HR Cloud Portfolio at SAP HR: Attract & Select Workforce Administrate Workforce Reward & Recognize Workforce Develop & Retain Workforce Exit Workforce Recruiting Organizational Payroll Processing Performance & Predictive Analytics Onboarding Management Compensation Goals Contingent People and Benefits Succession & Workforce Mgmt Transactions Development (SAP Fieldglass) Absence Learning Management HR Shared Services Resumee/ Job Matcher Learning (in Beta Test) Recommendations (in Beta Test) SAP Cloud Platform Social Partner Social Partner Semos JpbPts Semos Survey Enterprise Jungle Approvals Approvals SAP Stock Rocks Alumni Purchasing Fit@SAP 53

55 Master Data Marketing Sales Finance Procurement Travel and Expense External Workforce HR Analytics Learn how SAP streamlines enterprise analytics to achieve steering excellence in the digital age The digital age is changing the game when it comes to steering a company. Speed in decision making matters now more than ever. How can we survive in such disruptive times? The ability to constantly readjust your path forward is essential. Every company has a strategy that is reflected in a business plan, broken down into defined objectives. We set goals and KPIs to measure their fulfillment. Meanwhile, business processes like Marketing, Sales, and Finance produce tons of data that is being captured in IT systems, ready to be aggregated and analyzed. So nowadays the big problem in many companies is how to bring together data and strategy in a seamless way without the need for twenty-five Excel docs and fourty-two systems to bring it all together. Not to mention waiting two weeks to have a report ready for management, so they can then make a decision based on data that's already outdated. That s a reality many companies are facing today. What they need is to be able to seamlessly check their KPIs against the respective data (from both internal and external data sources) in order to evaluate progress compared to the company's overall strategy. And at the same time they need to be able to predict a forecast, adjust course, and refocus all in real time. What is Needed vs. Usual Reality Company Strategy Mid Long Term Biz Plan Short Term Biz Plan Objectives Goals KPI Company Strategy Mid Long Term Biz Plan Short Term Biz Plan Objectives Goals KPI Continuous check of plan vs actual Semantic Forecast and predict Semantic Semantic Measures Aggregation Operational Rep. Operational Biz Rules IT Systems Data, Processes Measures Aggregation Operational Rep. Operational Biz Rules IT Systems Data, Processes 54

56 Transformation Approach At SAP we are currently facing the challenges of tranforming our business into a cloud company. This means facing holistic, cross-functional questions which cannot be answered with separated systems, separated information, and separated KPIs from different lines of business. We identified several issues we needed to address from both the process and technology side: PROCESS Standardize KPI definition and dimensions Ensure data consistency Avoid redundant und duplicative work by reusing analytical assets and views. Cascade the steering logic into to company from the top to the bottom TECHNOLOGY Single Source of Truth Governed, federated system approach = one analytical platform S/4HANA at the core In memory technology allows for on-the-fly reporting Analytics Cloud as the analytics platform running on our cloud platform Across the company dimensions have to be harmonized. Otherwise we cannot ensure that people both at the top and across the company talk about the same thing when they look at the different KPIs in the organization or across the different dimensions. 55

57 SAP had long employed a variety of small analytics groups within the company. One, called Insight-Driven Marketing, focused on marketing analytics. Other groups existed within Finance, Human Resources, and Sales. There was relatively little contact and collaboration among these groups. However, this approach often resulted in difficulties consolidating reports and results across functions and units. By fall 2014, SAP executives agreed that a more enterprise focus and a unified analytics organization were necessary. Not only could these consolidation problems be addressed, but the company could also employ more innovative and predictive analytics capabilities with a combined organization, and respond to the challenges and opportunities of big data. So the SAP Enterprise Analytics organization was created. Bringing these de-centralized analytical groups together to work as one, while also informing a singular technical platform as their single source of truth will be bearing fruit shortly. Enterprise Analytics recently launched a cross-business program called The Digital Boardroom, which integrates real-time, cross-business metrics for a full business view that SAP will use internally as well as bring to market through their co-innovation approach. 56

58 The Digital Boardroom The Digital Boardroom is our answer to managing digital transformation. It creates full transparency across the company in real-time. It helps to create business impact fueled with Analytics from the boardroom to every end user. The Digital Boardroom is the top notch superior SAP analytics solution, bringing together all the different information in aggregate fashion across the company be it HR, sales, finance, or our portfolio external data. Executives get a very accurate overview on how all of our market units are performing, but at the same time can go down into every level of detail. In the previous offline formats (e.g. Powerpoint documents) it would be an extremely cumbersome and complex document consisting of hundreds of slides. We can now produce a rich set of capabilities, and have online real-time reporting, resulting in a system that executives can really interact with. At the click of a button, board members can see the entire pipeline broken down into the different regions, including correpsonding growth assumptions and other forecasts. With this powerful tool, we at SAP define how we want to steer the company. And then we can cascade that down into our business units. Board and Senior Management Digital Boardroom based on SAP Analytics Cloud Dashboarding cascaded from the Boardroom Middle Management Operational Reporting Operational Level 57