SAP S/4HANA and the Digital Transformation. Sven Denecken GVP Co-Innovation and Strategy SAP S/4HANA, SAP SE April 2015

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1 SAP S/4HANA and the Digital Transformation Sven Denecken GVP Co-Innovation and Strategy SAP S/4HANA, SAP SE April 2015

2 The Innovation Adoption Model for Digital Transformation Transformational Level Business Impact Business Processes Business Model Business Outcome NEW BUSINESS MODELS Business Innovation New customers New markets NEW NEW Improved PRODUCTS Optimize products Offer new products/services NEW OLD Improved PROCESSES Improve single processes Replace single processes Change end to end processes NEW OLD Improved DECISIONS Transparency Decision support Decision automation OLD OLD Technical SOLUTION Velocity 3

3 Value Drivers with SAP S/4HANA Digital Transformation for Systems of Me

4 SAP S/4HANA fueling the Digital Transformation The Building Blocks of Digital Transformation Cloud Data Collaborative Business Real-Time Business Digital Connections In-Memory Simplicity Time to Value Speed to Innovation Predictive Insights New Product Strategies Customer Engagement Mobile Business Transactions Advanced Analytics Big Data Mobile Networks Social Volume Explosion in the amount of data + Variety + Multiple data formats; Non-structured data boom Cloud Velocity Fast collection, processing and consumption Adaptability for the 21 st Century Workforce Everything doable from Anywhere Hyperconnectivity Digital communities Social Collaboration Collaborating beyond Enterprise Boundaries 5

5 Where does complexity hide in enterprises? Scattered information Batch orientation Technology limitation Complex decision making Large global organizations have created so much complexity that businesses often struggle to bring good ideas to the marketplace profitably. (McKinsey, 2014) Complex business processes Large organizations can spend between 40% and 80% of their time on non-value-added activities (BCG, Complexity Report) Complex technology 73% percent of executives said the complexity of data is the largest IT challenge (Forrester, 2013 report) 70% 50% 40% 90% say complexity is increasing costs are unsure who is accountable Economist 2010 worry whether their organization can keep pace McKinsey Study 2013 say business is growing more complex Economist

6 SAP S/4HANA Key Enablers to run digital transformation for key enterprises Sap hana as the underlying platform Olap & oltp merge In-memory compression Increase in speed SAP HANA Natively Cloud REAL-TIME & SIMPLIFIED Simplification of applications and underlying data model No aggregates & no indices Higher flexibility & throughput Data footprint reduction 10x smaller data footprint 7x higher throughput SAP FIORI 1800x faster analytics & reporting Sap fiori as the user experience (UX) paradigm; Cross-application user experience Web-based, all devices Role-based Decisive 4x less process steps 7

7 Business Value S/4 HANA - Designed for Business Viability Sample Use Case: Real-Time optimization of manufacturing processes Do new things Foundation Do things better Do things differently HANA Data Models User Experience & Decisions Business Processes Business Models Complexity reduction TCO reduction Service quality increase Margin protection Service quality increase Higher asset utilization Inventory cost reduction Revenue growth Business Agility Stock price appreciation Market share growth Customer success/loyalty 8

8 SAP S/4HANA From System of Records to System of Me Focus on Collaboration ME SAP S/4HANA Simple Logistics MRP Analysis Ariba SAP S/4HANA Simple Finance Cash Mgmt SuccessFactor s Fieldglass SAP S/4HANA LoB Scenarios hybris Marketing SAP S/4HANA Industry Scenarios Prof. services SAP Jam Workpatterns Guided Configuration Focus on business tasks Collaborate and Communicate Connecting people in real time Structured and unstructured content Support each individual in his given task and role SAP S/4HANA solution family Sales order Purchase order Material master Production plan Invoice. Accounts Payable Accounts Receivable General Ledger Material Ledger Employee Mini- Master Add-Ons and Co-Deployments build on the SAP HANA Cloud Platform Focus on Transaction Information highway Single source of truth Processing of structured data Used within company boundaries 9

9 Exemplar Value Scenarios Digital Transformation for Systems of Me

10 Value Scenarios of SAP Simple Finance Real-time analytics enabling real-time processes Analyze Plan Transact Centralize Finance Real-time financial and operational reporting Harmonized internal and external reporting Group reporting in multi-erp and M&A situations Flexible reporting in matrix organizations Centralized process execution Close Books in a Day Task acceleration and automation Plan Dynamically Integrated business planning $ Optimize Working Capital Group cash management Working capital analytics Ensure Compliance Fraud detection and prevention Intra-period reconciliation Predictive forecasting Continuous cash collections Audit management Soft close and simulation (planned) Budget management (planned) Invoice and discount optimization 11

11 Accounting and Financial Close Planned Innovation for Simple Finance Add-On > 20 3 < 1 Laggards Best-in-class Target Universal Journal Ultimate single source of truth for instant insight and easy customer extensions ONE line item table with full detail for all applications This replaces the logical document of release 1.0. Secondary cost elements are now G/L accounts. Data stored only once: no reconciliation needed by design Reduction of memory footprint through elimination of redundancy. Accelerated Financial Close Improved soft close and hard close Real-time profitability by earlier derivation of market segment Correct asset acquisition values at any time - now also for valuation areas with special items Elimination of multiple reconciliation tasks due to the universal journal Significant speed-up of asset depreciation run Central Finance Real-time replication of secondary CO postings from several source systems into a central system Document drill back to the original FI document in the source system Replication of cost objects (production orders, product cost collectors, and internal orders) Mapping functionality for harmonization of master data (optionally via MDG solution) Centralized error handling with the error correction and suspense tool 12

12 Value Scenarios of SAP Simple Logistics Removing locking issues cut post-processing Analyze Plan Transact Comprehensive Analytics Accelerate business decisions with focus on event based reaction (like Material Shortage) and with integrated decision and simulation support. MRP runs several times per day Analysis and identifies disruptions in the material flow. Plan Dynamically Better visibility into inventory and product data. Optimize Backorder Processing Backorder processing with intuitive requirement classification, simple selection criteria and automatic exception handling. Comprehensive ATP Fast and precise ATP confirmation towards customers increase service level. 13

13 Simplifying all Line of Businesses with SAP S/4HANA LoBs touched by the solution Supply Chain Sales Sourcing & Procurement Sustainability Manufacturing R&D and Engineering Asset Management Service 14

14 Intuitive User Experience And A Responsive Design Today Functional-based applications from: One transaction for multiple roles with too much and complex functionality Target Role-based applications to: Decomposed apps for each role with simple functions from: Multiple entry points for the user and inconsistent user experience to: One entry point for the User and UX following common design directions This is the current state of planning and may be changed by SAP at any time. 15

15 Key Capabilities of a Responsive Design with SAP FIORI Key capabilities of a SAP FIORI Designed Screen Example: SAP Simple Finance Consolidation of activities, Intelligent navigation patterns, Intuitive usability Contact data Credit data: UKM_BP Personalized post-it notes Trends & analytics at a glance Simulation Full customer contact history Decision Support Personalize layout variants Contextdependent actions Example: Simple Logistics - MRP Cockpit - Material Shortage 16

16 Example: Transforming Manufacturing 1-hour Inventory optimization Improved suppliers collaboration Consolidation financial security reporting on aging and rediscount processes, 93.75% faster (previously 2 days). 50% faster production planning operations 45% faster execution of business operations 102x faster general ledger Real-Time Data Analysis on the SAP HANA Platform Based on analytics with SAP HANA Live Material Resource Planning on HANA Material Resource Planning on HANA Ensures citizen security 3million skills, assets and qualifications managed in real time Enhanced existing business processes 5x faster database response times Improved service quality 30x faster response times for reports and patient scheduling Unifyed software landscape on SAP HANA SAP CEI powered by SAP HANA Unifyed software landscape on SAP HANA 17

17 Summary Customers can start today their SAP S/4HANA journey. SAP HANA is a proven technology in the market.

18 The Innovation Adoption Model From Push Static Aggregation FI Postings Customers Products Profit Centers Suppliers 19

19 The Innovation Adoption Model to Pull On-the-fly Aggregation Lowest Level of Granularity FI Postings Customers Products Profit Centers Suppliers 20

20 The Innovation Adoption Model Business Processes Transactional Data External Data Business Networks Structured and Unstructured 21

21 Why for SAP S/4HANA? To achieve the Perfect Enterprise Instant insight-to-action based on real-time information No latency Re-architecting for in-memory platform Unrestricted granularity Built-in harmonization Continuous processing Real-time and predictive Processes Simplification of entire solution Real-time analytics Predictive forecasting Embedded simulation Preserving valuable functionality Build new solutions Discontinue not needed scope 22

22 Thank you Sven Denecken GVP Co-Innovation and Strategy SAP S/4HANA, SAP SE LinkedIn SAP SE or an SAP affiliate company. All rights reserved.

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