Transform High Tech with SAP S/4HANA S/4HANA SAP SE or an SAP affiliate company. All rights reserved. Public

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1 Transform High Tech with SAP S/4HANA S/4HANA 1

2 AGENDA SAP S/4HANA: Overview for High Tech 3 Digital Supply Chain Deep Dive 6 Outcome-Based Business Deep Dive 9 Portfolio of Solutions for High Tech from SAP 10 SAP S/4HANA: Value Proposition for High Tech 12 Customers Are Achieving Value from SAP S/4HANA

3 SAP S/4HANA: OVERVIEW FOR HIGH TECH Transform Your Company s Digital Core with SAP S/4HANA to Adapt to Rapid Changes Radical change in the high-tech industry is occurring at a rapid pace. Changes in technologies, in business models, in standards, and in the makeup of high-tech companies themselves require constant adaptation. The following four examples show how SAP S/4HANA enables high-tech companies to transform their digital core to be ready for change. Change in technology: Internet of Things (IoT) SAP S/4HANA enables high-tech companies to take advantage of rapid technological advances in the IoT. Miniaturization of sensors, combined with increased network bandwidth, is creating a treasure trove of data that is most useful when analyzed and acted on in real time with integration into a digital core as supported by SAP S/4 HANA. Change in business model: outcome-based business SAP S/4HANA supports high-tech companies in taking the next step to being a value-adding company. Combining IoT capabilities with advanced billing functionality opens the door to new business models where outcomes are provided to customers instead of selling products. Change in standards and processes revenue recognition All companies (public and private) will be required to prepare their revenue contracts now to comply with the new IFRS15 revenue recognition regulations by SAP S/4HANA Finance provides, along with SAP Revenue Accounting and Reporting, one of the mostmodern revenue recognition solutions available. Change in company makeup: mergers and acquisitions (M&A) M&A activity is constantly changing the makeup of high-tech companies. SAP S/4HANA provides the ideal platform to unify business processes across the new makeup. It enables rapid adoption of changed companies, their changed business processes, their new business models, and newly acquired technology. SAP S/4HANA provides the digital platform for uninterrupted, real-time transactions and analytics; the ability to work with Big Data; and connectivity to line-of-business (LoB) extensions. This allows companies to support business processes, to transform existing supply chains into digital supply chains, or create new business models where an outcome is delivered instead of just products. SAP S/4HANA provides high-tech companies with a proven framework to adopt industry best practices while attaining operational excellence. Alliance Contract Manufacturing (ACM) 30% decrease in inventory levels With SAP S/4HANA, ACM is running better than ever. Moreefficient operations and better data access are giving us the edge we need to compete in the global marketplace. We are saving money in the process. Erik Looi, Senior Manager and Head of IT, Alliance Contract Manufacturing Sdn. Bhd. Varian Medical Systems The simplified data model and corresponding IT landscape are an exciting continuation of innovations, such as the universal journal, which helps eliminate reconciliation between financial accounting and controlling, that first attracted us to SAP S/4HANA. Arnab Mukherjee, Manager of Enterprise Applications, Varian Medical Systems - 3-3

4 SAP S/4HANA: OVERVIEW FOR HIGH TECH SAP S/4HANA sources of value The value from SAP S/4HANA comes through simplification of the user experience, architecture, and process. Simplified user experience: across all devices SAP S/4HANA empowers various user roles with a user-centric, consumer-grade experience, increasing their productivity by allowing them to manage by exception and focus. SAP is driving simplification and innovation in how business users work with a role-based, consistent user experience available on any device. Simplified architecture: no aggregates no redundancies The simplified data model of SAP S/4HANA provides an advanced digital data architecture that provides, in real time, a single source of the truth for both transactions and analytics. This enables extensive flexibility to adapt to changing business models, for example, simulating the impact of business reorganizations in minutes rather than days. Simplified processes: key industry capabilities of SAP S/4HANA Digital Supply Chain Production planning and scheduling Advanced available to promise (ATP) with allocation and back-order processing Material requirements planning Inventory management Extended warehouse management Outcome-Based Business Configure price and quote Sales order management and processing Billing and invoicing Revenue recognition Sales contract management - 4-4

5 SAP S/4HANA: OVERVIEW FOR HIGH TECH EXAMPLE: User experience simplification SAP S/4HANA enables an anywhere, any-device, mobile-first, role based user experience that simplifies and enhances employee engagement and productivity transforming the way work gets done. SAP S/4HANA for streamlining material requirements planning in supply chain management Traditional ERP Lengthy MRP runs overnight Plans are already outdated, when the MRP has finished Time-consuming resolution of supply exceptions with no decision support Production planner MRP controller MRP run Collective display of MRP list Inventory manager Stock/requirement situation Side-by-side tools Production orders planned orders purchase orders purchase requisitions SAP S/4HANA MRP controllers produce timely planning results with superior insights. Powerful graphical simulations drive better decisions. Training and labor costs are reduced while business processes are accelerated. Production planner MRP controller Inventory manager More than smarter and faster reimagining work 10% 15% reduction In revenue loss due to stock-outs 10% 12% reduction In days in inventory MRP: SAP Fiori launchpad Monitor production orders Manage internal requirements Manage purchase orders Monitor inventory *Benefits are based on early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise

6 DIGITAL SUPPLY CHAIN DEEP DIVE Typical challenges Traditional ERP SAP S/4HANA enhancements Cloud/LoB extensions or enhancements Benefits Difficult to drive sales and operations planning (S&OP) process with executional ERP system, which causes planning to be done in a slow, manual process with inconsistent information across functional areas Long batch-run processes lead to inefficient planning Long batch-run processes lead to inefficient planning Planning systems disregard capacity and material constraints Disparate planning and transactional systems lead to data integration latency and errors Collaboration around a sales and operations plan needs separate integration; difficult to analyze different scenarios of future demand and supply and to come up with actionable plan Planning runs at predefined times without real-time data MRP lists are working with snapshots of the planning situation during the planning run Production planning capabilities (MRP/constrained planning) available in ERP and advanced planning systems, such as the SAP Advanced Planning and Optimization component or a third-party solution Fast MRP run and new working model for MRP controllers based on decision support Accelerated MRP: improved effectiveness of planning with faster and more-frequent MRP runs multiple times a day SAP Fiori apps for MRP (cockpit) provide real-time insights into material availability and flow Advanced and embedded production planning and detailed scheduling capabilities in SAP S/4HANA with harmonized master data and SAP Fiori user experience (UX) Streamlined data and processes with and embedded analytics and decision support enable faster MRP-based planning and execution processes, resulting in more-accurate information and reduced latency planning Rapid and collaborative S&OP, including what-if and scenario planning of different potential business plans, to allow business stakeholders and functional leaders to agree on and execute desired path forward (SAP Integrated Business Planning) Supply planning beyond MRP in conjunction with SAP Integrated Business Planning to provide unconstrained or constrained supply plans Rapid and collaborative S&OP, including demand sensing, what-if and scenario planning (SAP Integrated Business Planning) Lower overall supply chain planning cost Reduced sales and operations planning cycle time Improved manufacturing function planning efficiency Reduction in revenue loss due to stock-outs Increased production plan adherence - 6-6

7 DIGITAL SUPPLY CHAIN DEEP DIVE Typical challenges Traditional ERP SAP S/4HANA enhancements Cloud/LoB extensions or enhancements Benefits Inefficient strategies or manual processes to manage orders and allocations lead to revenue loss and fulfillment issues Inability to select alternative sources intelligently impacts profitability targets Inability to promise accurate and reliable order dates leads to customer dissatisfaction and revenue loss Global available-to-promise (ATP) checks in a different planning system Low-volume back-order processing supported Advanced ATP check for back-order processing, product allocation, and release for delivery app to enable timely actions on short-term supply and demand change Mass product-availability check for sales, planned, and production orders Advanced ATP check and performance improvements for releasing large production orders Response planning capability for midterm allocation planning and shortterm order confirmation in order to automate allocation procedures and take effective corrective action and respond rapidly (SAP Integrated Business Planning) Improved customer service levels Reduction in revenue loss due to fulfillment issues Reduction in back-ordered items Improved customer satisfaction and retention Improved inventory turnover - 7-7

8 SAP S/4HANA: OVERVIEW FOR HIGH TECH EXAMPLE: process simplification SAP S/4HANA provides reengineered and simplified business processes that can yield significant benefits, transforming the execution from multistep processes with latency in terms of key performance indicators to real- time processes with actionable insights to offer your customers compelling outcome and solution configurations, flexible pricing models, and a perfect order and delivery experience every time. SAP S/4HANA for achieving an outcome-based business Traditional ERP Multiple orders sales order, service order, service contract, and work orders are created by multiple people to get to an outcome. All parts (hardware, software, and service) of the solution remain unrelated, making it difficult to execute and measure success. Sales rep Sales rep Sales order Service order Order orchestration Service provisioning Goods issue Service issue Billing and invoicing Accounts Receivable General ledger and multiledger Consulting rep Service contract Project scheduling Service delivery SAP S/4HANA One account executive configures, prices, and quotes a solution for delivering an outcome. At every step o the process, SAP S/4HANA is aware that all parts (hardware, software, and service) belong together. Account executive Solution order and order orchestration Delivery Goods issue Service usage Billing invoicing Accounts receivable General ledger and multiledger More than smarter and faster reimagining business model 95% faster Quote-to-order process when quotes are configured by a configure-price-quote solution % lower Customer complaints when real-time order, billing, and invoicing is available 8

9 OUTCOME-BASED BUSINESS DEEP DIVE Typical challenges Traditional ERP SAP S/4HANA enhancements Cloud/LoB extensions or enhancements Benefits Inability to configure complex solutions or outcomes consisting of products and services, including from third parties; support approval process and provide an updated price for complete solution during each ordering step Lack of visibility into the order management system results in slow resolution of order fulfillment issues with risk of delayed delivery Limited insights in process cycle time hampers the improvement of sales process quality Several unrelated orders sales order, service order, service contract, and work order get created by several people to create a solution that provides an outcome Responsible employee has to check multiple reports to get a holistic view of all process-related issues No available capability for process performance monitoring in ERP (only with additional process observer feature) SAP S/4HANA is at every step of the process, aware that all parts (hardware, software, and service) belong together Prioritized list with key characteristics of outstanding sales orders for internal sales Prebuilt content to monitor and analyze order-to-cash process performance; allows insights into process cycle times and enables process manager to improve the service level for customers The SAP Hybris Commerce solution can manage the content for rich and proper display of options and values for models originating in the variant configuration feature, with high flexibility to customize and extend the user experience Improved sales productivity Increased on-time delivery Better internal sales productivity More business model flexibility Increased customer satisfaction Lack of ability to handle billing for subscription and usage-based services, and inability to combine billing for physical goods and services on a single invoice Lack of ability to manage revenue allocation across the solution elements, handle complex revenue recognition rules such as required by IFRS and GAAP, and accurately forecast revenues Master agreement contract supported for B2B service providers Revenue recognition often requiring batch processes and reports limited to summary information SAP S/4HANA generates one single invoice combining goods and services on a single bill Real-time postings to recognize revenue and support different revenue recognition methods based on statutory and organizational requirements. Update general ledgers and automatically recognize revenue. The SAP Hybris Billing solution allows the rapid launch of customer-centric subscription offers with B2B and B2C billing applications Improved compliance and risk Higher contract management efficiency Lower selling, general, and administrative (SG&A) expenses Inability to see and manage one single quote, contract, and invoice statement listing all provided services, projects, and products that are sold together as one solution or one outcome Limited support for complex businessto-business (B2B) agreements and contractual relationships, which combine terms for physical goods and services in a single contract and invoice Master agreements for large-enterprise customers managed by bundling one-time sales of products with projects, service offerings, subscriptions, and usage-based services in one contract The SAP Customer Relationship Management (SAP CRM) application: ability to support a single contract for physical goods and services - 9-9

10 PORTFOLIO OF SOLUTIONS FOR HIGH TECH FROM SAP In addition to digital supply chain and outcome-based economic benefits provided by SAP S/4HANA, the digital core also provides native prebuilt integration to allow firms to leverage SAP s complete portfolio of solutions to comprehensively address the needs demanded by today s digital economy. Processes are designed from the outset to flow end to end across the cloud-based solution extensions, listed in the white bands, and are fully integrated to S/4 HANA Enterprise Management and are optionally deployed to address business needs. The solution capabilities in the dark blue band, the digital core, are delivered as part of S/4HANA Enterprise Management. The lighter blue band, also in the digital core, are part of S/4HANA Enterprise Management, but added on as needed. The outcome-based economy example illustrates which solutions are enabling a business model to change from selling products to selling business outcomes. SAP Cloud Platform is an open platform-as-a-service that provides unique in-memory database and application services. It is a cloud platform that enables you to rapidly develop new applications or extend existing ones and enables anyone to extend SAP applications in minutes, all in the cloud. Outcome-based Economy Suite Products Digital core Products Suite Product Innovation and Sourcing SAP Engineering Control Center SAP Product Lifecycle Costing SAP Innovation Management SAP 3D Visual Enterprise SAP Product Stewardship Network SAP Enterprise Portfolio and Project Management SAP Commercial Project Management Compliant product lifecycle management* Product development and project control* Production engineering Collaborative sourcing and contract management Time recording Core human resources and payroll Talent management Time and attendance management Human capital analytics Supply Chain SAP Integrated Business Planning Ariba Collaborative Supply Chain SAP Transportation Management SAP Extended Warehouse Management Advanced ATP Embedded production planning and detailed scheduling (PPDS) Inventory and basic warehouse management Production planning Manufacturing S/4 HANA Enterprise Management Accounting and closing operations Accounting Cost management and profitability analysis Financial planning and analysis Accounting and financial close Treasury management Receivables management Invoice management and accts payable BPC for S/4HANA Finance SAP Digital Boardroom SAP Shared Service Framework Ariba Collaborative Finance Human Resource Finance Procurement SAP Manufacturing Execution SAP Manufacturing Integration and Intelligence SAP Plant Connectivity SAP Asset Intelligence Network SAP Predictive Maintenance and Service Constrained-based production planning Production scheduling Environment, health, and safety Asset operations and maintenance Production orchestration and execution Quality management Maintenance management Operational purchasing Invoice and payables management Supplier management Procurement analytics Supplier collaboration Business network Guided end-user buying External workforce management Sales & Marketing SAP Price and Margin Management by Vendavo Collaboration SAP Hybris Cloud for Sales SAP Hybris Cloud for Marketing SAP Hybris Commerce Billing and revenue innovation management (BRIM) Sales planning and performance management (ICM) Order and contract management Service management* Service master data management* Service parts management* Service agreement management* SAP Mobile Asset Management SAP Predictive Maintenance and Service Asset information collaboration SAP Hybris Cloud for Service, SAP Hybris Commerce, SAP Hybris Billing Service SAP Hybris Commerce SAP CPQ SAP Hybris Billing SAP Price and Margin Management by Vendavo Collaboration BRIM Advanced ATP Order and contract management Production orchestration and execution Service management* Service agreement management* Accounting and closing operations Accounting Accounting and financial close Receivables management Invoice management and accounts payable Supplier collaboration External workforce management SAP Cloud Platform Customize applications Integrate apps, data and processes Build new apps *(Partially) compatibility scope

11 PORTFOLIO OF SOLUTIONS FOR HIGH TECH FROM SAP An end-to-end solution for high tech High-tech companies need to constantly innovate across their company value chain to drive profitable growth and adapt to how customers want to acquire, use, and pay for their products and services. The capabilities delivered with SAP S/4HANA and the prebuilt, native integration with the line-of-business (LoB) solutions help ensure processes run smoothly and efficiently across the end-to-end total engagement lifecycle, allowing companies to balance supply and demand and drive sustainable revenue growth and maintain margins. Digital supplier collaboration Instant collaboration Real-time, integrated supply chain planning Insights beyond company boundaries SAP Integrated Business Planning Manufacturing executive and insights Connect shop floor to top floor SAP Manufacturing Execution SAP Manufacturing Integration and Intelligence Digital customer engagement Product Innovation and Sourcing Supply Chain Manufacturing Multichannnel Sales and Marketing Customer Service Provide innovative products and services SAP Cloud Platform Big Data and the Internet of Things Drive innovation and bring new products to market quickly Finance Be agile and responsive to volatile markets and demanding customers Increase flexibility of manufacturing and fulfillment operations Engage customers and drive profitable growth Procurement Build profit and loyalty by meeting customers high expectations Manage talent Third-party labor Attract, develop, and retain the right talent Integrate contingent labor to close capacity and skills gaps Allow for visibility into the state of the business at any time Automate and streamline complex, high-volume invoice processes and purchasing documentation Enterprise Management Digital core

12 SAP S/4HANA: VALUE PROPOSITION FOR HIGH TECH SAP S/4HANA provides government agencies a proven framework to adopt industry best practices while attaining operational excellence. Strategy enablement Accelerate creation of new business models Enter new markets and industries Accelerate M&A synergy Run Live (SAP Digital Boardroom) Reorganize on the fly Achieve greater speed and agility Run Simple (master complexity) Manage risk and ensure compliance Strategy enablement Business benefits Business benefits* 10% 30% increase in on-time delivery 25% 30% reduction in inventory levels 10% 20% increase in customer satisfaction 10% 12% reduction in days of inventory 10% 15% reduction in revenue loss due to stock-outs 10% 12% reduction in total logistics cost 3% 5% reduction in supply chain planning cost Reduction in order fulfillment lead time Empowered employees Higher productivity with a new, role-based way of working with responsive, intuitive SAP Fiori user experience on all devices Role-driven, user-centric processes and self-service BI for user empowerment 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 early adopters of SAP S/4HANA or conservative outside-in benefits due to moving from a traditional ERP to enhanced SAP S/4HANA and LoB/cloud capabilities. As each enterprise is at a different level of maturity, our recommendation is to work with you to determine the value proposition for your enterprise

13 CUSTOMERS ARE ACHIEVING VALUE FROM SAP S/4HANA Alliance Contract Manufacturing (ACM) To support the entire value chain, ACM integrated the SAP S/4HANA Finance solution across subsidiaries and experienced decreased inventory and lower procurement costs. ACM can now make global decisions based on real-time information. Complete visibility into operations means it can supply the hightech components that keep its customers factories turning out the electronic products their consumers require. Indeed, ACM helps the world not just keep pace with technology but advance it. With SAP S/4HANA, ACM is running better than ever. More efficient operations and better data access are giving us the edge we need to compete in the global marketplace. We are saving money in the process. Erik Looi, Senior Manager and Head of IT, Alliance Contract Manufacturing Sdn. Bhd. Varian Medical Systems We participated in the guided beta for the SAP S/4HANA 1610 release, completing the upgrade from SAP Business Suite powered by SAP HANA [SAP ECC EHP 8] to 1610 in 10 working days, We are looking forward to fully deploying SAP S/4HANA 1610 in 2017 as the solution now includes key components such as extended warehouse management and product portfolio management. The simplified data model and corresponding IT landscape are an exciting continuation of innovations such as universal journal, which helps eliminate reconciliation between financial accounting and controlling that first attracted us to SAP S/4HANA. Arnab Mukherjee, Manager of Enterprise Applications, Varian Medical Systems Company Alliance Contract Manufacturing Sdn. Bhd. Industry High tech SAP solutions SAP S/4HANA Finance Customer Web site Read business transformation study Company Varian Medical Systems Industry High tech SAP solutions SAP S/4HANA SAP HANA Customer Web site Click here for the source reference

14 CUSTOMERS ARE ACHIEVING VALUE FROM SAP S/4HANA EMC EMC Corporation is the world s largest provider of data storage systems. The company needed to replatform its go-to-market strategy to enable solution selling and provide improved new product introduction cycle times. They implemented the SAP Configure, Price, and Quote solution for solution sales configuration, integrated with SAP HANA, SAP Customer Relationship Management (SAP CRM), SAP Hybris solutions, and a customer user interface to provide a digital and contemporary shopping experience. The partnership with SAP has allowed us to deliver a really robust solution to our business. As we think about what they're expecting from us, they want solutions that don't have issues, that scale when they need it at peak volumes, and that are intuitive to use. I think the solution we delivered has done just that. Kate Parsons, Vice President of Enterprise Applications, EMC Corporation Company EMC Corporation Industry High tech SAP solutions SAP Configure, Price, and Quote SAP HANA SAP Hybris solutions SAP CRM Customer Web site Lexmark Lexmark International is transforming its business model. Formerly a manufacturer of office printers, it s now becoming a provider of print management solutions. Ultimately, Lexmark s business-model transformation will require not only better customer service but also better machine-tomachine communications, and even insight into the Internet of Things. SAP is helping Lexmark on its transformation journey by starting with the implementation of live reporting within SAP ERP powered by SAP HANA to consolidate finance and supply chain data and forecasting on a common platform. Moving to SAP S/4HANA, Lexmark expects to lay the foundation for its future business growth and successful business transformation. The SAP HANA platform is the only direction for us to go. It s not only a IT migration project, but a business transformation project as well Billy Sparks, Senior SAP Finance Manager, Lexmark International Company Lexmark International Industry High tech SAP solutions SAP ERP powered by SAP HANA Customer Web site Click here for the source reference Click here for the source reference

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