THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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1 SAP HANA EFFECT Title: Episode 15 ARI Fast on its Fleet with SAP HANA (Duration: 18:42) Publish Date: April 27, 2015 Description: Bill Powell from ARI Fleet Management explains how BPC on HANA works with their non-sap backend to keep its database growing and fleets on the move. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. Welcome to The HANA Effect. I m your host, Jeff Word, from SAP. Each week, we bring listeners the real stories of how companies are taking advantage of real-time computing to transform their organizations and let them share the lessons they ve learned along their journey. Welcome to The HANA Effect. I m your host, Jeff Word, from SAP, and I m joined today with Bill Powell from ARI Fleet Management. Welcome. Thank you, Jeff. So, this is a great story we re happy to share with everybody today. ARI Fleet Management is a great SAP customer, but they re very different than most of the traditional SAP customers. So, Bill, why don t you introduce yourself and a little bit about ARI Fleet HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 1

2 Management so that everybody can understand what kind of business you re in. So, my name s Bill Powell. I m the Director of Enterprise Architecture for ARI. And ARI is a fleet management company. So, what we do is we manage assets, cars and trucks and various products for a number of customers throughout the world. We provide everything from financial services, so from acquisitions through to disposition of the vehicle, including fuel management, maintenance management, license and title, very much like you would on your own car or truck. We provide an array of services of roughly different services to roughly about 1.2 million vehicles worldwide. We re the largest privately held fleet management company in the world. In the last three years. We ve been voted by Fortune magazine as one of the top 100 best companies to work for. We have roughly 2,800 employees working out of North America, the U.K., Germany, and Asia. Roughly about $4.5 billion in assets and about $2.6 billion in annual sales. Well, that s great. Tell everybody a little bit about your kind of SAP footprint, just so they get an idea of what we re talking about. As you already mentioned, Jeff, we re not your typical SAP customer. Our transactional systems that we have are primarily Oracle based. So, most of our acquisition, disposition of the vehicle, and everything in between is HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 2

3 happening in the Oracle layer. Where SAP comes into play and also all that various technology that we have with SAP is around analytics and business intelligence. We have a HANA system that was put in place roughly at the end of 2010; went into active use in We ve been using it ever since as a new data warehouse for ARI. So, as our data continues to grow, and our fleets or our customers become more complex and we also grow geographically, there was a dire need and there still is a dire need to handle that data to be able to report back to our customers the most cost effective way to manage their fleets. We were really struggling with the care and architecture and we took a step back, reached out to SAP for options, and initially we looked at SAP Explorer. That s another one of the product that we have, sits on top of HANA. We re using SAP Explorer quite effectively in the customer space. We don t want to just constantly be in this mode of generating report after report for our customers. We wanted to have self-service, where they can come in and answer an array of questions that they have using the various technology that we have at hand. It makes things much more efficient, much more effective. So, we re using SAP Explorer in that space. Works fantastic for our customers, where it s very intuitive, very quick. They can come in. They can take a look at their inventory, their expenses, their fuel, their telematics information. And they can form analysis based upon that information that we re managing for them. As we continue to grow and as we HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 3

4 continue to roll that product out, we took a long hard look at the underlying technology and we implemented HANA. So, now we have Explorer on top of HANA and we re starting to use that more internally where we can have our internal customer service folks, who manage one to many customers look at all their customers not just one at a time. And we re starting to form new analysis based upon all that information, being able to reach out, not just this one customer in oil or gas. But what are all of our customers in oil and gas doing or the rail technologies or pharma technologies to form new compelling analysis for our customers? You said this was primarily started for you guys to provide reports to your customers. Tell us a little bit about what the reaction of the customers was when you started giving them access to all this information from your internal systems that was flowing through HANA. It s a two piece story. So, initially, you re exactly right was to provide new capabilities to our customers around the reporting space, the business intelligence space, to give them transparency optics into their information that we re managing for them. Typically, in the past, we would that by interacting with the customer, understanding their needs. That request would come inside into our normal process and we would generate a report, little back and forth, and then finally the customer would have their HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 4

5 information. Still do that quite a bit. It s very effective. But it s not as efficient as it could be and it s not empowering the customer. They have a dire need for that information and if you follow that process I just described, you have this, I call this data latency or enter information latency, where by the time we answer that question, most likely your question already changed. So, we knew we had to change tactics to keep up with the customer. By putting that information in front of the customer and putting that capability in front of the customer, they re now much more self-efficient. They can answer those questions by themselves. And would you say that that is some kind of a key competitive advantage or a way to provide even additional value to your customers to keep them happier and working with you more closely? And I want to make sure to be clear, it s not only about creating reports and going through data and making the repots run faster. Obviously, that s a huge byproduct of this. But the part that really gets me excited about this and other here it opens up the blinds. Typically, in the past, what would happen is the customer would have a request. Let s just say it s around maintenance information. You know, which vehicles are really driving my costs over the last 2-3 fiscal years? Well, we have various ways to solve that, various ways that are already out there. What happens is I ve seen it time after time is HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 5

6 that you develop tunnel vision so that you always kind of solve the problem the same way because you re used to it. You already have a process set up. That may be great, but things change. The markets change. The vehicles change; conditions change. When you start reaching outside the normal process, there was always concern around, well I know if I follow this process, I can get a result in reasonable amount of time. If I reach outside of that process, it may take a little bit longer. By introducing HANA and then the various products and services on top of it, whether it s Explorer or Lumira or business intelligence, or our own custom applications we right.net code quite a bit and that s all integrated into HANA also and we keep on doing more and more it allows you to just fire questions at the system and get a very quick response. You re more adapt to, hey, what if this scenario happened or this scenario happened? Or, let s look at it by geographics or by seasonality or by whatever. It really opens up the capability to analyze information and to, again, perform more compelling analysis for our customers with the sole objective of driving down our total cost of ownership. Yeah. That s one aspect, the lower TCO, but can you give everybody an idea of what the business benefit to your company is by providing this extra value to your customers? Has this resulted in much better relationship with customers? Has it got more customers because this is a capability? HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 6

7 Yes on both counts. The relationships are much deeper with the customers. We re able to work with them on a much closer basis. As an example, one of our customers, a rail customer, reached out to us and asked us to help them drive down costs even further. And we do this quite often and we generally, again, try to solve the problem the same way. By using the HANA technology and by working with this customer, we developed some reports. We were able to put those immediately right on the ipad. We went out, we had a deep conversation not with the customer but with the vendors that were servicing the customers the ones that were actually fixing their vehicles. And we showed them very transparent information. Here s your average price. Here s what your rate typically is for let s just say a brake service or suspension service. And here are all the other vendors your competitors that are within a 2 ½ - 3 mile proximity of you and these are their rates. And they re typically 30-40% lower. It really opens up the conversation now; changes the dynamics of the conversations quite a bit to negotiate better rates, better service on our customers behalf. Yeah. I think that to me is one of the coolest things about this is you guys are reaching 3-4 layers outside your company up into the value chain and the business network and spreading that knowledge to not only help you, obviously add more value to your customers, but it helps them save money and HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 7

8 have better relationships with their other suppliers. That kind of third/fourth order affect is something that I don t think you could ve ever done without having such a powerful analytical tool on everybody s fingertips that everybody s singing off the same song sheet, so to speak, right? Completely agree with you. Absolutely. So, those conversations are very dynamic by nature. So, you need to have a tool set or the ability with you to go with the conversation. So, as the vendor asks questions, and we may be looking at information from a little different angle than what they re used to. In such a case, maybe that particular vendor can t service medium or heavy duty truck. And we re trying to bring information to bear to show them that the over vendors in the area can. It s really irrelevant to them. It doesn t really matter. So, we want to stay in that conversation. We need to be able to change the dynamics of the conversation right away to filter out the medium and heavy duty trucks to get down to the light duty, the commercial vehicles and then level set everything and then approach them again and say, alright, well, let s take a look at the light duty trucks or the commercial vehicles. And, now, let s talk about your average price as compared to your competitors in the area. You also mentioned that now you guys have actually expanded this and you re using the same system to HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 8

9 do more internal types of analysis for that data. Give us a couple of ideas of how that s actually transforming the way you guys work internally. In the customer service area, the way we re set up is we have customer service representatives that have one to multiple customers that they manage. It really depends on the complexity and the size of the customer in terms of how many they manage. In the past, well, we still do it quite a bit, is they would use our internal systems to go in and take a look at that customer and see what was going on. Let s just say in the case of a manufacture recall comes out. Well, they would go in and take a look at that one particular customer and see how many vehicles aligned to that particular recall and then start going through the various dynamics of the information, analyzing the information to determine the next course of action. But it s customer by customer, it s kind of silo based if you want to take a step back and look at it like that. With the technology now, we very easily have the capability to reach out and look at all the customers, all the makes, all the models. It doesn t really matter. The internal staff was really becoming accustomed to the level of service that they were given throughout the years. And when you have that and when you reach outside of that and if you don t have the technology to support that, it can be an awful painful process. So, using the SAP technology, again, using the HANA technology combined with some internal applications we developed in addition to business HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 9

10 intelligence applications that from SAP, we re able to give them an array of products and really tailor things to their needs. We have certain customer areas, let s say they re directly on the front lines of the customers. So, they re going to be using the Explorer product. We white label that and we call it ARI Analytics. They re going to use the exact same product that our customers are going to use because they want to have the same optics as the customers, no surprises, no calls from the customers saying, Hey, did you realize that this expense happened or this event occurred? We can t have any of that for proper customer service. Then we have other areas strategic consulting is one inside of ARI. It s a different division of ARI. They are still on the front lines of the customers, but they re more charged with looking at the customer from a broader base. They re going to be using tools Lumira, where they can come in and they can mash different data sets together. In many cases, they re going to take information out of our HANA system that we have and in some cases they may need information that s, let s just say an Excel spreadsheet that just came in from the customer, that s not in our HANA system or information that was never moved over to our HANA system that s in our Oracle system. They can use that capabilities of Lumira and mash that data together, analyze that and make some quite compelling analysis on our customers behalf. HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 10

11 In terms of IT efficiencies, HANA really changed it quite a bit. HANA s a database when it comes down to it, right? If you want to compare it to an Oracle or SQL Server or DBII or whatever at that standpoint, but it s also very different when you start digging down a little bit more. Between the way it aggregates information, the analytic views, the calculation views. In an Oracle environment instead of replicating data and storing data two or three times just because you need to get through it really fast, that obsolete. You don t need to do that. You just store it once; you leverage it multiple times. From a caring and feeding perspective, from an IT perspective, for our database administrators that come in and manage that HANA system, not a lot different from their behalf, which his good news for us. So, I have a team in here that s very adept at managing SQL Server databases and Oracle databases. A number of them just raised their hand and say, Yeah, I would love to get my hands on this HANA system. It was a very easy training and hand off process for them to manage the HANA system. So, in many cases, I have DBAs that manage the HANA database and Oracle database and a SQL Server database. They don t have to be specialized. They understand what s needed. Well, that s phenomenal. That internal reduction of TCO for the IT department combined with the massive new value and ROI you were guys were HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 11

12 getting from pushing this information out to your internal employees and then also multiple levels into the supply chain to your customers is pretty phenomenal. So, sounds like you guys have had a couple of really, really big wins. You ve been doing this for a while now. What s on the horizon for you guys? Where is this headed from now on? Number of different areas we re looking at. One of the major things that s very interesting now if we take a look at Lumira. The Lumira is a great product for going in there for data visualization, for going in and taking a look at a lot of different data. Being able to mash things up from different areas. And inform those compelling analysis, inform those charts and graphs that they can make quick decisions from. It s fantastic from that. On the other spectrum, we develop a lot of software in here ourselves. In our fleet management space, software s not really a commodity. It s very difficult to go out and buy what we re doing. So, we have to develop it ourselves and we re always looking for ways to become more efficient. We sort of did a proof of concept last year with SAP around Lumira. And, specifically, can we use Lumira or these great charts and graphs that we re designing in there, which are very easy and I can have nine IT people do, can we leverage that? Can I take that information that they re creating, that product and then consume that through our.net applications, so that I don t have the expense of a HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 12

13 developer creating charting and graphing capability? They re doing what they re designed to do and then let the people that are closest to the action not the IT people, but the people that are in the business design the compelling charts and graphs. We did a proof of concept last year with SAP and it s looking very promising right now. We re in a test phase, where we have various people in our fleet management department, our license and title department, our marketing department, wherever, and they re using Lumira to create some of these charts and graphs and then when it s posted up into HANA system, our.net applications can see that. It s kind of like a gallery of products and services that are out there. It just happens to be charts and graphs. We can pick and choose; say, yep, we want this one. Put this one inside of our application on our dashboard and put this one here. And now, we have the efficiency on the IT side and we also have the efficiency and effectiveness by having the business be more engaged and more of a tie-in, so the end product that s being delivered to our customers. You re doing exactly what we ve seen with just about every other customer is they start with something rather small and kind of focused, but then that breeds another successful project and an expansion and another one and another one and you start layering on these other new things on top of HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 13

14 that same data set because you have that capability in HANA to scale it kind of infinitely, right? So, what s next beyond Lumira? Well, beyond Lumira we re developing quite a bit. Our own.net applications and internally some of the thing on the horizon right now that we re looking at is around geospatial analysis and really leveraging the capability inside of HANA with the various products and services from SAP or our own products and services that we develop. So, as an example, telematics is a huge product for us in the fleet management space. What telematics is is like a transponder on the vehicle. Not every vehicle has one, but the ones that do, where the customer chose to have that transponder put in place, we get a lot of information back from these vehicles. A latitude, a longitude roughly every two minutes. It also tells us some pretty detailed information regarding the vehicle. We also have the maximum speed in the last two minutes; the maximum amount of idle time in the last two minutes. Some of these are pretty sophisticated where they have gyro sensors. So, we can determine how many hard lefts and hard right turns they make, jack rabbit starts and stops. All that and when you start to aggregate that information, it really comes into driver behavior. It s a big program for us to try to figure out, how can we again draw down that TCO? You need to know what s going on behind the wheel. You need to get to that driver by looking at those different driver HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 14

15 patterns, we can really form this analysis to drive down fuel costs, to slow the vehicles down, slow the fleet down, so we can help the fleet maybe reduce their insurance expense, in essence, to drive safer. That s really what it comes down to. And you re providing all that data back to you customers, again increasing the value that you provide through your relationship with the, right? Yes, we are. And this is one of the byproducts of having the HANA system in place and the business becoming used to having speed. I keep on talking about the tunnel vision effect. But it s amazing when you take a look back and look at the impact it has on an organization, it s really profound, especially when it comes to telematics information. Because of the sheer volume of this information, it s a pretty scary proposition when you sit there and you want to analyze it and maybe merge it with what s happening in the fleet business? What s happening in the fuel side of the house? Maybe we want to use it for audit controls. Was the vehicle fueled? What the vehicle truly there? Or was the fuel card used for somebody else s vehicle? Well, before we were able to mash these data sets together, you just really didn t know. Now, we have two different data points. We have the telematics. We know where that vehicle was. We also have the touch point of the fuel transaction; put those two together and now we HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 15

16 have some pretty profound audit controls that we could put in place. Prior to this technology stack, could we do it? Sure, we could do it, but it was more sharp shooting at that point. It was really understanding what we wanted to do and sitting down and spending a lot more time analyzing instead of doing. And now we just sit down and say, alright, what else can we do? Ah, try this out. Try this out. Not everything s going to work, but we have the ability and the speed now to try out different methods. Yeah. And that rapid experimentation and adaptation to these entirely new types of business value that you guys are trying to derive is really groundbreaking and, like I said, I think you guys are probably one of the farthest along with this stuff, so really excited to hear those stories. We ll have you guys back on the podcast once those go live because definitely want to hear the reaction and the results from those types. So, Bill, I want to thank you so much for sharing your HANA journey over the past couple years with us and we ll check back with you towards the end of the year to talk more about some of the telematics and predictive and unstructured data things that you re doing right now on projects and see what the results have been for those amazing innovations. HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 16

17 So, I want to say thank you again for joining us. Great. Thank you again for your time. I appreciate it. And with that, we ll close another episode of The HANA Effect. Thank you guys for listening and if you d like to get The HANA Effect each week, please subscribe to our channel on SoundCloud or itunes. Look forward to hearing a lot of great stuff from ARI a little bit later in the year. Thanks, a lot. HANA Effect Episode 15 ARI Fast on its Fleet with SAP HANA 17