Become a Live Aerospace and Defense Business Torsten Welte, Global VP and Head of Aerospace and Defense, SAP Industry Business Solutions March 8, 2017
It was the best of times (to run an A&D business), it was the worst of times (to run an A&D business)... It all depends on how you run it. 2
Who leads, who follows, and who makes it all work? The digital age rewards change and punishes stasis. Companies must be open to radical reinvention to find new, significant, and sustainable sources of revenue. Source: McKinsey & Company http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/from-disrupted-to-disruptor-reinventing-your-business-by-transforming-the-core I 3
Building blocks for business success I 4
IT s new role business hero 5
Change cannot wait In the future, companies that don t embrace technological change are not going to survive. Level of tech inflection point Time Source: Tom Kennedy, CEO, Raytheon http://aviationweek.com/defense/promise-and-peril-raytheon-ceo-new-technology-revolution I 6
Automation Cloud Intelligent things Blockchain 3-D printing Pervasive technologies invade the A&D business landscape Cybersecurity Artificial intelligence Machine learning Internet of Things Microservices I 7
Technology building blocks Intelligent things and the Internet of Things Cybersecurity Blockchain Artificial intelligence and advanced machine learning Cloud and microservices 8
Intelligent things and the Internet of Things: Just the facts 10 million New autonomous vehicles per year could be driving on U.S. roads by 2030 5 US$1.27 billion Expected size of the global market for commercial drones in 2020 5 20.8 billion 2020 6.4 billion 2017 Connected things in use worldwide 6 Sources: 5) Digital Futures, SAP, 2016 6) Gartner Says 6.4 Billion Connected "Things" Will Be in Use in 2016, Up 30 Percent From 2015, Gartner, November 10, 2015. I 9
Intelligent things in action Image: Creative Commons, Smithsonian Institution 10
Cybersecurity: Just the facts $3.5 billion $75 billion $170 billion 2004 2015 2020 Growth of Worldwide Cybersecurity Market 11 $1 trillion Total spending on cybersecurity from 2017 2021 9 $19 million Investment in cybersecurity by the U.S. government in fiscal year 2017, a 35% increase in spending over the previous year 10 $6 trillion Annual cost of cybercrime by 2021 9 253 (2013) - 318 (2015): Total number of breaches in 2015 12 Sources: 9) Cybersecurity Ventures http://cybersecurityventures.com/cybersecurity-market-report/ 10) Akamai s [State Of The Internet] / Security, Akamai, 2016 11) http://cybersecurityventures.com/cybersecurity-market-report/ 12) https://www.symantec.com/content/dam/symantec/docs/reports/istr-21-2016-en.pdf?aid=elq_&om_sem_kw=elq_16978574&om_ext_cid=biz_email_elq_&elqtrackid=283a3acdb3ff42f4a70ab5a9f236eb71&elqaid=2902&elqat=2 - page 8 I 11
Blockchain: Just the facts 90% Of banks are currently exploring the use of blockchain/distributed ledger technology in payments 7 >24% Of countries currently investing in distributed ledger technology 8 $1.4 billion In investments in a blockchain technology over the past 3 years 8 Sources: 7) Blockchain Technologies. How Banks Are Building A Real-Time Global Payment Network, Accenture, 2016. 8) The Future Of Financial Infrastructure, World Economic Forum, August 2016. I 12
Blockchain: Just the facts 90% Of banks are currently exploring the use of blockchain/distributed ledger technology in payments 7 >24% Of countries currently investing in distributed ledger technology 8 $1.4 billion In investments in a blockchain technology over the past 3 years 8 Sources: 7) Blockchain Technologies. How Banks Are Building A Real-Time Global Payment Network, Accenture, 2016. 8) The Future Of Financial Infrastructure, World Economic Forum, August 2016. I 13
An event needs to be recorded as a transaction. 1 The block is broadcasted to every party on the network 3 2 The transaction is represented on the network as block Network approves transaction 4 5 The block is added to the chain of recorded transactions 14
Artificial intelligence and advanced machine learning (AML): Just the facts 84% Of managers believe machines will make them more effective and their work more interesting 1 ~40,000 Units Collaborative robots in 2020: $1 billion In revenue Enterprise AI/AML market: 4% 7% Penetration of manufacturing workforce 2 ~$4 billion in 2020 $11 billion in 2024 Sources: 1) Managers and machines, unite!, Accenture, 2015. 2) CMI Opinion based on slides 14 to 19, IDC Worldwide Revenues for Augmented and Virtual Reality Forecast Aug 2016, Goldman Sachs, PwC 3) Emerging Technology Trend Report, SAP, 2016. 4) Why Deep Learning Is Suddenly Changing Your Life, Fortune, September 28, 2016. $7.5 billion Total investment in AI 4 I 15
AML The right stuff Source: www.popsci.com 16
Cloud: Just the facts Industry clouds 2020: 150 2017: 50 $20 billion in revenue $500 million in revenue More than 250 EB of data Sources: CMI Opinion based on slides 14 to 19, IDC Worldwide Embedded and Intelligent Systems 2015-2020 Market Forecast, May 2016, Global Market Insight Embedded Market Size, Application Potential, Competitive Market Share and Forecast 2016-2023 Nov 2016 I 17
What s next: Microservices I 18
Building a technology foundation for business growth Micro services Blockchain Cloud AI Intelligent things Cybersecurity Digital Infrastructure 19
Case study: Newport News Shipbuilding Image: Newport News Ship Building, Chris Oxley I 20
Don t go it alone To climb Mt. Everest, you need a partner. I 21
Don t go it alone For digital transformation, you need a team of Sherpas. I 22
Trust your ecosystem and your partners 23
Synthesizing a live A&D business People Processes Technology 24
Components of a live A&D business Agile planning, synched with operations in real time Digital boardrooms, supporting interactive decision making Accelerated financial reporting Real-time logistics Deliver actionable insights on unified data and processes Explore new ways of working and consuming Goals: Reduce cost and drive operational excellence 25
Driving operational excellence Requirements for success in today s A&D market: Deliver faster on record-high production rates Optimize capacity within existing assets Enhance product innovation and quality while cutting costs 26
Foundation of a live A&D Business the digital core Real-time A&D operations In-memory computing power End-to-end business processes Governance Real-time simulations and predictive analytics 27
Digital business framework Customer Experience Industry Workforce Engagement Machine Learning Digital Core APIs Business Transactions Smarter Insights Blockchain Security IoT & Supply Chain SAP HANA SAP Cloud Platform Spend Management 28
The digital core Next-generation manufacturing with SAP S/4HANA SAP S/4HANA FINANCE SAP S/4HANA HUMAN RESOURCES SAP S/4HANA SOURCING & PROCUREMENT SAP S/4HANA SUPPLY CHAIN SAP S/4HANA MANUFACTURING Streamlined procure to pay Accelerated plan to product Optimized order to cash Enterprise Management Enhanced request to service Core finance Core human resources The digital core SAP S/4HANA MARKETING AND COMMERCE SAP S/4HANA SALES SAP S/4HANA SERVICE SAP S/4HANA ASSET MANAGEMENT SAP S/4HANA RESEARCH AND DEVELOPMENT 29
Next-generation decision making with SAP S/4HANA Introducing Knowledge Workspace Watch video here https://icn.sap.com/projects/knowledge-workspace.html I 30
It s not a boardroom, it s a control room 31
Reimagine processes with IoT connectivity and a digital supply chain New Business Models New Business Processes New Work Environments 32
Accelerate your journey Ready to become a live A&D business? Quick-start your digital transformation with tailored value assurance service packages for SAP S/4HANA. 70,000 Experts at your service 40% Less effort required for technical implementation 50% Less effort required for planning Realize faster time-to-value and lower costs with SAP Value Assurance service packages for SAP S/4HANA. 33
How can we help? 34
Thank you. Contact information: Torsten Welte Global VP and Head of Aerospace and Defense, SAP Industry Business Solutions
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