Commodity Management Solutions from SAP Eric Somitsch, Director, Solutions for Commodity Management May 2013
Global trends and their impact on commodity management Volatility fueled by market dynamics Increasing demand in emerging global markets is creating a tight balance between supply and demand Geopolitical uncertainties Rising influence of hedge funds and financial institutions Increasing focus on risk management Increased focus on risk management by crisis-shaken executives, driven by the need to protect earnings and keep company operations running Compliance with government regulations Companies struggle to keep up and comply with regulations such as hedge accounting rules Strong demand for business solutions designed to meet these requirements 2013 SAP AG or an SAP affiliate company. All rights reserved. 2
Our approach to commodity management Commodity management solutions from SAP is one of the strategic investment areas within SAP Business Suite applications Our commodity management solution leverages our core strengths in logistics, finance, and industry solutions Our commodity management solution is an integral part of SAP ERP no need for additional interfaces, hardware, and so on 2013 SAP AG or an SAP affiliate company. All rights reserved. 3
Our commodity management solutions For some industries special solutions will be available, such as agriculture 2013 SAP AG or an SAP affiliate company. All rights reserved. 4
Efficiency gains in commodity procurement and sales Capture contract Create calloff Transport and delivery Provisional invoice Update quality or price Differential invoice Savings and efficiency gains in procurement and sales Manage pricing with integrated price conditions Flexible contract pricing Handle multiple commodity and pricing conditions Multiple invoice cycles Handle quantity and quality adjustments Integrated with treasury Transfer commodity risk automatically Fully integrated in standard purchase order screens 2013 SAP AG or an SAP affiliate company. All rights reserved. 5
Efficiency gains in commodity risk management Managing physical risk exposure Assessing risk Executing hedging strategy Deal administration Accounting and settlement Hedge accounting Real-time position reporting Ability to see consolidated commodity position Integrated with logistics Based on customer-defined risk criteria Full suite of commodity instruments Expanded list of hedging instruments Detailed risk reporting Foundation for management reports Fully integrated in hedge and standard accounting Integrated in standard screens 2013 SAP AG or an SAP affiliate company. All rights reserved. 6
Solution road map
Overview of SAP road map for commodity management Commodity procurement Commodity sales Enhanced commodity procurement Enhanced commodity sales SAP HANA Mobile Procurement Risk Mgt. Sales Commodity risk management Enhanced commodity risk management Analytics Usability Solution today Planned innovations Future direction 2013 SAP AG or an SAP affiliate company. All rights reserved. 8
Rapid deployment solutions for commodity management Q3 2012 Q1 2013 Q2 2013* Software Service Content Enablement SAP Commodity Risk Management SAP Commodity Risk Management (powered by SAP HANA) SAP Commodity Procurement * Planned dates only 2013 SAP AG or an SAP affiliate company. All rights reserved. 9
SAP Commodity Risk Management Planned innovations Buy SAP Commodity Procurement Predefined industry and commodity-specific pricing rules Complete audit support for contract and price changes Higher degree of automation in month-end processing Increased insight into contract optionality and contract fulfillment status Sell SAP Commodity Sales Manage Risk Improved risk reporting (position reporting, MTM, and so on) Detailed monitoring of business risk key figures Real-time risk integration of specific procurement and sales processes Support of complex over-the-counter (OTC) instruments SAP Commodity Risk Management 2013 SAP AG or an SAP affiliate company. All rights reserved. 10
Taking commodity management solutions to the next level Future innovations SAP Commodity Risk Management will leverage SAP Mobile platform and in-memory database functions of SAP HANA Innovating together with our customers to create the most value adding use cases to drive the highest business benefits Future direction 2013 SAP AG or an SAP affiliate company. All rights reserved. 11
Future innovation Commodity management Enhanced analytics Leverage the real-time capabilities of SAP HANA Improved usability in transactions and reporting Specific industry requirements Enhanced trading functionality Continued legal compliance Enhanced financial instruments support SAP HANA Mobile Analytics Procurement Risk Mgt. Sales Usability Future direction 2013 SAP AG or an SAP affiliate company. All rights reserved. 12
Customers and conclusions
Selected customer examples European CP companies Live with SAP Commodity Risk Management European metal company live with the full suite of our commodity management solutions Swiss-based Oil trading company implementing full suite of our commodity management solutions Various European metals companies implementing our commodity management solutions Large international Mining company implementing full suite of our commodity management solutions for complete business U.S. coffee roasting company, Asian agricultural businesses, North American food ingredients company, North American Sugar producer, South African precious metals refining and smelting company and number of more companies Preparing project on EHP6 Hundreds of customers live with SAP Treasury and Risk Management and different versions of our industry solutions 2013 SAP AG or an SAP affiliate company. All rights reserved. 14
Summary SAP delivers a commodity management platform that leverages the strength of SAP Business Suite Our commodity management solutions provide integration between logistics, risk management, and finance and enable a real-time view of the risk position for all involved parties SAP is investing further in this area in close cooperation with customers and partners to allow our customers to participate in and benefit from future innovations 2013 SAP AG or an SAP affiliate company. All rights reserved. 15
Thank you Microforum: Manage Commodity Risk in Today s Volatile Markets Now at 4:00 pm in the Financials Microforum area right next to the presentation theater. Contact information: Eric Somitsch Director, Solutions for Commodity Management eric.somitsch@sap.com 2013 SAP AG or an SAP affiliate company. All rights reserved.
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