Delivering Real-Time Business Value for High Tech

Delivering Real-Time Business Value

for High Tech SAP Business Suite Powered by SAP HANA

July 2013 Public

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2 Public

The real-time opportunity

Shorter product lifecycles and increasingly

demanding customers require high-tech companies

to continuously innovate ways to align business

operations with customer needs.

Create new and innovative products that excite customers

Respond rapidly to evolving trends

Develop flexible, efficient, and cost-effective business

processes


Becoming an innovation driven enterprise Align business operations with customer needs

Bring enticing and

relevant products to

market rapidly

• Predict trends and evolving customer needs

• Co-innovate with customers, partners, and suppliers

• Speed global rollout of products

Drive profitable

growth with flexible

sales and revenue

models

• Develop customer intimacy in marketing, sales, and

service

• Improve agility and speed in campaigns and

promotions

• Simplify sales, usage, and payment across multiple

channels (retail, Web, mobile)

Respond to market

dynamics in real

time

• Control complex multilevel supply chains

• Optimize out-sourcing, in-sourcing, and near-

sourcing

• Personalize any product, service, and delivery

model


SAP Business Suite powered by SAP HANA The next-generation business platform

Real-time business

In-memory

Business

transactions

Digital

connections

Collaborative

business

Cloud Social

Big Data Mobile

One platform bringing it all together

Advanced

analytics


Industry value map for high tech Enabling the innovation-driven enterprise

Product Innovation and

Sourcing

Project Portfolio and

Project Management

Product Development and

Compliance

Strategic Sourcing

Customer Service and

Field Repair

Multi Channel Support and

Field Service

Professional Services

Engagement and Delivery

Service Parts Management

Multichannel Sales and

Marketing

Segmentation and Campaign

Management

Partner and Channel

Management

Sales Pipeline and Order

Management

Responsive Manufacturing

and Fulfillment

Production Scheduling and

Efficient Manufacturing

Customer Fulfillment

and Logistics

Demand-Driven Supply

Chain

Demand Sensing and

Response Management

Integrated Sales and

Supply Chain Planning

Collaborative Supply

Management

People and

Talent Core Human Resources

and Payroll Talent Management

Time and Attendance

Management

Workforce Planning and

Analytics

Finance Financial Performance

Management

Accounting and Financial

Close

Treasury and Financial

Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Procurement Supplier Discovery and

Lifecycle Management Sourcing and Contracting

Procurement and Order

Collaboration Collaborative Invoice to Pay Commodity Management

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and Project

Management IT Service Management IT Strategy and Governance

Adaptive Pricing and

Usage-Based Billing

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA Platform

Application Development

and Integration


Product Innovation and

Sourcing

Project Portfolio and

Project Management

Product Development and

Compliance

Strategic Sourcing

Customer Service and

Field Repair

Multi Channel Support and

Field Service

Professional Services

Engagement and Delivery

Service Parts Management

Multichannel Sales and

Marketing

Segmentation and Campaign

Management

Partner and Channel

Management

Sales Pipeline and Order

Management

Responsive Manufacturing

and Fulfillment

Production Scheduling and

Efficient Manufacturing

Customer Fulfillment

and Logistics

Demand-Driven Supply

Chain

Demand Sensing and

Response Management

Integrated Sales and

Supply Chain Planning

Collaborative Supply

Management

People and

Talent Core Human Resources

and Payroll Talent Management

Time and Attendance

Management

Workforce Planning and

Analytics

Finance Financial Performance

Management

Accounting and Financial

Close

Treasury and Financial

Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Procurement Supplier Discovery and

Lifecycle Management Sourcing and Contracting

Procurement and Order

Collaboration Collaborative Invoice to Pay Commodity Management

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and Project

Management IT Service Management IT Strategy and Governance

Adaptive Pricing and

Usage-Based Billing

Technology

Solutions

Analytics Consumer Experience Data Management Enterprise Mobility

SAP HANA Platform

Application Development

and Integration

Industry value map for high tech Real-time value for key end-to-end processes

Highest real-time

business value for

high tech

1

3

2

4


Today With SAP Business Suite on

SAP HANA

KPI improvements are high-level estimates and will have to be validated for each customer situation.

Production scheduling and efficient manufacturing Business value for high-speed material planning

Decisions often based on periodic

material requirements planning

(MRP) runs and outdated information

Inability to replan quickly if conditions

change due to long run times

No holistic production planning

across all relevant production sites

50% reduction in MRP run time with

high-speed reads

Faster reaction to demand changes

Faster propagation of demand

information through the supply chain

Simulation of different what-if

scenarios in real time

Increased use of stored procedures

to accelerate calculations such as

stock requirements list and where-

used lists

Better synchronization of demand

and supply for global cross-plant

planning (and reduction of bullwhip

effect)

Instant update on supply network

collaboration with latest demand

information

Reduce out-of-stocks by

4%

Decrease

Limit

inventory and safety

stocks by

3%

bullwhip effect



SAP HANA


Integrated sales and supply chain planning Business value for supply chain monitoring

Lack of near real-time information

No ad hoc operational reporting

Time-consuming data loads in

traditional reporting tools

Reporting, queries, dashboards that

have to be created by each customer

Inability to run sub-daily planning

jobs and analyze the results because of

the long data preparation times

Inability to respond fast to ad hoc

customer queries, which may

result in lost sales

Decision support based on near real-

time information

Out-of-the-box analytical reporting

with streamlined data load

Predefined dashboards for different

use cases (analytical workflows)

Advanced data retrieval and

computing functionalities of SAP

HANA optimize the reporting of

supply chain planning data

Reduce supply chain costs

by

3%

Optimize

Increase

inventory levels by

7%

customer service

level by

4%



SAP HANA


Sales pipeline and order management Business value for sales

Difficult to distinguish profitable

customers within the customer pool

Inability to identify gaps in the sales

pipeline leading to missed targets

Need to extract actionable information from the enterprise-wide Big Data on customers to maximize the chance of a sale

Minimal insight into the buying preferences of customers within the social data context

Quick identification of profitable

customers with account intelligence

analytics

Faster transaction search capabilities

Complete transparency into the sales pipeline based on real-time information with unlimited drill-down functionalities

Optimization of sales territories by simulating large volumes of territory data for adequate coverage

Real-time analysis of Big Data to

better understand buying patterns

Real-time access and assembly of all

data, including social and sales data

Increase profitability by

2%

Decrease

Improve

cost of sales through

balanced territories by

4%

offer win rate



SAP HANA


Product portfolio and project management Business value for accelerated product development

Time-consuming analysis and

progress monitoring of complex and

long-lasting projects

Poor resource productivity and project

profitability

Inability to monitor all aspects of a

project due to high volume of data and

detached analytics

Inability to monitor project progress

sufficiently and in a holistic manner to

support decision processes

Deviations in costs, time, resources, or

quality detected too late in the process

to make decisions

Decisions to mitigate risks and

opportunity costs taken too late

Improved run time of project

monitoring reports

Combined analysis of financials and

logistics data

Real-time access to large volumes of

data

On-the-fly analysis, calculation, and

decision making

Early insight into deviations and

risks, enabling timely corrective

measures

Improve time to market for

new products

3%

Reduce

Reduce

cost impact of

engineering changes

4%

project failure


Customer cases

Japanese

technology firm

SAP HANA software and SAP Business

Suite on SAP HANA

Automated reporting

Inventory optimization

Predictive analytics

Inventory visibility

European

technology firm

SAP Business Suite on SAP HANA

Real-time inventory

Real-time material planning

Marketing and sales

Fast financial close

Leading U.S.

technology firm

SAP HANA platform and SAP Business

Suite on SAP HANA

Variable margin analysis

Customer service excellence

Opportunity order analysis


Supplier network traceability

Predictive scoring

$25 million

Benefit over

five years

Annual

benefit

€85 million

Five-year net

value

$152 million


Next step Business scenario recommendation and value discovery workshop

SAP offers a proven methodology and approach to

discover the customer-specific business

improvement areas and quantify value potential.

We suggest such a workshop with your

line-of-business and IT experts.

As a starting point, we recommend a performance

and usage analysis of your current software

system.

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Thank you

Contact information:

Dirk Wenzel

Senior Director, Global High Tech Solution Marketing

3010 Hillview Avenue, Bldg. 3

Palo Alto, CA 94304

[email protected]

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Appendix with detailed customer cases


Customer case: Japanese technology firm Summary validated scenarios

Feasibility

Bu

sin

ess v

alu

e

Legend

Lo

w

Hig

h

Low High

Allocation

optimization

(NA)

SAP Business

Suite on

SAP HANA

SAP HANA

products

SAP HANA

platform


(US$108k)

Annual revenue: US$2 billion

Automated

reporting

(US$1,168k)

Inventory

optimization

(US$5,737k)

Inventory visibility

(US$672k)

1 Short term

SCM Inventory optimization: Reduce inventory

carrying costs and inventory obsolescence

Inventory visibility: Cut down the days in

inventory ‒ one-time benefit

Allocation optimization: Reduce cycle time;

improve alignment to market dynamics; lower

business risk; improve ability to adapt to future

business requirements ‒ for example, channel

inventory

2 Medium term

SCM: Automated reporting: Improve productivity and

supply chain planning

Predictive analytics: Prevent revenue leakage

due to stock-outs

3 In evaluation

Other functions: To be discussed in future

discovery workshops

SAP HANA use cases mapped to industry value map end-to-end solutions

SAP HANA Platform: customer-specific SAP HANA products: SAP NetWeaver BW on SAP HANA, high-performance applications (HPAs), apps powered by SAP HANA SAP Business Suite on SAP HANA

Scenario

(business value)

Phase – deployment road map


Customer case: Japanese technology firm SAP HANA platform

Results over five years

Surplus US$22 million

ROI 232%

Pay-back period 21 months

(4.468)

(627)

6.490 6.490

1.276

(6.000)

(4.000)

(2.000)

-

2.000

4.000

6.000

8.000

10.000

2013 Phase 1 Phase 2

Costs SoH Applications Platform

Anything built on the platform that is customer specific ‒ new business processes and business models

SAP NetWeaver BW on SAP HANA, HPAs, apps powered by SAP HANA – mapped to industry value map end-to-end solutions

$

Currently available functionalities (SP0, 1, 2); 23 scenarios mapped to IVM E2E solutions; and planned functionalities (All of

the end-to-end solutions on the industry value map are in scope.)

Actual SAP customer

business case Annual benefits, SAP HANA

platform

Annual benefits, SAP HANA

products: US$1.3 million

Annual benefits, SAP Business

Suite on SAP HANA: US$6.5 million

Estimated deployment costs

Total transition cost: US$5 million

SAP HANA platform

SAP HANA products

SAP Business Suite on

SAP HANA

More information: Koert Breebaart

SoH = SAP Business Suite on SAP HANA


Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation

sessions and may not be completely validated.

An electronics manufacturer ‒ automated reporting High tech

Business context and goals

This manufacturer can improve the productivity of the supply chain planning team by automating

reports and decision-making data needs based on real time SKU level reporting. This reduces

manual consolidation of spreadsheets.

Business challenges

The planning team is currently looking at sales data and stock inventory that is a few days old

because of the manual steps required to create the reports. This negatively impacts the amount

of work and the quality of decisions.

Process innovations

Improved productivity of marketing forecasting.

Contribution of SAP HANA

SAP NetWeaver Business Warehouse (SAP NetWeaver BW) on SAP HANA provides instant

and automated reports to the planning team.

Value drivers/KPIs

Improve productivity supply chain planning

Innovation scope

SAP HANA products (HPAs, apps)

End-to-end (E2E) solution

Integrated sales and supply chain

planning

Value potential 3

Feasibility 4

Low High

1 5

Low High

1 5




An electronics manufacturer ‒ inventory visibility High tech


Due to limitations on SKU level reporting on inventory, the company’s allocation of stocks is

suboptimal and it keeps higher safety stocks than necessary. Improved supply chain planning

based on predictive modeling on SKU level will help.

Business challenges

Due to slow queries and data accuracy issues the planning team is not able to perform analysis

and predictive modeling on SKU level.

Process innovations

Near real-time visibility on inventory in all channels


SAP NetWeaver BW on SAP HANA provides SKU level reports to improve management of

inventories.

Value drivers/KPIs

Cut down the days in inventory (one-time benefit).

Innovation scope


E2E solution


planning

Value potential 4

Feasibility 3

Low High

1 5

Low High

1 5




An electronics manufacturer ‒ allocation optimization High tech


Decisions about allocation of products are not based on recent developments but rather on

historical rules and are therefore suboptimal.

Business challenges

Allocation rules are not dynamically linked to real-time inventory and sales data.

Process innovations

Decision making on product allocation can be based on facts.


SAP NetWeaver BW on SAP HANA provides SKU level reports to improve product allocation.

Value drivers/KPIs

Reduce cycle time, Improve alignment to market dynamics, lower business risk, improve ability to

adapt to future business requirements (for example, channel inventory).

Innovation scope


E2E solution


planning

Value potential 4

Feasibility 4

Low High

1 5

Low High

1 5




An electronics manufacturer ‒ predictive analytics High tech

Innovation scope


E2E solution


planning

Value potential 2

Feasibility 4

Low High

1 5

Low High

1 5


This electronics manufacturer can increase revenues by reducing its out-of stock products in the

stores. Improved supply chain planning based on predictive modeling will lead to improved

allocation of goods and a better alignment with the manufacturers.

Business challenges

Current data warehouse with historic sales data and stock inventory is updated by offline manual

batch processes and prevents the planning team from performing real-time analysis.

Process innovations

Near real-time simulation of marketing forecasting.


SAP HANA boosts the performance of SAP NetWeaver BW, helping to overcome many of the

limitations on forecasting.

Value drivers/KPIs

Reduce revenue leakage due to stock-outs (% of revenue).




An electronics manufacturer ‒ inventory optimization High tech

Innovation scope


E2E solution


planning

Value potential 5

Feasibility 3

Low High

1 5

Low High

1 5


Due to limitations on SKU level reporting on inventory, the company’s allocation of products is

suboptimal and it keeps higher safety stocks then necessary. Improved supply chain planning

based on predictive modeling on SKU level will help.

Business challenges

Due to slow queries and data accuracy issues, the planning team is not able to perform analysis

and predictive modeling on SKU level.

Process innovations

Near real-time visibility on inventory in all channels.


SAP NetWeaver BW on SAP HANA provides SKU level reports to improve management of

inventories.

Value drivers/KPIs

Reduce inventory carrying costs; reduce inventory obsolescence costs.


Customer case: European technology firm Summary validated scenarios

Feasibility

Bu

sin

ess v

alu

e

Legend

Lo

w

Hig

h

Low High

Real-time material

planning

(€8 million)

SAP Business

Suite on SAP

HANA

SAP HANA

products

SAP HANA

platform

Annual revenue: €5.9 billion

Real-time inventory

(€12 million)

Fast financial close

(€5.7 million)

Marketing and

sales

(€55 million)

1 Short term

CRM Marketing and sales Average annual fund

overspend (in %); trade spending as a % of

revenue; % of qualified leads closed annually; %

of sales transactions where cross-sell/up-sell is

offered

SCM Real-time inventory Inventory carrying cost (%

of revenue); overall supply chain planning cost

(% of revenue); revenue loss due to stock-outs

(in %)

2 Medium term

SCM: Real-time material planning % production

shutdowns due to missing parts; % purchased

goods ordered late

FIN Fast financial close % effort on working with

audit related data (finance); audit cost as a % of

revenue; days to close annual books (in days)

3 In evaluation

Other functions – to be discussed in future

discovery workshops


Scenario

(business value)

SAP HANA use cases mapped to industry value map end-to-end solutions Phase – deployment road map


1 Short term

Finance: Fast financial close

(variable margin analysis)

Sales: Insight-driven sales

(opportunity order analysis)

Marketing: Insight-driven marketing

(Predictive scoring ‒ real-time segmentation,

campaign optimization, and affinity analysis)

Service: Insight-driven service

(Customer service excellence ‒ mine ASUP

data proactively)

Sourcing: Supplier network traceability

(strategic purchase optimization)

3 In evaluation

Other functions – to be discussed in future

discovery workshops

Customer case: leading U.S. technology firm Summary validated scenarios

Feasibility

Bu

sin

ess v

alu

e

Lo

w

Hig

h

Low High

Variable margin

analysis

(US$45 million)

Predictive scoring

(US$15 million)

Annual revenue: US$6.2 billion

Opportunity order

analysis

(US$15 million)

Customer service

excellence

(US$37 million)

Supplier network

traceability

(US$13 million)

Legend

SAP Business

Suite on SAP

HANA

SAP HANA

products

SAP HANA

platform

Predictive

analytics

(US$108,000)


Scenario

(business value)

SAP HANA use cases mapped to industry value map end-to-end solutions Phase – deployment road map