Insights from SAP Performance Benchmarks. Diving deep into why and how SMBs go through a digital transformation.

1. Customer
Is Your Business Ready for a Digital Transformation?
Insights from SAP Performance Benchmarking

2. 2Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
1. Why Digital Matters?
2. What Organizations Want From DX?
3. The Reality of Digital Transformation Maturity
• A Perspective Across Industries
4. Lessons from Digital Leaders
• Reimagine Business Models
• 10 Attributes Driving Higher Digital Maturity and Stronger Performance
5. Key Takeaways and Next Steps
Agenda
Assessment Overview | Why Digital |DX Objectives| The Reality | Lessons from Leaders | Next Steps
DX = DigitalTransformation

3. 3Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
+43%
HIGHEROPERATING MARGIN
+49%
+118% Organizations where the CEO and
Board are executive sponsors of
digital innovation
Organizations that leverage cloud
computing to rapidly innovate without the
stress of managing software, platform, or
the underlying infrastructure
Organizations that leverage their
strengths and work with partners /
broader ecosystem to drive
successful business models
Source: Enterprise Digital Readiness Assessment: 2016, N=114
Why Digital Matters
Digital Transformation Maturity Drives Higher Financial Performance
Assessment Overview | Why Digital | DX Objectives| The Reality | Lessons from Leaders | Next Steps

4. 4Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Want to improve
Customer Experience
through DX
50%
Want to Drive
Innovation through DX
36%
Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation, Participants were asked to pick top 2 objectives for Digital Transformation
Want to Increase
Revenue through DX
32%
Want to Transformthe
Business through DX
17%
Want to improve
business decision
making through DX
41%
Want to Improve
Agility through DX
29%
Want to Reduce
Costs through DX
66%
 While different industries have different goals they want to achieve out of DX; Reducing Costs and Improving Customer Experience are consistent as top
objectives across most industries
 Reducing costs should not just be read in the traditional sense of increasing the bottom line but organizations’ intent to “shrink to grow” while shifting this
funding to digital transformation initiatives
 Improving Customer Experience is not just a top objective for Consumer-driven industries but also conservative/ asset-intensive industries like Mill Products,
IM&C and EC&O
 Adoption of cutting edge technologies like Robotics, AI, IOT can help organizations achieve all of the above
What Organizations Want From DX?
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps

5. 5Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Organizations are
aggressive and disruptive
in use of digital technologies
Only
6%
Organizations are
focusing on DX as part
of their strategy
89%
Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation * - Compared to organizations with ‘One-off initiatives”
The “aggressive and disruptive” organizations:
have a dedicated budget in place to support digital
transformation initiatives
leverage large-scale in-memory computing
leverage cloud computing
have a culture of innovation and risk taking within
the organization supported by fast and agile
methodologies like Design Thinking
connect people, data, and devices seamlessly
35%
35%
41%
38%
44%*
There is awareness and intent to go on a DX journey but
huge gaps remain in execution
The Reality of Digital Transformation Maturity
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps

6. 6Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
14%
26%
33%
39%
52%
59%
Shared economy
Compete as an ecosystem
Expand to new industries
Outcome-based business
Digitization of products and services
Digital platform
Monetizing a large, captive communityof users and customers
by charging transaction fees and opening access to marketers
Disruptingvalue chain by rethinking how products/services can
be delivered faster and cheaper
Moving beyond sellingproducts and services to delivering on
measurable business outcomes
Entering and disruptingother industries or markets by leveraging
core assets and capabilities
Digital and seamless connections of productsand services from
several companiesdeliver better outcomes for the end customer
Facilitatingpeer-to-peer-based sharing or access to underutilized
resources through a community-based digital platform
Siemens
Customer Examples
Hagleitner
Under Armour
Shell and
Volkswagen
Kaiser
EasyPark
Top New Business Models Being Focused on by Enterprises
Lessons From Digital Leaders
Reimagine Business Models
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey

7. 7Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Machine Learning
Digital Leaders are 84% more mature
in machine learning adoption to
eliminate waste, risk, and downtime
Blockchain
Digital Leaders are 75% more mature
in leveraging Block chain technologies
to document transactions in a secure
manner with no intermediaries
Alberta Treasury Bank (ATB Financial) - ATB Canada
successfully transferred CA$1,000 to ReiseBank (Germany)
using a network built on SAP technology and Ripple’s Lab’s
network of enterprise blockchain solutions. The payment,
which would typically have taken between 2 to 6business days
to process, was completed in around 20 seconds.
eBay decided to partner with SAP to gain real-time insights
through an early pattern detection system powered by
predictive analytics on the SAP HANA platform. eBay now
leverages these predictive analytics to power its early signal
detection system for the marketplace – all to gain insights
into its virtual economy, identify opportunities, and take
corrective action
Customer Examples
+84%
1
+75%
2
Lessons From Digital Leaders
10 Attributes Driving Higher Digital Maturity and Stronger Performance
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey
Digital Maturity Score

8. 8Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Brooks Brothers partnered with SAP and IBM to
create an omni-channel system that provided visibility
into talent, and create a true performance culture.
With new systems in place, Brooks Brothers not only
has a full view of internal systems and processes, they
also have a 360° view of their talent pool and how
people are performing, growing, and comparing to one
another at any given time, anywhere in the company.
The shift away from a paper-based culture has allowed the
environment and Public Spaces Ministry of the City
Government of Buenos Aires to make an immediate impact.
Claims and complaints are responded to in a matter of days,
rather than weeks or months. Bottlenecks can be quickly
identified and resources shifted to address specific needs.
Culture of Innovation
Digital Leaders are 75% better in
culture of innovation and risk taking
enabled by fast and agile
methodologies like Design Thinking
Digital Talent Enablement
Digital Leaders are 75% more mature in
enabling talent with the right business and
technology skillsets and digital technologies
to succeed in today’s digital age
Lessons From Digital Leaders
10 Attributes Driving Higher Digital Maturity and Stronger Performance
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey
Customer ExamplesDigital Maturity Score
+75%
3
+75%
4

9. 9Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Siemens MindSphere is a cloud system to help
manufacturing companies leverage power of IoT, and
optimize and automate chain of processes for mass
production. This open IT ecosystem powered by SAP allows
OEMs and application developers to access the platform via
open interfaces and use it for their own services and
analyses
To quickly resolve issues when customers contacted its call
centers, CenterPoint Energy Inc. needed to provide customer
service reps with fast access to up-to-the-minute, accurate
customer data across all lines of business. CenterPoint chose
SAP and with the help of predictive analytics, customer service
reps can more quickly identify customer needs and efficiently
route calls to the appropriate agent or other destination. As a
result, CenterPoint has reduced average call-handling time and
created a superior customer experience. The company has
also achieved 15% increase in call handled by the IVR system
rather than an agent, thanks to predictive analytics.
Predictive Business
Digital Leaders are 74% more mature in
combining information from assets, sensors
and other externalsources with internal data
and transactions to move from a reactive to a
more predictive business
Technology Platforms
& Agile Development
Digital Leaders are 71% more mature
in leveraging technology platforms
that include open APIs and agile
development capabilities to enable
people to collaborate, add services
with ease and drive innovation
Lessons From Digital Leaders
10 Attributes Driving Higher Digital Maturity and Stronger Performance
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey
Customer ExamplesDigital Maturity Score
+74%
5
+71%
6

10. 10Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Cox Communications is the third largest cable entertainment
and broad bad provider in United states. To improve service
and bring more people's digital experience to life, Cox needed
to personalize offers for more than 6 million subscribers across
28 regions. Cox chose SAP and reduced customer churn by
28% and increased products per customer household by 14%.
Plus the solution is scalable, so it can support the company’s
short- and long-term marketing strategy, including predictive
modeling for customer acquisitions, retention, lifetime
valuation, and event-based marketing.
Mass Personalization
Digital Leaders are 70% better in shifting
from a focus of mass “everything” to mass
personalization based on each individual
customer’s needs and marketing, sales,
service, and commerce act in unison to
provide the personalization demanded by
today’s consumer
Dedicated CDO
Digital Leaders are 70% more mature in
driving digital transformation across the
organization by having a dedicated
digital transformation leader (Chief
Digital Officer or equivalent)
“In our view, digitization strategies that are integral to
corporate strategy should be “owned” by a C-level
executive: the chief digital officer.”
Strategy &, Formerly Booz & Company
Lessons From Digital Leaders
10 Attributes Driving Higher Digital Maturity and Stronger Performance
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey
Customer ExamplesDigital Maturity Score
+70%
7
+70%
8

11. 11Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
City of Cape Town, South Africa, consolidates data from
different state divisions, data sources “on the ground,” and
social media. By sharing this data with the police department
and other emergency services, it can respond quickly,
efficiently, and even proactively to threats and incidents.
Hyper Connectivity
Digital Leaders are 67% better in
enabling people, data, and devices to
seamlesslyand instantly interconnect
from any device, any moment, anywhere
Executive Sponsorship
Digital Leaders are 66% better in digital
innovation sponsorship. CEO and Board
executives ensure that digital transformation
is on the management agenda and clearly
articulating a vision focused on the customer
Senior Management intertest or desire to drive
digital outcomes is the highest chosen factor of
success and lack of it the highest chosen factor of
failure.
Bullish on digital: McKinsey Global Survey results
Lessons From Digital Leaders
10 Attributes Driving Higher Digital Maturity and Stronger Performance
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
Source: Enterprise Digital Readiness Assessment: 2016, N = 439, DX = Digital Transformation The customers mentioned above may or may not have completed the benchmarking survey
Customer ExamplesDigital Maturity Score
+67%
9
+66%
10

12. 12Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
With our survey, we discovered that many commonperceptions about digital transformation were actually myths as stated below.
These myths can lead senior executives to make unfortunate and costly decisions.
Our global survey of 439 large firms provides fact-based answers:
 Digital maturity matters. Digital leaders are more profitable than their competitors (+41% higher operating margin) and the markets reward them.
 No firm and no industry is immunefrom digital transformation. The future digital tsunami is coming quickly.Since it takes time to become digitallymature, senior executives in every
industry should take active steps immediately to consider the opportunitiesand threats available through digital transformation.
Digital is primarily about
the customer experience
Digital primarily matters
only to technology or
B2C companies
Digital transformation
approach is different for
every industry and company
In our industry we can wait
and see how digital develops
1
2
3
4
In addition to customer experience, efficiency and
productivity remain a priority with huge opportunities
Opportunities exist in all industries with no
exceptions
Digital Leaders exhibit a commonDNA, Business
Capabilities and Technology Adoption
There are digital leaders disrupting and
outperforming their peers in every industry
today
Myths Realities
Key Takeaways
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps

13. 13Customer© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Take action now to create your own digital advantage. Let’s
connect and get a personal baseline of where you think your
organization stands – kyler.miles@sap.com
Next Steps
Assessment Overview | Why Digital | DX Objectives | The Reality | Lessons from Leaders | Next Steps
Thank you.

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