Delivering Real-Time Business Value for Retail

Delivering Real-Time Business
Value for Retail
SAP Business Suite Powered by SAP HANA
July 2013 Public

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2Public
The real-time opportunity
Increasing consumer access to information and
choice has transferred power from the merchant to
the customer. Customers expect to interact with
retailers across multiple channels with increasingly
shorter response times. The result is that retailers
need to:
 Transform the business with unified and simplified processes
 Create a personalized experience
 Create a seamless customer experience across channels

Toward a customer-driven enterprise
Redefined
customer
interaction
• Put the customer at the center of all processes
• Increase the number of customer touch points
• Engage with customers at every stage of the path to
purchase with personalized interactions
New level of
real-time
customer data
• Deliver real-time personalized offers to consumers via
any channel
• Achieve agility and speed in campaigns and promotions
• Use customer data as the heart of merchandise,
assortment, promotion, and demand planning
Global, channel-
agnostic supply
chain
• Use inventory efficiently across all channels and regions
• Create new levels of interaction with suppliers to reduce
costs throughout the supply chain
• Allow consumers to easily cross channels to order and
receive products whenever and wherever they want

SAP Business Suite powered by SAP HANA
The next-generation business platform
Real-time business
In-memory
Business
transactions
Digital
connections
Collaborative
business
CloudSocial
Big DataMobile
One platform bringing it all together
Advanced
analytics

Industry value map for retail
Retail without boundaries
Technology
Solutions
Unified Customer Experience
Real-Time Customer Insight and
Personalization
Superior Web and Social
Experience
Store Excellence
Analytics
Consumer
Experience
Enterprise Mobility
SAP HANA Platform
Customer-Centric
Merchandising
Customer-Driven Supply Chain
Real-Time Customer and Supply
Chain Analytics
Integrated Demand and
Replenishment Planning
Optimized Logistics and Fulfillment
Execution
People and
Talent
Core Human
Resources and
Payroll
Talent
Management
Workforce Planning
and Analytics
Finance
Financial
Performance
Management
Accounting and
Financial Close
Collaborative
Finance Operations
Enterprise Risk and
Compliance
Management
IT Management
Application
Lifecycle
Management
IT Infrastructure
Management
IT Service
Management
IT Strategy and
Governance
Application
Development and
Integration
Data
Management
Time and
Attendance
Management
Treasury and
Financial Risk
Management
IT Portfolio and
Project
Management
Real-Time Customer Insight
and Predictive Analytics
Optimized Merchandise
and Assortment Planning
Marketing, Campaign and
Promotion Planning
Perfect Price and Promotion
Execution
Collaborative Sourcing, Buying
and Manufacturing
Vendor Discovery and Lifecycle
Management
Sourcing and Buying Excellence
Private Label Development and
Manufacturing
Collaborative Business
Networks
Empowered Mobile Consumer
Real Estate
Lifecycle
Management
Indirect
Procurement

Industry value map for retail
Retail without boundaries
Technology
Solutions
Unified Customer Experience
Real-Time Customer Insight and
Personalization
Superior Web and Social
Experience
Store Excellence
Analytics
Consumer
Experience
Enterprise Mobility
SAP HANA Platform
Customer-Centric
Merchandising
Customer-Driven Supply Chain
Real-Time Customer and Supply
Chain Analytics
Integrated Demand and
Replenishment Planning
Optimized Logistics and Fulfillment
Execution
People and
Talent
Core Human
Resources and
Payroll
Talent
Management
Workforce Planning
and Analytics
Finance
Financial
Performance
Management
Accounting and
Financial Close
Collaborative
Finance Operations
Enterprise Risk and
Compliance
Management
IT Management
Application
Lifecycle
Management
IT Infrastructure
Management
IT Service
Management
IT Strategy and
Governance
Application
Development and
Integration
Data
Management
Time and
Attendance
Management
Treasury and
Financial Risk
Management
IT Portfolio and
Project
Management
Real-Time Customer Insight
and Predictive Analytics
Optimized Merchandise
and Assortment Planning
Marketing, Campaign and
Promotion Planning
Perfect Price and Promotion
Execution
Collaborative Sourcing, Buying
and Manufacturing
Vendor Discovery and Lifecycle
Management
Sourcing and Buying Excellence
Private Label Development and
Manufacturing
Collaborative Business
Networks
Empowered Mobile Consumer
Real Estate
Lifecycle
Management
Indirect
Procurement
7 8
1
2
3
4
6
5
Highest real-time
business value
for retail

Today
KPI improvements are high-level estimates and will have to be validated for each customer situation.
Real-time customer insight and predictive analytics
Business value of customer analysis and segmentation
 Customer data is fragmented and
difficult to access.
 Users do not have easy access to
the metrics that they need.
 Customer and sales information is
Big Data, which is difficult to process
in real time in order to make business
decisions such as segmentation and
targeted promotions.
 Customer segments are not
generated based on tastes or
preferences.
 Traditional data mining reports are
difficult to understand and utilize.
 Ability to flexibly perform
segmentation on any object
represented by an SAP HANA
database view
 Ready-to-use content and data
models
 Fast response times and instant
display of result set counts and target
list generation on Big Data sets
 Communication management and
load balancing
• Creation of customer segments
based on insights into customer
attributes and demand patterns
• Ability to visually mine and analyze
data via interactive charts
Minimize
data fragmentation
and manual
processes
Increase
Improve
speed and
performance by
98%
understanding of
customer needs
and preferences
With SAP Business Suite
on SAP HANA

Today
Optimized merchandise and assortment planning
Business value of merchandise, financial, and assortment planning
 It’s difficult to get products to the
customer in time to generate new
sales in a highly competitive
environment.
 There is insufficient planning at the
store level to accurately match
customer demand and shopping
habits.
 Different sources of information and
metrics deliver complicated,
disparate planning processes.
 Integrated plan delivering aligned and
targeted product assortments across
channels
 Real-time insight by product and
selling location to improve customer
service levels (in-stock percentage)
 One unified view of customer
demand across all selling channels
 Real-time visibility into trends,
customer demand, and profitability
measures to lift effectiveness of
merchandise departments
 One centralized repository allowing
immediate reconciliation of financial,
merchandise and assortment plans
 Fine-tune category mix and pricing
for local needs to increase sales and
profitability
Improve
inventory turn by
25
basis points
Decrease
Improve
markdowns taken by
10−15%
gross margin by
25
basis points
on SAP HANA

Today
Marketing, campaign, and promotion planning
Business value of marketing planning and campaign management
on SAP HANA
 Market opportunities are missed due
to lack of visibility and inefficient
processes.
 There is an explosion of data, driven
by new levels of connectivity of
consumers via mobile devices and
social networks.
 Data is in disparate data sources,
which prevents true 360-degree view
of the customer.
 Agile marketing to respond faster to
changing market dynamics and
opportunities
 New analytical, data mining
capabilities on Big Data (social
media, predictive)
 Near real-time monitoring and
reporting on marketing performance
 One central place for collecting all
customer data, leading to 360-degree
view of customers in real time
 Precision marketing to personalize
every interaction with the customer
Improve
Optimize
Increase
profitability by
0.5%
return on marketing
investments by
15%
customer
satisfaction by
40%

Today
Marketing, campaign, and promotion planning
Business value of integrated promotion management
 It’s difficult to understand customer
demand patterns and design
profitable and attractive promotions.
 Retailers must quickly respond to
competitive threats and dynamic
customer preferences.
 Promotions are too generalized and
do not appeal to specific customer
tastes and needs.
 Manual processes and disconnected
data require long lead times and
involve rigid planning processes.
 Tailored promotional offers based on
science-based predictive analysis
 Fast, real-time analysis of promotion
performance
 Access to customer information,
sales trends, and demand variations
to design and execute targeted
promotions
 Single version of the truth for
promotion planning and execution
 Increased efficiencies, shorter lead
times, and fewer errors
Improve
profitability by
25%
Increase
Reduce
basket size by
15%
planning timelines
by
30%
on SAP HANA

Today
Superior Web and social experience
Business value of customer service with interaction center
 To successfully resolve customer
issues, companies must be able to
quickly locate the right experts or
resources within the organization,
whether those experts reside inside
the contact center or elsewhere.
 Managers and supervisors lack
actionable reporting and visibility into
the workload of their teams.
 High volume of customer records and
interactions results in increased
search times and greater difficulty
locating specific customer records.
 With the new agent in-box based on
the SAP HANA platform, users can
more easily search for relevant
experts – whether on their own team
or elsewhere in the organization –
and dispatch/escalate issues to the
best-suited employee roles.
 A new interactive work distribution
dashboard provides supervisors with
actionable insights into the workload
of their teams and employees.
 Searches in the interaction center are
significantly faster, including account
searches, interaction history, and the
customer fact sheet.
Decrease
average handling
time
Improve
Reduce
service-level
agreement (SLA)
compliance
service cost
on SAP HANA

Today
Store excellence
Business value for real-time store operations
 There’s no efficient way to detect on-
shelf availability situations and take
corrective actions – leading to loss of
sales and unhappy customers.
 Store managers don’t have full
visibility of store performance and
can’t take corrective actions quickly.
 Productivity is limited due to lack of
access to related and timely
information.
 Detection of on-shelf availability
issues in real time
 Optimization of on-shelf availability
and resource deployment
 Increased customer satisfaction
 Real-time access to most relevant
key performance indicators (KPIs) for
store performance: gross/net/weekly
sales, sales vs. plan, and so on, to
monitor store performance and meet
planned revenue
 Increased productivity of store
associates and store managers by
providing them access to real-time
information whenever und wherever
they need it
Increase
customer
satisfaction
Optimize
Increase
on-shelf availability
and store
performance
productivity
on SAP HANA

Today
Financial performance management
Business value for profitability and cost analysis
on SAP HANA
 Data latencies and processes delays
impact the ability to react to issues
and opportunities.
 Lack of data depth and user self-
service affect internal decision
making.
 Processes take a long time to run.
 Data queries are time-intensive.
 Data analysis is mostly manual.
 Substantial amount of effort does not
directly add value.
 Resource efficiency and
effectiveness is suboptimal.
 Timely execution of critical business
processes that supports decision
making and increases the ability to
swiftly act (insight-to-action) in
dynamic market environments
 Critical transactions and calculations
that run quickly
 Instant response times on queries
 Prebuilt analytics that automate the
data analysis process
 Leaner processes from data capture
through data analysis
 Increased productivity through
process-optimized analytics and
mobile support
Improve
Reduce
Minimize
cycle times and
manual effort by
75%
operating costs
service-level
performance

Today
Accounting and financial close
Business value for entity close
Minimize
time to close the
entities’ books
Reduce
Enhance
cost of finance
compliance and
accuracy
on SAP HANA
 Processes take a long time to run.
 Reconciliations are time-intensive.
 There is limited time for analysis.
 Inefficiencies are created due to
manual processes and low
automation.
 Missing financial excellence
results in higher cost of equity
at the capital markets.
 It’s difficult to support parallel
financial reporting standards on a
global basis and in simulation of
scenarios.
 More time for analysis, less overtime,
and earlier publishing of financial
results through faster
period-end processes and better
reconciliations
 Increased efficiency through smarter
reconciliations and reporting,
reducing operating costs and
improving stakeholder satisfaction
 Real-time analytics down to the
lowest level of detail – delivering
quality at source, transparency, and
process efficiencies

Customer case: global retailers
Summary of validated scenarios
Feasibility
BusinessvalueLowHigh
Low High
Value-driven
product innovation
(0.1% of revenue)
Account and trade
promotion optimization
(0.5% of revenue)
360-degree customer
insight
(0.5% of revenue)
Real-time inventory
visibility
(0.1% of revenue)
Supply chain
orchestration
(2.6% of revenue )
Merchandising
assortment planning
(0.4% of revenue)
SAP HANA use cases mapped to
industry value map end-to-end solutions Phase – deployment road map
Legend
SAP Business
Suite on
SAP HANA
Applications
powered by
SAP HANA
SAP HANA
platform
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)
1 Short term
Planning: account and trade promotion
optimization, real-time planning analytics
Sales: 360-degree customer insight with SAP
HANA as multichannel data repository
2 Medium term
Product development: value-driven product
innovation
3 In evaluation
Planning: customer-centric merchandising
(increase efficiency of marketing campaigns and
promotions, lower days in inventory)
Other functions – to be determined in future
discovery workshops

Customer case: global retailers
Summary of validated scenarios
-42.000
-10.000
147.069 147.069
13.733
-100.000
-50.000
0
50.000
100.000
150.000
200.000
2013 Phase 1 Phase 2
Costs SoH Applications Platform
$
Annual revenue: US$10 billion
Based on actual SAP
customer engagements
SAP HANA Platform: Anything built on the platform that is customer-specific – new business processes and business models
SAP HANA products: SAP NetWeaver BW powered by SAP HANA; high-performance apps (HPAs); applications – mapped to
inventory value map (IVM) end-to-end (E2E) solutions
Currently available functionality (SP0, 1, 2) – 23 scenarios mapped to IVM E2E solutions, and planned functionality(all of the
E2E solutions on the IVM are in scope)
Annual benefits, SAP HANA
platform
Annual benefits, applications
powered by SAP HANA
Annual benefits, SAP Business Suite
on SAP HANA: US$7.16 million
Estimated deployment costs
Total transition cost: US$5 million
SAP HANA Platform
SAP HANA products
SAP Business Suite
on SAP HANA
SoH = SAP Business Suite on SAP HANA

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 starting point, we recommend a performance
and usage analysis of your current system.

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

© 2013 SAP AG or an SAP affiliate company. All rights reserved.
Appendix
with detailed customer cases

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.
Fashion retailer – supply chain orchestration for retail chain
Retail
Business context and goals
 The retailer is in a constant process of stock forecast and replenishment.
Business challenges
 Fast-growing company is facing problems with supply chain orchestration due to increased
complexity, speed of changes, and data volumes. Due to the technological constraints, the
retailer prepares sales analytics overnight, which does not satisfy business need.
Process innovations
 Interactive replenishment planning and tracking based on real-time sales and stock data
Contribution of SAP HANA
 SAP HANA is enabling the new approach to supply chain management through fast analysis of
large volumes of fast-changing sales data.
Value drivers/KPIs
 Increase sales
 Reduce lost sales
 Improve inventory turnover
Innovation scope
SAP HANA platform (customer-specific)
E2E solution
Retail – integrated demand and replenishment
planning
Value potential 4
Feasibility 4
Low High
1 5
Low High
1 5

Home furnishings retailer – reduce time to market
for new offerings
Retail
Innovation scope
(now and future)
E2E solution
Retail – marketing, campaign, and promotion
planning
Value potential 4
Feasibility 3
Low High
1 5
Low High
1 5
 Coordinate and tailor promotions around the world, reducing time of replication and increasing
promotion effectiveness
Business challenges
 Need to analyze selling patterns and customer behavior around by geography, product, and line
of business to increase promotion effectiveness and scale promotions globally
Process innovations
 Increased visibility into all trade-related processes to facilitate collaboration and allow reactive
decisions
 Real-time expense data for accurate cost forecasting and promotion planning
Value drivers/KPIs
 Increase revenue
 Reduce days in inventory

Home furnishings retailer – value-driven product
innovation
Retail
Innovation scope
(now and future)
E2E solution
Retail – application development and
innovation
Value potential 3
Feasibility 2
Low High
1 5
Low High
1 5
 Develop new products and services based on value-driven investment decisions
Business challenges
 Long time from recognizing new customer needs and new trends to new product realization
Process innovations
 Develop innovative products and services to respond faster to customer inquiries, and coordinate
resources across a project’s entire lifecycle, as well as across several business functions
 Manufacturers able to create a framework that can help them align product strategy and
development, streamline development processes
Value drivers/KPIs
 Enable profitable growth

Fashion retailer – category management
Retail
 Optimize pricing and shelf space decisions; optimize pricing and shelf space for each SKU within
category; provide analytical support for markdown optimization; optimize shop-floor layouts by
store type and market; optimize promotions by store type and market; provide omni-channel view
of customer to manage impact of spend shift to the Web
Business challenges
 Inability to optimize regular price and promo pricing with shelf space based on localized
requirements
 Optimize pricing and shelf space decisions; optimize pricing and shelf space for each SKU within
category; provide analytical support for markdown optimization; optimize shop-floor layouts by
store type and market; optimize promotions by store type and market; provide omni-channel view
of customer to manage impact of spend shift to the Web
Value drivers/KPIs
 Increase gross margin
Innovation scope
E2E solution
Retail – optimized merchandise and
assortment planning
Value potential 5
Feasibility 3
Low High
1 5
Low High
1 5

Fashion retailer – accelerated inventory reporting
Retail
 Inventory reporting/inventory extracts have a significant system overhead on the ERP system. In
addition, from an end-user reporting perspective there are many time-outs and long-running jobs that
impact users’ ability to perform their function. There is also significant use of SE16N against the
MBEW table that causes performance issues as well as business risk.
Business challenges
 Despite current archiving initiatives, the database is continuing to grow as businesses (transactional
data) and related master data components are added.
As data volume increases, performance decreases.
Improved analytics require the large volume of current and historical data.
Process innovations
 The retailer can benefit with SAP HANA for inventory reporting/extracts and can significantly reduce
the impacts to overall batch schedule as well as provide users with better reporting options.
 B52 reporting: Primary users are inventory control and sourcing teams.
 Mode: This report is run in both the background and in the foreground. A large number of system
time-outs occur when it runs in the foreground, especially around month-end.
Contribution of SAP HANA Value drivers/KPIs
 Key inventory financial reports availability faster
by hours
 Opportunity to improve significant excess
inventories without affecting service levels
 Daily “best estimate” of inventory position/costing
to facilitate a move to a value-creation culture –
across planners, buyers, and merchandising
 Business user productivity
 Key inventory financial reports availability faster
by hours
 Opportunity to improve significant excess
inventories without affecting service levels
 Daily “best estimate” of inventory position/costing
to facilitate a move to a value-creation culture –
across planners, buyers, and merchandising
Innovation scope
(now and future)
E2E solution
Retail – real-time customer and supply chain
analytics
Value potential 2
Feasibility 5
Low High
1 5
Low High
1 5

Multinational retailer – real-time inventory visibility
(multichannel)
Retail
Innovation scope
SAP HANA products (HPAs, apps)
E2E solution
Retail – integrated demand and replenishment
planning
Value potential 4
Feasibility 4
Low High
1 5
Low High
1 5
 Real-time view of inventory is needed across multiple channels.
Business challenges
 Lack of real-time view of stock across the supply chain results in a different customer experience
in different channels (stores, Internet, and so on), and also results in high stock cost (due, for
example, to safety stock being maintained separately for different channels).
Process innovations
 SAP HANA would provide real-time cross-channel view of inventory across the customer's
supply chain. This would help customer to minimize out-of-stock situations, reduce product
markdowns, reduce safety stock inventory, reduce stock loss, and improve supply chain agility.
 SAP HANA would provide real-time cross-channel view of inventory across the customer's
supply chain.
Value drivers/KPIs
 Reduce inventory
 Reduce stock-outs
 Increase promotional effectiveness

Electronics retail – shop clustering
Retail
Innovation scope
SAP HANA products (HPAs, apps)
E2E solution
Retail – optimized merchandise and
assortment planning
Value potential 3
Feasibility 3
Low High
1 5
Low High
1 5
 Company manages assortment in 1,800 stores across the country and needs to forecast
inventory level and plan replenishment.
Business challenges
 Suboptimal planning of assortment, resulting in high level of out-of-stocks
Process innovations
 Store clustering based on real-time analytics to allow active replenishment planning and tracking
 SAP NetWeaver Business Warehouse (SAP NetWeaver BW) application powered by SAP HANA
for fast data access
Value drivers/KPIs
 Reduce out-of-stocks

Innovation scope
E2E solution
Retail – financial performance management
Value potential 5
Feasibility 3
Low High
1 5
Low High
1 5
Multinational retail – improve financial planning
Retail
Financial planning
Plan at granular levels, run complex scenarios and allocations. Provide faster analysis on larger data volumes.
Develop financial models based on detailed drivers vs. roll-ups. Provide timely and accurate actuals to support
planning. Enable planning, forecasting based on real-time operational data combined with analytics. Manage
expenses with operational and financial drivers in a much faster and more automated way with reduced cycle time.
Enable other applications/business processes to leverage business planning and consolidation (BPC ) software.
Business challenges
Financial planning
Business warehouse to BPC process is very “clunky” with significant and variable data load times (45 min. to 8
hours) every day. As company grows, uncertain how system will handle data. Risk with delayed data loads: if
actuals aren’t loaded on time, team cannot research variances and inform the next forecast. No line of sight to
understand the increase in costs today because inability to view granular level of details. Pre-aggregate article/site
data into category before BPC load. Need to get to additional levels of detail. Examples include: Expense
management: finance relies on data to drive decisions; if not available, then forecast is overestimated with “cushion.”
Headcount, indirect spend, project systems, and real estate expense management cannot be proactive without
granular insight into data and ability to do detailed calculations. Comp sales: Company does not plan down to the
article/site level, but if it did, this would unlock an “enormous value lever”; BPC calculations are available but system
will crash because of too much data. Hurricane Sandy: manual process were necessary to know why comps were
low, no tracking at site level; information was not provided in time.
Financial planning
Plan at granular levels, run complex scenarios and allocations. Provide faster analysis on larger data volumes.
Develop financial models based on detailed drivers vs. roll-ups. Provide timely and accurate actuals to support
planning. Enable planning, forecasting based on real-time operational data combined with analytics. Manage
expenses with operational and financial drivers in a much faster and more automated way with reduced cycle time.
Enable other applications/business processes to leverage business planning and consolidation (BPC ) software.
Value drivers/KPIs
 Reduce gross margin (reduce clearance/markdowns)
 Reduce selling, general and administrative expenses (SG&A), cost of sales
 Reduce consulting costs for SAP NetWeaver BW

Fashion retailer – 360-degree customer insight
Retail
Innovation scope
E2E solution
Retail – consumer experience
Value potential 4
Feasibility 3
Low High
1 5
Low High
1 5
 Company needs to grow in three dimensions: channels, brands, and formats.
Business challenges
 To set the main strategy guidelines for growth (such as new market opportunities, new brand to
be acquired, format to be promoted), the company needs 360-degree customer insight.
Process innovations
 Create a multichannel data repository
 360-degree customer insight with SAP HANA as multichannel data repository
Value drivers/KPIs
 Increase growth
 Increase customer satisfaction

Delivering Real-Time Business Value for Retail

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