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The Future of the Digital Economy and SAP's Role

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Learn about how SAP plays a role in the future of the digital economy in this presentation by Sven Denecken.

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The Future of the Digital Economy and SAP's Role

  1. 1. The Future of the Digital Economy and SAP’s Role Sven Denecken, GVP Co-Innovation and Strategy, SAP S/4HANA October 2015 @SDenecken
  2. 2. The Market Perspective @SDenecken
  3. 3. Macro perspective, the modern drivers of change *Concept  Source:    Unboundary,  Inc.   © 2015 SAP SE or an SAP affiliate company. All rights reserved. 3
  4. 4. Hyperconnectivity across people, business, and devices give rise to a new digital economy powered by real-time data © 2015 SAP SE or an SAP affiliate company. All rights reserved. 4 75 billion connected devices in the Internet of Things Over 2.55 billion social media users by 2020 U.S.$65 trillion in global trade through connected businesses Source: SAP Corporate Fact Sheet 1/2015Source: www.emarketer.comSource: Business Insider
  5. 5. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 5 As five billion people reach middle class, new challenges arise in customer expectations, workforce, and resource management Dramatically Changing Workforce 82% customers stop doing business with a company due to a poor experience $5.6T savings through connected vehicles 67% increase in crop yields 22% increase in supply chain efficiency Rising Customer Expectations 71% of business leaders believe that customer experience is the next battleground High employee engagement: 3x higher operating margin 72% of Millennials feel their current organization is not making full use of their skills Pressure on Resources Water 1.5x by 2030 Energy 1.5x by 2020 Food 1.5x by 2030 Metals 2x by 2030 Sources: Impact Report, Harris Interactive. Colin Shaw and John Ivens, 2010; Deloitte Millennial Study, 2015; Shell, 2014; WRI, 2014; SAP SE, 2014. Towers Watson, 2012
  6. 6. Major tech trends drastically change "art of the possible" Augmented reality Immersive  visualiza<on,  e.g.   showroom  experience,   maintenance/  assembly     instruc<ons   Internet of things/device interaction Intelligently  connect  smart  objects   to  link  material  and  informa<on   flows   Advanced robotics Autonomous,  coopera<ng  industrial   robots  with  numerous  integrated   sensors   3D printing Manufacture  tailored  products  in   smaller  lots,  more  distributed/ closer  to  point  of  sale/use   Big Data/Predictive analysis Develop  deep  insights  into  supply   chains  &  beJer  forecast,  e.g.,   demand  and  capacity   Autonomous transportation Intelligent,  autonomous  systems,   e.g.,  self-­‐driving  vehicles/trucks,   unmanned  areal  vehicles  (UAVs)   Shift to the cloud Highly  scalable  soPware-­‐as-­‐a-­‐ service  apps  with  remote  storage   and  processing  power   Ubiquitous connectivity "Always-­‐on"  access  to  content  and   communica<on  capabili<es   Social, local, mobile On-­‐going  engagement  with   customers  and  communi<es  in  a   relevant  and  geo-­‐contextual  way   © 2015 SAP SE or an SAP affiliate company. All rights reserved. 6
  7. 7. 10.2% or U.S.$237 billion of profits are lost by the top 200 global companies due to hidden costs of complexity © 2015 SAP SE or an SAP affiliate company. All rights reserved. 7 Business Network Say it’s decision making 75% 73% 60% Believe it’s technology Layers of legacy and interfaces make it difficult to keep pace with change Say it’s business processes Business processes built for the Internet age, not the real- time digital era, where insights are connected to action Difficult to collect the right data, see from top level to transactions, socialize decisions, and connect decisions to actions Source: The Simplicity Index 2011, 2015 Wharton-SAP Run Simple Survey.
  8. 8. The Digital Core @SDenecken
  9. 9. Internet  of  Things   Unit  of  One   Technology   induced   change   Digi<ze  The  Core   Service promise Ability to deliver End to end experience The  end  to  end  digi0zed  enterprise     is  a  mandatory  consequence   [#/€]   <me  Digital  Economy   Number   of  items/lots   value/size   of  items/lots   Unit  of  One   Digital store as typical fast market entry Digital  Customer  Experience   Segment  of  ONE   New customer expectations Auto-replenishment/ Subscription Personalized Coupons Plan Your Trip to the Store Personalized Communication Easy Ordering from app Curated Experience In-Store Navigation
  10. 10. The digital economy is a reality *MIT  Digital  Change  Survey,  2013   Of  business  leaders  said  that   achieving  digital  transforma<on   will  become  cri<cal  to  their   organiza<ons  within  the  next  two   years.*   78%     Of  employees  in  companies  where   CEOs  have  shared  their  vision  for   digital  transforma<on  feel  that  it  is   the  right  thing  for  the   organiza<on.*   93%   All  lines  of  business  running  in  real  <me  on  a  digital  business  plaZorm   The  digital  value  chain   Suppliers   People   Resources   Omnicommerce   Deliver  excep<onal  experiences  to  your   customers  across  every  channel  of   interac<on   To  enable  the  workforce  of  the  future   –  employees  and  con<ngent  labor   Enable  fric<onless  commerce  by   managing  suppliers  beJer   Manage  materials,  assets,  money,  and  other   resources  beJer   Customers   Business  network   Social   Internet of Things   Other unstructured/ structured data The  digital  value  chain   © 2015 SAP SE or an SAP affiliate company. All rights reserved. 10
  11. 11. The business models of the future Customer centric Operationally excellent Globally networked Rapidly innovating  Agile   •  Fast  adapta<on  of  business   strategies     •  Fast  innova<on   •  Highly  skilled,  empowered   people  in  cross  func<onal,   cross  organiza<onal  teams   •  Driven  by  strong  vision  and   leadership   "Plug  and  play"  networks   •  Global reach •  Scalable capacity •  "Pay as you go" •  Secure •  Actively managing risk   Segment  of  One  –  at  scale   •  Personalized,  intelligent   products     and  services   •  Rich,  real  <me  customer   interac<on   •  Based  on  360°  customer   view   Next  genera0on  processes   •  Highly automated e.g. "touchless order" •  Embedded,  "real  <me"   decision  support   •  Highly adaptive Empowered consumer / customer Science and technology progress GlobalizationCompetitive and regulatory pressures Powered  by  digital  technologies   © 2015 SAP SE or an SAP affiliate company. All rights reserved. 11
  12. 12. •  Definition of strategic digital objectives •  Agile approach to strategy Digital  strategy   •  Think and act like a VC •  Still: leverage existing asset base •  ... Digital  disrup0on   Five main approaches towards digital transformation Prioritized approache(s) are specific for each company Create  value  from  data   •  Business model based on data •  Digitally enhanced products •  Product-­‐related  services  based  on  sensor   data   •  ...   Digi0ze  core  business   •  Faster, simpler and further automated processes •  Seamless integration across all value chain processes •  Digital R&D, production, administration •  ... Enhance  digital  capabili0es   •  Analy<cs  capabili<es   •  Agile  working  mode   •  Agile  plaZorms,  con<nuous  delivery   •  PlaZorm  TCO   Improve  customer  experience   •  Relentless  customer  centric  focus   •  Connected  touch  points  in  customer   journey   •  Sales  channels  /  CRM   •  Mobile customer engagement Digital transformation Build digital ecosystem •  Posi<oning  in  relevant  ecosystem   •  Consume  digital  services   •  Partner  for  common  offerings     •  ...   © 2015 SAP SE or an SAP affiliate company. All rights reserved. 12
  13. 13. Plenty of digitization opportunities in core processes Even though ERP processes seem to be unchanged at the top level Automa<on  of   process  steps   Management  by   Excep<on   Insight  to    Ac<on   Process  Integra<on   Segment     of  One   Loca<on-­‐  and  context   aware  processes   Self  service  processes,     any<me  &  anywhere   Omni-­‐Channel  customer   engagement   Simplified  User   Experience   New   Devices     QR  Codes,  RFID,  Sensors   New   Technologies     New     Data     New   Services     Localiza<on  services   New     Tracking     Green  manufacturing,  CO2  tracking,   GRC  standards   Employee   Empowerment,  de-­‐ layering   Procure  to  Pay   Plan  to   Product   Order  to  Cash   Request  to   Service   Finance   Human  Resources   Process digitization opportunities Process digitization drivers © 2015 SAP SE or an SAP affiliate company. All rights reserved. 13
  14. 14. Marketing in real time to the Segment of ONE based on individual customer activities on all channels Individualized advertise-ments, discounts, product configurations, product recommendations, etc. Mass  customiza0on  supported by real time •  fulfillment monitoring •  processing of customer change requests •  responses to unplanned downtimes •  responses  to  changed  parts availability •  etc. Digitzation of core processes is critical to scale up Example: Digital commerce – fulfillment example Digital store is a typical MVP for fast market entry Digitized core is needed for consistent customer experience Digital  store  front   Batch  fulfillment   Digital shopper experience •  Mobile commerce •  In store navigation •  Easy ordering •  Peronalized coupons •  Curated expereince Limited number of variants Weekly or daily planning, fulfillment and delivery tact Low flexibility for order changes and responses to unplanned down time, supply problems, etc. Lot  size  one   ✓Auto-replenishment/ Subscription Personalized Coupons Plan Your Trip to the Store Personalized Communication Easy Ordering from app Curated Experience In-Store Navigation Auto-replenishment/ Subscription Personalized Coupons Plan Your Trip to the Store Personalized Communication Easy Ordering from app Curated Experience In-Store Navigation Digital  store  front   Minimum Viable Product End to end digitized © 2015 SAP SE or an SAP affiliate company. All rights reserved. 14
  15. 15. SAP S/4HANA – The Digital Core @SDenecken
  16. 16. Understanding  the  new  value  levers   The  digi<zed  core  enables  transforma<on   Digital  economy   Mobile   Big  Data   Internet  of   things   Cloud   Subscrip0on   Digi0zed   core   Segment  of  one   Unit  of  one   Personalized   experience   Connected   manufacturing   Business  model   transi0on   Lot  size  one   Contextual   marke0ng   Digital  transforma<on  
  17. 17. SAP S/4HANA Value Toolkit: digitize beyond the core, embrace the digital economy Internet     of  Things   Business     networks   Social     networks   Devices   Big  Data   People   Process  Enriched   Scalability  I  Real  <me  I  Predic<on  I  Simula<on     Live  Data   Granular  I  Responsive  I  Accurate     User  Empowered   Instant  insight  I  Contextual  informa<on  I  Personalized  experience   Segment  of  1   Lot  size  of  1   No  latency   Tradi<onal  core  value  play     SAP  S/4HANA  value  play   At  scale     Leading-­‐edge  processes  I  Integrated  system   Digital  transforma<on  of  business  models   Digital  Core  Digital  Economy   Digital  Transforma0on   © 2015 SAP SE or an SAP affiliate company. All rights reserved. 17
  18. 18. Connect  to  the  world’s  largest  business  and  social   networks  and  lead  business  innova<on  with  IoT   •  Instant  connec<vity  to  supplier,  customer  and  partner   networks     •  360  view  of  customers  with  access  to  all  interac<ons   •  Real-­‐<me  connec<ons  to  sensors  embedded  into   products  and  assets   SAP S/4HANA's offers breakthrough capabilities for digital transformation Re-imagined business processes Advanced business analysis Connections to IoT and Business NetworksImmediate  business  insight   Use  embedded  analysis,  predic<on  and  simula<on  to   an<cipate  future  business  outcomes     •  Contextualized  analy<cs  at  the  point  of  decision   making     •  Easy  to  use,  yet  sophis<cated  built  in  predica<ve   func<ons   •  What  If  analysis  tools  to  make  more  informed   decisions     Get  live  and  personalized  business  insight  to  make  any   decision  from  anywhere  on  your  device  of  choice   •  Single  source  of  truth  across  the  en<re  enterprise   data     •  User  experience  tailored  to  individual  business  roles   •  Interoperability  across  different  devices  and  OSs     Run  digi<zed  business  processes  across  your  enterprise   with  a  modern  core    designed  for  the  digital  economy   •  Faster,  simpler  and  more  automated    business   processes     •  Seamless  process  integra<on  across  the  en<re  value   chain   •  Big  Data,  Cloud  and  Mobile  enabled  business  process     © 2015 SAP SE or an SAP affiliate company. All rights reserved. 18
  19. 19. Exemplar Value Case: Digital transformation in Finance and Logistics Manufacturing   “In Sync” manufacturing Ÿ  Ensure physical reality in production and representation in IT system are always in sync Ÿ  Drive more frequent Inventory updates in real time Business outcome: Ÿ  Reduce costs with always correct inventory information, less exception handling Ÿ  Improve product quality with early detection of master data errors Key innovations: Finance   Soft Close Ÿ  Improve management and control of operations anytime within period Ÿ  Allow immediate financial and business decisions (such as transaction- based revenue recognition, calculation of overheads) Business outcome: Ÿ  Revenue and margin increase through real-time profitability analysis Ÿ  Real-time revenue recognition for goods and services Key innovations: Process Enriched Scalability I Real time I Prediction I Simulation Live Data Granular I Responsive I accurate User Empowered Instant insight I Contextual information I Personalized experience Digital  Core   Ÿ  Universal journal Ÿ  Intra-period reconciliation Ÿ  Real-time inventory management Ÿ  Inventory information at granular level © 2015 SAP SE or an SAP affiliate company. All rights reserved. 19
  20. 20. Connected  equipment.   Big  Data.   Industry  4.0   Internet  of  Things.   Connected  design:     Providing:  Complete  lifecycle  visibility  for  improved  design.   Business  outcome:  Lower  cost  and  higher  quality.   Serving  the  segment  of  one:     Providing:  BeJer  synchroniza<on  of  processes.     Business  outcome:  Higher  revenue  through  faster  <me  to  market.   Connected  manufacturing:     Providing:  Real  <me  informa<on  with  the  Internet  of  Things  .       Business  outcome:  Increased  cost  efficiency    &  asset  u<liza<on.  The Digital core The manufacturing Digital transformation Omni-­‐Channel  commerce.   Internet  of  Things.   Big  Data.     Insight-­‐driven  wholesale   distribu0on.   Omni-­‐Channel  service:     Providing:  Mul<  channel  customer  interac<on.     Business  outcome:  Increased  revenue  and  customer  loyalty.   Profitability  op0miza0on:     Providing:  Customer  Life<me  value  based  targe<ng.     Business  outcome:  Increased  margin  per  customer  segment.   Connected  vending  machine  sales:     Providing:    Meet  customer  demand,  any<me,  anywhere.   Business  outcome:  Increased  customer  loyalty.       The Wholesale Digital transformationThe Digital economy in Wholesale: The Digital economy in Manufacturing: +  real  <me,  in  memory  plaZorm   +  role  base  &  mobile  UX     +  flexible,  lowest  data  granularity     +  predic<ve  and  analy<cal  driven   +  digital  readiness   +  guided  configura<on   Exemplar Value Case: Digital transformation in Manufacturing and Wholesale
  21. 21. How to Start @SDenecken
  22. 22. The Digital Transformation lever is huge Mobile   Cloud     Big   Data   IoT   Business   Networks     Internal  IT  as  service  broker   Hybrid  as  the  new  norm   End2End  process  chain   How  to  leverage  for  my  business   New  enterprise  architecture   Mobilize  services,  BYOD   Collabora<on  Web  2.0   New  value  chains   New  communica<on   mechanisms   Data-­‐driven  development   Real-­‐<me  analy<c   Data  as  new  economic  resource   Machine2Machine   communica<ons   Classic industry vs. digital business IT security, tracking User  experience   Simplify  data  model   Flex  the  core   © 2015 SAP SE or an SAP affiliate company. All rights reserved. 22
  23. 23. Right ambition level depends on both industry and company specific drivers Opportunis*c   adop*on  of  digital   technologies   Transforma*on  of   core  business  model   Systema*c  leverage   of  digital  for   performance   improvement     Leverage  digital  to   develop  new   compe**ve   advantage   Industry  specific  drivers:   •  Development  of  new  business  models   •  Reduc<on  of  entry  barriers   •  Share  of  industry  revenue  pool  generated  by  digital   •  Relevance  of  customer  behavior   Company  specific  drivers:   •  Digital  as  add-­‐on  or  fundamental  transforma<on   •  Poten<al  to  leverage  digital  to  mobilize  and  innovate   company   Source: BCG experience What is the right aspiration for your company in Digital? © 2015 SAP SE or an SAP affiliate company. All rights reserved. 23
  24. 24. SAP helps simplifies your technology architecture, business processes, and decision making © 2015 SAP SE or an SAP affiliate company. All rights reserved. 24 Applications Business Network SAP HANA Platform In-memory computing. Analytics. Services. Every line of business and every industry SAP S/4HANA Customer engagement and commerce Human capital management Procurement Inter-enterprise commerce and spend Suppliers Workforce Travel and entertainment
  25. 25. With SAP, CEO’s can reimagine new business models to take advantage of the opportunities in the Digital Economy © 2015 SAP SE or an SAP affiliate company. All rights reserved. 25 Zero latency supply chains Applications Business Network Sales, Service, Marketing Human Resources Finance Supply Chain SAP HANA Platform Capitalize on the power of real-time data to deliver innovation to business without disruption Anticipate customer needs Inspired and engaged employees Instant cash flow visibility Frictionless commerce Deliver across channels Fluid and scalable workforce Predictable and optimized expense
  26. 26. Your journey to master simplicity and capture the Digital Economy starts today – at the pace you choose © 2015 SAP SE or an SAP affiliate company. All rights reserved. 26 Design Thinking Co-Innovation Choose business processes Choose decision scenarios Choose technology platform Architectural plan Technical readiness assessment Data discovery workshop Business strategy Data mapping Industry value engineering Business scenario recommendation
  27. 27. Run Simple. Thank you. @SDenecken INTERNAL
  28. 28. Run  simple  with  the  next-­‐genera<on  business  suite   @   sven.denecken@sap.com @SDenecken https://www.linkedin.com/in/sdenecken Sven Denecken, GVP Co-Innovation and Strategy S/4HANA SAP SE

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Learn about how SAP plays a role in the future of the digital economy in this presentation by Sven Denecken.

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