Clarity in the New Reality

Sajjad Syed Head SAP Pakistan

November 12, 2009

Pre 2008 Reasons for IT Enabled Systems

Holistic (Integrated) view of business

Cost Control Specially in Inventory and Supply Chain

Adoption of Industry Best Practices

Managing growth and geographically dispersed entities.

Top management to focus on strategy rather than implementing controls.

Then

Reality Changed

as

we faced the biggest global Economic downturn in the history of mankind

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Today’s New Reality & Challenges The context in which businesses operate today

Economic Volatility

Proliferation of Global Regulation

Business Network Transformation

Rising Consumer Power

Sustainability

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60%60%60%60%74%74%74%74%

How do you lead through challenging times?You need clarity and transparency to act decisively

Will reduce operating costs

Will reduce capitalinvestments

Sources: McKinsey Economic Conditions Snapshot, Feb. 2009

38%38%38%38%

Had layoffs in 2008, >50% plan layoffs in 2009

Source: CFO magazine global CFO survey Feb 2009

CUT BACKCUT BACK

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INNOVATEINNOVATE

37%37%37%37% 36%36%36%36%

45%45%45%45% 40%40%40%40%

How do you lead through challenging times?You need clarity and transparency to act decisively

Will increase productivity

Sources: McKinsey Economic Conditions Snapshot, Feb. 2009

Will restructureWill introduce new Products/servicesTo gain market share

Will change theirenterprise model to be more collaborativeSource: IBM global CEO study

‘the enterprise of the future’ 2008

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New ways to build value – even in a downturnAlign strategy and execution to enable long term growth

Focus your business

network on the end customerReduce costs and risk,

differentiate brand

It’s important to innovate through a recession to sustain new brands and products and offer the customer a little more value.

A.G. Lafley Chairman, Procter & Gamble

“

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Become “Clear” to Drive SuccessInstill accountability, agility, and customer centricity into your organization

Transparent and accountable

Lean and agile

Collaborative & customer-centric

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Demand clear answersChoose vendors that can support your business

Chief Information OfficerChief Information Officer

Line of Business ManagerLine of Business Manager

Chief Financial OfficerChief Financial Officer

How does your company enable us to support the quickly changing needs of the business?

How can your company help us to navigate through economic challenges?

How can your company help us to develop effective business strategies?

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Today’s challenges require strategic agilityEnable insight, efficiency, and flexibility

How does your company enable us to support the quickly changing needs of the business?

How can your company help us to navigate through economic challenges?

How can your company help us to develop effective business strategies? INSIGHT

EFFICIENCY

FLEXIBILITY

INSIGHT

EFFICIENCY

FLEXIBILITY

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Business strategies evolve …but silos create a gap between strategy and execution

Functional silos and non-integrated systems reduce agility and undermine growth

Functional silos and non-integrated systems reduce agility and undermine growth

STRATEGY

EXECUTION

Sales ShippingBusiness Users Call Center

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The Economic Uncertainty Affects Businesses of All Sizes

Current Economic Environment

Revenue, Income

COGS, Margins

Cash flow, Liquidity

Slowing demand(spending cut-back, customers

postponing purchases)

Rising costs(inflation, energy/commodity

prices, healthcare costs…)

Reduced credit(tougher lending standards,

declining loan/line of credits)

Measurable Impact on Your Business Lack of access to funds

Higher cost of capital

Reduced cash flow

Rising inflation risks

High market volatility

Wave of consolidations

Government re-regulation

Declining consumer optimism

Translating into…

Source: -NFIB Small Business Economic Trends, October 2008-The Conference Board Mid-Market CEO Challenge, 2007-Collateral Damage, The Boston Consulting Group, Oct 2008

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Technology Can Be A Strategic Tool To Help Weather the Economy

Make decisions based on hard facts Make smarter fact-based decisions using business intelligence, reduce guesstimates and risky blunders

Streamline processes, cut operating costs Improve efficiency and profitability by using an integrated system that eliminates errors & duplications

Get accurate, precise control on cash flow Keep receivables in check, inventory low and cash flowing

Proactively respond to customer needs faster Identify emerging trends / customer needs, focus on your most

profitable customers, turn dissatisfied customers around

Be best positioned for the rebound With careful IT investments, you can position your company for recovery and achieve sustainable growth.

1. Slash operating expenses

2. Improve cash flow & liquidity

3. Optimize working capital & debt

4. Act now on efficiency initiatives

5. Focus on customer retention

6. Diversify product portfolio

7. Go after less-affected markets

8. Increase smart marketing

9. Invest in employee development

10.Engage in selective M&A

Business Measures to TakeTechnology Can Help Your Customers Now

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SIX PRIORITIES FOR TODAY’SECONOMIC CLIMATE

1. Manage Cash

2. Run Lean Operations

3. Drive Compliance Activities

4. Get Closer to Your Best Customers

5. Retain Your Top Talent

6. Protect and Nurture Your Brand.

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Services

Consumer Industries

Trading Industries

Financial Services

Process Manufacturing

DiscreteManufacturing

PublicServices

85% of the Forbes 500 run SAP BP

85% of the Forbes 500 run SAP BP

Companies that have Benefited from Best Practices

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Agility, Effectiveness & Insight…Pakistani Corporations partnering with SAP

Consumer Products

FSI/ Processed Industry

Manufacturing

Oil & Gas

Life Science / Public Sector

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Path to ClaritySteps towards becoming a clear enterprise

 1. Choose the IT Product that can truly support your business strategies.

2. Develop a plan to build strategic value.

3. Start small but think big.

4. Engage key partners in your busi ness network. to build stronger business networks.

5. Close the strategy-to-execution gap and measure the benefits.

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Thank you!