digital transformation at the regional innovation board, october 2015
TRANSCRIPT
Digital Transformation
Sven Denecken, GVP Co-Innovation and Strategy, SAP S/4HANA Rome, October 2015
@SDenecken
Macro perspective, the modern drivers of change
*Concept Source: Unboundary, Inc.
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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
10.2% or U.S.$237 billion of profits are lost by the top 200 global companies due to hidden costs of complexity
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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.
The digital economy is a reality
*MIT Digital Change Survey, 2013
Of business leaders said that achieving digital transformaFon will become criFcal to their organizaFons within the next two years.*
78%
Of employees in companies where CEOs have shared their vision for digital transformaFon feel that it is the right thing for the organizaFon.*
93% All lines of business running in real Fme on a digital business plaMorm
The digital value chain
Suppliers People
Resources
Omnicommerce
Deliver excepFonal experiences to your customers across every channel of interacFon
To enable the workforce of the future – employees and conFngent labor
Enable fricFonless commerce by managing suppliers bePer
Manage materials, assets, money, and other resources bePer
Customers Busine
ss network
Social Internet
of Things
Other unstructured/
structured data
The digital value chain
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Understanding the new value levers The digiFzed core enables transformaFon
Digital economy
Mobile
Big Data
Internet of things
Cloud
SubscripCon
DigiCzed core
Segment of one
Unit of one Personalized experience
Connected manufacturing
Business model transiCon
Lot size one Contextual markeCng
Digital transformaFon
Internet of Things Unit of One
Technology induced change
Why Digitize The Core?
Service promise Ability to deliver End to end experience
The end to end digiCzed enterprise is a mandatory consequence
[#/€]
Fme 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
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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 customizaCon 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
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The business models of the future
Customer centric
Operationally excellent
Globally networked
Rapidly innovating
Agile • Fast adaptaFon of business
strategies • Fast innovaFon • Highly skilled, empowered
people in cross funcFonal, cross organizaFonal 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 Fme customer interacFon
• Based on 360° customer view
Next generaCon processes • Highly automated
e.g. "touchless order" • Embedded, "real Fme"
decision support • Highly adaptive
Empowered consumer / customer
Science and technology progress
Globalization Competitive and regulatory pressures
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The Digital Transformation lever is huge
Mobile
Cloud
Big Data
IoT
Business Networks
Core 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
CollaboraFon Web 2.0
New value chains
New communicaFon mechanisms
Data-‐driven development
Real-‐Fme analyFc
Data as new economic resource
Machine2Machine communicaFons
Classic industry vs. digital business
IT security, tracking
User experience
Simplify data model
Flex the core
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Mobile
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 • ReducFon of entry barriers • Share of industry revenue pool generated by digital • Relevance of customer behavior
Company specific drivers: • Digital as add-‐on or fundamental transformaFon • PotenFal to leverage digital to mobilize and innovate
company
Source: BCG experience
What is the right aspiration for your company in Digital?
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Simplify your technology architecture, business processes, and decision making
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Applications Business Network
SAP HANA Platform
In-memory computing. Analytics. Services.
Every line of business and every industry
Customer engagement and commerce Human capital management
Procurement
Inter-enterprise commerce and spend
Suppliers Workforce
Travel and entertainment
Reimagine new business models to take advantage of the opportunities in the Digital Economy
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Zero latency supply chains
Applications Business Network
Sales, Service, Marketing
Human Resources
Finance
Supply Chain
In Memory 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
Your journey to master simplicity and capture the Digital Economy starts today – at the pace you choose
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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
Where to go for more information on Digital Transformation
Blog series on Digital TransformaCon ü hPp://scn.sap.com/community/cloud/blog/2015/01/17/digital-‐transformaFon-‐series-‐the-‐wrap
openSAP MOOC course on Digital TransformaFon ü hPps://open.sap.com/courses/dit1
Blog series on Digital TransformaFon use cases with S/4HANA
ü hPp://scn.sap.com/community/s4hana/blog/2015/07/13/s4hana-‐-‐the-‐use-‐case-‐series-‐-‐intro
openSAP MOOC course on use cases S/4HANA ü hPps://open.sap.com/courses/s4h3
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Run simple with the next-‐generaFon business suite
@SDenecken
https://www.linkedin.com/in/sdenecken
Sven Denecken, GVP Co-Innovation and Strategy S/4HANA SAP SE